1_January 6, 2002 - The Ukrainian Weekly

More documents

Recommendations

Info

6 THE UKRAINIAN WEEKLY SUNDAY, JANUARY 6, 2002 No. 1 Ukraine 10 years on: a social and economic review by Dr. David R. Marples In December 1991, over 90 percent of Ukraine’s residents ratified the declaration of independence in a national referendum. The new state was widely regarded as a potential economic giant. The second largest nation in Europe in terms of area, it possessed a population of 52.5 million, significant agricultural and industrial resources, and a highly educated workforce. What followed was unforeseen: a spectacular decline in the standard of living, accompanied by several disturbing demographic changes. In retrospect, Ukraine’s position was never as good as it seemed. It was complicated by several issues: relations with foreign powers and reliance on them for energy requirements, especially Russia; and the need to focus on security issues, to define borders with neighbors, and to construct the infrastructure of the new state from the ruins of the Communist one. Agriculture, the mainstay of the Ukrainian SSR was already producing less than Ukraine’s proportion of the Soviet Union. The coal and steel industries had been declining for a decade. There was also a fear among political sectors of embarking too quickly on a program of radical economic reform, and perhaps above all the country was markedly regionalized, though this latter factor became more evident only in subsequent election campaigns and political events. This brief paper will address the various sectors of Ukraine’s social and economic life to analyze the situation after the first decade of independence. As a prequel, one might note that the retention and consolidation of independence are in themselves significant achievements. However, the success of the transition ultimately will be measured by factors such as living standards and quality of life, and by the image of the state abroad. In these areas, the state of Ukraine has not lived up to the high expectations, but it should not be viewed in isolation. The changes have been equally difficult in other post-Soviet states, though it is arguable that, given Western aid, advice, advisors and general support over at least the past seven years, Ukraine’s performance should have been better. Along with Belarus, Ukraine has had to deal with a prolonged dilemma from the nuclear disaster at Chornobyl. Only in December 2000, after numerous discussions and an agreement with the G-7 plus Russia and the International Atomic Energy Agency was the nuclear plant finally closed. The repercussions on health, agriculture and the economy, however, will continue for several decades. An overview In a recent talk here at the University of Alberta, my colleague Oleksii Omelianchuk discussed the “state capture” in Ukraine by business groups or oligarchs who have succeeded in creating vast wealth as a consequence. Such affluence does not pertain to the state sector or to the population as a whole. As the decade has progressed, Ukraine’s GDP has fallen below its 1991 value by 60 percent. Only over the past two years has some slight recovery been manifest, but this improvement in GDP and industrial output David R. Marples is professor of history at the University of Alberta in Edmonton and director of the Stasiuk Program for the Study of Contemporary Ukraine at the Canadian Institute of Ukrainian Studies, which is based at that university. This paper was originally presented at a panel titled “Quo Vadis, Ukraine?” held at the University of Alberta on December 3. is not expected to endure. The IMF, for example, forecast recently that the growth rate in Ukraine would slow in the year 2002. Prime Minister Anatolii Kinakh has pointed to some serious structural defects in the way the Ukrainian economy operates, noting in particular that the bulk of exports is raw materials and products that require finishing outside the country. The banking system, according to President Leonid Kuchma, is the weakest of all the post-Soviet countries, and the lending rates are so extortionate as to preclude factories and enterprises from being bold enough to run up debts. The demographic structure of Ukraine has changed significantly over the past decade. Over 72 percent of the population of Ukraine lives in towns, while the rural population has shrunk to less than 14 million people. The population as a whole has declined more rapidly than in any other former Soviet republic as the mortality rate is now substantially higher than the birth rate. In the year 2000 the population fell below 50 million for the first time, and the total is anticipated to fall further to 48.1 million by 2015 and 45.9 million by 2025, assuming there is no significant in-migration. Infant mortality in Ukraine, i.e., the deaths per thousand of babies that die before reaching the age of 1, is around 15 – three times higher than in Canada. Life expectancy at birth, which was 65.8 for men and 74.5 for women in the last five years of Soviet rule, today is 62.7 for men and 73.5 for women (14 and eight years, respectively, less than in Canada). In June 2001, at the special session of the United Nations General Assembly dealing with HIV/AIDS, it was revealed that over 250,000 residents of Ukraine are HIV positive, and that the disease has reached the status of a national epidemic. Similar pictures emerge when examining other infectious diseases in Ukraine, and health standards in general have declined because of a shortage of funding. Figures in Russia are comparable, with the proviso that one is not comparing like with like. As a federation, Russia possesses more extremes, from poverty-stricken regions such as Daghestan and the Far North, to the affluent and booming city of Moscow. Ukraine in that respect is much more uniform, though the agricultural regions of the west appear to have suffered more from the economic downturn than the industrial areas on the left bank of the Dnipro River. The industrial workforce has been prone to protest and strike against existing conditions, particularly the delays in receiving wages. One of the more poignant experiences of the decade of independence was the sight of unpaid workers from the Chornobyl nuclear plant protesting in Kyiv. In the year 1999 there were 327 strikes in Ukraine. The two major problems of the Ukrainian economy in 2001 (aside from corruption, which merits a separate discussion) are inflation and unemployment. Last year the inflation rate in Ukraine was over 25 percent, compared to 19.2 percent in 1999. Though the figure is well below the hyperinflation that pervaded the country in the early 1990s, it is still worrisome, and is accounted for by price increases for food and fuel. Recent agreements made with Russia on long-term pay- ments for debts on imported oil and gas may help to reduce inflation in the future. State debt remains high at around 54.6 billion hrv (around $9 billion U.S.) In the year 2000, the average wage in Ukraine was around $40 per month. According to the Infocus Program on Socio-Economic Security, about 37 percent of the population were considered to be living in poverty at the end of 1999, but this figure is likely an underestimate since the national minimum wage was around 41 percent of the average wage – a sum that would be unlikely to sustain minimal subsistence levels. Unemployment officially stands at just over 12 percent of the workforce. But the real figure is also higher as numerous workers are on “administrative leave.” If one adds to the official list those who are not seeking work but are nonetheless part of the “able-bodied” population, the figure is over 26 percent. Those who do work are often not at their desks or workplaces, as absenteeism is around 20 percent. This overview of Ukrainian society and economy provides a portrait of a country in deep crisis. It is also one that is approaching a period when it may be cut off from Has the West been fair to Ukraine? Have we as Westerners expected too much too soon? Could one say that the problems that Ukraine faces today are a result more of the Soviet legacy than of its own making? trading links with neighbors such as Poland, which will become part of the European Union. Such a development will deprive Ukraine of significant border trade that provides a lifeline for many rural communities of western Ukraine. Though the EU appeared to consider associate membership for Ukraine several years ago, it has also made it plain that the present regime does not meet the rigid standards that would be acceptable to Europe. However, the gloomy perception of Ukraine by the international community may reflect, in part, the country’s inability to publicize its achievements, to “sell itself” to the West as a viable entity that still possesses the potential to develop a thriving market economy. Added to this problem is the dead weight of the legal intricacies and bureaucratic roadblocks that Western businesses face when they attempt to deal with Ukraine. President Kuchma has survived the political scandal of the death of journalist Heorhii Gongadze, but his standing could hardly be lower among those Western countries with which Ukraine wishes to deal. Therefore, the question arises: Has the West been fair to Ukraine? Have we as Westerners expected too much too soon? Could one say that the problems that Ukraine faces today are a result more of the Soviet legacy than of its own making? Ukraine’s international image One year ago, the president of the Ukrainian National Academy of Sciences, Borys Paton, published a bitter article titled “If They Had to Close Chornobyl in America,” which essentially made this same argument. Dr. Paton noted that Ukraine made two huge sacrifices, namely removing nuclear weapons from its territory voluntarily and closing the Chornobyl nuclear power station on December 15, 2000. Dr. Paton noted that, despite their enormous significance both events hardly caused a stir within Ukraine. In his view, President Kuchma deserved “at least” a Nobel Peace Prize for the decision to close Chornobyl (the role of the G- 8, EBRD, IAEA and others who pressured the president into such a decision is not mentioned in the article.) However, notes Dr. Paton, most Ukrainians care little about international prestige because they are “living in misery.” In his view, Ukrainians should project a certain image abroad, adopt certain ideas that reflect Ukrainian society and convey them to the political elite of the world. He points, in contrast, to the masterful way Russia handled the aftermath of the Kursk submarine tragedy, depicting on Russian television the images of the divers making repeated attempts to penetrate the submarine: “a devastating fiasco turned into a victory.” Why, he wonders, can Ukraine not exploit the closure of the Chornobyl plant in the same way? One answer might be that the Kuchma regime has destroyed its international credibility over the past seven years. The corruption (only Azerbaijan of the post-Soviet states is ranked as more corrupt than Ukraine according to Transparency International), the attacks on the media that include closures of anti-government newspapers and assassinations of individual journalists, as well as the general reluctance to permit large-scale private landholdings, to assist joint ventures and to undertake substantial economic reforms have all weakened that same public image. Ukraine’s Parliament has also acted as a millstone around the neck of the president, though the existence of a parliament with significant powers can be considered a democratic asset – no such Parliament exists in Belarus, and the Russian Duma is for the most part an ineffective talking shop. However, the plethora of political parties and electoral blocs only adds to the political stalemate and economic inertia. The situation has only been complicated by the events of September 11. The new relationship that Russia enjoys with NATO can only put pressure on Ukraine, with its avowed multi-vectored foreign policy that until recently was more oriented toward Europe than to the east. Russia has appointed former Prime Minister Viktor Chernomyrdin as the plenipotentiary ambassador to Ukraine, and it has declared the year 2002 to be the Year of Ukraine. There could hardly be a better indication of President Vladimir Putin’s intention to draw Ukraine more closely into the Russian orbit, but it is not a direction that the Ukrainian government has shown any inclination to follow in the recent past. Conclusion After a decade one can assert that Ukraine has succeeded in several areas: political survival, the avoidance of civil strife, the promotion of a Ukrainian linguistic and cultural presence, and the resolution of problems such as the existence of nuclear weapons on its territory and the operations of the Chornobyl plant. However, even compared to its neighbors, it would hardly merit a passing grade if the last decade were regarded as an examination process. Ukrainians have suffered an unprecedented decline in living standards over the past decade. Some of these dilemmas truly emerged from the Soviet era, such as obsolete industries in need of radical overhaul. But many of them did not, and can only be attributed to an uninspiring and often self-serving leadership that often seems to represent regional power blocs more than politicians with the interests of the country at heart. Not everyone will agree with my assessment. I have often had people say to me: Look at Kyiv, at the Mercedes and BMWs hurtling down the Kreshchatyk! Surely this is a sign that life is improving for Ukraine. Unfortunately the visible evidence of the success of new businessmen is hardly a (Continued on page 53)
No. 1 2001: THE YEAR IN REVIEW Ukraine’s foreign affairs: a sullied image’s effects For Ukraine, 2001 should have been a year dedicated, first and foremost, to celebrating as the country marked its first decade as an independent state (see separate section on the 10th anniversary celebrations). The celebratory mood was marred, however, by controversy and intrigue surrounding the disapparance of an independent journalist in September 2000 and the appearance of secret recordings that implicated the Ukrainian president and top government officials in the affair. The controversy known variously as “Gongadzegate” and “Tapegate” greatly influenced Ukraine’s foreign affairs in 2001 and affected Ukraine’s standing in the international community. The country was all but ostracized in the first half of the year. In fact, no Western leader visited Kyiv in 2001 until the last month of the year, when German Chancellor Gerhard Schroeder paid a call after the scandals had quieted and, for all practical purposes, had become dormant. Officials in Washington showed they were not going to ignore the affair in the first days of the New Year. On January 10 Steven Sestanovich, special assistant to the U.S. secretary of state with responsibility for the former Soviet states, called for “a speedy and transparent investigation” into Heorhii Gongadze’s apparent murder. But the scandal went truly international on January 25 when the Parliamentary Assembly of the Council of Europe (PACE) officially condemned the lack of freedom of expression in Ukraine and agreed to organize an independent investigation into certain aspects of the Gongadze affair. While PACE refrained from sanctioning Ukraine for its less than pristine human rights record of late, it voted to take responsibility for an independent analysis of the audiotapes allegedly recorded in the Ukrainian president’s office and to give their source political asylum. The human rights body, which consists of representatives of the parliaments of Europe, also agreed to conduct an independent DNA analysis of the body allegedly belonging to Mr. Gongadze, which was found outside Kyiv in mid-November. PACE again raised its collective voice regarding Ukraine on April 15 when it voted to recommend to its Committee of Ministers that it should suspend Ukraine’s membership. While the action was never taken, the vote came after Hanne Severinsen, a PACE member and rapporteur on Ukraine, charged Kyiv with abuse of human and civil rights. “It concerns misuse of authority, particularly oppression of freedom of speech and oppression of opposition,” Ms. Severinsen told Radio Liberty, underscoring that the president of Ukraine was specifically responsible. The next day the U.S. State Department announced that the U.S. Immigration and Naturalization Service had granted political asylum to Myroslava Gongadze, the spouse of the murdered journalist, and their 3-year-old twin daughters, along with Maj. Mykola Melnychenko, the presidential bodyguard who allegedly recorded the president’s conversations. Another international organization, the Committee to Protect Journalists, also leveled criticism, although in a different manner, when on May 3 it named President Leonid Kuchma to its list of the 10 Worst Enemies of the Press for 2001, an annual compilation of world leaders who are responsible for the worst abuses against the news media. Mr. Kuchma joined such notorious figures as Liberian President Charles Taylor, Zimbabwe’s President Robert Mugabe and Iranian Supreme Leader Ayatollah Ali Khamenei. In an example of how quickly positions change in the fragile world of international politics, by autumn the Council of Europe had begun tempering its unyielding criticism of the human rights situation in Ukraine and the way the government had mishandled the Gongadze case. On September 27 PACE issued a resolution that continued to criticize Ukraine but at the same time underscored that Ukraine was making progress in meeting human rights objectives and fulfilling promises it had made upon entering the organization in 1995. The wife of the murdered journalist appeared during one meeting of the PACE autumn session to call for an independent international investigation into the Gongadze case. The pressure applied by the international community to resolve the murder slowly dissipated, even though as THE UKRAINIAN WEEKLY SUNDAY, JANUARY 6, 2002 7 late as November 28 U.S. Ambassador Carlos Pascual claimed that in the eyes of the United States the Gongadze affair was not over and that Ukraine still had to resolve the case to clear the black mark from its record. By the time of the visit of German Chancellor Schroeder to Kyiv on December 6, those types of remarks were becoming much less strident. At a press conference at the Mariinsky Palace Mr. Schroeder’s reply to a question on Ukraine’s human rights was taciturn and even accommodating. While admitting that, “I don’t think things are altogether good,” he explained that “things have the possibility of improving.” Mr. Schroeder also let it be known that Ukraine’s international standing in the eyes of Germany was where it should be. “We not only do not have any problems in our relations, they are very good as well,” stated Mr. Schroeder as a satisfied President Kuchma looked on. While Western leaders were rare in Ukraine in 2001, Russian President Vladimir Putin was there several times. His most important appearance in the country came two days after some 5,000 demonstrators called for Mr. Kuchma’s political head in Kyiv. Then Mr. Putin flew into the southern city of Dnipropetrovsk for a previously scheduled meeting with Mr. Kuchma in what many Western media outlets called a move to prop up the faltering Kuchma administration. The two sides signed 16 assorted bilateral documents on closer economic and trade relations, the most important of which were deals on the joint development of military and space technology, including cooperation in research and development of joint missile production. The two countries also agreed to support each other in the modernization and upgrading of heavy machinery factories, many of which are directly connected to the military-industrial sector. Finally, in a controversial agreement, Ukraine decided to reconnect to Russia’s electric grid, which would give the energy-starved country access to Russian electricity generation. While expressing satisfaction with the agreements, Mr. Putin also underscored that he had not taken advantage of Mr. Kuchma’s shaky political situation in getting the accords. The day before the Dnipropetrovsk meeting he explained the situation between Moscow and Kyiv: “Leonid Kuchma is the legally elected president of Ukraine. We will cooperate with him. We are not going to suspend our cooperation, as Russia has the right to count on a certain stability in relations with its partners.” The agreements reached during the Russian president’s visit in many respects were but mere tiles in a mosaic of new cooperation between Kyiv and Moscow laid over the course of 2001 in political, military and economic relations – all part of a new foreign relations doctrine Ukraine had announced at the beginning of the year. Minister of Foreign Affairs Anatolii Zlenko officially presented the new approach in a major policy address on February 4. He said Ukraine was moving into a more mature stage of its diplomatic relations and would place an accent on developing its “European characteristics” and promulgating the country’s economic interests in its diplomatic efforts as “ambassadors of Ukrainian business.” He acknowledged, however, that a new pragmatic chapter in relations with Russia had opened and that bilateral cooperation had taken on a “realistic and practical meaning.” He underscored that a policy of close-knit relations with Russia was not mutually exclusive with Ukraine’s new pro-European policy. On January 18-20 high-ranking defense officials of both countries met in Kyiv and presented one aspect of the new attitude when they put aside what had been undercurrents of competitiveness and mistrust to sign a 52-point agreement on cooperation in the next year, including an increase in cooperation in the Black Sea region and in technology modernization. The agreement produced all sorts of international and domestic concerns – not the least of which was a fear by the West that the two countries would now pool their resources in new weapons production. The military accord raised the hairs of Western leaders when Ukraine’s Minister of Defense Oleksander Kuzmuk told reporters that the agreement would not only mark the beginning of closer cooperation between the two military forces, but also between the military-industrial establishments of the two countries in “the creation of new sorts of arms and production.” A Ukrainian Ministry of Defense spokesman tempered those remarks a few days later when he said the cooperation initially would be only in the realm of technology modernization. The two sides also agreed on a controversial joint naval force in Sevastopol, which would have responsibility for navigational command-control over sea traffic into and out of the port of Sevastopol and would oversee search and rescue operations in the area. Some Ukrainian politicians thought the agreement ceded too much control over Sevastopol’s waters to Russia’s Black Sea Fleet. And yet another point of concern arose when The Financial Times reported that Kyiv had given Moscow veto rights over international military exercises on Ukraine’s territory. A Ukrainian military official refuted that assertion, while giving assurances that Ukraine discusses the details of international military exercises on its territory, including U.S.-sponsored Peace Shield and Sea Breeze maneuvers, only with the countries involved. Ukraine-Russia economic relations attained a new level of visibility on May 10 when President Putin announced that he had named former Prime Minister Viktor Chernomyrdin, one of the most powerful figures in Russian politics and business over the past decade, as the new ambassador to Ukraine and his special envoy on economic and trade relations. In announcing the move, President Putin said: “We would have difficulty finding a person who better knows AP/Valery Soloviev Ukraine’s celebrations of its 10th anniversary of independence attracted several leaders of neighboring states. Seen during the gala concert at the Ukraina Palace on August 23 (from right) are: Macedonian President Boris Trajkovski, Ukrainian Prime Minister Anatolii Kinakh, Polish President Aleksander Kwasniewski, Verkhovna Rada Chairman Ivan Pliusch, Russian President Vladimir Putin, Liudmyla Kuchma and Ukrainian President Leonid Kuchma.
Page 1 and 2: INSIDE: • “2001: THE YEAR IN RE
Page 3 and 4: No. 1 Losten says U.S. contribution
Page 5: No. 1 NEWS AND VIEWS International
Page 9 and 10: No. 1 2001: THE YEAR IN REVIEW to r
Page 11 and 12: No. 1 2001: THE YEAR IN REVIEW The
Page 13 and 14: No. 1 2001: THE YEAR IN REVIEW land
Page 15 and 16: No. 1 2001: THE YEAR IN REVIEW the
Page 17 and 18: No. 1 2001: THE YEAR IN REVIEW THE
Page 19 and 20: No. 1 2001: THE YEAR IN REVIEW trat
Page 21 and 22: No. 1 2001: THE YEAR IN REVIEW Ukra
Page 23 and 24: No. 1 2001: THE YEAR IN REVIEW Anat
Page 25 and 26: No. 1 2001: THE YEAR IN REVIEW by h
Page 27 and 28: No. 1 2001: THE YEAR IN REVIEW achi
Page 29 and 30: No. 1 2001: THE YEAR IN REVIEW Demo
Page 31 and 32: No. 1 2001: THE YEAR IN REVIEW inve
Page 33 and 34: No. 1 2001: THE YEAR IN REVIEW acce
Page 35 and 36: No. 1 2001: THE YEAR IN REVIEW Ukra
Page 37 and 38: No. 1 2001: THE YEAR IN REVIEW •
Page 39 and 40: No. 1 2001: THE YEAR IN REVIEW Cana
Page 41 and 42: No. 1 2001: THE YEAR IN REVIEW iors
Page 43 and 44: No. 1 2001: THE YEAR IN REVIEW her
Page 45 and 46: No. 1 2001: THE YEAR IN REVIEW tion
Page 47 and 48: No. 1 by Dr. Daria Markus It was no
Page 49 and 50: No. 1 COMMUNITY CHRONICLE New Haven
Page 51 and 52: No. 1 NOTES ON PEOPLE Juliana Osinc
Page 53 and 54: No. 1 St. Vladimir’s College in R
Page 55 and 56: No. 1 Ukrainian Gold Cross... (Cont

1_January 6, 2002 - The Ukrainian Weekly

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?