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The front men of reform
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The front men of reform


By Kyiv Post. Published April 3, 1997 at 1:00 am


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Seldom have o politicians been as beloved abroad and as despised at
home as First Depu Prime Minister Viktor Pynzenyk and National Honest History: Saying
‘the Ukraine’ is more H&M to open first store in
Agency for Reconstruction and Development Director Roman Shpek.
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They are hardly the only Ukrainian apostles of reform.
Ukraine celebrates
Ivana Kupala, and
National Bank Chairman Viktor Yuschenko has been widely credited for
recreates ancient
ending the funny-money policies that unleashed hyperinflation in the
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New Economy Minister Yuri Yekhanurov and his replacement at the
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advisers.

Yet when it comes to forcing meddlesome ex-Soviet apparatchiks to


mend their ways or to persuading Western creditors that they have done so, it is Pynzenyk and Shpek who
take the center stage.

Both leaders acknowledge that they are only as effective as their powers of persuasion, and that any
progress inevitably involves compromise.

‘Every day I have to make some small compromises. When one squanders his attention on trifles he misses
tens of millions of opportunities,’ Pynzenyk said. ‘Now I realize the necessi for compromise. Reforms can
never go in a straight path. One needs to take a winding road which is farther but faster. It is possible to
take a straight path, but there always will be someone to hinder you.’

Shpek said he prefers to concentrate on small gains while compromising as little as possible on larger
issues.

‘Any reforms that are passed are viewed as gains because you have battled for them. As a member of the
government I feel responsibili and dissatisfaction because many issues have not been decided,’ Shpek
said.

The greatest task testing Pynzenyk’s powers of persuasion has been lobbying anti-reform and leist
lawmakers to adopt the government’s Economic Growth ’97 package of reforms currently stalled in
Parliament. Opponents of the package, which proposes a wholesale overhaul of the tax and pension
systems, say Ukraine is not ready for measures like the reduction of some social securi benefits and the
introduction of proper taxes.

‘I asked Pynzenyk why he always agrees to explain these unpopular things and his answer was that
everybody rejected the job, but somebody had to do it. He is a kind of fanatic – all of his work is for the
benefit of the public,’ said Serhiy Teriokhin, Parliament depu and member of the Finance and Banking
Committee.

Pynzenyk is open about his frustration when dealing with politicians and decisionmakers unwilling to
accept his liberal economic views. ‘Many times I have taken blows for taking steps too fast, but now I see
that those decisions were absolutely correct because now, o years later, we return to them,’ he said. ‘I
don’t understand those people who see only as far as tomorrow.’

Opponents of Pynzenyk’s reforms are equally open in their criticism.

‘These policies have brought a total crisis to Ukraine,’ said Vitaly Lutsenko, secretary of the central
committee of the Communist Par of Ukraine. ‘A crisis that embraces every sphere of the country.’

Last month, 29 leist members of Parliament signed a letter calling on President Leonid Kuchma to fire
Pynzenyk and demanding that he be investigated for ‘crimes against the Ukrainian people.’

His support in the West is unflagging, however.

‘Pynzenyk is a genuine reformer and has made a great contribution to moving Ukraine toward a market
economy, but when you have to conduct so many reforms and eliminate social privileges, you can’t be
popular by nature,’ a Western economics expert said.

‘The reform process has been an uneven one; while moving forward consistently in the past several years,
the pace has varied. It is clear that differences exist among government officials as to the pace and scope of
reform,’ a U.S. embassy official said.

Shpek has drawn flak from Parliament for allowing Ukraine to accumulate $3.5 billion in debt to
multilateral lenders such as the International Monetary Fund, the World Bank and the European Bank for
Reconstruction and Development.

Lutsenko equated Ukraine’s reliance upon Western funds with drug addiction, saying ‘Ukraine is hooked
on the foreign financial needle and cannot make decisions without consulting its big financial bosses.’

Not surprisingly, Western observers disagree.

‘Shpek and his agency are doing very important work in coordinating the government with the World
Bank, EBRD, donors and foreign investors. He is doing something very important by bringing in external
financing.’ said a Western economic expert.

For his part, Shpek said insults matter little to him: ‘I am very tolerant to criticism. I lived in a country that
criticized no one and everyone voted unanimously. I would not like this country back.’

Western observers and analysts understand the difficulties of Ukraine’s politicial terrain and credit
Pynzenyk and Shpek for progress.

‘Mr. Pynzenyk and Mr. Shpek have been key figures in moving forward the process of economic reform in
Ukraine. Both individuals are highly motivated and have persevered in an environment that sometimes
can be very difficult,’ said a U.S. embassy official. However, Western praise oen serves only to further
undermine the reformers’ credibili among skeptics at home.

‘We should include some elements of a liberal economy, but we need our own approach considering the
specifics of the economy instead of just taking everything from the West,’ Lutsenko said.

Pynzenyk said things are changing and some officials are coming around. ‘People are finally beginning to
realize that without serious reforms nothing will change,’ he said.

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