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. Last Updated: 07/27/2016

Kuchma Calls for Aggressive Economic Reform

KIEV -- President Leonid Kuchma called on Tuesday for "decisive, aggressive action" to speed reform and overhaul Ukraine's crumbling economy, but faced resistance from a conservative parliament and a weary electorate.

Kuchma presented a plan outlining a "new economic policy" embracing long-term structural market reforms for one of the weakest economies in the former Soviet Union.

"The president is going ahead with decisive, aggressive action" to avoid economic catastrophe, a confident Kuchma told deputies.

"The basis for this is the objective recognition that market reforms must be speeded up. There is no alternative to this. We cannot drag out to infinity the transitional command method of running the economy."

Ukraine's economy, he said, had "no resources to improve the standard of living in the country. We have empty coffers, debts are piling up and we are facing another bout of hyperinflation."

In his 50-minute speech Kuchma repeated calls for strong executive power to carry out reforms, saying he would present in November a proposal for revamping the division of power.

Kuchma is eager to clinch parliament's support for his economic vision. The assembly controls the state budget and much legislation affecting long-term economic policy.

Deputies vote on supporting the plan next week, but Kuchma's advisers say he will proceed whatever the outcome.

Kuchma's speech followed last week's preliminary agreement with the International Monetary Fund on a first IMF loan of $360 million -- contingent upon Ukraine implementing a short-term economic stabilization program.

Socialist Parliament Chairman Olexander Moroz has said he will support the IMF program because Ukraine desperately needs Western financing to pay off big arrears for energy.

But conservatives in parliament have resisted measures such as price liberalization and cutting budget expenditures, sure to be painful for most Ukrainians.

Communist deputies said they would not support privatization of property and land -- a key plank in Kuchma's plan. In July, the assembly slapped a moratorium on privatization.

"If such reforms come to pass and Kuchma does not listen to us, we will actively defend our position. Reforms should not be made at the expense of people," said Yevgeny Marmazov, one of the leaders of the Communist Party -- the largest in parliament.

Kuchma said Ukraine needed a broad-based "social pact of consensus" between political forces during the transitional period and called for a six-month moratorium on strikes.

His plan envisages three stages of structural reforms. Measures include complete privatization of small firms by the end of 1995 and of medium and large enterprises within the next three years.

The budget deficit, currently at 20 percent of GDP, is to be cut to 8 percent next year and 4 percent in 1997.

Mass hidden unemployment, high inflation and nosediving industrial output have cast most of Ukraine's population into poverty.