Economic Reformer Quits Ukraine Cabinet on TV

Deputy Prime Minister Viktor Pynzenyk, the leading market-oriented official in Ukraine’s government, resigned Friday night on live television, saying his reform policies were being sabotaged in the Cabinet.

“I have no choice; the situation is critical,” the deputy prime minister said. “My possibilities for influencing government decisions are exhausted.”

Pynzenyk’s resignation during a TV interview came in the thick of a wearying parliamentary debate on Ukraine’s future, and deprived the Cabinet of Prime Minister Leonid Kuchma of its most outspoken advocate for the implementation of economic change.

Once again, free market forces seemed to suffer a major setback in this nation that has trailed far behind Russia in sloughing off state socialism. As Ukraine held muted ceremonies this week to celebrate the second anniversary of its declaration of independence, inflation was running at 40% a month--twice Russia’s rate.

Pynzenyk said he quit because he had not been informed of the government’s recent decision to increase the price it pays farmers for grain. That cost will raise the retail price of bread from 150 to 1,000 karbovantsi (or about 8 cents) per loaf.

It was that decision, he said, that prompted the Parliament on Friday to nearly double the monthly minimum wage, to the equivalent of $2.35. He predicted this would lead to general price increases within two or three months.

“I can’t tolerate people pointing their fingers at me and accusing me of decisions leading to price increases when I had no part in those decisions,” Pynzenyk said.

His disagreements with other government leaders, however, were much more general. Pynzenyk had been pushing for tighter controls on subsidies to agriculture and industry and a general limit on government spending so Ukraine, like Russia, could conclude an agreement with the International Monetary Fund that would open the gates to more Western aid.