UKRAINE…. A

depressing World Bank study reports that Ukrainian privatebusinessmen spend 28% of their time dealing with government officials.Twenty-five government agencies conduct inspections (fire, health, taxaudit, etc.). The typical firm endured seven tax audits last year, eachlasting an average of ten days. A 1996 survey reported that bribes cost theaverage firm $150 a year per employee. Professor Louise Shelley of AmericanUniversity in Washington, DC, calls the Ukrainian economy thoroughly”criminalized … controlled from top to bottom.” Widespread corruptioncontributed to last year’s decision by the International Monetary Fund towithhold $300 million of a planned $540 million in credits and to suspendtalks on a $2.2 billion extended financing facility. Without that support,commercial banks abroad will not risk lending to Ukraine. Internal sourcesof finance are also increasingly hard to tap. The government already takes50% of gross domestic product. Only a sharp reduction of governmentspending is likely to spare Ukraine further economic stagnation, and thedivided parliament has been unwilling to back government efforts in thatdirection.