100 Head-Off Steps

Ukrainians traditionally celebrate the first 100 days of each government like St. Valentine’s Day or Halloween – just a nice occasion with the gist forgotten. In 100 days no government has ever been able to fulfill its pre-election promises...

Ukrainians traditionally celebrate the first 100 days of each government like St. Valentine’s Day or Halloween – just a nice occasion with the gist forgotten. In 100 days no government has ever been able to fulfill its pre-election promises, overcome corruption, improve legislation, or even help its sponsors recoup their contributions to the election campaign. Yet, it is conventionally believed that in the first hundred days a new government enjoys its highest rating of popular trust and ought to use this circumstance for reforms and innovations – often unpopular and painful – that yield deferred positive effects. In this sense the new Ukrainian leadership has simply wasted its first 100 days. The word “leadership” is used here instead of “government” because the Tymoshenko cabinet was formed by the democratic coalition, i.e. the parliamentary majority. This coalition has been anything but a reliable backup for the government. Besides, half the ministers were appointed personally by the President, making him equally responsible.

So what have the political leaders been doing? Tied in a tight knot of mutual dependence, they have been putting out fires, tripping up one other, and meting out alms. Exhausted by chaos, this country needed radical and painful treatment. The clinical picture is clear: disseminated sclerosis of the executive vertical; corruption phlebitis; gas drug dependence; epidemic of fake private entrepreneurship; wage anemia, judicial impotence, land kleptomania, asthma of small and midsize businesses, law enforcement dependence on presidential medication, and so on and so forth. How do the leaders treat these diseases? They hand out benefits, competing with each other on TV, promising more benefits and accusing each other of populism. “You have diabetes?’ asks Tymoshenko, ‘You are tired of dieting? Here’s a kilo of candies for you.” “You have fever?’ echoes Yushchenko, “Here’s a good draft – stand in it for a minute and you’ll feel better.” The patients take this care with earnest gratitude and next morning they take their temperature and sugar tests…

Actually, Tymoshenko and Yushchenko are acting the way they have to: there can be only one head physician in this clinic. Both must be thinking: when I win the race, I’ll cure the country. But do they know that after the presidential election in 2009 there will be strict diets, splints, and surgeries? Do they really know what they are going to cure and how?

So far, instead of a comprehensive course of therapy, the doctors have only stopped hemorrhage or made anesthetic injections. And whenever either of them prescribes something more radical, the other one immediately wakes up the patient, “Look what’s going on! It’s going to hurt!” The patients are naturally scared. Most of them prefer shadow kickback schemes to transparent deductions to the budget. Most of them are ready to trade the country’s independence for cheap natural gas. Most of them are content with the miserable UAH 1,000 [equal to $200, the standard reimbursement for lost deposits with the USSR Savings Bank] instead of demanding indexation, let alone demanding their $150 billion from Russia.

Ukrainians are so undemanding! Old people are content with their UAH 1,000 and a kilo of buckwheat [traditional pre-election “graft rations”]. One part of the intelligentsia is content that the Ukrainian language is still alive and the other part is happy to be still able to use Russian. Millionaires are content with the “tithe” they have to deduct for arts and charity. Doctors are content with their commissions from “cooperation” with pharmaceutical companies [for prescribing exclusively medications produced by those companies]. Generals are content with their posts. The Intelligence and other special services are content with the last mythical remnants of their omnipotence. The public is content with political shows. NGOs are content with grants… And that is how a Citizen turns into a “little man”.

Ukrainians demand less and less from authorities. They only want their favorite leaders to win and then, possibly, to help them solve their personal problems. Some pay a bottle of vodka. Others pay millions. Everybody demands to put an end to corruption in the highest echelons but resist any attempts to fight it at the grassroots level: taxi drivers still drive their passengers with the meter off; draftees’ parents still pay conscription officers for exemption from military service; marketplace vendors still give short weight; students still “buy” their test and exam grades.

During the Orange Revolution Ukrainians demanded “jails for bandits”. Of course, they meant “oligarchs”, not accoucheurs who would never even enter the prenatal ward unless palmed with $300. Authorities will never change until each and every citizen demands rules for all instead of personal exceptions for himself, a rod to catch enough fish for himself and his dependants instead of regular fish rations… Those who rule Ukraine are not from Mars, Washington, or Moscow. They are the very flesh of the flesh of those “little Ukrainians”, only vested with authority. The symptoms are the same. The diagnosis looks very clear from the figures below.

100 Days in Figures

According to the State Statistics Committee, in January and February practically all basic economic development indices increased (except decreased milk production). The increase, however, barely exceeded last year’s.

· GDP totaled UAH118,600M [$1 = UAH5.05]; corrected for inflation it totals 5.8% growth vs. January-February of 2007;

· Consumer prices grew by 5.7% (in January-February of 2007 they grew by 1.1%), having exceeded half the limit set by the government for 2008; at such a rate the annual price growth index may well total 21.9%;

· Nominally, the average wage rose by 39.9% (vs. 27.4% in January-February of 2007), but the real increment barely exceeded that of 2007 (15.5% vs. 13.2%);

· National industries sold UAH54,100M worth of products, works, and services; considering the price hikes, the real sum exceeded last year’s by 8.8%;

· The agricultural sector sold UAH7,100M worth of products – a mere 0.7% more than in January-February of 2007 when the increment versus the same period of 2006 was 5.6%;

· Construction practically remained at the same level, real growth being 0.4% – even less than in the agricultural sector (last year’s growth rate was far more impressive – 20.1%);

· What did grow more significantly in January and February was retail trade; stimulated by increased social welfare outlays and bank loans, it reached UAH56,200M (28.3% of real increment vs. 2007);

· According to the Finance Ministry, national exporters received UAH4,100M in reimbursements for VAT, which was UAH900M more than planned and UAH1,600M more than was reimbursed in January-February of 2007;

· By March 14 the State Customs Service had fulfilled the quarterly plan by 102%, having transferred UAH15,160M to the national budget – 70% more than in the same period of last year.

Staff Comb-Out Continues

Political instability boomerangs on the public service sector. The political leadership never learned the lesson of 2005 when as many as 9,600 public servants were fired for political reasons. According to Tymofiy Motrenko, chief of the Main Public Service Department, due to dismissals for reasons of “political expediency” the state loses the most experienced and qualified public servants. He notes the dangerously increasing outflow of young public servants: in 2004 young public servants made up 68% of the total number and in 2006 their number reduced to 51%. Motrenko insists on separating administrative and political posts in order to retain professionals in the public service sector, enable their career growth, and keep the institutional memory of executive bodies.

Extensible Procrustean Bed

When the Tymoshenko government drafted the 2008 national budget (on the basis of the one drafted by the previous government) and the parliament adopted it, everyone was aware of the need to revise it by April at the latest. However, it is already clear that a new budget can be adopted in May at the earliest.

The “pie” is not too big. Having recalculated the predicted 2008 GDP, the government plans to increase the revenue section of the consolidated budget by UAH20 billion – up to UAH294 billion. The government plans to distribute that surplus among central bodies of authority and replenish the budget by cutting some “unjustified expenses”. At the same time, according to Finance Minister Viktor Pynzenyk, the ministries are requesting an additional UAH80 billion. Besides, the revision of the 2008 budget involves “the problem of political decision-making rather than technical problems”. The President demands an additional UAH23 billion for humanitarian projects and defense, but didn’t he say that he would not sign the 2008 budget bill if the budget deficit exceeded 2% of GDP?

Harmonious Slipknot

Yulia Tymoshenko reiterates that her relations with the President are “harmonious”. Viktor Yushchenko says that he is working day and night to keep the democratic coalition together. Yet, numerous statements by both political leaders and their teams leave no doubt that they are waging a war for power and popularity rating. Any political leader naturally wants to raise his or her rating but uses different methods in competing with different rivals. Although Yushchenko had as many as seven ministers in the Yanukovych government, he never allowed himself to meddle in its work like he meddles in the Tymoshenko government’s work. According to official information, in its first 100 days the Yanukovych government received 88 directives from the President and 143 tasks from his chancellery. The Tymoshenko government received 621 and 260 directives, instructions, and tasks respectively, which was 881 more than the previous government did – almost nine per day…

Laws and Flaws

The slogan “One Law for All” will be just hollow words as long as Ukrainian politicians are guided by Franco’s motto “Everything to Friends, Law to Enemies!” and as long as they interpret and use laws to their liking instead of abiding by them.

Article 19 of the Constitution obliges all public servants, executive officials, and bodies of authority to act in strict compliance with the Constitution and laws, but it has never stopped Kuchma or Yushchenko, Yanukovych or Tymoshenko. But for the opposition’s feeble efforts to play the controlling role, Ukraine would hold the Guinness record for the number of constitutional violations.

Yushchenko’s impetuous lawmaking activity was deterred when the parliament and government were controlled by Yanukovych and other opponents (who were far from law-abiding, either). As soon as the tide turned and Yushchenko got a loyal majority in the parliament and a more or less compliant government, he jumped at the opportunity. In the first 100 days since the Tymoshenko government took office he issued about 500 acts. Many of them were questionable in terms of constitutionality. In accordance with Article 118 of the Constitution, the President may appoint and dismiss heads of region and district administrations exclusively upon the government’s relevant decision. Since the start of this year Yushchenko has decreed nine appointments and dismissals in defiance of this norm. Besides, he has personally appointed 22 acting heads of local administrations, even though no normative act provides for such appointments by presidential decrees.

Like his predecessor Leonid Kuchma, Viktor Yushchenko often meddles in the economic sphere, trying to regulate issues that are in the government’s exclusive competence. He has tried to influence the following:

- the activity of the national company Naftogaz;

- the use of energy resources;

- privatization mechanisms;

- development of roads;

- pricing in the public utility sector;

- extraction of amber.

Some legal experts call into question the legality of his recent decree on reforming the law enforcement structure. According to the Constitution and the Law on the Cabinet of Ministers (which he utterly dislikes but which is still valid), this issue is beyond the presidential competence.

The same law vests in the Cabinet of Ministers the exclusive right to adopt regulations for all ministries and other central executive bodies. However, most of those agencies still function on the basis of presidential decrees. The government has repeatedly requested the presidential chancellery to abrogate those decrees as no longer valid and is still waiting for a reply.

As we could expect, the presidential structures are now pressing the Cabinet of Ministers in all spheres. The most effective method of pressure is using National Security and Defense Council’s decisions, with which they try to substitute the Cabinet’s decisions – both acting and possible.

For instance, in February 2008, the National Security and Defense Council forbade the Cabinet of Ministers to take issue with the state concern Aviation of Ukraine. The actual plans of the government concerning this enterprise are a topic for a separate discussion. However, it is a direct function of the Cabinet of Ministers to manage the object of the state property. Thus, with the help of the decisions made by the National Security and Defense Council in March 2008, the President has sufficiently reduced the influence of the government on the fuel-and-energy sector, the privatization sphere and the land market.

100 Days – 100 Laws

During 100 days of co-existing with the new government, the Verkhovna Rada managed to hold only 16 plenary sessions. During this time, about one thousand draft laws were introduced into the parliament. More than half of those draft laws (562) were initiated by the coalition.

According to our sources, the parliament passed 100 laws during the period from December 18 to March 26. 89 of them were initiated by the coalition. However, we should note that 81 of 89 coalition’s laws are concerning early elections of cities’, towns’ and villages’ heads. The last 8 are the acts on early mayoral elections in Kyiv and the acts on Ukraine joining NATO.

Viktor Yushchenko appeared to occupy second place in the law-making productivity ratings: his five laws were enacted. His laws are on changing the minimal living wage, on overall strength of the military forces and on ratification of the agreements between Ukraine and the EU regarding simple visa registration.

The opposition is the next in our rating with three bills – on approving the first session’s plan and on creation of committee to investigate the activities of the head of the Interior Ministry and the head of Kyiv city administration.

The Cabinet of Ministers of Ukraine is the last in our rating: it introduced only one law – the law on the 2008 budget of Ukraine.

We should note that during these 100 days, our law-makers didn’t please us with any bills which could sufficiently improve our lives today or in the future. From this point of view, the productive capacity of the ruling coalition is, to put it mildly, not very high.

Authors: Yelena Boltushkina, Inna Vedernikova, Yulia Mostovaya,

Serhii Rakhmanin, Yuriy Skolotiany, Nataliya Yatsenko

Mirror-Weekly # 12 (691), Kyiv, Ukraine, 29 March - 5 April 2008

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