EDITORIAL: Ukraine at a crossroads (05/25/97)

EDITORIAL

Ukraine at a crossroads

When President Leonid Kuchma visited Washington last week, he was simultaneoulsy praised and admonished for what has been accomplished and what has not in Ukraine.

As he received the IFES Democracy Award on May 15, he was praised for his "tireless efforts to support the democratic elections process in Ukraine and for his leadership in securing adoption of the new Constitution." Ukraine received kudos for eliminating its nuclear weapons and embarking on multi-faceted reform.

Earlier that day, however, he had been warned by Rep. Sonny Callahan to deal with corruption and stop dumping of steel ... or else. The "or else" being risk losing substantial U.S. foreign assistance. Rep. Callahan berated the president on investors' problems, including corruption (e.g., Gala Radio, the Grand Hotel), and the dumping of Ukrainian products in North America (i.e., steel). It was not an unexpected outburst (though it was less than respectful toward a head of state), given the Alabaman's previous statements. Mr. Kuchma responded in an equally strong manner, noting that no one here in this office would put Ukraine on trial and underlining that an aggressive program to combat corruption has been put into place in Ukraine.

The next day during the first plenary session of the U.S.-Ukraine Binational Commisson, Vice-President Al Gore hailed Ukraine's citizens for saying "yes to reform and democracy," and then told President Kuchma: "We continue to be ready to help where possible, but there are many things we cannot do for you. In the end, economic development, trade and investment can only proceed in Ukraine if the objective conditions for such progress exist, and if investors, Ukrainian and foreign, conclude that they have reasonable conditions in which to operate."

Once back in Kyiv, President Kuchma followed up with strong words. In a speech before the Union of Industrialists and Entrepreneurs he said the Cabinet seems to be "incapable of controlling national economic processes." He turned up the heat on Prime Minister Pavlo Lazarenko in particular, and he scolded the Verkhovna Rada, observing that deputies continue to obstruct approval of tax and economic reform, as well as passage of the 1997 state budget.

But, there was more bad news this week. First, national deputies decided to take a vacation during the last week of May and not consider the budget at all during the remainder of this month. (Verkhovna Rada Vice-Chairman Viktor Musiyaka had predicted a new budget would be approved by June 1.) Then, the World Economic Forum released its annual Global Competitiveness Report - seen by business and government leaders as their report card. Out of the 53 countries rated, Ukraine came in next to last (only Russia was rated less competitive); and second from last in terms of growth potential (only Russia and Italy fared worse).

Lack of economic growth, as emphasized recently by Ambassador Richard Morningstar, President Bill Clinton's adviser on aid to the NIS, is the greatest threat to Ukraine's development "as an independent, stable, market democracy." Ukraine is at a crossroads.

And only Ukraine can determine which route it takes. Perhaps, having heard the bitter truth from officials in Washington, Ukraine will choose the right path.

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