RFE/RL Poland, Belarus, and Ukraine Report Vol. 1, No. 21, 19 October 1999

A Survey of Developments in Poland, Belarus, and Ukraine by the Regional Specialists of RFE/RL's Newsline Team.

RFE/RL POLAND, BELARUS, AND UKRAINE REPORT A Weekly Survey of Developments in Poland, Belarus, and Ukraine

TRADE WITH UKRAINE PLUNGES. From January-August, the trade turnover between Belarus and Ukraine decreased by 44 percent, compared with the same period last year, to stand at $438 million. During this period, Belarus had a negative trade balance with Ukraine totaling $95 million. And its exports to that country fell to $267 million from $527 million in January-August 1998.

According to a Belarusian Foreign Ministry expert on 11 October, the main reason for the decline in Belarusian exports was the fact that Ukraine has already switched to collecting value-added tax and customs duties on goods in the country where those goods are to be sold (the so called "country-of-destination" system). Belarus has not yet introduced that measure and thus Belarusian exporters continue to pay VAT twice (in Belarus and, in this case, also in Ukraine).

According to the independent "Belorusskaya delovaya gazeta," the reason for the plunge is to be found in the Belarusian economy: the country produces poor-quality commodities at relatively high production costs and cannot compete with foreign exporters. On the other hand, Belarus does not have enough money to pay for Ukrainian imports. The newspapers points out that Belarus's trade with Russia also plunged: from $6.44 billion in January-August 1998 to $4.25 billion during the same period this year.


CRIMINALIZATION OF ECONOMY CONTINUES. Ukrainian ProsecutorGeneral Mykhaylo Potebenko told a 11 October seminar on the role of prosecution agencies that Ukraine is witnessing the increased "criminalization" of economic relations. According to his data, so far this year Ukraine's law enforcement bodies have detected 100,000 violations of the law in the economic sphere. Prosecutors launched 9,000 criminal proceedings, and some 46,000 people have been or may be held responsible for various wrongdoings in the economic spheres.

Deputy Prosecutor-General Olha Kolinko told the same seminar that the "inexpedient use of funds" totaling 292 million hryvni ($65 million) has prevented the construction of nuclear reactors at the Rivnenska and Khmelnytska nuclear power plants from being completed. According to Kolinko, this summer's severe shortage of gasoline in Ukraine was caused by the unlawful activities of fuel dealers, who created an "artificial" deficit and subsequent hikes in the price of gasoline. Another problem is the agro-industrial sector, where, according to Kolinko, tax evasion and thefts abound. "Following an examination of the economic entities that grow, store, and process agricultural products, [Ukraine's prosecutors] have opened 827 criminal cases against those who evade taxes and revealed 175 fictitious firms.... Because of misdeeds by managers of agricultural enterprises and because of swindles by traders, some farms had no means to harvest new crops," Interfax quoted Kolinko as saying.

WHO FATHERED THE AN-140 PASSENGER PLANE? On 11 October, President Leonid Kuchma and other officials watched a test flight of a new An-140 passenger plane. Kuchma called the plane a "modern miracle," while congratulating the Kyivbased Antonov Design Bureau and the Kharkiv State Aviation Enterprise that designed and build the aircraft. The plane can carry 52 passengers or 20 passengers and 3.65 tons of cargo for a distance of 2,300 kilometers at a maximum speed of 555 kilometers per hour. It is expected to cost some $7 million. Demand for the plane is estimated at 100 machines within Ukraine and some 500 in Russia and other post-Soviet states by 2005, according to AP.

The Moscow-based "Segodnya" wrote on 13 October that Ukraine has "cheated its elder brother, Russia, to the full" regarding the development of the An-140. According to the newspaper, Russia's budget has almost entirely financed the development of the plane, but Ukraine says the machine is solely its own "child" because, as "Segodnya" put it, Russian budget allocations do not give Moscow copyright rights. Russia has the right only to buy 70 An-140 machines from Ukraine ahead of other customers, but "Segodnya" argues that Russia does not have sufficient funds to take advantage of this priority treatment. As regards the copyright for the plane's design, they belong solely to Ukraine's Antonov Design Bureau. According to "Segodnya," future Russian customers will have to pay dearly for An-140 design charts and schemes.

QUOTES OF THE WEEK. "I think that the main reason for the failures of Russia, Belarus, Ukraine, or Slovakia is the low level of their political elite. [That elite] has not been able to define a goal for people's joint [reformist] effort, explain that goal, or organize citizens [to undertake] consecutive tasks. It has also proven to be surprisingly egoistic, susceptible to corruption to a far larger degree than what we see in Poland. Although we are right in complaining about our politicians, they nonetheless have not put us to such shame as one [Ukrainian] ex-premier has put the Ukrainians--he was arrested at the French-Swiss border with a Panamanian passport when he was driving to draw stolen money from a bank account." -- Former Polish Foreign Minister Andrzej Olechowski, quoted by the 10 October "Wprost."

Nowadays "CIS summits are held specially for the sake of Kuchma in order to give a possibility for the head of states and authoritative politicians to support him on the eve of the presidential elections," Lukashenka commenting on the 8 October summit of CIS prime ministers in Yalta (Belarus refused to participate in that meeting). Quoted by the 12 October "Izvestiya."

"Involuntarily, it comes to mind that the president of a friendly country has somewhat exaggerated the extent of his influence on Ukraine's electorate and the international situation as a whole," Kuchma's spokesman Oleksandr Martynenko responding on 15 October to Lukashenka's remark above on CIS summits. Quoted by AP.

"Kuchma doesn't even plan to change his reform course. What's the second half of the path? Everyone has to understand that to vote for Kuchma means to vote for Ukraine's colonization. This is how this reform course will end." -- Natalya Vitrenko, quoted by Reuters on 13 October.

"I have no doubt that we will never return to the old system. Today, on the whole, the presidential elections are the last and deciding battle for many parties." -- Leonid Kuchma on 13 October, quoted by Interfax.

RFE/RL Poland, Belarus, and Ukraine Report is prepared by Jan Maksymiuk on the basis of a variety of sources including reporting by "RFE/RL Newsline" and RFE/RL's broadcast services. It is distributed every Tuesday.


BELARUS'S SHARETSKI REPORTEDLY MEETS WITH KUCHMA. Syamyon Sharetski, chairman of the opposition Supreme Soviet, who is now residing in Lithuania, visited Kyiv last weekend at the invitation of Ukraine's Popular Rukh, Interfax reported on 18 October. Rukh spokesman Dmytro Ponomarchuk said Sharetski traveled to Kyiv "to warn Ukraine against repeating the Belarusian experience." Ponomarchuk added that Sharetski met with Ukrainian President Leonid Kuchma. However, Kuchma's spokesman Oleksandr Martynenko said the presidential staff "has no information" about Kuchma's meeting with Sharetski. Meanwhile, Foreign Minister Borys Tarasyuk criticized Belarus for breaking up the 17 October opposition march. "Beating people who take advantage of the right to express their opinion does not conform with international norms," Interfax quoted Tarasyuk as saying. JM

COUNCIL OF EUROPE SAYS UKRAINE NOT MEETING MEMBER OBLIGATIONS. Meeting on 18 October in Kyiv, Council of Europe Secretary-General Walter Schwimmer and Iceland's Foreign Minister Halldor Asgrimsson criticized Ukraine for failing to fulfill its obligations as a council member. The council has repeatedly rebuked Ukraine for not abolishing the death penalty and for harassing independent media. On this occasion, council officials also expressed concern that presidential candidates have been granted unequal access to the state-controlled media. Earlier, the council postponed until January 2000 taking a decision on whether to suspend Ukraine's membership. JM


When four candidates announced in August that they were joining forces in the Ukrainian presidential race, the media generally welcomed that announcement. The four candidates-- socialist Oleksandr Moroz, parliamentary speaker Oleksandr Tkachenko, head of the mayors' association Volodymyr Oliynyk, and former Prime Minister Yevhen Marchuk--made their announcement in Kaniv, the rural, leafy burial-place of a national poet. They subsequently became known as the Kaniv Four. Analysts said a single candidate from the Kaniv Four could be a real challenger to President Leonid Kuchma, who is running for re-election.

Two months later, the Kaniv Four are again in the news, but the media attitude has greatly changed. Moroz, the most popular of the four candidates, has lost voter support in the wake of a scandal surrounding the attack on the life of rival candidate Natalya Vitrenko. Tkachenko has been accused of breaking election laws by campaigning on Russian television. And the failure of the four to announce a single candidate, as promised, has led to widespread speculation that the Kaniv Four have splintered into a Kaniv Three, or even Two.

The candidates delayed announcing their choice several times, saying they feared physical attacks on the chosen candidate. Finally on 15 October, Moroz's team announced that Tkachenko and Oliynyk would support Moroz, while Marchuk would continue his own campaign independently. Moroz's campaign manager said the Kaniv Four still intend to field a single candidate and it is "70 percent likely" that Moroz will be that candidate. The final announcement is expected just days before the 31 October election.

Government media greeted the delays with derision. Kuchma was widely quoted as calling the behavior of the group "agonizing." He said the four candidates were "monsters" and that Moroz was "losing face." The press speculated that the announcement was delayed because the four have no strategy.

Mykola Tomenko, head of the Kyiv Institute of Politics, told RFE/RL that he considers the delay in the announcement of a single candidate to be a reasonable response to an unstable situation. He said the decision of Oliynyk and Tkachenko to resign their candidacies in support of Moroz is significant: "It's the first serious step. I think if he remains the only one of four it will be a more serious step to a member of the Kaniv Four to have a claim on the presidency."

Tomenko added that he thinks the group was wise not name Moroz as their candidate at this juncture. The media have been linking Moroz with the grenade attack two weeks ago against Vitrenko, who split with Moroz's Socialist party several years ago and now heads the more radical Progressive Socialists.

Moroz has denied involvement and attempted to challenge the negative media coverage. The parliament last week ordered the state channel UT-1 to show Moroz defending himself against the allegations. UT-1 did not comply with the parliamentary order, which most commentators say has a dubious basis in law.

Analyst Tomenko says the state media's criticism of the Kaniv Four is an indication that Kuchma sees the alliance as a serious threat. That is a line the candidates themselves have taken. "I think this only confirms the weight of the four. The official channel UT-1 and the program "Panorama" [recently] devoted 15 minutes to criticizing the Kaniv Four and 10 minutes to criticizing Oleksandr Moroz. It seems possible to draw the conclusion that the authorities are afraid of the Kaniv Four and afraid of Oleksandr Moroz as a real candidate."

At a press conference on 18 October, the four candidates said they plan to appeal to the Central Election Commission to have Kuchma's candidacy annulled. They say he is unfairly using his government power over the media to further his campaign.

The author is an RFE/RL correspondent based in Kyiv. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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