Kuchma first became president on 10 July 1994. Friction between president and parliament has been a factor (as will be discussed below) in hindering economic reform. Kuchma has been re-elected, winning the second round of the presidential election (held on 14 November 1999) more comfortably than anticipated. His rival, Petro Simonenko (head of the Communist Party), was perceived as too inclined to state regulation of the economy and too close to Russia. Nevertheless, OSCE expressed considerable concern about the way Kuchma ran his campaign, e.g. the use of the state to manipulate the media. The general election of 29 March 1998 did not result in a sea change in the balance of forces in parliament: leftist forces remained the strongest but without a majority; a substantial centre persisted; nationalist forces, however, weakened somewhat. Parties have generally been strengthened. Kuchma hoped for a more constructive relationship with parliament and for a less geographi-cally split country.

ABSTRACT

The appointment (in December 1999) of the reformist governor of the central bank, Viktor Yushchenko, as prime minister augured well for accelerated economic reform. Even so, the central bank (at a time when he was governor) has been accused of exaggerating the size of Ukraine’s foreign reserves and thus misleading the IMF. The IMF statement (14 March 2000):

It appears that a number of transactions in 1996-8 gave the impression that Ukraine’s reserves were larger than was actually the case. The view of the IMF staff is that Ukraine appears to have received disbursements from the IMF on three occasions in late 1997 and early 1998 that it would not have done if the true state of Ukraine’s reserves had been known at the time.