Ukrainian President Ousts Reformist Economy Chief

In a move that bodes ill for his country’s reforms, Ukrainian President Leonid Kravchuk dumped his radical-minded economics minister over the weekend and replaced him with a former Communist Party official.

Kravchuk justified the dismissal by pointing out that outgoing Economics Minister Volodymyr Lanovoi, 39, holds a leadership position in the New Ukraine political movement, which recently announced its opposition to the government.

“It is nonsense when a person has a position in the government and criticizes the government,” Kravchuk said on television.

The falling-out between Kravchuk and Lanovoi typifies the political squabbles that have kept Ukraine, a former Soviet republic of 52 million people, from pushing forward with its plans to shift from a Communist economy to market-driven capitalism in a program similar to the one Russia began six months ago.

It also appeared to jeopardize Ukraine’s bid for funding from the Western institutions that Lanovoi has been personally courting. It was Lanovoi’s plan that the International Monetary Fund had examined and tentatively approved, and he had also held negotiations with the World Bank.

Although Lanovoi’s reforms found favor in the West, they ran into concerted opposition from Ukrainian conservatives. Kravchuk himself, a former Communist apparatchik, seemed unable to steel himself to face down the hard-liners and launch Lanovoi’s program with full force.

Lanovoi argued Sunday that his movement, New Ukraine, “stands for economic reform. If the president also stands for economic reform, where’s the logic?”

“If he removes the person who is the leader of the economic reform movement, this means he probably isn’t very much for economic reform,” Lanovoi said of Kravchuk.

Valentin Simonenko, named by Kravchuk to replace Lanovoi, is known to have fostered entrepreneurship in Odessa, the Black Sea city where he was mayor for eight years, but he lacks serious credentials in radical economic reform.

Ukrainian journalists speculated that Kravchuk appointed Simonenko because he wanted a man whose background and thinking were similar to his own. Simonenko, like Kravchuk, served the Communist Party for years and then turned strident nationalist as the party failed.

Simonenko is likely to prove more flexible than Lanovoi, who had complained loudly that he was not being allowed to put his reform program into effect.

Special correspondent Alex Shprintsen, in Kiev, contributed to this story.