Harvard symposium evaluates seminal period in Ukraine's history (08/24/97)

UKRAINE'S INDEPENDENCE: THE SIXTH ANNIVERSARY

Harvard symposium evaluates seminal period in Ukraine's history

by Irene Jarosewich

CAMBRIDGE, Mass. - On the eve of the sixth anniversary of Ukraine's independence, the Harvard Ukrainian Research Institute (HURI) completed a yearlong project devoted to the examination of the first five years of an independent Ukraine with a conference, "Ukraine Since Independence: A Symposium on Politics, Economics, Society and Culture," held here July 31-August 2.

Domestic issues

"Ukraine has come an enormous distance in the past five, six years, and the road taken has not been an easy one," began Bohdan Krawchenko of the Academy of Public Administration in Kyiv and an advisor to the office of the president of Ukraine, as he addressed the topic "The National Government and Central Administration." "Its relative successes should not be taken for granted - peaceful transitions, several elections, foreign policy," he added.

However, "reform-minded leaders understand that economic reform cannot move forward at this point without the reform of the political administration," he continued, and that one of the major blocks to economic reform is the lack of qualified government administrators to implement changes. There are too many Soviet-style technocrats with vested interests and not enough skilled managers, lawyers, budget planners.

The current government structure also must be reorganized along functional lines and by policy areas, according to Dr. Krawchenko. For example, there should not be a Ministry of Statistics; data gathering should be an administrative function of the government. The goal is to reduce the more than 100 ministries and state committees to no more than 25. There is also an almost paralyzing duplication of effort within the executive branch, since the president's administration has appointed officials who take care of similar matters as their counterparts in the Cabinet of Ministers, or within ministries. Delineation of authority and responsibility are muddled.

Ukraine still suffers from gaps in expertise, said Dr. Krawchenko, no real mechanism for developing, analyzing or revising public policy exists. Ukraine never had policy formulating bodies or experience; Ukraine had technocrats who carried out orders and fulfilled Moscow's plans.

Changing management culture anywhere is difficult, conceded Dr. Krawchenko, and post-Soviet Ukraine was not a blank slate; the old system was not really fully destroyed and the task of transformation is often more complex than building anew.

James Clem of the Harvard Ukrainian Research Institute addressed the topic "Political Parties and Elites," and noted that the next election to Parliament will probably not be a watershed election for Ukraine, as were the parliamentary elections in 1990 or the presidential election of 1994.

Political parties remain relatively weak; the election law is extremely cumbersome and detrimental to party development, said Dr. Clem, adding that no new revisions or changes are expected soon.

The Communist and Socialist parties have retrenched after having suffered setbacks between 1990 and 1994. Nonetheless, in 1990 and in 1994, some regions had successes on local levels, in city and oblast council elections and elected reformers.

The National Democratic Party and the Liberal Party are on track to revive the political center and take power away from the dominant left. Both centrist parties are organized along functional, practical lines, not ideological.

Ukraine's brief history with open elections is good, it is important to have elections and since the process is a mechanism to force change.

Interest groups function more like "interest grabbers," seeking power and control, according to Margarita Balcemeda of the University of Toledo, speaking on the topic "Interest Groups and the State." Informal interest groups (more colloquially referred to as "clans" or "mafias") have developed by region and industry; they are loose and overlap, such as the steel, coal and gas industries, or the Donetsk, Dnipropetrovsk and Crimea groups.

There is not much activity from organized groups in the Western sense of interests groups, for example, ethnic or religious entities. Part of the problem, according to Dr. Balcemeda, may be that strong individual interest, the desire to maximize individual opportunity, is not yet strong in Ukraine.

More formally organized interest groups are the Financial-Industrial Groups (FIGs). Vertically integrated from finance and management to supply, production and distribution, and organized according to industry sector, they have many critics who consider them to be monopolistic, quasi-private mechanisms of state control.

According to Dr. Balcemeda, there is pressure in the Ukrainian legislature to give tax exemptions to Russian-Ukrainian joint ventures, especially to FIGs, and primarily Russian groups are pushing for these exemptions. There is also pressure internally in Ukraine, to not develop independent, national businesses, but to create trans-national FIGs, supra-state entities that cross the borders of the former Soviet republics.

Reiterating a point made by Dr. Krawchenko in his presentation, Dr. Balcemeda stated that Ukraine cannot be compared to Poland, and especially not to Russia, because Ukraine never had even a basic independent infrastructure, a fact often forgotten by people who want to compare Ukraine to those countries in terms of civic, political and economic development.

Roman Solchanyk, an analyst with the Rand Corporation who spoke to the topic of "Ethnicity and Regionalism," stated that despite repeated "dire predictions and warnings, there is still no evidence of inter-ethnic conflict in Ukraine." Based on survey data for all groups, Ukrainian, Russian, Jewish, the rates of perceived discrimination are low. In most cases, less than 10 percent (usually 3 to 8 percent) of the respondents felt they had been victims of discrimination. Exceptions were Russians who feel increased discrimination in western Ukraine (17 percent) and in Crimea (19 percent).

Dr. Solchanyk speculated that some of this feeling among Russians can be attributed to the reversal of roles. This reversal is difficult for Russia, as well as for some Russians, to accept, and objective or imagined slights and diminished influence impacts how they feel.

The Russian government continues to worry about Russians who live outside Russia proper (two committees exist in the Russian Duma, one to deal with the situation of Russians living in foreign countries, and one for those living in the near abroad) and continues to develop programs to help them. However, polls consistently show that most Russian voters don't really care about the 25 million Russians living abroad and that there is no real evidence that those living abroad need help.

According to the surveys, dissatisfaction with independence in Ukraine comes from economic factors and not ethnic or regional conflicts; nonetheless, dormant fears remain. About 60 percent of respondents fear ethnic tensions could evolve. Dr. Solchanyk said he suspects this is a result of general feelings of insecurity and discomfort about economic and social changes, and is not rooted in ethnic hatred. Though respondents personally don't feel discrimination and would not participate in escalating tensions, they are afraid others might.

As part of his presentation on "Religion, Inter-Confessional Relations and Society," Dr. Andrew Sorokowski gave data published in the April edition of the journal Liudyna i Svit (Man and the World) concerning the religious situation in Ukraine.

Whereas in Poland, 83 percent of those surveyed claim to attend divine liturgy or prayer services at least once a month, only 20 percent in Ukraine, and 7 percent in Russia claim to do so. Nonetheless, 63.4 percent in Ukraine consider themselves to be religious believers, while 29.5 percent consider themselves to be non-believers, and 7.1 percent cannot decide.

Of the religious organizations registered in Ukraine, 52 percent are Orthodox, 24 percent are Protestant, 17 percent are Greek-Catholic, 4 percent are Roman Catholic, 1 percent are Muslim, 0.5 percent are Jewish.

This differs from the results obtained from individual respondents. Of those who claim any religious identity, 71.8 percent claim to be Orthodox, 17.5 percent to be Greek-Catholic, 5.3 percent to be Muslim, only 2.2 percent to be Protestant, 1.6 percent to be Roman Catholic, 1.2 percent "simply believers" and 0.4 percent Jewish.

Though inter-confessional tensions have decreased over the past several years, in particular between Orthodox and Catholic, tensions between the Ukrainian Orthodox Churches, most notably between the Kyiv and Moscow Patriarchates continue. The Ukrainian Orthodox Church - Moscow Patriarchate continues to claim the largest number of believers.

More than 50 women's groups have formed in the past five years, based on community organizing principles and along interests such as health, welfare and children, said Martha Bohachevsky Chomiak, who spoke on the topic "Women in Ukrainian Society." The situation is desperate in Ukraine in the areas of so-called traditional women's issues, with increases in abortion, illegitimate births, lack of contraceptives, low birth rate and high mortality.

However, broader debate about, and actual changes in, men's and women's roles in society is not under way. (This point was reiterated later that evening at the students' roundtable where it was mentioned that feminism, the roles and responsibilities of men and women, concepts of exploitation and beauty were only beginning to be debated - sometimes hotly and often not well - among younger people).

A new development is the loose coalition of women deputies that is forming in Parliament, especially around women's issues, and the former Minister of Family and Youth, Suzanna Stanik is perceived to be dynamic, unlike some of her Soviet-era predecessors.

The national economy

The economists. Ouch. These guys had nothing good to say. They all conceded that Ukraine faces extraordinary challenges, even overwhelming and often not manageable challenges. Despite the fact that other republics faced similar problems and also often achieved lackluster economic results, the four economists, nonetheless, all refused to grade on a curve and gave Ukraine failing marks in economics.

The director of the Harvard Institute for International Development, Jeffrey Sachs, is a renowned proponent of using the strategy of economic "shock therapy" as the most effective way for former communist countries to complete a rapid transition to a market economy and international economic integration. Countries that adopted this approach and stuck with it for the past few years, such as Poland and Hungary, are now reaping the benefits. Countries that have refused to bite the bullet, such as Ukraine and Belarus, suffer from a dismal economic situation, a result that not only causes prolonged suffering for a nation's people, but can eventually threaten nationhood as well.

Though Dr. Sachs, who spoke on the topic "Economic Administration and Reforms," believes that restricting foreign investment by regulation or taxation impedes economic growth, he conceded that the fears many Ukrainians have about the unrestricted flow of Russian capital into Ukraine's economy is not without basis.

"So much of Russian capital right now," said Dr. Sachs, "is non-transparent in its origin, its nature, its political linkages, such that capital is not capital in the Russian context, it is also political power. Institutions like Gazprom are not simply corporations, they are mechanisms of political control, mechanisms of policy. To the extent that investment of capital is transparent, that these are arms-length, market-based transactions that happen to be Russian, I don't see a problem. More than that, I think that it's natural, and that it is going to happen, that there would be Russian investment in Ukraine and Ukrainian investments in Russia. To the extent that there is a strong role of the state in quasi-private transactions, with heavy-handed politics in key infrastructure sectors, like natural gas, I see this as a risk."

Daniel Kaufmann, also of the Harvard Institute for International Development, and formerly the director of the World Bank office in Kyiv, provided the conference participants with a detailed explanation of how the ubiquitous bribe impedes economic growth. Addressing "Ukraine's Economic Performance," Dr. Kaufmann stated that though Ukraine has met many macro-economic goals, such as reducing budget deficits, reducing inflation, introducing a currency and stabilizing exchange rates, economic growth remains elusive. Dr. Kaufmann said he believes that not enough change has been implemented on the micro-economic level. There still is excessive regulation, licensing requirements, and high and inconsistent taxation that leads to strangulation of initiative or bribery, which in turn, fuel the shadow economy.

Based on information acquired from interviews with new entrepreneurs, and correlating this with other data such as amount of electricity used, Dr. Kaufmann estimated that 50 percent of economic activity in Ukraine is in the shadow economy.

From his interviews, Dr. Kaufmann learned, for example, that for a Kyiv businessman, each visit by a tax inspector or licensing agent results in the payment, on average, of a $90 "unofficial fee" (bribe) to avoid high taxes or an audit. However, a typical enterprise receives many of these "visits" in a year, and can pay up to $20,000 in "unofficial" payments. This amount is still lower than the tax owed, yet the state receives nothing, the tax collector receives everything and the business continues to work in the shadow, covering up its activity. Since true economic activity is not being reported, the economy appears to be unhealthy, and as a result, foreign investment stays away, and businesses take money out of the country. Furthermore, the arbitrariness of the total cost of the "unofficial fees" that a new business could incur is a strong disincentive for new business start up and a bad use of capital.

Most businessmen would be willing to pay lower taxes and be legitimate, according to Dr. Kaufmann, and the "missing pillar" in Ukraine's economic reform is reducing taxation, reforming licensing requirements and reducing regulations.

Oleh Havrylyshyn of the International Monetary Fund (IMF) proposed that diversification of foreign trade is a key indicator of economies that are successfully undergoing the transition to a market-based economy. Speaking on "Ukraine's Integration into the Global Economy," Dr. Havrylyshyn offered Poland as an example of a country that has consciously expanded and diversified foreign trade, and explained that this diversification parallels the rate and level of economic reform.

Ukraine, which the IMF places in the group of "slow reformers," has very undiversified foreign trade, on average, between 40 and 50 percent with countries of the former Soviet Union, while "advanced reformers," countries such as Poland, the Czech Republic, Hungary and Slovakia, have less than 10 percent with FSU countries.

Though Russia will probably, naturally, always be a large trading partner for Ukraine, Ukraine would do well to balance out and diversify with the large markets of Europe as well, claimed Dr. Havrylyshyn. In response to Ukraine's arguments that those markets are closed, he noted that competitive Asian and Central European countries have gotten in, and that Ukraine's strategy of "first learning competitiveness in the easy markets of the former USSR" is misguided, since it runs the large risk of re-enforcing pre-existing trade and industrial ties instead of forging new ones.

The period 1994-1995 was a critical window of opportunity to pass reforms, according to Anders Aslund of the Carnegie Endowment for International Peace, speaking on the topic "Ukraine and International Financial Institutions." At that time, Ukraine carried a huge foreign debt, and its survival as a nation was in question.

Michel Camdessus of the IMF, took advantage of the window of opportunity, Dr. Aslund noted, and visited Kyiv; the G-7 offered $4 billion to Ukraine as an incentive to reform. Several bold individuals, he added, such as Viktor Yuschenko, the former chairman of National Bank of Ukraine, took decisive action, for example, stopping credit emissions, and Yurii Yekhanurov, the former head of the State Property Fund, who performed a good privatization balancing act between competing interests.

However, according to Dr. Aslund, with the exception of progress on privatization into 1996, "since June 1995, let's face it, much has been attempted, but nothing done. There is a total reluctance to go forward." "Economic problems, such as continued decline in GDP are not perceived as a threat to state," therefore the critical steps of tax reform and de-regulation are not being taken, he said.

Dr. Aslund has given up expectations for the time being that President Kuchma is a reformer and claims that the "proverbial poor organization of Ukrainian government" as an impediment to economic reform is in fact a political choice, and exhibits a lack of political will. The former prime minister, the continued existence of the Cabinet of Ministers with an apparat of 800 people, and the new prime minister chosen can only be viewed as a "choice to remain with bad government," according to Dr. Aslund. "If Lazarenko was corrupt, then Pustovoitenko is the greatest bureaucrat - the second worst choice," he stated.

The IMF and World Bank, which have been working with Ukraine on the development of economic and financial policies, have done a reasonable job, but only the next elections and continued pressure from the outside will work to force the current political elite to view economic stagnation as a threat that they must overcome.

Later that evening, at a dinner at the Harvard Faculty Club, Prof. Roman Szporluk, director of the Harvard Ukrainian Research Institute, offered levity after a day of gloomy information and provided conference guests with a series of anecdotes on "Ukrainian Independence in Historical Perspective." Quoting unnamed former Soviet experts and citing journalists and news reports, he led guests through an amusing game of "which expert was expert enough to say something this dumb," and offered the observation that "political scientists, by and large, are a more cheerful lot than economists."

Culture and society

The final day of the conference focused on social problems and Ukrainian culture in a period of flux. Solomea Pavlychko of the Institute of Literature at the National Academy of Sciences of Ukraine confessed that while preparing for her topic, "New Cultural Discourse and Literary Debates," she kept returning to only one event: the recent split within the Ukrainian Writer's Union.

The Ukrainian Writer's Union (UWU), established in 1934, has often played the role of propagandist for the state, whether it was publishing prosaic poetry about tractors and happy workers under communism, publicizing more sophisticated broadsides against decadent capitalism, or promoting Mikhail Gorbachev's perestroika. Publishing was controlled by the state, writer's were "invited" to join the UWU, and the state provided salaries and perks. At its congress in October 1996, the UWU continued in this political vein and declared that the building of Ukrainian statehood is the purpose of the organization. In turn, the leadership of the UWU expected to continue to receive state subsidies.

According to Ms. Pavlychko, the split was the culmination a yearlong process, and the principled and very heated split highlighted the deep division among UWU members over the understanding of what is a writer, and around which principles to organize a union of writers.

In March, the Association of Ukrainian Writers (AUW) was established. It has 100 members, compared to the UWU membership of 1,000. According to Ms. Pavlychko, the AUW is interested in adhering to practices adopted by trade and professional writers' organizations in the West, where writing is a creative, and not a political, profession. As writers, "we do not want to belong to the state," she noted.

For those who have traveled to Ukraine and wondered why authors don't band together and hold book fairs to sell books that are often unavailable in stores, the answer is: the state. In order to sell and distribute books, one needs a state-approved license. Providing an example of the type of excessive regulation and licensing that strangles economic activity described by Dr. Kaufmann a day earlier, Ms. Pavlychko explained that authors do not have the right to openly sell their work without a license.

Concurring with Ms. Pavlychko's assessment that the old system of government support is no longer in place for artists, and those who once worked under it are having a hard time letting go, composer and professor Virko Baley of the University of Nevada claimed he understood these artists' pain. After all, the life of a Soviet artist/musician/composer was very good - housing, vacations, retreats paid for, time to create - conditions unheard of in the West for most composers and musicians.

Speaking about the state of "Performing and Fine Arts," Prof. Baley said that besides music and composition, the art of filmmaking is in dire straits. Film is the art form of the 20th century according to Prof. Baley, and what little PR Ukraine received in the creative world was from films. Ukraine once produced 20 to 30 films a year, it now produces five. The famed Dovzhenko Studio basically doesn't exist anymore.

Ukraine is undergoing a talent drain, as well. The Jewish emigration for the past 10 years, and more recently a non-Jewish emigration, is leaving to play, teach, compose, and direct elsewhere in order to survive.

Performing companies that tour, said Prof. Baley, are more likely to survive; foreign tours often provide stipends and cover expenses, more than Ukraine can provide.

On a bright note, Prof. Baley cited commercial theater: Broadway-style productions are now being produced for the "Novoye Russki" (nouveau-riche); this entertainment for the new elite is popular and profitable and includes such productions as "Carmen," arranged more like a musical than a traditional opera

Another trend, noted Prof. Baley, is art as a chic aquisition for the nouveau-riche. An attitude of "My friends are buying a soccer team, so instead, I'll buy myself an orchestra" is beginning to take hold.

Similar conditions exist in all the arts as Ukraine makes a transition to living by the profit motive and defines issues such as state support vs. state control and the proper role of the benefactor.

Yuri Shevchuk of the New School for Social Research introduced a topic that is as controversial as the issue of eubonics in the U.S. He says that he believes "surzhyk" (pidgin Ukrainian) is not an linguistic aberration, but a viable tongue of discourse for millions of Ukrainians.

Speaking on the topic of "Identity and Language in Ukraine," Mr. Shevchuk put a spin on the definition of surzhyk: "It's difficult to define surzhyk; I can't say. But like the definition of pornography, I know it when I hear it."

Surzhyk can't be written, therefore it does not have a major attribute of a language. Mr. Shevchuk contended that Ukrainian is spoken by only a minority of the population, and that surzhyk, a synthesis of grammatically broken Ukrainian and Russian is more prevalent. Even though it is the tongue of low prestige, discussions about national consciousness are taking place in surzhyk and are associated with it. Many people who speak surzhyk think they are speaking Ukrainian, he said.

He continued that, for some, speaking Russian or Ukrainian is a political act, while speaking surzhyk is an easy way out of the war. It is being heard more in pop music, and in new Broadway-style entertainment. Even some sophisticated youth at the prestigious and competitive National University of the Kyiv-Mohyla Academy claim that surzhyk is their primary language. Surzhyk appears to be acquiring a veneer of "hipness," though Mr. Shevchuk correlated (albeit, in a somewhat confused manner) the use of surzhyk with the remnants of Soviet self-identity in Ukraine.

Ukraine is in a stage of national myth-making, said Dr. Krawchenko as he addressed the topic "Historical Consciousness and National Identity."

The major vehicle for disseminating information about historical consciousness is the media, not historians and intellectuals, and some of the new accepted truths include: 1) Ukraine is descendant from Kyivan Rus'; 2) the Hetman state was a Ukrainian state; 3) Mykhailo Hrushevskyi was Ukraine's first president; 4) Ukraine is a European nation. According to Dr. Krawchenko, President Kuchma has stated that one of the most important aspects of the NATO-Ukraine charter was that NATO recognized Ukraine as a European nation.

After Dr. Oleh Wolowyna completed his presentation (see article on page 9). Alexander Motyl of Columbia University provided a conclusion to the conference sessions with his presentation "Independent Ukraine in Comparison with Other Post-Soviet States." Ukraine, according to Dr. Motyl, fairly consistently appears in the middle of various rankings of the Central European and CIS countries by organizations such as the IMF or World Bank, Freedom House or The Economist.

Given that this distribution by groupings tends to reflect a pattern, (Ukraine is usually grouped in with Moldova, Belarus and Russia, the "middle" countries) and given that these three or four clusters (Baltics to Slovenia; the countries of the Caucusus and the East; and then the "middle" countries) have been fairly consistent for four to five years, Dr. Motyl claims that problems are systemic, "and not simply a matter of political will."

"It is unreasonable to assume, for example, that Central Europe has political will, while Central Asia has none, and 'middle countries' have it only upon occasion," he continued, "the uniformity of trend suggests that more than lack of political will and bad policy" are to blame for endemic problems in Ukraine, as well as other post-communist countries.

Other factors that could be considered as influencing the success of transition, include a country's proximity to Europe, cultural history and the length of time under totalitarian or imperial rule. The fact that Ukraine is located between Europe and Russia also plays a role because Ukraine's stability is tied to the stability of neighbors.

He chastised analysts for participating in the "fetish of economic policy" and claimed that Ukraine may not be a market economy turning the corner, but it is not bad on nation-building. He underscored that Ukraine has managed to avoid authoritarian solutions to solve its problems and has pursued a relatively balanced development.

Echoing the sentiment behind an old Ukrainian proverb that a good beginning is half the success, one participant noted that if one assumes that a state is a necessary precondition to a healthy economy, then the experience of Ukraine in the past five years has been at least a 50 percent success; if one assumes that the economy is a necessary precondition to a healthy state, then Ukraine has been a 100 percent failure.

The conference received many accolades from the participants, including more than 40 business representatives, academicians, representatives from U.S. and Canadian government agencies, members of the media, private individuals, associates of other Harvard University programs, graduate students and participants of Harvard's summer training program for professionals.

Claiming that he opted for the 50 percent success verdict, Dr. Lubomyr Hajda of the HURI, the primary organizer of the symposium, as well the manager as of HURI's yearlong program on the fifth anniversary of independence (which included a major conference in Washington, published materials and special lectures), offered the thought that "on the eve of the sixth anniversary, it's not too early to look ahead and make plans to examine, in an academic way, the first 10 years of Ukraine's independence."

| Home Page |