PM Yanukovych's economic program stresses continued development, stimulus (03/02/03)

PM Yanukovych's economic program stresses continued development, stimulus

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Prime Minister Viktor Yanukovych placed continued economic development and investment stimulus at the top of his government's developmental program for Ukraine, which he presented to his full Cabinet of Ministers and Verkhovna Rada and regional government leaders on February 19.

"We can only solve our social problems with stable growth of the national economy, of each region and each enterprise, and only with Ukraine's integration into the world economy," explained Mr. Yanukovych.

The prime minister said he sees the need for more reliable protection of private ownership rights for investors and creditors. He also said he is determined to ease tax burdens both on businesses and individuals. In addition he said he intends to make bank credits more accessible and more affordable

Titled "Openness, Efficiency and Effectiveness," the program calls for a sharp rise in portfolio and direct investments in commercial projects in Ukraine, most notably by foreigners. It also calls for corporate governance statutes long sought by foreign businesses, as well as the development of procedures to protect stockholders' rights and to make the underdeveloped and underutilized Ukrainian stock market more transparent and more understandable.

First Vice Prime Minister Mykola Azarov presented details of the government program, which is based on a presentation made to the Verkhovna Rada last year by President Leonid Kuchma called "European Choice."

The keystone of the program is completion and legislative approval of a new tax code, which would limit the corporate profit tax to 20 percent and reduce the value-added tax (VAT) to 15 percent from its current 20 percent, explained Mr. Azarov. The former chief of the State Tax Administration said he would like to see the new tax code enacted by mid-year.

"Tax administration procedures will be liberalized, but tax breaks will be reduced and the tax base widened," explained the first vice prime minister.

Mr. Azarov stressed that if the government and the Verkhovna Rada cooperate to legislate and implement the reforms as presented in the government's plan, Ukraine should see GDP growth of up to 6 percent for this year, which would be a 2 percent rise over the current forecast, and even stronger growth - as much as 8 percent - in 2004. Last year the country's economy grew by 4.1 percent.

The first vice prime minister added that the growth would mean a 12 to15 percent growth in real wages for Ukrainian workers.

If the Verkhovna Rada adopts the initiative, which is scheduled for a vote on March 6, it would also protect the prime minister from a vote of no confidence for a year while he works to implement the government plan.

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