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Ukraine: New Prime Minister Could Propel Country Toward Reform

Ukraine's new prime minister, Viktor Yuschenko, for years resisted suggestions that he should seek public office. Now, after a career as central banker that earned him the respect of Western financial institutions, Yuschenko holds the country's number two job. RFE/RL correspondent Askold Krushelnycky looks at who the man is and what tough tasks await him.

Prague, 14 January 2000 (RFE/RL) -- Installed as prime minister just before the new year, Viktor Yuschenko is being hailed as a new type of leader for Ukraine. At age 45 he is younger than most of the country's politicians, and he enjoys a rare reputation for honesty and intelligence. His marriage to an American adds to his pro-Western image.

From 1993 till last month, Yuschenko was the chairman of the National Bank of Ukraine, In that role, he impressed foreign financial institutions such as the World Bank and the International Monetary Fund (IMF) with his skill and integrity. Major achievements during his term include curbing Ukraine's runaway inflation and keeping the new currency, the hryvna, stable.

His early remarks as prime minister indicate that Yuschenko wants to steer clear of the corruption and cronyism that have characterized Ukrainian politics since independence. Most Ukrainians believe that their political leaders are merely intent on lining their own pockets.

Yuschenko told RFE/RL's Ukraine Service earlier this month that he wants to bring in younger people whose outlook has not been shaped by the Communist system.

"In the first place, these people should be dedicated to Ukraine's interests in every sphere. This pan-Ukrainianism should become the bedrock upon which we build our nationhood. And it goes without saying that these should be people with clean hands and they must have strong personalities." Yuschenko was born in the town of Khoruzhivka in Sumy Oblast, which borders Russia. His first financial job was as assistant to the chief accountant at a collective farm in Western Ukraine. After serving his time in the Soviet Army, he began work in the USSR State Bank and rose rapidly within its ranks. When Ukraine declared independence in 1991, Yuschenko was the deputy director of the commercial agro-industrial bank Ukrainia.

Yuschenko's public behavior makes him a rarity in Ukraine. Unlike most high officials, he has not sought to exploit his position for personal gain. Instead, he comes across as a self-effacing person who values his privacy.

Those who know him personally describe him as pleasant and sensitive. Bank employees used to affectionately refer to him as "batko" or father. He likes art and, while chairman of the National Bank, sponsored many art exhibitions to promote young artists.

Friends say Yuschenko is committed to economic and democratic reforms. They say he is deeply patriotic and wants to solidify Ukraine's independence and give Ukrainians reasons to be proud of their country.

Others point to his courage: During the presidential campaign, Yuschenko threw his support behind one of the few genuinely democratic and reformist candidates, Yuri Kostenko, rather than taking the politically expedient path of supporting the successful incumbent, Leonid Kuchma.

The primary task for the new prime minister is to lead Ukraine out of its economic morass. Living standards have plunged since independence, and industrial and agricultural outputs plumb new depths with each successive year.

The former central banker holds out a vision of a new, fiscally responsible Ukraine. He told RFE/RL that Ukraine's economic situation is dismal, with successive governments borrowing massively without making plans for repayment.

"The last two years have been the most difficult that I remember not only in Ukraine's recent history but ever in the field of national finances. It's a logical outcome because for the last nine years, as far as economic matters go, we have been living amorally. We did not adopt a conscientious political stance, there was no political solidarity and in the absence of those things an atmosphere of political irresponsibility developed."

Yuschenko hopes that he will be able to win over a large enough proportion of the parliament to back his and President Leonid Kuchma's wide-ranging reform plans. These plans include abolishing collective farms, massive privatization, and a radical reorganization of central and local administrations. The present parliament -- and its predecessor -- failed to make much progress on widespread economic or political reform because the Communists, who constitute the largest single party in the parliament, have been able to block legislation in concert with their leftist allies.

Ivan Lozowy is the director of the Institute for Statehood and Democracy, a Ukrainian think-tank. He says Yuschenko is the best choice for prime minister that independent Ukraine has had.

"I think this is a very unexpected but very pleasant boon to Ukraine to receive such a prime minister as Viktor Yuschenko. This is a respected banker and a person who has demonstrated that he is of a clear reformist orientation. And in the conditions that exist in Ukraine in the political sphere, he is a very welcome addition to the political establishment and it certainly opens the door to the hope that things can change for the better finally."

Some observers in Ukraine believe that President Kuchma's appointment of Yuschenko was simply a cynical move to exploit Yuschenko's good relationship with the IMF and Western politicians. With such a respected prime minister Kuchma could secure better terms for repayment when Ukraine's huge debts -- around $3 billion -- become due this spring. After that, cynics say, Yuschenko will be fired.

Lozowy says that could be part of Kuchma's calculation -- but that if Yuschenko does manage to improve the economic situation it will be difficult to remove him.

"Certainly the administrative changes that have begun finally at the initiative of President Leonid Kuchma and now being picked up by Viktor Yuschenko leads me to believe that systemic change has already begun. Again I stress that in the short term, it's difficult to see real changes taking place but in the long term, we know for a fact, and that's the essence of real reform, that they will have a positive impact."

This week the IMF has come to the Ukrainian capital Kyiv for crucial discussions about Ukraine's debts and the release of new funds.

But the IMF wants to see real signs of economic reform, reflected in the country's budget. Yesterday Yuschenko's hopes of demonstrating that parliament is going to back him took a blow when the majority voted not to accept his budget reforms.

But the good news was that a majority expressed a desire to back his long-term reforms. If he can turn that expression of support into practice, Yuschenko could be the man who finally propels Ukraine into real reform.