RFE/RL Poland, Belarus, and Ukraine Report Vol. 2, No. 3, 18 January 2000

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

NEWSPAPERS AND RADIO SETS FOR POLES ABROAD. Poland will be sending gratis more than 62,000 copies of the nationwide daily "Rzeczpospolita" as an annual subscription to Polish cultural centers in Ukraine, Belarus, Lithuania, Latvia, Kazakhstan, Georgia, Romania, Bulgaria, and Russia in 2000. Those centers will also be presented with 2,000 Polish radio sets. The action, proposed by the Foreign Ministry, will be implemented in cooperation with Polish Radio, the Polish Post Office, and the Presspublica company, PAP reported on 12 January.


'GAS PRINCESS' LAUNCHES 'GAS ATTACK.' Deputy Prime Minister Yuliya Tymoshenko stirred quite a sensation last week when she commented in Kyiv on Ukraine's gas debt to Russia's Gazprom following her 10 January talks with Gazprom head Rem Vyakhirev in Moscow.

On 11 January, Tymoshenko said Ukraine's gas debt to Gazprom--according to Gazprom's accounting books--totaled $2.8 billion, almost three times as much as the estimated $1 billion that was quoted by Russian state officials in November last year. Tymoshenko accused the National Joint Stock Company Naftohaz Ukrayiny of accumulating this huge debt and of siphoning off Russian transit gas from pipelines on Ukrainian territory. It was the first time Kyiv officially admitted stealing Russian transit gas. According to Tymoshenko, Naftohaz Ukrayiny "has established its work with Russia in such a way that every day Ukraine's gas debt to Russia increases by $10 million," Interfax quoted her as saying.

On 12 January, Tymoshenko somewhat corrected herself by saying that Naftohaz Ukrayiny owes Gazprom $2.233 billion: $1.741 billion for gas supplies and $492 million in fines for not paying on time. "Ukraine can in no way disclaim [having] this debt," she noted, adding, however, that she officially did not acknowledge this debt during her trip to Moscow. "I will not assume responsibility to confirm this debt. The debt should be confirmed by Naftohaz Ukrayiny, which created it," she said.

Naftohaz Ukrayiny Deputy Chairman Ihor Didenko on 12 January denied that his company is guilty of increasing the country's gas debt. He added that in the near future, "the position of the deputy prime minister [Tymoshenko] and the company's leadership in the sphere of gas supply policy will be brought closer." According to Didenko, Naftohaz Ukrayiny's debt to Gazprom stands at $911 million. "As regards the sum exceeding $2 billion, it is the debt of all economic entities that worked on the gas market earlier and maintained relations with gas suppliers from Russia, including Ukraine's Unified Energy Systems," Didenko commented.

Tymoshenko's unexpected statements have provoked a lot of speculation as to her motives. Progressive Socialist Party leader Natalya Vitrenko said Ukraine is unable to repay the gas debts quoted by Tymoshenko. "This is not only a bomb planted under the budget, this is a liquidation of the state," Vitrenko noted. Vitrenko believes that Tymoshenko wants to dismiss Ihor Bakay from the post of Naftohaz Ukrayiny chairman and take control of the company herself or through her proteges. "This is the declaration of an attack...on Ukraine's energy market," Vitrenko said.

According to Stepan Havrysh from the Revival of Regions parliamentary caucus, Tymoshenko's statements are "an attempt to show that there are domestic enemies in the state and that a new campaign of struggle should be launched against them." According to Havrysh, Tymoshenko's statements "are of a political rather than economic character."

It should be recalled in connection with this haggling about gas debts that Yuliya Tymoshenko for some time headed Ukraine's Unified Energy Systems corporation--a major trader in Russian gas in Ukraine--and was dismissed by President Leonid Kuchma in 1998. Tymoshenko's corporation was openly favored and supported by then-Prime Minister Pavlo Lazarenko who, according to some reports, earned "hundreds of millions of dollars" on that support. One British newspaper dubbed Tymoshenko "Ukraine's gas princess" at that time. In the fall 1998, to counteract Lazarenko's people on the gas market, Kuchma created Naftohaz Ukrayiny--another state gas trader-- and appointed Ihor Bakay to run it.

Tymoshenko broke off her ties with Lazarenko well before his well-publicized arrest in Switzerland, the charges of money laundering brought against him by Ukrainian and Swiss authorities, and his appeal for refugee status in the U.S. She left Lazarenko's Hromada party, created the Fatherland group in the parliament, was elected head of the Budgetary Committee, and started to build her political career. In December 1999, in a move that surprised many, she was appointed deputy prime minister for the fuel and energy sector in Viktor Yushchenko's new cabinet. Thus, as some observers suggest, Tymoshenko obtained real leverage to settle accounts with her gas market rival, Ihor Bakay. Her attack on Naftohaz Ukrayiny is supposedly the first sign of what some Ukrainian observers think to be a "new re-division" of Ukraine's gas market, which is not only a source of huge debts but of huge profits as well. The point is, however, that debts are usually listed as the state's liabilities, while profits usually evaporate unaccounted for.

Some Ukrainian media reported that the country's deputy prosecutor-general, Olha Kolynko, resigned in protest against the cabinet appointment of Tymoshenko. The Prosecutor General's Office previously suspected the Unified Energy Systems of financial machinations, but no formal charges were filed. According to "Kievskie vedomosti," the corporation failed to pay 1.4 billion hryvni to the budget (some $400 million in 1998).

Apart from the definitely bad news from her trip to Moscow on 10 January, Tymoshenko also brought some good: she claimed to have struck a preliminary deal with Gazprom for the supply of 30 billion cubic meters of Russian gas in 2000 at $40 per 1,000 cubic meters (so far, Gazprom wanted $80 per 1,000 cubic meters). However, Gazprom made its agreement conditional on Ukraine's payment for those supplies in cash. Given Ukraine's long-standing inability to repay its gas debt to Russia, and the chronic shortage of money in the budget, Tymoshenko's deal seems to be only a self-congratulatory statement with no substance.

Ukraine consumes some 73 billion cubic meters of gas every year; 55 billion cubic meters is imported from Russia (including 30 billion cubic meters as payment for Russian gas transit via Ukraine). This means that payments for Russian gas will remain a major economic and political issue in Ukraine for the foreseeable future. And for Moscow, gas and oil supplies to Ukraine will remain the most important tool for exerting strong leverage on Kyiv.

"If the president's decree (on holding a constitutional referendum) appears under circumstances of the (current) legal chaos, this will mean that the referendum itself will also take place in the situation of legal chaos, and this will be the beginning of a serious political destruction [process] in Ukraine." -- Ukrainian political analyst Mykola Tomenko, commenting on the possibility of a constitutional referendum to oust Ukraine's present legislature. Quoted by Interfax on 14 January.

"Ukraine is witnessing the application of a formula typical of non-democratic transition societies: the will of the oligarchs is the will of the people. This will of the oligarchs, reinforced by the president's support for the idea of a referendum, means that referendum's results can be predicted beforehand." -- Political analyst Mykola Tomenko, quoted by Interfax on 14 January.

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.

UKRAINIAN POLITICIANS CRITICIZE KUCHMA'S REFERENDUM DECREE. Both leftist and rightist politicians on 17 January criticized President Leonid Kuchma's decree to hold a nationwide constitutional referendum on 16 April (see "RFE/RL Newsline," 17 January 2000). Socialist Party leader Oleksandr Moroz said Kuchma's decree is a "constitutional coup d'etat." Peasant Party leader Serhiy Dovhan said the decree "grossly violates the country's laws." A bloc of three rightist parties, composed of the Popular Rukh, the Reforms and Order Party, and the Congress of Ukrainian Nationalists, said the referendum raised "a danger to constitutional order in Ukraine," according to UNIAN. The Communist Party announced that it intends to appeal the decree to the Constitutional Court. Meanwhile, Kuchma commented the same day that if the current parliament creates a "constructive majority," it may survive until the expiration of its constitutional term. JM

UKRAINE'S GAS TRADER DENIES STEALING RUSSIAN GAS. Ihor Bakay, head of the state-owned Naftohaz, denied on 17 January that Ukraine has been illegally siphoning off Russian transit gas that passes over Ukrainian territory, AP reported. Bakay said Naftohaz will open its books to Russian scrutiny by 5 February to dispel the charges. He added that his company was taking Russian gas in accordance with an agreement with Gazprom as payment for transit. Bakay also said Russia is exaggerating Ukraine's debt for gas supplies. According to him, the debt now stands at $763 million. The sum of $2.23 billion mentioned by Deputy Premier Yuliya Tymoshenko (see "RFE/RL Newsline," 13 January 2000) includes the debts of commercial structures, for which Naftohaz is not responsible, he added. JM

POLISH, UKRAINE PRESIDENTS MEET IN KRAKOW. Polish President Aleksander Kwasniewski and his Ukrainian counterpart, Leonid Kuchma, discussed the founding of a Polish-Ukrainian university and the continuation of visa-free travel between both countries at their meeting in Krakow on 17 January. Kwasniewski and Kuchma intend to ask rectors of several Polish and Ukrainian universities to work out plans for establishing a joint university in Rzeszow, southeastern Poland. According to dpa, Kwasniewski declared that Poland will negotiate with the EU an arrangement enabling Poland to continue visa-free movement between the two states. Kwasniewski and Kuchma also discussed Russia's new defense doctrine, the Chechen war, the Belarus-Russia Union, and the joint Odesa-Gdansk gas pipeline project. JM