Yevgeny Shevchuk: "Economic prosperity key to future recognition of Pridnestrovie"

Yevgeny Shevchuk, 39, is Speaker of PMR's Parliament and leader of the country's largest opposition party "Renewal"

TIRASPOL (Tiraspol Times) - Having just turned 39, the Speaker of Pridnestrovie's Parliament Yevgeny Shevchuk spoke to the press about the economic problems facing the government of the small and unrecognized country of just over 500,000 people. In his interview, he took a snipe at communism and communist ideology and instead spoke in favor of private property rights and privatizations. He also complained about the low attendance of certain members of parliament, in particular singling out Oleg Smirnov, the son of Pridnestrovian president Igor Smirnov. First and foremost on Shevchuk's mind: The need for a strong economy which, he says, will pave the way for Pridnestrovie's recognition as an independent and sovereign state.

Parliament passed a resolution under which the government should develop a program to improve the economic situation. Will Parliament participate?

" - It goes without saying that all government agencies must implement a uniform state policy though performing their own functions. According to the practice in other states, it’s traditional that executive government develops economic or particular branch development programs. There are certain strategiс programs, for instance in Russia, that result in a double increase in GDP, etc. We believe that Pridnestrovie’s legislation should be innovated as well and Parliament is currently working on some of these things: to insert a provision that the principal officer of the executive agency addresses a message, for instance, on economic guidelines for a particular period of time into the Constitution or any other legislative act.

This message relates not only to economic issues but highlights political issues. Dwelling on economic issues, we believe that we need such a document that all the government agencies would follow and make efforts to achieve the results mentioned in it during a particular period of time.

We currently have no detailed scheme for how to achieve our goals with regard to macroeconomic indicators, how to raise GDP and living standards. We need coordinated actions to be taken by all government agencies. Normally in other countries it is the executive branch of government which takes such measures since they have cull information about economic actors, the situation on the market, the foreign market environment. Then on the basis of the analysis the proposals on economic development should be put forward to satisfy the needs of the state and to determine strategically important areas that are potentially highly profitable and will lay a foundation for our budget in 3-5 years. We should formulate such a strategy, too.

Of course, I realize that it will be hard to implement here in Pridnestrovie for our foreign trade is always affected by the situation on the Pridnestrovian-Ukrainian and Pridnestrovian-Moldavian border and those negative decisions that our partners often take. I think we’ll be unable to solve current problems without such a systematic approach. We are in critical economic situation with a considerable budget deficit of the off-budget funds. There are a number of objective and subjective reasons. We know and suppose that there will be budget shortfall for the coming year and of the off-budget funds according to the 2008 tax and budget policy, which was laid before Parliament. we’d like the September discussion to grow into a constructive dialogue and development of the program on stabilization of the economic situation. We should set such goals that we’ll have to achieve and all government agencies must put their efforts into implementation of the plan.

Secondly, we are likely to amend the legislation that determines the procedure for presenting guidelines. I understand that all people of PMR have concerns about the situation with the budget revenue in the coming year. But I again emphasize that the situation is under control. Both executive and legislative government is trying to solve it. I’d like to note that there was 25% increase in tax rates with the aim to stabilize the budget. But it is not enough. Our liabilities exceed our budget means greatly. Though we again have tax increase proposals, the tax burden on some companies is steadily approaching critical points. So we can’t change the situation only through rise in taxes or imposition of new taxes. We need a program offering more financial opportunities but not more tax burden. Our main concern is also a decrease in investments into capital funds of Pridnestrovie that entail less attractiveness of Pridnestrovie for investors, less control over implementation of investment liabilities. We can’t expect more tax receipts to the budget if there’s no increase in investments. I hope we’ll find opportunities to raise pensions to index them in line with inflation, though I can’t promise a considerable increase for the lack of funds. On 5 September 2007 we’ll first of all discuss tax legislation and then we plan to give a second reading by mid-September to have a clear view of the consolidated budget and the off-budget funds."

Won’t Parliament’s resolution on use of gas money affect relations between Russia and Pridnestrovie?

" - First of all, let me clarify that Parliament didn't pass a resolution but a draft law which was initiated by the President and which dealt with amendments to the current 2007 Republican budget law. These amendments enabled a loan of 120 million PMR Rubles to cover our liabilities regarding off-budget funds, in particular the pension fund, and to pay social benefits. This is social funding. Both Parliament and the executive branch of government are in a difficult situation, and everybody understands perfectly well that the fate of pensioners hang in the balance. It’s the first time that we decided at the legislative level to take such a loan.

Secondly, we haven't got the means to pay social benefits from the republican budget. In the Pridnestrovian Moldavian Republic, all our actions were done on behalf of the pensioners and to ensure that our old people would be paid on time. I am aware that this doesn't make us look good to Gazprom because the money for gas will not be sent to Russia as planned. There were two ways to solve this problem and we decided to choose the only one which allows us to pay social benefits to our pensioners. Our aim was to provide a pension to each recipient on time.

This decision is inconsistent with economic logic, because the gas money should go to pay for gas. But when we are faced with two decisions that are mutually exclusive, and we weigh them against each other, then we should pick the one which provides social benefits to our own people.

Now, it will be necessary to develop normal economic relations with Gazprom and settle the debt, and try not to repeat such situations. We should make every effort to prevent such a situation in future. Our immediate task before us is to explain the reason for our decision to our Russian partners. We rely on their understanding and support at this issue.

When emergency legislation is under debate in Parliament, there’s no time to coordinate actions. The pension fund is financed on a rotating basis. Even with its faults, we’ve made the right decision. As for further actions, in accordance with Parliament’s resolution the President was recommended to send an official delegation of Pridnestrovie to Russia to meet the relevant government agencies and chief executive officers of Gazprom to find a mutually acceptable solution. I hope the solution will be found."

There are 10 parties per 530, 000 people in Pridnestrovie. Do you have options to promote democracy and take local peculiarities into account?

" - Firstly, the number of parties is determined by the wish of people to join into public associations and we may not put obstacles to their wish. As for a great or small number of parties, it’s up to people to decide. Secondly, speaking of parties’ participation in activities of government agencies, there are various mechanisms of influence, restrictions, etc. As you know, small parties may not win seats in legislatures due to a high percentage required to win a seat in Parliament. In my opinion, it’s rather positive that people are united, we can contact them and have a dialogue with members of political parties, they may raise their concerns and make their voice heard. We passed Counter- Extremism and Counter-Terrorism laws; it means that parties may be closed if they take actions banned by law. on one hand, the number of parties is growing but the state control is also toughening to prevent any split in society as to ethnic, social or other features and dissemination of ideas that could cause instability in our common home – Pridnestrovie."

Does Parliament develop any legislation to bring Pridnestrovians to their native land?

" - As for the position of Parliament on the return of people to Pridnestrovie I think any state wish its citizens to live in their native country, to enjoy prosperity, stability and well-being. Our state is not an exception and I share your concern. In my opinion, the return of people and a decrease in migrants from PMR is an economic problem, it relates to the budget of each family as well as political instability – the problems arisen due to the lack of international recognition of Pridnestrovie, the lack of passports valid beyond Pridnestrovie, education and treatment. If we manage to raise these economic indicators and incomes by 70-80 percent, then the people stop leaving the country. The question is how to reach such results. Here we again advert to our first question – there’s a need for a detailed scheme and the government must say in details what measures they are going to take to improve the situation. There’s a great staff shortage in PMR, people are leaving the state, and the number of PMR population reached the 1924 level when PMR was in fact created. It’s an issue of paramount importance. For the last 7 years there has been no government program that will clearly state where to go, what to achieve."

Will privatization bring PMR's economy into a deadlock?

" - We often make statements that privatization was often not successful, but I won’t say that it was a failure, for there are successfully-privatized companies, though they are not so great in number as they’d like them to be. Unfortunately, lots of new owners do not invest money into production development. According to the information available to us a number of enterprises are standing idle, the equipment is brought out, staff is fired, contract terms are not observed… Several years ago we initiated a bill that later was signed into law that prescribes procedures for returning companies into public or municipal ownership. It is not re-privatization. The key aim of privatization was to develop production, to create jobs, to attract investments and introduce innovative technologies, but we see no good results at some enterprises. I believe we should toughen control over new owners. Before privatization state-owned companies showed no progress as well. The situation was the same and there was a need to make decisions. I was a member of the 3rd elected Parliament and I remember the situation when in 2001-2002 there was a budget shortfall and a sharp need to raise salaries of the budget-sector workers and pensions. We also had to make an emergency decision to re-allocate part of the revenue to the republican budget and off-budget funds. Unfortunately there was no progress, for no reforms were launched when we had extra money and we were back to the point when we had to make a decision beneficial for both people and economic progress of Pridnestrovie. today’s decisions due to be taken are more complicated compared to 2001. I hope we’ll find solutions. We expect serious discussions; I hope they will be constructive. If the solution is not found negative processed will become more active that is not good for all government agencies."

It’s clear that this year harvest won’t be good. Does the Government intend to restrict export or offer relief for grain importers, since it may result in high prices?

" - I understand people’s concern about the situation in agriculture and first of all the weather that resulted in sharp decrease in the yield. We addressed the appropriate letter to the President to urge the executive government in charge of the food security of the state to examine carefully all the arguments in view of weather conditions. We were notified that there’s enough amount of grain to manufacture bread this year, though the rise in prices for grain is still possible. We know that the decision to restrict export has been approved in Ukraine and is drafted in Moldova. Restrictions are not aimed at obliging a manufacturer to fox a price profitable for the state. Restrictions are related to the control over foreign trade contracts. I’d warn government agencies not to impose restrictions that will make agrarians to sell grain under cost. It won’t be economically wise to take such steps. In these circumstances we should stabilize prices for bread. Lots of mechanisms are available; Parliament proposes one of them – not to raise tax rates for bread-bakers and to power plants. We’ll see the outcome when the 2008 republican budget law will be laid before Parliament. The President’s Decree on maximum prices and tariffs for the following financial year will be enclosed with it. Parliament and all government agencies understand that bread is an important product for pensioners and budget sector workers so we must not allow a considerable fluctuation of prices."

What are the plans of the Renewal party with regards to Pridnestrovie’s course expressed by people at the referendum?

" - As a party leader I’d like to say that all fundamental party documents and programs are first of all based on ideology and people’s aspirations. The citizens who participated in the referendum are the citizens who voted for members of Parliament and delegated them to Parliament. There are over 20 members of the Renewal party in Parliament, these are our citizens and their wish, views and aspirations are a law to us. If the decision was taken at the referendum, it’s a decision of the Renewal party ("Obnovlenie") as well. As for the communist ideology, I want to say that I don't support it, due to several reasons. I want to remind that incitement of social hatred is prohibited by law in PMR. So the term “bourgeois” may be regarded by law-enforcement agencies as a breach of law. It doesn’t mean to restrict anybody but to avoid the principle: let’s first destroy everything and then let’s build it again, these are good but those are bad. I believe that PMR is able to launch reforms and to create a favorable environment for changes. In my opinion, our state has not entered the stage of stable development. Non-recognition entails a range of problems and internal and external factors have a great impact on our people. The creation of stable climate in society, the friendly atmosphere of cooperation and mutual understanding is of great importance to us. It should become a basis for decision-making how to overcome the crisis together and raise incomes of people. There’s no state, no perfect public and state system in the world. But everybody is looking for a formula of prosperity for their people. We witness Russia aiming at raising living standards of its citizens. We wish them to achieve their goal as soon as possible. Other states such Sweden, Norway have already reached high living standards. They went through certain stages to achieve success. The economy of most of highly developed states is based on several elements such as large corporations, firms, organizations having overseas branch offices. States promote their national business abroad to increase the national income.

I don’t say that there should be no public property, I think they should compete. But the state-owned companies may not give a boost to the economy. I think we can’t treat people and judge the contribution of people and organizations by their social status. There are rich people who work here and then take everything out of Pridnestrovie, but there are also rich people who maintain kindergartens here. I believe that we should create favorable environment for both business and state. We should encourage companies that offer jobs and invest money in Pridnestrovie’s economy, participates in social programs. I’ve already mentioned low attractiveness of Pridnestrovie for investors. We need funds to launch new production, to extend it and the state is unable to do it. Let me remind that before 2003 the state invested considerable sums of money into the economy. 200 million rubles were earmarked for agriculture. But what is the result? Most of agricultural companies went bankrupt. We allocated money but didn’t change the system of organization and management. The stronger Pridnestrovie’s economy is, the harder it is to put obstacles to state building. Now the problem of Pridnestrovie’s state status and its stable development depends on its recognition. If we can boost the economy and prosperity, then that will be a key to the future recognition of Pridnestrovie."

Does the Standing Orders of Parliament stipulate any punishment for low attendance of MPs?

" - Unfortunately, legislation stipulates no penalty. Parliament is now empowered to take radical actions and we are seeking a solution. I think it is not normal when citizens of PMR delegate their representative to give consideration to important bills. When the representative doesn’t attend the meeting of Parliament or the Committee, the people are not represented there. We consider an opportunity to empower Parliament at the legislative level to bring such persons to account up to disqualification of a Member of Parliament if he/she doesn’t attend Parliament’s or Committee meetings. Citizens pay taxes, they in fact maintain Parliament and members of Parliament and they expect an appropriate efficiency from parliamentarians. But I’d like to note that the attendance of 4th-elected Parliament is higher as compared to the 3rd-elected Parliament. 34-35 members of Parliament attend all the meetings, 40 members of Parliament were present at the last meeting of the spring-summer session. They held half as much meetings but they considered twice as much resolutions and laws. The efficiency of work has increased we’d like to improve the quality of work over bills. There’s a majority faction in Parliament that make a great contribution to decision-making. Members of the faction exchange their views outside Parliament as well, it allow to make work more efficient. As for members of Parliament who seldom attend the meetings. MP Oleg Smirnov still shows lowest attendance for either objective or subjective reasons. The non-attendance of the 80% of Parliament’s and Committee meetings is not normal; I don’t think people support it. I want to express thanks to members of Parliament, official representatives for the President who participate in lawmaking, to local legislatures and the media who reported on parliamentary business.

I’m pleased to see that more information about Parliamentary activities is available. It’s of importance as we want to have feedback from citizens of PMR. I’m pleased to hear that you read the parliamentary newspaper Sovety Naroda ("People’s Advice").

As for the work program for the coming year, of course, we have it approved. We’ll focus on the tax and budget policy, tax legislation, formation of the republican budget and the off-budget funds, agriculture, development of a complex program on economic development of Pridnestrovie. I hope we jointly with all government branches will find an optimal solution.

I do want to thank members of Parliament for their work; we've made decisions on most of the matters that were under consideration. It shows that problems are efficiently settled at the legislative level. We’ve given consideration to over 300 legislative acts, resolutions and laws. Parliament passed a number of long-awaited laws such as the Notary law, a number of laws aimed at public safety such as Counter-Extremism and Counter-Terrorism laws. We’d like to give law-enforcement powers at the legislative level to combat and prevent it. We passed the law to streamline the registration procedure for members of rural communities. Lots of citizens petitioned Parliament about a complicated procedure for title registration. I hope the law will resolve the problem of rural people."

See also:
» Yevgeny Shevchuk: "We will work for more and more democratization"
» Yevgeny Shevchuk: "We should be ready for the worst"
» Yevgeny Shevchuk: "This situation doesn't help constructive dialogue and a search for solutions"
» Yevgeny Shevchuk: "Democracy means respecting the majority will of the people"