Ukraine: Crisis on the Basis of Vague Economic Policy

For Ukraine, 1993 was a year of major socioeconomic disappointments. Favorable initial prerequisites for the creation of an independent economy immediately after the attainment of political independence that were actively supported in the West were assumed but did not materialize. Moreover, the hopes connected with this were ultimately dashed by the continuous decline of production and the disintegration of the national financial system. While Ukraine's political elite scored certain foreign policy successes, these were essentially nullified by the absence of a substantive economic reform program. Some Western experts assess the results of the first years of independence as a total failure when hyperinflation is combined with the absence of elementary economic policy.>sup>1>/sup> And in Ukraine itself, economic measures by the authorities who were unable to halt the decline of production and to cope with inflation are increasingly subjected to well-founded criticism. In late 1993 and early 1994, the crisis intensified still more because of the latest price rise and the new complication of relations with Russia and Turkmenistan over the settlement of accounts involving energy sources. As former Prime Minister L. Kuchma persistently warned shortly before his retirement, the very viability of the Ukrainian state was at stake.