On August 7, Ukrainian President Leonid Kuchma signed a decree ordering drastic cuts in state budget expenditures. The effect of this would be a reduction in the overall budget deficit in 1998 to 2.5 percent of the projected GDP. The deepest cuts are being made in health care, agriculture, subsidies to municipal utilities and education–in that order. The military and law enforcement budgets also suffer. Concurrently, Kuchma signed a decree canceling tax payments into the Chornobyl Fund and reducing tax payments into the Social Security Fund. This decree aims to alleviate tax pressure on enterprises. (Ukrainian agencies, August 7 and 8; Eastern Economist Daily [Kyiv], August 10)
Both decrees indicate that Kuchma is moving quickly to meet the International Monetary Fund’s conditions for approval of a three-year Extended Fund Facility credit program, worth US$2.2 billion. (See the Monitor, August 3) Kuchma’s decrees are likely to encounter strong resistance and risk being overridden in parliament when it reconvenes next month.
LORTKIPANIDZE CONFIRMED, OUTLINES GOVERNMENT PROGRAM.