Tymoshenko Vows Softer Approach To Business

KIEV, Ukraine -- Yulia Tymoshenko, former Ukrainian prime minister, promised a business-friendly agenda yesterday if she succeeded in forming a ruling coalition, following her bloc's strong second-place showing in Sunday's parliamentary elections.

Yulia Tymoshenko
Ms Tymoshenko said she would radically lower corporate tax rates to encourage investment.

"A few points won't make a difference. Only a radical lowering of tax rates will bring business out of the shadows," she said.

She also sought to dispel anxiety among investors that she might againchallenge the legality of privatisations by the pro-Moscow administration before the 2004 Orange revolution brought President Viktor Yushchenko to power.

Investors were dismayed last year when Ms Tymoshenko, who served as Mr Yushchenko's prime minister until she was sacked in September, pursued populist economic policies including attempts to reallocate privatised assets and attacks on business oligarchs.

Ms Tymoshenko's latest promises will not in themselves assuage businesspeople's concerns. Thereis considerable worry in Kiev about how she can reconcile her business-friendly remarks with campaign promises to boost social spending and attacks on big business.

Ms Tymoshenko said the government should not try to reverse privatisations. "My name was absolutely artificially connected with reprivatisation in order to discredit me," she said.

"The main task to bring foreign investment is to make all business equal before the law and no business more equal [than others]."

Ms Tymoshenko was speaking as the last votes were counted in an election in which her bloc emerged as the largest of the three pro-west "Orange" parties, ahead of Mr Yushchenko's Our Ukraine and the much smaller Socialist grouping.

Together, the three parties will take about 54 per cent of parliament's seats, ahead of Viktor Yanukovich, the former pro-Russia prime minister, whose Regions party will have about 41 per cent.

Mr Yushchenko, who has hinted he could try to block Ms Tymoshenko's return, has little room to manoeuvre and is playing for time. His statement that he wanted simultaneous talks with Ms Tymoshenko and Mr Yanukovich drew fire yesterday from the Socialists and from Our Ukraine leaders.

Alexander Valchyshen, head of research at ING Bank's branch in Ukraine, said Kiev's financial community was heatedly debating the pros and cons ofMs Tymoshenko's likely return.

He said the pros included her success in fighting tax evasion and closing loopholes, while the cons included the uncertainty that was created by the challenges to past privatisations, sudden changes to tax rules she pushed through at the beginning of her term and the overall higher taxpressure.

"The widespread view of economists is that her pol-icies decreased business confidence and slowed investment," Mr Valchyshen said.

Source: Financial Times