Political Arithmetic of 2003 Budget
This year’s government spending targets are impossible to meet. This was stated, according to Verkhovna Rada Budget Committee Chairman Petro Poroshenko, by Minister of Finance Ihor Yushko at the September 20 cabinet meeting. Moreover, new reasons have appeared for claiming that the hue and cry over next year’s budget has reached fever pitch. Interfax-Ukraine has reported what seems to be a more unexpected piece of news than the 2002 budget sequester: People’s Deputy Poroshenko said his committee was not going to urge the Cabinet of Ministers to modify next year’s draft budget, for this “would have unduly delayed the budget adoption process.” He also promised that the parliament would correct the proposed budget’s shortcomings during the first reading.
The synchronicity of these two things is striking. Not so long ago, Minister Yushko studiously avoided any comment on the official sequester of the 2002 budget, while Poroshenko in turn reiterated that the proposed 2003 budget was unrealistic, adding that its only advantage lay in “being submitted to Verkhovna Rada on time.” Now is precisely the right time to think what will happen if both documents (sequester proposals and the next year’s draft budget) are submitted to the parliament simultaneously.
Deputy Poroshenko’s second statement shows that it is highly probable the parliament already has a majority capable of adjusting next year’s budget estimates at its own discretion. As to the sequester, not everything is clear. The Day pointed out as early as last spring that Our Ukraine and the Party of the Regions deputies might come closer on this. Now there are no ample grounds either to confirm or to deny the existence of any coordinated actions. In any case a host of questions arise that evince far greater interest among ordinary Ukrainians.
“The budget must serve the national interests and must not fall hostage to narrow political and narrow group interests.” Even if Anatoly Kinakh were a psychic in the current situation, not only the Prime Minister of Ukraine, these words of his would have hardly impressed the ministers, parliament members, and regional administration chairmen attending the workshop On Forming the 2003 State and Local Budgets held September 19. It is perhaps only incorrigible optimists who could assess the situation in this way, such as those who, guided by information from sources close to the budget committee leadership, believe in the likely adoption of the “financial constitution” (especially on the eve of the oncoming presidential elections) without taking into account, to put it mildly, “corporative interests.”
By all accounts, the problem lies not so much in the presence of these interests (although the priority nature of budget transfers has always dismayed rank-and-file entrepreneurs who pay their taxes on time) as in the absence of political responsibility for passing the state budget. Thus Mr. Kinakh is a thousand times right to press for a “realistic and balanced” budget. The picture, however, looks different.
Obviously, strong groundwork for a “realistic and balanced” budget can be laid only by means of the government’s sober calculations and the good will of 226 people’s deputies. It looks like the Cabinet of Ministers is having as many problems with the latter as with the former. To see this, one does not even have to read the closely-guarded text of the so-called economic constitution. It suffices to look at the behavior of the political forces represented in the legislature.
Symptomatically, there are now two majorities being organized in Verkhovna Rada, which claim they are ready to assume political responsibility. Moreover, the three opposition factions (plus Our Ukraine, which joined them without enthusiasm and thus should not be taken into account in this context) have logically found themselves outside the budget debate.
As to the others, the picture is admittedly much foggier. To be more exact, the firm position has been taken by the SDPU(o) and until September 20 Our Ukraine’s “chief budget man” Petro Poroshenko. The latter, whom Minister of the Economy Oleksandr Shlapak expected to show the constructive attitude of a financier in the 2003 budget debate, harshly criticized and now offers to correct the draft. Meanwhile, the leader of Deputy Poroshenko’s faction, with one foot in the opposition, used the other foot and both hands to clamor for establishing an Our Ukraine-based majority in Verkhovna Rada. How responsible will this coalition (if it is formed) be in the debates with the government (taking into account Poroshenko’s view that the wave of opposition will jeopardize the budget-adoption process)? UNR leader Yury Kostenko announced on September 20 that the project of a parliamentary coalition contending for the office of premier was already afoot. If this is true and the project will be implemented, does this mean the 2003 draft budget will be rewritten? In this case, however, the majority will also incorporate forces admittedly linked with the Kinakh government (e.g., Labor Ukraine and the industrialists). Or will portfolios and the budget remain two separate issues? Where would the political responsibility be in such a case?
Hence, this year’s budget adoption procedure in the parliament is going to be interesting. Experience shows that when everybody tries to take responsibility by projecting identical priorities, but without joining forces to achieve the goals, it will be easier later to catch the wind in the field than to find those responsible. The latter become fall guys as a rule. Even now, Finance Minister Yushko says the 2003 budget is “revenue- strained and expenditure-tight,” noting that while the government was compiling the state budget, it made maximum use of the proposals and remarks from Verkhovna Rada committees and the regions. Poroshenko also says some majority district deputies are worried about some expenditure items. Both admit that the State Tax Administration will have a tough time next year. Is it a time to simply lay low?
