Ukraine faces a "fight for the middle class," President Viktor Yushchenko said Monday, warning that the government was not spending enough to support small and medium-sized businesses, BusinessWeek reports.

"If Ukraine goes down the road of monopolies, of concentrating key enterprises in the hands of one person or another, then we may become a nation of oligarchs, but we will never become a nation of the middle class," Yushchenko told a meeting of business and industry officials.

He said the government needs to develop dozens of national programs to help spur smaller businesses and create new jobs.

The president called the 1.8 billion hryvna (euro357,000, euro272,000) that Prime Minister Viktor Yanukovych's government has allotted to develop small and medium business far too little, "barely enough to hold two or three conferences."

Ukraine has a handful of very well-connected tycoons who control key industries and routinely mix business with politics in the ex-Soviet republic.

Yushchenko said he was asking the government to take a cautious approach in restoring the free economic zones that offer benefits to businesses based in certain geographic zones. Yanukovych's predecessor, Yulia Tymoshenko, had canceled the free economic zones, calling them black holes in the state budget. But Yanukovych now wants them restored, saying they are needed to improve the economy.

"I will always be against restoring to one businessman benefits that are undeserved, that come at the expense of the work of others," Yushchenko said.


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