One Should Not Confuse Rigid Measures and Emergency Situation

Last Thursday, the President’s Press Secretary Oleksandr Martynenko stressed that Mr. Kuchma in his televised appearance said he was not going to sign any decree on any emergency. “The notion of an emergency situation,” Mr. Martynenko pointed out, “implies very severe measures provided by law, including mobilization resources and so on. In fact, it means a situation close to a state of war. In the case at issue it is necessary to get the situation under control and take extraordinary measures, but an emergency situation is not the term applying here.”

Oleksandr Riabchenko, head of the parliamentary special privatization oversight committee, spoke sharply against the emergency situation when asked by The Day:

“There is an emergency situation in the power industry, so one doesn’t have to impose it. Yet the disastrous situation has developed not with the district energy companies but with the generating ones. This is an open secret and the situation became evident last fall: no fuel reserves and no money to pay for them with. And the emergency measures being so actively discussed, along with privatization, would mean a sequel to the policy carried out by the previous Cabinet.

“The consequences are easy to predict: the foreign investor will forget all about Ukraine for some time. The State Property Fund recently announced a contest for consultants to help with tenders selling blocks of shares (including three controlling interests) in seven energy companies, but while an emergency situation is in effect no one will seriously consider investing in this industry. This may have a negative effect on other industries, but the power industry will suffer most, because it is most investment- attractive and salable. This, in turn, poses danger to budget revenues where privatization forms one of the most important income items.

“And mind you, the approach proposed is standard for this country: once there is a problem in the power industry the privatization process is halted, as though all our troubles are because something has been privatized. In fact, very little has been privatized in the energy industry: 25% of the transport companies and not a single generating one. And there is no crisis in the transport department. It has affected only the generating sphere, which is run by the state alone, and no privatization is planned here in 2000. So why stop anything? Especially after the Pustovoitenko administration suspended privatization in the power industry for a year and a half. Or should we stop selling 1-1.5% of the shares on the stock exchange? I am amazed to see that the trouble with the power energy is blamed on a nonexistent process.

“Yet the most dangerous thing is that those campaigning for emergency status are trying to institute differential tariffs and prices for energy resources. This can introduce a second weight, meaning of property. Some property will cost more and some less. Such price lists can have a strong negative effect on the economy, because some will be entitled to approve these price lists, precisely the kind of butter to top one’s bread and then spread caviar. Returning to a rigid regulation of prices with the aid of differentiated tariffs can mean only one thing: those in charge will get hold of everything. How can one combat corruption in an agency ‘entrusted’ with the regulation of tariffs? It’s the same as when setting prices at all filling stations of Ukraine by sending orders from a certain place far away. How can one stop bribe-taking and giving at this agency? Even video cameras won’t help. In that case one would have to send reinforcements to the General Prosecutor’s Office, because such price lists would mean the introduction of global corruption.”