The government of Ukraine has done its best to move the 2013 state budget bill in the Verkhovna Rada within the stipulated period of time and finally did so. But the document proved to be imperfect. “Last Saturday I sent the state budget bill back to the Cabinet,” Parliament Speaker Volodymyr LYTVYN said at a conciliatory council meeting. In his words, to form the 2013 budget, one must take into account “the fact that the budget should reflect the proposals the president made in his annual message to parliament.”
As always before the elections, the budget adoption process is turning from an economic discussion into tough political games. What is going to be brought into play is not only the rule “Each for himself,” which first-past-the-post candidates are so zealous to stick to this time, but also a hierarchic approach. Accordingly, Presidential Administration officials are much more knowledgeable about budget maneuvering than the ones who work under the premier’s guidance and are directly involved in shaping the country’s main financial document. And it is, naturally, the opposition that knows best how to lay out the budgetary money as revenues and expenditures. What is more, this statement is true in the same proportion as the proverbial glass – it is half-empty, on the one hand, and half-full, on the other.
Yet the draft budget is being criticized from all sides at the current stage. What is very characteristic in this case is the comment of Iryna AKIMOVA, First Deputy Chairperson of the Presidential Administration and the president’s representative in the Cabinet. “The draft state budget needs to be radically revised,” she said, calling the draft budget’s macroeconomic targets “middle-realistic.”
But Pavlo ZHEBRIVSKY (NU-NS), a subcommittee chair at the Parliamentary Budget Committee, does not quite agree with her. In his opinion, the government’s GDP target is too optimistic. The MP’s assessment is based on the fact that the crop is poorer than last year and the foreign market situation is unfavorable. Zheblivsky does not believe in the 4.5-percent GDP growth the government is projecting. “It is fantasts, not realists, who work in the Ministry of Finance and the Cabinet,” he says and notes that excessive concentration of oligarchic assets as well as corruption, which causes a third of the budget to go down the drain, pose a threat to the Ukrainian economy. Zhebrivsky is aware that parliament will approve any government-prepared budget, but he forecasts that the latter will be revised and replaced thereafter. “Both the revenues and the expenditures will be in fact revised in February and March,” the MP says.
Tetiana YEFYMENKO, ex-deputy minister of finance, president of the Financial Management Academy, agrees that there is a danger that the 2013 budget in its current shape will not be fulfilled. But the expert says convincingly that “our active stand is to resist this danger.” “If we achieve the level expected in 2012 (the government still hopes to meet this year’s target of a 3.9-percent GDP growth), this will give us certain grounds to believe that the 4.5-percent 2013 target is realistic,” Yefymenko points out. Nor does she have any special fears about the hryvnia’s exchange rate: “We can hope that the exchange corridor will be within the limits we have this year.”
At the same time, the financier’s positive program has something in common with the ideas of Zhebrivsky. In her opinion, Ukraine should implement an economic legalization program and carry out an income tax amnesty. This may furnish this country with an essential resource. (Will the government dare to take this bold step? For this was the talk of the town back in the times of privatization which was carried out not so successfully for the state but more than successfully for some individuals. Feeling the taste of impunity, they became convinced that they would go scot-free further on. And they were right after all. The state failed to nab the “grabatizers” in time. Its bus has gone. Amnesty is the only hope. But none of the Ukrainian presidents and cabinets had enough political will do so.)
What Yefymenko suggests seems to be a motion away from the demands of Arsenii YATSENIUK, leader of the United Opposition-Fatherland. In his view, the 2013 state budget’s resource is a saving on the government, the Front of Changes press service reports. “We demand that expenditures for the Presidential Administration, the prosecution service, and the police be at the level of 2009, which means minus 12 billion hryvnias from the current year’s expenses,” the press service quotes its leader as saying. Yatseniuk suggests that the saved funds be earmarked for social needs. But he seems to be totally unsure that his proposals will be accepted because he is convinced that only the new Verkhovna Rada, which will approve the 2013 budget proposed by the democratic majority, will be able to make these changes.
Oleksii PLOTNIKOV, MP (Party of Regions), member of the Parliamentary Committee for Economic Policies, is also concerned about the 2013 budget’s social articles. In his view, the draft state budget guarantees the funding of all social initiatives. “The fact that the Cabinet has approved the next year’s state budget shows that the government is realistically assessing the situation in the country. As for the draft budget’s macroeconomic targets, they are realistic, and, even taking into account the danger of world crises, Ukraine will have adopted the budget by the end of this year. Our citizens can be sure that all social commitments to public-sector employees will be fully met,” he said. The president of Ukraine had also been insisting on this before. “There will be no rolling back. We will continue to pursue this policy irrespective of the political situation or the elections,” he said, addressing the Economic Reforms Committee.
And we cannot but quote here Viktor PYNZENYK, chair of the Ukrainian Reform Support Foundation, ex-minister of finance. “The current year’s budget calls for a 19.3-percent growth of general revenues. However, the increment was only 11.1 percent in eight months (2/3 of the year),” the economist comments on his website. He points out that the general fund was receiving an average 23.6 billion hryvnias a month. And, to fulfill the budget plans, the general fund’s average monthly revenues should be raised to 32.2 billion hryvnias, or by 36.4 percent. “This means having three times as high growth rates,” Pynzenyk reflects. “Even a layman will see that a growth like this is unrealistic, especially when the economic pace is slowing down.” He thinks the government should cut down on non-priority budgetary expenditures, cancel tax privileges for some businesses, immediately close the so-called conversion centers, and, what is more, to draw up a realistic draft budget for 2013. As we can see, it is not the budget itself but the demand of a realistic approach to its preparation that successfully rallied Ukrainian society together the other day. Can society be satisfied with this if it sees politicians ruining and disuniting this country step by step?
