One cannot help but rejoice for those pensioners and low-income people who, even if only once before the elections, will nonetheless receive a little extra to their meager pensions and benefits.

But the question remains open as to where, and at the expense of what (or whom) these supplements will be made, because in this year's budget they were not provided for.

According to official data from the State Treasury of Ukraine, as of September 1, revenues in the amount of UAH 42,542 million were received into the State Budget of Ukraine. This sum already includes funds from the latest large privatizations that came in August. But, considering that the 2004 budget amounts to UAH 65.2 billion, then over eight months, as of September 1, revenues in the amount of UAH 43,464 million should have been received into it (65.2 : 12 x 8 = 43.464), but, I remind you, only UAH 42,542 million was received. Thus, even including privatization funds, the State Budget, as of today, is already short of revenues by UAH 922 million (43.464 – 42.542 = 922), that is, by almost UAH 1 billion — and this is with "unprecedented GDP growth," which significantly exceeds the indicators planned for this year.

So where is Yanukovych's government to get the money to finance its pre-election promises, if even the revenue part of the budget is not being fulfilled, in which these supplements were not provided for at all?

The managers of state finances found a very simple answer: there are no funds from State Budget revenues — we will take them at the expense of its expenditures. And if that is not enough — we will borrow.

So, here is the story of the "deriban" [giveaway] regarding the payment of pre-election supplements to pensions and benefits, or the true sources of the "government's care for its citizens":

Source 1. The State Treasury registered, for January-August 2004, refusals by the central budget to pay the accounts of local budgets totaling UAH 540 million — that is, the central budget refused to pay local budgets this amount on their accounts — this is the government's real "care" for the development of the regions and local self-government.

Source 2. This year's arrears on VAT reimbursement, as of today, amount to about UAH 300 million — and several times more in VAT debts the Tax Administration forced enterprises to write off.

Source 3. Wage arrears, at working and closed enterprises, as of September 1, amount to UAH 1.5 billion — including almost half of the wage debts falling on two oblasts: Donetsk (30% of the debt) and Luhansk (15% of the debt).

Source 4. During January-August 2004, the amount of Ukraine's state debt increased by UAH 5.43 billion — through the issuance of 2004 external state loan bonds (UAH 2.43 billion), through the attraction of external credit resources (UAH 2 billion), and additional internal borrowings from the issuance of internal state loan bonds (UAH 1 billion).

Thus, over eight months of the current year, the Government did not repay old debts in the amount of UAH 1.8 billion (UAH 1.5 billion + UAH 300 million), and accumulated new debts in the amount of UAH 6 billion (UAH 5.43 billion + UAH 540 million).

Conclusion: not receiving sufficient funds in State Budget revenues, V. Yanukovych's Government is paying the pre-election promises of presidential candidate V. Yanukovych, evidently, at the expense of debts: to its own citizens — on wages, to its own enterprises — on VAT reimbursement, to local budgets, and from new external debts and internal borrowings.

The pre-election supplements to pensions and benefits will be paid, and the debts will remain. It is interesting who will repay them, and out of whose pockets?

Finally: recently the country's chief Financier, Mr. Azarov, at a meeting with journalists uttered words sweet to the ears of voters, that "... we have settled all our obligations, ... has anyone ever done such a thing before?" So then, taking into account the above, to the nearest tenth of a hryvnia, I report that according to the latest official data of the Ministry of Finance of Ukraine headed by Mr. Azarov, as of August 31, 2004, Ukraine's state debt amounts to UAH 82,964,107.45 thousand, including state external debt — UAH 61,450,512.63 thousand, state internal debt — UAH 21,513,594.82 thousand.

That is, Ukraine's state debt, today, amounts to almost UAH 83 billion. Considering that the State Budget of Ukraine for 2004 has a size of UAH 65.2 billion, we have an objective statement of the absolute unprofessionalism of the Ukrainian government in conducting economic policy and its complete irresponsibility before future generations of Ukrainians.

Andriy Novak, Candidate of Economic Sciences