EU-DIGEST

Op-ed: Leonid Kuchma Built a Prosperous Ukraine - Anders Aslund

On August 9, Leonid Kuchma turned 70 years old. For 10 years, from 1994 until 2004, he was the president of Ukraine. He arrived as the savior of his nation, but the Orange Revolution ended his second term. His legacy is rich but multifaceted. The year before he came to power, Ukraine recorded hyperinflation of 10,200 percent. The Soviet-style command economy had ceased to function, and no new economic system had been established. Economic chaos prevailed, and output was in near free fall. Ukraine had no international reserves, only unregulated debts. At the time of Kuchma's election, the CIA issued a National Intelligence Estimate titled, "Ukraine: A Nation at Risk," which postulated that Ukraine might not survive as a state.

Kuchma asked the International Monetary Fund to help him sort out state finances and did what it took to save his country. Without hesitation, he carried out the necessary market economic reforms and privatized most of the economy. By 1996, he had defeated inflation and introduced Ukraine's national currency, the hryvna. In 2000, when Viktor Yushchenko was prime minister, economic growth finally took off. Since then, it has averaged 7.5 percent a year—no mean feat.For the last three years, Ukraine has adopted very little legislation, apart from the legislation needed to enter the World Trade Organization this year. If Yushchenko does not change his policies, his term will have been one in which no government could accomplish anything. Naturally, this leaves a black mark on the Orange Revolution. Since Tymoshenko became prime minister, Yushchenko has vetoed nearly all her decisions, notably all decisions on privatization. Inflation rose to 31 percent in May because the Central Bank insists on an inadequate exchange rate policy with a dollar peg and therefore maintains high, negative real interest rates. Whatever you say about Kuchma, he was a man who could make decisions and get things done. His second term, from 1999 to 2004, was Ukraine's most productive in terms of both legislation and economic growth. He managed to rule Ukraine, which is a difficult art. Whatever happened under his rule, he created a functioning democracy. One reflection of Ukraine's democratic strength is that both Kuchma and his predecessor, Leonid Kravchuk, remain public personalities. Kuchma's 70th birthday is an opportunity to celebrate his contributions. Few people have done so much for their country.

Labels: Leonid Kuchma, Ukraine