Ukraine's industrial and financial spheres are currently in a state of economic catastrophe, said Oleksandr Moroz, head of the Socialist Party of Ukraine, current Deputy and former Speaker of the Verkhovna Rada (Ukrainian Parliament), and a presidential candidate of Ukraine, at a Kennan Institute lecture on 27 April 1999.

According to Moroz, a very high social price has been paid by the Ukrainian population in this catastrophic situation. He cited statistics that show that of twenty-four million members of the employment-age population, only nine million are permanently working. In addition, he noted that teachers and factory workers have not been paid for up to several years. He lamented that pension arrears add up to one-half of total budget revenues, and that Ukraine's population has significantly declined due to out-migration and health factors.

Moroz, when asked, took some of the blame for this situation on himself, saying that he had foreseen the impossibility of the proposed reforms but was unable to convince others of that fact. However, he placed the majority of the blame on the legacy of the USSR and the decisions of the executive branch of government. He noted that Ukraine inherited only parts of a large economy--a situation that, in his view, led inevitably to a certain level of economic degradation. However, he noted that the extent of the catastrophe should be attributed to the lack of a well thought through economic policy.

In order to pull out of the crisis, Moroz suggested a plan that would use Ukraine's own resources and traditions while taking into account the experiences of other countries who have gone through social and economic transformations. He recommended accenting Ukraine's ability to attract investment rather than its credit needs. In the economic sphere, Moroz sees Ukraine moving toward a market economy with government regulations that can determine the implementation of market relationships.

Regarding privatization and ownership of land, Moroz discussed the Socialist Party program, which states that all forms of ownership should be equal. He noted that legislation for privatization was passed by the Verkhovna Rada and foresees that all aspects of the process be undertaken openly and transparently. According to Moroz, the reforms being implemented by the executive branch countermand that legislation and have created an opaque process that encourages corruption.

Moroz remarked on the situation of agricultural land ownership as well, noting that laws allowing the lease of land to Ukrainian citizens and foreigners alike have been put into effect. The main problem now is to make sure that all farms, regardless of the type of ownership, can survive the current crisis. In order to facilitate their survival, Moroz explained that reducing tax pressure for farmers, regulating influences on pricing for goods according to European Union standards, and providing access to credits are crucial.

Moroz stressed that Ukraine is in a deep crisis, the population lacks money, the monetary unit is devalued, and foreign currency floats freely around the country. Under these conditions, Moroz stated that it would be a "basic crime" to make land a commodity in the same way that state property was made a commodity through privatization.

According to Moroz, Ukraine should become a democratic country with a multi-party system and full freedom of expression. He pointed to the need for all citizens to live in accordance to the rule of law as the most complicated problem in Ukraine today. He claimed that violations of existing legislation and the constitution--which according to Moroz are being perpetrated by the president of Ukraine and his administration--stimulate the phenomenon of corruption in Ukraine.

Moroz also directed several comments toward issues of Ukraine's foreign policy. His analysis of the geopolitical situation in the region led him to conclude that Ukraine must be a "strong, modern, independent state." He stressed that Ukraine therefore should not be pushing to move either to the east or the west, but simply to move "up" and out of the crisis situation.

Ukraine should continue to work with NATO within the confines of the Partnership for Peace program, said Moroz. He noted, however, that NATO must transform itself in the future, and should not be seen as a replacement for the United Nations.

Moroz advocated holding a European conference on the topic of security and cooperation which could establish mechanisms to address conflicts such as those in Yugoslavia. He noted that plans had been made to hold the first of these conferences in Kyiv in March 1998, but were canceled by the Kuchma administration. Moroz claims that the cancellation was due to the conference's proximity to parliamentary elections and concerns that opposition parties would gain too much publicity in Ukraine were it to take place.

As to relations with Russia and questions of a Slavic union, Moroz stated that Ukraine and Russia are and should be the closest of neighbors, and that it is their fate to live as brothers. He stressed that in doing so it must be made clear that Ukraine not lose "one single gram of sovereignty."