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. Last Updated: 07/27/2016

1995 Is Make or Break Year, Wary Kuchma Says

ZHYTOMYR, Ukraine -- Ukrainian President Leonid Kuchma has said 1995 will be a signal year for economic reform, but warned that change was threatened by chaos in his cabinet.


"This year, 1995, will be the most important year for implementing economic reforms, and the most difficult," Kuchma told newspaper editors Thursday in Zhytomyr, central Ukraine. "We will either turn the situation for the better or face total economic collapse."


But Kuchma said his cabinet lacked commitment to reforms, and suggested a cabinet reshuffle was possible.


"There are deep internal contradictions within the government, which is the most threatening and dangerous thing (for reforms). The government is undirected. Its work is not systematic or aimed at one goal," he said.


"The president cannot be inactive in such a situation, but a decision on the government will be taken openly."


Kuchma drew up and won parliamentary approval for Ukraine's first post-Soviet market reform plan after his election in July.


He has built up a core group of reformers in the cabinet, but most government officials, including Prime Minister Vitaly Masol, are economic conservatives.


Kuchma said the country's energy sector is in disarray as Ukraine's contracts with its biggest trade partners, Russia and Turkmenistan, have yet to be concluded for this year.


He also hinted at high-level government corruption, saying "the decisions of the most senior government officials are allowing commercial structures to grow rich from state coffers."


Kuchma said his goals for 1995 include stimulating production, mass privatization, agricultural reform and reining in inflation, which was over 28 percent in December.


The 1995 budget -- "the strictest budget Ukraine has ever had" -- is nearly drafted, he said.


The budget is the chief hurdle to be cleared for a $1.5 billion loan from the International Monetary Fund. The cabinet is already committed to a budget deficit of no more than 5 percent of gross domestic product.


Kuchma repeated his intention to push for more executive powers, setting the end of January as a deadline for parliament to vote on a draft law on separation of powers.