Yuschenko's Cabinet and reforms in Ukrainian coal mining sector

Abstract

In 1999, when Yuschenko's government began its term of office, the coal mining sector was badly in need of reform. His government had to tackle not only problems inherited from previous regimes, but also to introduce its own new system of reforms. For various reasons, the finances of the industry were in chaos, mines and equipment were operationally inefficient, and geographical conditions were worsening. Three main directions of reform were identified: administrative, financial, and managerial. The main goals of these were: to introduce new laws and instructions to change the 'rules of the game', to reach 100% cash payments for coal shipments and to set up forward looking, less complex management schemes. Although reforms were pushed through, some measures achieved only partial success and, as a result of the new policies, the Yuschenko government was brought into conflict with the aims of Donbass industrialists and political leaders whose generally antireform proposals would tend rather to further their own financial interests than benefit the national economy. Alliances of convenience may have to be formed by Yuschenko's successors, and it remains to be seen whether succeeding regimes will be able to build on the changes introduced under Yuschenko and develop and modernise the industry to create a financially viable coal mining sector.