Publication: Monitor Volume: 4 Issue: 143

Ukraine’s parliament, the Verkhovna Rada has adjourned for the summer recess without discussing the deficit-reduction corrections, which President Leonid Kuchma had urgently sought to make to the 1998 budget. Moreover, at the session’s last sitting on July 24, the parliament adopted a resolution which–if implemented–would perpetuate the deficit into next year. The document, “On the 1999 Budget Policy Guidelines,” instructs the cabinet of ministers to set the budget expenditures in the amount that would guarantee full funding of all the existing social programs and welfare benefits. At the same time, the resolution expressly leaves it up to the cabinet to determine the actual size of the budget deficit. This latter proviso is meant to wash the parliament’s hands of the political responsibility for its own decision.

The voting on the resolution–286 in favor, only 16 against and the balance of 139 absent or not voting–suggests that many pro-reform deputies found it politically risky to oppose the resolution outright. (Ukrainian agencies, July 24; Fakty i Kommentarii [Kyiv], July 25) The parliament acted even as the International Monetary Fund considers the possibility of approving a US$2.5 billion, three-year Extended Fund Facility program for Ukraine, contingent on reform measures. Reduction of both budget expenditures and the deficit is among the IMF’s requirements.