FACES AND PLACES: An open letter to President Kuchma (05/11/97)

FACES AND PLACES

by Myron B. Kuropas

An open letter to President Kuchma

Dear Sir:

Welcome to the United States. May God bless your visit here, and may all of your aspirations be realized.

As you are no doubt aware, Ukraine has recently been criticized in the American press. In an April 9 New York Times article titled "Ukraine Staggers on Path to Free Market," Raymond Bonner underscored the concerns of American Embassy officials in Kyiv who described the business environment as "marked by bribes, threats and violence. American and Ukrainian officials estimate that as much as $100 billion has been spirited out of the country by profiteering officials; if the money were brought back, the country's foreign reserves would nearly double ..." Despite massive U.S. aid, the country's standard of living has plummeted to an average monthly income of about $80 per month, Mr. Bonner wrote. Ukrainian officials, meanwhile, have become multimillionaires. This is unconscionable.

Ukrainian Americans doing business in Ukraine can vouch for the accuracy of that statement. They often meet Ukrainian officials who have two calling cards, one for their government post, the other for their business interests.

The Washington Post was a little more balanced in its approach. An April 14 editorial acknowledged that "Ukraine has made progress in six years. Unlike Russia and most former Soviet republics, it weathered a peaceful transition when President Kuchma defeated Ukraine's first president in a free and fair election. Thousands of state-owned firms have been privatized. Ukraine voluntarily gave up the nuclear weapons it inherited when the Soviet Union collapsed." At the same time, however, "the institutional corruption of the Ukrainian political economy and its slow progress on reforms pose a dilemma to the West. The U.S. has more than enough experience to know that pouring aid into dysfunctional regimes solves no problems - and often exacerbates them. Ukraine is approaching that point."

In an April 23 Wall Street Journal article titled "Complaints by American Businesses About Ukraine Could Curb U.S. Aid," Matthew Brzezinski echoed earlier concerns by writing: "Bureaucratic red tape [in Ukraine] is so thick that the share of the underground economy is estimated to have risen last year to 60 percent from 50 percent of total economic output. Top governmental officials sport gold Rolex watches, while millions subsist on wages that are often not paid. Diplomats complain that the new breed of apparatchiks, or communist-style bureaucrats, is increasingly brazen in dishing out the nation's meager wealth to cronies. Bureaucrats from competing political clans have been gunned down in drive-by shootings from passing police cars."

Whether or not all of these complaints are accurate (I happen to believe most are) is irrelevant. What matters is that the three newspapers cited above are read by America's power-brokers, the people who have an influence on American foreign policy.

Some Ukrainians have argued that other nations receiving substantial U.S. aid also are corrupt. Egypt has an authoritarian government, while Israel's moral turpitude is legendary. America, too, has its share of political chicanery. According to the late Ukrainian columnist Mike Royko, Chicago's unofficial motto was Ubi Est Mea ("Where's Mine?"). All of this also is irrelevant. Egypt, Israel and Chicago have influence in Congress that Ukraine does not enjoy. Ukraine, moreover, has powerful enemies in the United States who make judgments according to a double standard. It's not fair, but that's the way it is. For better or for worse, Americans tend to believe what they read. And right now they are not reading nice things about Ukraine. No useful purpose is served by accusing the press of "slander" as did Ukrainian Foreign Affairs Minister Hennadii Udovenko during a visit to Belarus recently. His statement that "opinion is being forced without concrete facts" is ludicrous.

The United States helps other nations for two major reasons: 1) it is in America's strategic national interest; 2) it results in long-term financial benefits for American companies and their stockholders. It is for this reason that American assistance rescued Europe and Japan after World War II, and the trend continues today. Foreign aid remains a significant aspect of U.S. foreign policy.

Thus far, it is in America's national interest to assist Ukraine as a buffer against Russian expansionism. The second part of the equation, however, long-term financial benefits for investors, has yet to be realized. How long America can wait given the negative publicity is hard to tell. The clock is ticking.

What can be done to change the situation in Ukraine? The commission you formed recently to find ways to make investment easier is a step in the right direction but, unless problems of bribery, official misconduct and criminal behavior are addressed as well, it won't be enough.

There must be a bold initiative. I am suggesting a plan that is a modified version of a strategy put forth by economist Larry Diamond: "a code of conduct for government officials that meticulously rules out use of political office or influence for economic gain; a comprehensive system for individuals to declare their assets on entering elective office or government service; a highly professional and rigorously independent body to monitor compliance with this code of conduct; a structure for trying corruption charges and punishing the guilty; and an infrastructure for auditing the accounts of government agencies and ministries." Ideally, laws should be passed that make it impossible for any Ukrainian government official to have business interests while holding office. This type of conflict of interest is contemptible and should never be tolerated. All members of your Cabinet and other senior officials of your government should be allowed six months to divest themselves of their business interests (a blind trust is one option) or resign from office. Legislation should be enacted that provides severe penalties (fines, jail terms) for office holders who betray the public trust.

None of these suggestions will matter a twit if there is no commitment from the top to create a civil society that permits the strengthening of institutions dedicated to the public good. In the words of President Harry Truman, "the buck" stops with the president. There is also a Ukrainian saying - something about the head of a fish. But I'm sure you know that one.

Good luck in your meetings with American officials and know that the diaspora is here to help.

Myron Kuropas' e-mail address is: 73753.3315@compuserve.com

| Home Page |