Publication: Monitor Volume: 6 Issue: 58

After three months of work, the reform-minded government of Ukrainian Prime Minister Viktor Yushchenko faces serious problems in its interaction with the center-right majority in parliament, the Verkhovna Rada. In December, the pro-presidential oligarchs played a key role in the Rada endorsing Yushchenko’s appointment. But since then he has not allotted a single post in his cabinet of ministers to the two most influential oligarchic groups: the United Social Democratic Party (USDP) and Regional Revival. At the same time, Yushchenko appointed to the post of deputy premier for fuel and energy the former director of United Energy Systems of Ukraine, Yulia Tymoshenko, a bitter rival of the energy concerns close to the USDP.

The leaders of Regional Revival, Oleksandr Volkov, and of the USDP, Viktor Medvedchuk, expressed their disapproval of Yushchenko’s cabinet and its program–called Reforms for Well-Being–in rather sharp terms. It is a matter of numbers: The program must pass in the Rada by a simple majority of 226 votes; between them, the USDP and Regional Revival are seventy of those votes. If these two groups refuse to endorse the cabinet’s program, the cabinet will have to resign.

Yushchenko asked the Rada to adopt the cabinet’s action plan last week, but Medvedchuk and Volkov made it clear that consideration of the plan may be postponed indefinitely. When Yushchenko and the Rada faction leaders met on March 20, the Rada leaders reportedly proposed that the cabinet’s program would be approved on the condition that Yushchenko include representatives of more center-right factions in his government–a move which would make the cabinet more “coalitional.” Later the same day, a key cabinet member, Economics Minister Serhy Tyhypko, announced that the cabinet is ready to resign if the Rada refuses to cooperate.

The cabinet is in the midst of a difficult period. Ukrainian President Leonid Kuchma hoped that Yushchenko’s team would prevent Ukraine from defaulting on its international loan obligations and improve relations with the International Monetary Fund (IMF). The cabinet has apparently managed to restructure Ukraine’s US$2.6 billion debt on Eurobonds, forestalling the default, but has so far failed to persuade the IMF to resume financing of Ukraine. Recent allegations in the international press about Ukraine’s mishandling the IMF loans in 1997-1998, when Yushchenko headed the National Bank, made Yushchenko’s task even more tough, damaging his international reputation. Encountering huge difficulties both internationally and at home, the cabinet now sorely needs clear signs of support from the president. If Kuchma fails in this, Ukraine may well lose the first truly market reform-oriented cabinet it has had since independence. Speaking in Baku on March 17, Kuchma defended Yushchenko concerning the IMF loans affair. At the same time, the chief of Kuchma’s office, Volodymyr Lytvyn, blasted Reforms for Well-Being, saying that it had been drafted in a “rough-and-ready fashion” (The New York Times, March 16; UT-1, March 17; Inter TV, March 19; UNIAN, March 20; STB TV, March 20-21; Segodnya, March 21; see the Monitor, February 16).

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at, by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions