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Kuchma Names Economic Reform INSIDE: • Nuclear safety program in trouble in U.S. Congress — page 3. • Ukrainians discuss redress issue with Canadian senior minister — page 4. • Make like Indiana Jones in Kamianets-Podilskyi — page 11. HE KRAINI A N EEKLY T PublishedU by the Ukrainian National Association Inc., a fraternal non-profitW association Vol. LXV No. 15 THE UKRAINIAN WEEKLY SUNDAY, APRIL 13, 1997 $1.25/$2 in Ukraine Kuchma names economic reform Tax reform package is stalled, no by Roman Woronowycz On April 9 Ukraine’s Verkhovna Rada Kyiv Press Bureau agreed to a proposal put forward by Mr. budget in sight for Ukraine Lazarenko during a speech before the leg- KYIV – Serhii Tyhypko, director of one islative body a day earlier that foreign by Roman Woronowycz bill has passed the legislature. The VAT, of the fastest growing banks in Ukraine and investors should not be given tax breaks, a Kyiv Press Bureau approved on April 3, will continue to be an associate of Prime Minister Pavlo levied at a rate of 20 percent on goods, move that would dampen investor enthusi- KYIV – With the first quarter of 1997 Lazarenko, was appointed vice prime min- asm in any country, much less one where services and trading operations that do ister for economic reform on April 9. complete, Ukraine still has no approved not come under exemptions. the investment climate is already frigid. budget for the current year. What’s worse, Mr. Tyhypko, chairman of the board President Kuchma, who publicly had One reason for the delay in passage of a and a founder of the Dnipropetrovsk- at the moment no consensus exists among budget by the Verkhovna Rada is that the supported Mr. Pynzenyk in his efforts and the branches of power as to when, and most based PryvatBank with which the prime his criticism of government inaction on government and the president have insisted importantly how, a budget will be passed. minister is closely tied, succeeds Viktor economic reforms, took his first public slap that the tax reform package pass the legisla- With the process at a standstill and no Pynzenyk, whose resignation was accept- at the former vice prime minister on April ture before the budget is revisited. The bud- resolution of the budget crisis in sight, ed by President Leonid Kuchma on April 5, when he told a group of reporters from get package went back to the Cabinet of President Leonid Kuchma asked the 7, five days after he had submitted it and regional newspapers that Mr. Pynzenyk Ministers for revisions in December and has Verkhovna Rada on April 8 to extend the after a closed-door meeting between the was in part responsible for the inability of never been returned, and the government emergency budget, based on 1996 expen- former vice prime minister and the presi- the government to get the Verkhovna Rada insisted that the Verkhovna Rada concen- ditures, from its original April 1 deadline dent. Sources close to the president said to approve a tax reform bill and a budget trate on the tax reforms. But national through June. that Mr. Pynzenyk insisted that the presi- for 1997. “Since Pynzenyk was the leading deputies, mostly leftists who hold key posi- What has stalled approval is a package of dent accept his resignation at the meeting. figure [in the lobby effort], this is the tions in committees reviewing the tax bills, seven tax reform bills called the “Economic At a press conference afterwards, Mr. expected result,” said Mr. Kuchma, have taken their time. Growth ‘97” package, whose author, Viktor Pynzenyk, in his first public statements according to the Associated Press. Mr. Prime Minister Pavlo Lazarenko, Pynzenyk, last week resigned from his post since his resignation, explained that he had Pynzenyk had earlier this month admitted attempting to jump-start the stalled budget as vice prime minister for economic reform quit because he felt the government had that at times he had been uncompromising process, appeared before the Verkhovna because he did not see any chance for fur- stopped moving forward on reform and in his vision of reform and could have Rada on April 8. He told deputies they ther progress on economic revamping in the had even begun a backward slide. “Today, approached his lobbying efforts in have been lax in working out the glitches in present government. I believe there is no political will on the Ukraine’s Parliament differently. the tax reform bills. “Even if separate arti- part of the government to push ahead with The president’s criticism on the fail- Of the seven bills, only one has been cles of the bills needed to be reworked, and approved, while four have gone through economic reform,” said Mr. Pynzenyk. “I ure to pass a budget previouly had been some truly did, two months have passed do not see the political potential to solve leveled specifically at Prime Minister only the first of three required readings, since the bills went through their first read- these problems in today’s government.” Lazarenko for shabbily putting together and two have been returned to the gov- ings. They could have been reworked and He said that in today’s Cabinet of the 1997 budget, which the Verkhovna ernment for further revisions. problems resolved,” he commented. Ministers too many divergent viewpoints Rada has steadily torn apart, and for not The package would lower income tax He offered a new schedule for approval exist as to how reforms should continue, submitting a tax reform bill far earlier. rates from 51 to 32 percent, write off of the tax reforms he believes are needed which has caused paralysis. He suggested During his state of the nation address debts accumulated by state-owned enter- for a 1997 budget by the end of April. that in the energy sector, with which the before the Verkhovna Rada on March 21, prises, reform unemployment and dis- Most important, however, he excluded the prime minister is closely tied, there even the president had criticized Mr. Lazarenko ability compensation, and establish a property tax bill – from which a substantial has been a return to a command economy value-added tax, among other things. run by monopolies in a system of barter. (Continued on page 3) At present, only the value-added tax (Continued on page 3) But the economist said most free-market mechanisms are in place for an economic upsurge, and that what is now needed is a balanced budget based on a new tax pro- VOA Ukrainian Branch may lose simulcast in Ukraine gram to provide economic stimulation. He by Irene Jarosewich to individual receivers, a typical radio cable television, a box with two or three said the government’s great failure is its on which a listener turns the dial and push-buttons that connected directly to inability to provide suitable conditions for JERSEY CITY, N.J. – Within the next selects a radio station that is on a specif- government radio programs was installed large foreign investment projects, and that few months the Ukrainian Branch of ic, numbered band. Such AM and FM in many homes, most often in the kitchen government policies and red tape have Voice of America is slated to drop its radio signals require that a large trans- or central hallway. In Ukraine, 12 million lately caused foreign businesses to leave simulcast into Ukraine, and return to pri- mitter be relatively near the listener. households are still equipped with cable the Ukrainian market. “It is tragic when a marily short-wave transmission of its pro- Short-wave radio signals can travel radio capability, thanks to Soviet planners. real or potential investor gives up on its gramming. The current VOA budget does longer distances, transmitters can be locat- For a broadcaster who wants to reach a projects,” he said. Since independence in not have funds to cover the increase in ed at a greater distance from the listener, general audience, AM, FM or the cable 1991 Ukraine has attracted merely $1.4 bil- broadcast fees being stipulated by the and the signals require more sensitive radio network is considered to be a better lion in foreign capital. National Council of Radio and Television receivers (short-wave radios) than stan- choice than short-wave: it’s easier for the If a tax program and a balanced bud- Broadcasting (NCRTB) of Ukraine. dard radios. During the Cold War era, listener and the transmission quality and get do get through the Verkhovna Rada, At present, VOA’s Ukrainian VOA relied exclusively on short-wave reception are better than short-wave, Mr. Pynzenyk said economic growth Branch, which celebrated 47 years of transmission to bypass Soviet transmitters. though these choices are more expensive. could still occur within a year. broadcasting into Ukraine in December In turn, the Soviet Union tried to distort, In the case of AM, FM or cable radio Because of his close association with 1996, broadcasts daily for two hours and or jam, VOA signals so that individual lis- transmission, somebody is the middle- Prime Minister Lazarenko, who also reaches an audience of close to 2 million teners could not accept that signal. In fact, man, a government or private business hails from Dnipropetrovsk, Mr. Tyhypko listeners on a regular basis. According to purchasing and/or owning a short-wave that owns the transmission equipment may at least be able to gather a consen- reports from the Prague-based Open radio receiver was a clandestine affair in and takes money for its use in the form sus on what has to be done to push the Media Research Institute (OMRI), the former Soviet Union, for which a lis- of broadcast fees and licenses.
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