Pustovoitenko orders debtors to civil defense training camp (08/23/98)

Pustovoitenko orders debtors to civil defense training camp

by Pavel Politiuk
Special to The Ukrainian Weekly

KYIV - In a radical and unorthodox move, Prime Minister Valerii Pustovoitenko, whose government is short of the cash it needs to pay billions of hryvni in wage and pension arrears, on August 12 ordered hundreds of directors of Ukrainian companies that owe money to the government to a special training camp outside Kyiv.

The prime minister said the directors would be allowed to leave only after they have paid the millions of hryvni they owe to the Ukrainian budget, the pension fund and the Chornobyl Fund.

"Only when they have decided how to pay their debts will they be allowed out," said Prime Minister Pustovoitenko. "They will be allowed out only with my personal permission," he added.

After calling a special extended session of the Cabinet of Ministers for August 6 to resolve the issue of non-payment to the government coffers and demanding that all directors pay what they owe the government, which resulted in 1 million hrv ($510,000 U.S.) of the 3 billion hrv ($1.4 billion U.S.) owed being placed in government coffers in cash and goods, the prime minister of Ukraine decided that harsher measures were needed to bring the directors and government officials around.

Those who had not settled their debt were told they were required to return daily to the Ukraina Palace of Culture, where the special session was being held, until the government deemed that a sufficient amount of money had been paid. By August 11 that figure had reached 94 million hrv.

Still not satisfied that the company directors and local government officials had made their best effort to repay the debts, Prime Minister Pustovoitenko on August 12 ordered that the 400 directors and government officials, including ministers, deputy ministers, and regional, city and district authorities from across Ukraine attend a special meeting at Ukraine's Emergencies Ministry. There the prime minister announced that a civil defense training camp would take place beginning immediately.

"During the past seven years we have not held such a training," Prime Minister Pustovoitenko told government and other officials at the meeting. "But now the situation in the country is very difficult, and we must do the training. We should remember that without fully covering the pension and wage debts we will not be able to solve any of the problems."

In accordance with Ukrainian law, all local officials and directors of large factories and companies also hold positions of authority in Ukraine's civil defense network, and are charged with managing their workers during possible emergency situations. As such, they answer to Mr. Pustovoitenko, who as prime minister is the chief civil defense officer in the country.

After the meeting the directors and government officials were whisked away in luxury buses to a civil defense training camp located 100 kilometers southeast of Kyiv near the small town of Pereiaslav-Khmelnytskyi, where they were issued military-type gear.

Prime Minister Pustovoitenko, who also participated in the camp, again addressed the directors and public officials at the training facility. "We are here to discuss the situation in the country, problems and measures to resolve them," said Mr. Pustovoitenko, outfitted in a camouflage uniform.

"I must say that, unfortunately, the traditional means of our government to get obligatory payments to the budget or to Ukraine's State Pension Fund have not brought results. We have decided to hold this meeting in this training camp, where the conditions to work and solve all our problems exist," said the prime minister.

Earlier, the government had said the payments deficit to the state budget has risen by 2.5 times to reach 7 billion hrv ($3.3 billion U.S.) during the first six months of 1998, including 4 billion hrv owed by non-state-run firms. The debts of hundreds of Ukrainian companies to the pension fund totaled more than 3 billion hrv ($1.4 billion).

The Cabinet of Ministers had ordered local officials and major enterprises to pay an initial minimum amount of 30 percent of their debt to the state budget. During a recess at the special session held at the Ukraina Palace of Culture, Mr. Pustovoitenko told reporters, "No one is leaving this hall until 30 percent of the debt to the pension fund and 5 percent to the central budget have been paid."

Mr. Pustovoitenko also said that, in order to persuade companies to more quickly repay their debts, Cabinet officials should take steps to begin reclaiming corporate shares. "Via a government decision we urged the State Property Fund to return to Ukraine the property of joint stock companies that owe money to the budget," he told a Cabinet meeting on August 7.

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