Social Democrats reservedly criticize the 2002 draft budget and warn of man-made problems in 2003-2005
On October 9 Ukrainian Prime Minister Anatoly Kinakh and Minister of Finance Ihor Mitiukov had a meeting with the Social Democrats (united) parliamentary fraction and listened to their criticism on the 2002 draft budget submitted to Verkhovna Rada for its first reading. At the beginning of his speech to the Social Democrats, on whose support in the budget process the government obviously counts, Mr. Kinakh stated with a certain self-criticism that he had forbidden both himself and other cabinet officials to call the project socially oriented. As he put it, the disagreement over the size of the minimum wage (140 or 160 hryvnias) speaks for this decision. He called such a wage humiliating for our citizens and called for refraining from political and personal pie-in-the-sky promises (perhaps this refers more to the government itself).
Meanwhile, Social Democrats greeted the government’s bill politely. As fraction leader Oleksandr Zinchenko stated, the basement for the fraction’s positive reaction to the draft is the fact that it includes increasing social expenditures by 52%. The methods of its preparing and the practice of internal budget relationships has also significantly improved. The SDPU(o) promised to support the government’s draft in first reading, although, according to Mr. Zinchenko, it has very serious criticisms of both the practice and theory of the budget process. Numerous remarks were made at the meeting on budget financing of the educational and health care systems and military and security agencies, particularly judicial system. At the same time, the fraction head stressed that the government should pay more attention to strategic issues along with everyday problems.
In the opinion of the united Social Democrats, in 2003-2005 Ukraine will face an infrastructure crisis caused by the obsolescence of its principal manufacturing resources, which, according to Mr. Zinchenko, in 1994 was 23%, while in 2001 it had risen to 43%. As regards non-manufacturing resources, in 1994 their wear rate was 20.7% but 35% in 2001. The critical state of principal resources in the fuel and energy complex is even more urgent. According to Mr. Zinchenko’s data, capital spending to the key industries has been cut two to three times. 96% of the energy blocks are already working beyond their planned service life. In the road and transport complex, the obsolescence of principal resources was 19% in 1994 and 51.2% in 2001. The railroad rolling stock has reached 75% obsolescence, for the housing and communal service it is 65% (repair work volume has been reduced 6.5 times).
According to the budget forecast carried out by the Social Democrats, the crisis will extend to 2005, caused primarily by the fact that the current increase in production output is not accompanied by technical renewal and this could trigger technical disasters. Every Ukrainian family will feel the consequences in such forms as the lack of water, heat, electricity, along with run-down houses and apartments. The fraction has informed the government in written form on the imminent danger and urged it to take immediate measures. Delay, in the deputies’ opinion, means that the country could approach 2003 with formally positive statistical indices but in fact be in a deep crisis that will last for the next three years.
PS
Oleksandr Zinchenko told Interfax Ukraine that the SDPU(o) is setting up a 2005 committee to work out preventive measures concerning the infrastructure crisis. He also stressed that the committee does not have a “strictly political or partisan character,” which makes it possible to bring together “people able to solve this most acute problem.”
