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Ukraine's Leaders Bite The Bullet

The gas crisis hit Ukraine hard on top of its other economic woes

The gas crisis hit Ukraine hard on top of its other economic woes

It is now clear that of all the countries close to the point at which a crisis becomes a complete collapse, Ukraine is closest of all.

A couple of gas wars with Russia; sharp declines in demand for, and prices of, metals, coal, and heavy machinery and equipment; and the country's domestic political disputes have done considerable damage. Production has fallen by 34 percent compared to January 2008, while inflation is running at an annual rate of 23 percent. Ukraine may be facing default.

You can say what you like about the mistakes of the Ukrainian leadership (and there have been many), but Ukraine was knocked out by the gas war and the global economic crisis.

At the same time, it is impossible to say that Russia's economic situation looks significantly better than its neighbor's. In general things are a little better for now, and for now Russia is a little richer. But we live in one neighborhood, on one street, so to speak, and among the players on the global economic stage, we can only be seen with a microscope.

Russia is a little bigger, a little more scandalous, a little more ambitious, but what good are our ambitions when our assets are so miserly? If oil falls to $10 a barrel (and there have been such predictions), we Russians may find ourselves envying Ukraine, which has little left to lose.

But it seems that neither our government nor Ukraine's knows what to do about the crisis. In fact, no one anywhere in the world seems to know. But everyone seems to have figured out that there is no more money and there won't be any more money for a long time. Therefore, it would seem wise to pull back as much as possible, to act a little more modestly, to tighten one's belt, to set an example for taxpayers, and -- at the same time -- show the voters that the authorities are being careful with their money.

Frugal Leadership

In spite of Ukrainian politicians' arguments among themselves, and the fun that Russian television has had at their expense, the fact is that they have acted exactly in this way: they adopted legislation that reduced their own salaries and state expenses.

In the last few days, the Verkhovna Rada cut the president's salary in half, as well as those of the prime minister, the parliament speaker, parliament deputies, deputy prime ministers, the leadership of the Security and Defense Council, staff in the presidential administration, and other top officials -- right down to the heads of regional and municipal government organs and their deputies.

The same day, lawmakers cut salaries at the Central Bank and those of judges, prosecutors, and the police "by not less than half" (according to the bill). This initiative was supported by 374 of the body's 423 deputies. Now lawmakers have turned their attention to cutting benefits: they are planning to take an ax to their own free public transportation, their free use of state sanatoriums, and their free housing benefit. They also plan to cut back on free air travel and telephone calls, which they believe can save the state about $2.5 million.

In all, the Ukrainian authorities have decided to save hundreds of millions of dollars at their own expense. And who knows -- maybe looking at those sacrifices will help a lot of Ukrainian citizens get through some lean years.

Or maybe that money can be used to save the beleaguered Artek Soviet-era youth camp. After all, at the very same legislative session, lawmakers overrode President Viktor Yushchenko's earlier veto on a bill giving state support to the camp.

Of course, politicians are politicians: no one at the trough of power has ever died of hunger. This is true of Ukraine, just as it is of the United States or Zimbabwe. But in Zimbabwe, despite raging hyperinflation, officials do not cut their own salaries and the president continues to hand out generous gifts from the state treasury to his relatives. So if you hear people comparing Ukraine's situation with Zimbabwe's, remember that there is at least one major difference. Hats off to them.

Olga Romanova is a contributor to RFE/RL's Russian Service. The views expressed in this commentary are the author's own and do not necessarily reflect those of RFE/RL.