FACES AND PLACES: Ukraine descending (10/29/00)

FACES AND PLACES

by Myron B. Kuropas

Ukraine descending

Ask average Ukrainian citizens how things are going and the inevitable answer is "worse." And they're right. According to Berlin-based Transparency International, a non-governmental organization that tracks corruption worldwide, Ukraine is 88th on its corruption index among the 90 countries listed - with first place being least corrupt and 90th the most corrupt. Last year Ukraine was 67th.

A recent report in The Economist argues that "recent events in Ukraine paint an ever-bleaker picture of the country." The Security Service of Ukraine (SBU), successor to Ukraine's KGB, recently claimed to have foiled a planned attack on the Chornobyl nuclear plant aimed at restoring Communist power. Many people blame the Kuchma administration for this amateurish scheme, which they believe was aimed at diverting public attention from government corruption. The SBU is headed by Leonid Derkach, leader of one of the large clans close to Mr. Kuchma.

The Economist also reported on the disappearance of journalist Heorhii Gongadze, who specialized in exposing corruption in Ukraine. His allegations that Oleksander Volkov, one of Ukraine's tycoons, was part of an organized crime network appeared a few days prior to Mr. Gongadze's Hoffa-like disappearance. After interrogating Mr. Gongadze's associates, the authorities suggested he may have disappeared in order to escape his debts. Right. And what about other journalists such as Petro Shevchenko and Borys Derevianko who were murdered in 1997? And the two journalists who were recently beaten after publishing stories about government corruption - what about them?

President Leonid Kuchma's tilt towards Russia is another reason for concern. Sacking his pro-Western Foreign Affairs Minister Borys Tarasyuk, Mr. Kuchma emphasized that the new prime minister's priority should be to placate Russia. Mr. Kuchma recently struck a deal with Russia's President Vladimir Putin for oil and gas this winter in return for allowing Russian companies to buy stakes in Ukraine's gas pipelines. More opportunities for Ukraine's partners in crime.

And it appears that the days of reformist Prime Minister Viktor Yuschenko, whose reforms would replace federal block grants to Ukraine's regions with funding based on clearly defined objectives and criteria, may be coming to an end. Supported by the World Bank, the European Bank for Reconstruction and Development, and the American and Canadian ambassadors, Mr. Yuschenko's plans receive little support from Mr. Kuchma who continues to snipe at Mr. Yuschenko, suggesting that foreign interests are interfering in Ukraine's domestic affairs. Mr. Kuchma's nomenklatura pals in the regions want block grants from the federal government to continue because they're easy to divert and require little or no accountability. Another way to make Ukraine safe for corruption.

Who lost Ukraine? Why do the 1990s represent a decade of wasted opportunities? Why, despite millions and millions of dollars for foreign aid, is Ukraine in such deplorable shape?

Part of the reason, I believe, is the failed policies of the Clinton-Gore administration, especially the much-ballyhoed relationship that exists between Vice-President Al Gore and President Kuchma. Mr. Gore, it can be argued, was Mr. Kuchma's enabler at best, his partner in crime at worse.

In the recently published congressional report "Russia's Road to Corruption: How the Clinton Administration Exported Government Instead of Free Enterprise and Failed the Russian People," the authors note that an executive branch troika consisting of Mr. Gore at the White House, Strobe Talbott at the State Department and Lawrence Summers at the Treasury Department, were provided carte blanche by President Bill Clinton regarding U.S. policy towards Russia. Ignoring CIA reports of a vast network of government crookedness, the troika's focus was on macromanagement of the economy rather than on the transformation of the legal system so that a competitive market economy could be created and maintained. The emphasis was on strengthening the central government, while ignoring the Parliament, regional governments and private organizations. The architect of U.S. policy in the region was Mr. Talbott who in a July 1992 Time article declared: "Nationhood as we know it is obsolete; all states will recognize a single, global authority. National sovereignty wasn't such a great idea after all."

In addition to an emphasis on Russia's executive branch, the Gore troika emphasized close personal relationships with Russian officials and an unwillingness to change direction when it became clear that many of these officials were thieves. Billions of dollars of economic aid were misdirected, enabling corrosive office-holders to transform state-owned monopolies into private monopolies, all in the name of "privatization."

Given Ukraine's present situation, it is not a stretch to suggest that the same approach applied there as well. Why else would President Kuchma resist greater regional accountability as visualized by Mr. Yuschenko? Why else would the president of Ukraine support a privatization policy that favors his former Commie buddies? How else do we explain the former kissy-kissy relationship between Pavlo Lazarenko and Mr. Kuchma, and the latter's lack of enthusiasm for Mr. Lazarenko's extradition? How else can we explain his tilt towards Russia, where real control belongs to the mafia? How else to explain the confiscatory tax rate in Ukraine that prevents honest entrepreneurs from blossoming?

While many Ukrainians in the diaspora are willing to admit that Mr. Kuchma's ties to criminal elements are probably real, they are reluctant to condemn the man. The last election, they argue, was a Hobson's choice with Mr. Kuchma as the lesser of two evils. As long as the United States and the Ukrainian diaspora serve as Mr. Kuchma's enablers, he has no reason to change his ways. It's time for the diaspora to stop making excuses for Mr. Kuchma. It's time we adopt a "tough love" approach towards Ukraine, especially when it comes to American aid. It's time we demand more accountability from Ukraine's government.

I am writing this on the eve of the American presidential election. If Al Gore is elected president, Strobe Talbott will retain his presence in the new administration and the situation in Ukraine will remain stagnant. If George W. Bush, who is familiar with the congressional report cited earlier, is elected, we have a right to expect some changes. Whichever way the election turns, it will be years before Ukraine achieves solvency.

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

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