INTRODUCTION

From the time of its independence on 24 August 1991, until at least the autumn of 1994, Ukraine was generally counted among the slowest reformers in the postcommunist group of countries (EBRD 1994, IMF 1995a). The presidential election victory of Leonid Kuchma over Leonid Kravchuk in July 1994 brought about a change in the priority accorded to economic reforms, and we see since October 1994 a comprehensive set of significant measures for stabilization and structural reforms. For outside observers, the dye marker identifying this sea change was the 31 October 1994 approval of the first IMF loan to Ukraine, a $375 million first-tranche of the systemic transformation facility (STF).

While the change in direction is clear, too little time has passed for a meaningful assessment of results. This essay therefore focuses primarily on the first three years under Kravchuk, and an analysis of why reform was delayed so long. In the analysis, I will also attempt to indicate how the delays in reform made the subsequent reform efforts more difficult. In place of a conclusion, I provide a tentative assessment of Kuchma's reform efforts.

One can identify three principal hypotheses explaining the delay of reforms in Ukraine:

1. intellectual debates about economic transition and the speed of reform;

2. the priority of nation-building tasks such as establishment of legal, political, military, and social institutions;