Parliament on Dec. 22 overwhelmingly approved Viktor Yushchenko, formerly the head of Ukraine’s National Bank, as prime minister, marking the first time in the country’s post-Soviet history that a devoted proponent of radical market reforms has occupied the top government post.
Some 296 deputies in the 450-seat Verkhovna Rada voted to approve Yushchenko, with only 12 votes against out of 316 deputies in attendance.
The news could signal a potential turnaround for Ukraine’s struggling economy, which has declined steadily since the 1991 independence amid futile efforts of the country’s previous seven governments to stop the downfall.
However, analysts say a lot will depend on what authority Kuchma will give Yushchenko to implement his reform plans and how cooperative the legislature will be.
Speaking before the confirmation vote, Yushchenko pledged swift decisions over the next 100 days aimed at stabilizing the shaky financial system and restoring foreign investors’ confidence in Ukraine, and asked lawmakers for support.
‘Within 100 days, we will have received a signal about the effectiveness of the reforms the government will implement,’ Yushchenko said, adding that the new Cabinet ‘must become a political leader of reforms.’
In a bow to parliament, which has been at loggerheads with the government for years, Yushchenko said the two bodies should share responsibility for Ukraine’s affairs and even sign a special accord to that effect.
Yushchenko said that he and speaker Oleksandr Tkachenko already had discussed ways to form such a majority, ‘without which it will be extremely difficult – if not impossible – to push through reform measures.’
Under the constitution, Yushchenko is now to submit his nominees for Cabinet posts for Kuchma’s approval.
Yushchenko, an energetic 45-year-old professional financier, has headed Ukraine’s central bank since 1993 and has been a key figure in talks with the International Monetary Fund and the World Bank.
He is widely credited with preserving relative stability in Ukraine’s financial markets and protecting the hryvna from collapse amid a severe economic crisis and the country’s mounting foreign debt burden.
Kuchma nominated Yushchenko last week after lawmakers refused to reappoint former Prime Minister Valery Pustovoitenko, who had kept the post for more than two years but failed to record any serious reform accomplishments.
Pustovoitenko’s government, Ukraine’s seventh since independence, resigned last month in line with the constitution after Kuchma was reelected.
The nomination of Yushchenko was seen as Kuchma’s latest step in a new reform drive launched after his Nov. 14 reelection. That drive appears to be aimed squarely Ukraine’s foreign lenders, which have promised hundreds of millions of dollars in financing next year if Kuchma can meet key reform requirements.
Kuchma earlier signed a decree cutting the number of top government agencies and abolishing Soviet-era collective farms, turning them into privately run enterprises. Critics said the measures, while steps in the right direction, were largely symbolic gestures.
Ukraine, which was virtually deserted by large foreign investors in the past several years, faces a formidable task of repaying more than $3 billion in foreign debts in 2000 and badly needs new loans to avoid outright default on some or all of those debts.
Many analysts say Yushchenko is one of the few officials in the government capable of persuading foreign investors to once again restructure the debts, a practice the government employed several times last year to bail itself out of trouble.
But Yushchenko’s most urgent task will be to push a realistic 2000 budget through parliament, a step that the IMF is awaiting before deciding whether to unfreeze its $2.6 billion Extended Fund Facility loan to Ukraine, suspended in September.
In his speech to parliament, Yushchenko also pledged that the National Bank he is quitting would remain a catalyst for market reforms.
‘The National Bank has been a corruption-free structure for eight years and it will remain so. This is a requirement, a credo and a sufficient condition to speak about [our] reform policy as a success,’ Yushchenko said.
Yushchenko had reportedly struck a deal with Kuchma, conditioning his acceptance of the prime minister nomination on his first deputy in the National Bank, Volodymyr Stelmakh, being appointed to replace him.
Stelmakh, 66, worked in the Soviet banking system for nearly 30 years before joining Ukraine’s National Bank. Ukrainian financial analysts have spoken highly of Stelmakh’s professional skills, but said he favors tighter monetary policies as compared to Yushchenko.
