Viktor Pynzenyk is rightly regarded as a veteran of Ukrainian reforms.
Thrice elected to Parliament and twice assigned important Cabinet posts,
he has participated in working out countless bills and one would be hard
put to count how many were passed and voted down - or how many are being
implemented and ignored. With his experience in the executive and legislative
domains, he knows better than anyone else where the current crisis comes
from. At The Day's round table he ruminated on how best to deal with it,
settle the differences begot by it, assess the steps being taken by the
government, and what to expect from them.
CABINET WILL BE RETIRED ANYWAY
Q: Do you think that Parliament will eventually show a majority
voting to bring down the government?
A: I think that the Cabinet's retirement is inevitable, but the
problem is who will replace who. The current situation cannot be corrected
going by the book, because it is caused by the people's distrust of current
policy. And I think that are we simply not prepared to make mature political
decisions.
Q: Then why change the government?
A: Because it must be replaced by a team of professionals.
Q: Is there a team that would agree to work on current terms
and with the President we have?
A: Hard to say, but the situation may become such that political
ambitions will have to be cast aside.
Q: You mean the President's ambitions?
A: Not only his, although he will have to take a corresponding
stand, of course.
Q: Will the President have to agree to curbing his powers?
A: Maybe the opposite. According to one scenario a decisive Premier
is given enough authority, by another, the President has the final say
in every matter.
Q: Mr. Pynzenyk, you are an experienced politician, you have
worked for the President for quite some time. Do you know of a single professional
who will agree to work for the current President and his administration,
given the present function allocation?
A: You ought to restate your question: work not for somebody,
but on certain terms. If such terms were formulated and agreed upon, vacancies
would be filled. There have been several premiers we know of who tried
to agree on certain terms, but there was always the Presidential Administration.
Q: Does this mean that politically this variant is unrealistic?
If so, a team of professionals will never be found under these circumstances.
There is a list of contenders for the Premier's post even now. Your name
does not seem to be included, perhaps because you have been on such lists
twice and they lack the nerve to invite you again. But if they did, would
you agree to take this post?
A: I think that the terms I've mentioned should be regarding
as a point of departure. Accepting the post just like that would be unreasonable
and hopeless. Here the important thing is not one's personal stand but
the idea itself. It must be upheld, not destroyed. If we steer a middle
course we will just last a little longer.
Q: In other words, you could agree on certain terms, couldn't
you?
A: I have never refused a job on acceptable terms and if these
terms were observed.
Q: And your experience on the previous two occasions would not
stop you?
A: I do not regret those experiences. I think that people appreciated
the degree of stability I succeeded in providing, although I did not achieve
much of what I had planned, like structural reforms.
Q: What about a coalition government? Is it possible? If so,
what could be the basis of such coalition?
A: There is such a possibility, but now it is regarded as a compromise
and we have no time for compromises, although we may not realize this,
not yet. What I mean is that the time has come to have a group of people
with complete and unquestionable authority vested in them. A government
made up of representatives of most factions would be incompetent; moreover
we also have to make reforms in government as such.
Q: Do you think there is a political will to make such reforms?
A: I hate to say it, but I don't. I believe, however, that life
will force us to do what has to be done. Otherwise there are no reasons
to expect the situation to improve in Ukraine. I also think that we will
have to take decisive steps even before the presidential elections.
Q: Would you agree that certain other options must be considered
under the circumstances. In the absence of political will and the impossibility
of a coalition, with Cabinet reshuffling implying a revision of the political
system, how can the problems we are faced with be solved? What could Parliament
do to help?
A: Not much if at all. I have never viewed Parliament as the
main obstacle in the way of reforms. Many things can be done using the
executive vertical and President. And Parliament can be made to accomplish
much using both traditional Ukrainian and classical democratic methods.
Presidential edicts were adopted previously, weren't they? Why not follow
in the same vein now? Also, the executive can veto such edicts.
Q: You have mentioned a group of people that should be vested
with full authority. Who exactly do you have in mind?
A: I did not mean anyone in particular. That's not important,
because we can always find people who know what must be done and how.
Q: What criteria should be used in selecting these people? Volodymyr
Filenko, one of the NDP leaders, says Ukraine is ruled not by political
forces, but by holding companies.
A: I didn't mean holding companies. This is a complex question.
Holding companies must realize that their time is over. Until they do -
and until several heavy caliber magnates suddenly find themselves bankrupt
- there will be no political understanding of the need to surrender all
power to them.
Q: Suppose certain political forces agree among themselves to
let Premier Pustovoitenko stay, but insist on firing NBU Governor Yushchenko.
Do you think this likely to happen?
A: I cannot rule out the possibility The more so that this scenario
is being discussed. There are enough forces in Parliament to choose precisely
this middle course. A certain number of portfolios will be sold. However,
we seem to underestimate what is going on in the economy. It was possible
to play such games in the last two years and stay afloat, but not now.
Negative processes will develop very dynamically unless we take decisive
steps. No good will come of compromises.
Q: What do you think of Mr. Yushchenko's possible resignation?
A: One cannot consider it a positive thing. The man is a topnotch
professional and his retirement would be taken as a very bad sign by financial
market decision-makers. Is the National Bank to blame for the current situation?
Certainly not. We have always overestimated its role in stabilizing the
economy on the one hand, and in destabilizing it on the other. We have
no monetary reasons for devaluation.
The way things are, even if Mr. Yushchenko retains his post now he
will be ousted later, for every political decision being made points in
that direction
NO MONETARY REASONS FOR DEVALUATION
Q: The President openly accuses the National Bank of wasting
its reserves on supporting the hryvnia, which he thinks is a short-sighted
price-setting policy. Any comments?
A: The NBU's key task is regulating the exchange rate, selling
or buying dollars. Now the President's accusation are obviously words put
in his mouth by someone else. The National Bank simply has had to do what
it has been doing since late 1997. Another thing is whether this policy
is adequate to the current situation, but even here NBU should not be blamed.
The whole responsibility rests on the government.
Q: What do you think the situation will be like a year from now?
A: It is very hard to predict, because in all our forecasts we
overlook the dynamic economic factor. In other words, we proceed from the
assumption that the hryvnia remains stable. What happens to our national
currency will drastically effect the situation.
Q: You say that the decisions being made only cause our problems
to be pushed down, but 70% of these decisions consist of measures aimed
are regulating foreign exchange policy. In addition, Mr. Yushchenko is
convinced that letting loose the exchange rate will damage the economy
far worse than the current temporal administrative control. What do you
think?
A: There is some Hr 6 billion in Ukraine's cash turnover and
there is a feverish demand for dollars which is sustained by the administrative
exchange rate. I understood the situation for so long as this rate was
kept in the manual regulation mode. This doesn't work and keeping this
rate like that any further is simply impossible. On the other hand, if
they let the rate loose it won't go higher than three hryvnias to the dollar.
Containing the exchange rate only strengthens people's distrust. I think
that today's rate is excessively devalued.
Q: How would you propose to do without emission now that the
rate is on the rise, as are the costs of energy resources, and there is
no money to pay them?
A: Many are frightened by the current situation. Of course, there
is nothing to feel happy about, but I regard it as a denouement. Too bad
1993 was an experiment, but I am certain that without that horrible experiment
there would have been no stability. And let us remember that to err is
human. People tend to make mistakes and will make them over and over. But
life itself will make us do the only right thing. Suppose the Communists
come to power on the crest of extremely popular slogans. Will the economy
change? It needs domestic investment and no one will provide it under slogans
of nationalization. Regrettably, this will be another experiment, but each
experiment is a lesson that cannot be ignored. Even the Communists would
not resort to emission.
In a word, the crisis is here and we have to face it. Now we must not
stand in the way of what is happening. If there is a disproportion, we
must find a way to regulate it.
* * *
Viktor Pynzenyk is known for his "inveterate optimism." He often uses
words like "there is a way out of any situation" or "life itself will make
us do the right thing." However, his arguments left The Day's journalists
under the impression that correct decisions in Ukraine are possible only
after economic cataclysms. This is not optimism but prosaic life.






