Kravchuk sacks his pro-market economic aide

UKRAINE TOOK what appears to be a step backwards in its economic reform programme at the weekend when President Leonid Kravchuk fired his pro-market chief economic adviser and replaced him with a former career Communist official. Mr Kravchuk, once a party boss, was apparently bowing to increasing pressure from conservatives in the government, which is largely made up of former Communists.

The sacked economist, Vladimir Lanovoy, held the posts of deputy prime minister and economy minister. He is one of the most Western-oriented of the former Soviet republic's senior politicians and his programme of reforms had been approved by the International Monetary Fund. However, many conservatives in the Ukrainian government were reluctant to move as fast as Mr Lanovoy would have liked, and Ukraine was falling well behind Russia in its reforms.

Yesterday Mr Lanovoy accused Mr Kravchuk of not being committed to market reforms. 'The President apparently doesn't think that purely market reforms can lead the country out of the crisis,' he said. 'I think he prefers administrative measures.'

The reason given by Mr Kravchuk for the sacking was that Mr Lanovoy had joined a political movement called New Ukraine, made up of liberal politicians and businessmen that two weeks ago came out in opposition to the government. But Mr Lanovoy said the real reason was that New Ukraine supports economic reforms and Mr Kravchuk does not. 'If President Kravchuk supports economic reforms, it is illogical that he should sack me,' he said. 'I think it just means that he doesn't seek these reforms.'

Mr Lanovoy, 40, belongs to the new generation of pro-market economists and, like Russia's chief economics minister, Yegor Gaidar, 36, is a symbol of the transition to a free-market economy. Mr Lanovoy was about to steer Ukraine through a vital stage of its reforms, including rapid privatisation and new links with foreign investors. He said his removal would play into the hands of former Communists in the Ukrainian parliament, who have formed an alliance with radical nationalists.

'I have to a large extent become inconvenient to the system which still runs the economy,' he said. 'Now another man will come in and will act as he is told.' He said he now understood that he was taken into Mr Kravchuk's the cabinet four months ago 'to serve as a cover, to create an impression that renovation was under way. In fact, it was only an imitation of reforms.'

Mr Kravchuk has named Valentin Simonenko to succeed Mr Lanovoy. Alexander Moroz, the leader of the Ukrainian Socialist Party (the former Communist Party) said that Mr Kravchuk was replacing a theoretician with a practical worker and was strengthening executive power.

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