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RFE/RL Poland, Belarus, and Ukraine Report Vol. 4, No. 15, 16 April 2002

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

ECONOMIC ACCORDS WITH MOSCOW TAKE INTEGRATION ONE STEP FURTHER. Following a meeting between Russian President Vladimir Putin and his Belarusian counterpart Alyaksandr Lukashenka in Moscow on 12 April, within the framework of the Supreme Council of the Russia-Belarus Union, the prime ministers of Belarus and Russia -- Henadz Navitski and Mikhail Kasyanov, respectively -- signed two accords on extending Russia's domestic prices for its energy resources to Belarus as of 1 May and Russia's domestic railway tariffs on shipments of Belarusian goods as of 1 June. In exchange, Lukashenka obliged himself to issue a decree canceling customs and tax preferences for Belarusian enterprises as of 1 May; thus equalizing the economic conditions for domestic and Russian producers in Belarus.

Belarusian Deputy Premier Leanid Kozik told Belarusian Television viewers on 13 April that, thanks to the first accord, Belarus's budget will get a windfall of more than $140 million a year, since the price of 1,000 cubic meters of Russian gas for Belarus will be lowered from $30 to $21.17. The second accord will allow Belarusian enterprises to save some $70 million a year on railway shipments in both Russia and Belarus.

Lukashenka also claimed to have agreed with Putin on Russian gas transit across Belarus. "We also agreed with Vladimir Vladimirovich [Putin] -- and the prime ministers sealed this agreement by signing an intergovernmental accord on the creation of a single system of gas provision not only to our country but also to Western Europe -- regarding the gas transit across the Republic of Belarus," Belarusian Television quoted Lukashenka as saying. "Such a system will be created in the near future. The Belarusian and Russian sides are vitally interested in this issue," he added.

Once again, Deputy Premier Kozik explained: "Today we pump some 28 billion cubic meters of Russian gas [per year] through our [pipeline] system. A part of this amount remains in Belarus [and] a part goes to Europe. The main bulk of Russian gas goes to Europe across Ukraine. You know that the Yamal-Europe gas pipeline is being built [and] you known that talks are being conducted with Poland to construct a link [bypassing Ukraine] [see story below]. That is, according to our calculations, in the future we will pump 60 billion cubic meters of gas. It means profit for us from gas transit. Nothing is done free of charge."

Meanwhile, Belarusian independent economics expert Leanid Zlotnikau told RFE/RL's Belarusian Service on 12 April that the officially advertised success of Lukashenka in forcing the two economic accords with Moscow is not as big as it seems at first glance. "There is a financial gain for Belarus [connected with the accord on gas pricing], but it is small, equal to some $100-115 million [a year]," Zlotnikau noted. "On the other hand, the sides have not agreed on collecting indirect taxes. Because of the lack of such agreement, Belarus's losses amount to some $180 million [a year]...which is more than the gain owing to the lowering of the gas price.... For the sake of comparison, I may say that the monthly wages and pensions of the Belarusian population total $500 million. Saving $100 million a year means almost nothing for the country. This sum does not resolve any problems today."


OFFICIAL RESULTS OF PROPORTIONAL PARLIAMENTARY POLL. The Central Election Commission on 15 April released the official results of the 31 March parliamentary election in the poll in which 225 seats were contested under a proportional party-list system, UNIAN reported. Our Ukraine obtained 23.57 percent of the vote (70 seats), the Communist Party 19.98 percent (59 seats), For a United Ukraine 11.77 percent (35 seats), the Yuliya Tymoshenko Bloc 7.26 percent (22 seats), the Socialist Party 6.87 percent (20 seats), and the Social Democratic Party-united 6.27 percent (19 seats).

The 4 percent voting barrier to qualify for parliamentary representation proved too high for 27 parties and blocs, including the Nataliya Vitrenko Bloc (3.22 percent of the vote), Women for the Future (2.11 percent), Winter Crop Generation (2.02 percent), the Communist Party (reformed) (1.39 percent), the Greens (1.3 percent), Yabluko (1.15 percent), and Unity (1.09 percent).

KYIV COUNTS ON 1O-YEAR GAS-TRANSIT DEAL WITH MOSCOW. Fears have risen again in Ukraine over Russia's plans to find other transit routes for natural-gas exports to Europe. But all signs suggest that Moscow cannot afford to pursue major pipeline projects for the time being.

Last week, Russia's decade-old effort to secure outlets for its vital gas exports seemed to be moving on several fronts at once with talks in Moscow, Warsaw, and Weimar (Germany).

The problem of access for gas exports has been a preoccupation for Russian leaders ever since the Soviet breakup left the main Progress pipeline system in the hands of Ukraine.

Since taking office two years ago, Russian President Vladimir Putin has been relentless in pursuing strategies to gain control of the transit pipelines through Ukraine or to bypass the country with new lines through Poland and Slovakia.

Aside from oil, natural gas is Russia's biggest hard-currency earner. Russia supplies one-fourth of Europe's gas, while 90 percent of the flow goes through Ukraine. The route has been a source of both cheap gas for Ukraine and endless disputes with Moscow. Charges of pilfering from the pipeline and Ukraine's $1.4 billion gas debt were supposed to be settled last October, when a deal was reached to restructure the debt over 12 years.

But Ukraine's anxiety has continued over Russia's long delay in accepting bonds to back the debt scheme and its continued campaign to find bypass routes.

On 9 April, an energy expert warned Ukrainian officials in Kyiv that the country could lose more than $1 billion in transit fees if Russia succeeds in building an alternate pipeline through Poland, AP reported. Volodymyr Saprykin of Ukraine's Razumkov Center for Economic and Political Studies said, "It means the loss of Ukraine's monopoly for gas transit," adding that "it may not happen today, but it's possible in five to seven years."

But the possibility may be less threatening after a meeting in Moscow between prime ministers Anatoliy Kinakh of Ukraine and Mikhail Kasyanov of Russia. Kinakh said after the meeting on 10 April that the two countries will sign a 10-year gas-transit deal by June. Kasyanov confirmed the plan, saying that the sides are also considering ways of making the pipelines secure.

Kasyanov said, "By June, specialists from the two countries will have provided a set of measures to become the foundation of the bilateral document," Russia's official news agency RIA-Novosti reported. Kasyanov also said the debt problem is "practically solved," a phrase that has prompted worries in the past because Russia has yet to explain the reason for delays in approving the bonds. He said only one legal "snag" remains, without elaborating.

But according to RIA-Novosti, Ukraine has agreed to honor the debts if the national-gas company Naftohaz Ukrayiny fails to pay them off. That point has been critical for Moscow in the past.

While the terms of the transit deal are unknown, the 10-year commitment suggests that Russia may be resigned to Ukrainian transit, even if it develops other routes in the long term. The Progress system still has vast unused capacity, which would be costly to recreate somewhere else.

The biggest hindrance may be that Russia's Gazprom lacks the funds to fulfill its bypass plans. Last month, Gazprom joined with Germany's Ruhrgas and Gaz de France in a $2.7 billion deal to buy 49 percent of Slovensky Plynarensky Priemysel, the Slovakian gas system. The move again stirred fears in Ukraine of a pipeline detour. But Gazprom's partners supplied all of the cash, because the company's finances are strapped.

Last month, the industry newsletter "Petroleum Argus" quoted an unnamed official of the Polish Oil and Gas Company as saying that "Gazprom has dropped its plan for a pipeline bypassing Ukraine" due to a lack of funds. A link to Slovakia would cost an estimated $1 billion. Russia has also delayed plans for building a second branch of its Yamal Peninsula gas line through Poland, because the first already has unused capacity," according to the newsletter.

In Poland, the gas issue is both financial and political. On 11 April, Gazprom Chairman Aleksei Miller held talks with officials in Warsaw about Polish demands to ease the terms of a 1993 "take-or-pay" contract because Poland's gas consumption has lagged. Gazprom has been pressing Poland to spend $200 million to finish the first Yamal line.

But the government has also been sensitive about the effect of a bypass on Ukraine. In addition, the daily "Gazeta Wyborcza" reported on 11 April that prosecutors in Gdansk have launched a probe into Poland's losses from construction of the Yamal project.

During Putin's talks on 10 April with German Chancellor Gerhard Schroeder in Weimar, the issue of gas exports also surfaced. At a meeting with business people, Putin voiced concern over new European Union competition rules that limit the share of energy that a member country can import from a nonmember to 30 percent. Putin said, "If we are talking about a common economic space, we should take measures and change the rules, and put Russia in the picture too," RIA-Novosti reported. Russia has been highly critical of the EU regulations, arguing that they threaten Gazprom's long-term contracts. The issue may be one more reason why Moscow may be becoming more cautious about new investments to build pipelines around Ukraine.

"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.

RUSSIAN JEWISH CONGRESS WANTS TO DEMONSTRATE SOLIDARITY WITH ISRAEL. The Russian Jewish Congress (REK) released a statement to the media on 15 April in which it said it is organizing mass demonstrations to be held nationwide by Russian Jews to show their support for Israel in the current crisis in the Middle East and to protest anti-Semitism and xenophobia, reported on 15 April. The statement said, "A wave of anti-Semitic actions has rolled across Western Europe and many other countries, has reached the border of CIS countries, and is approaching the territory of Russia." It added that recent attacks, including one on a synagogue in Kyiv (see "RFE/RL Newsline," 15 April 2002), as well as others in Belgium, France, Germany, and Tunisia, "show the consolidation of terrorist organizations with European neo-Nazis." VY

UKRAINE DENIES TRADING IN ARMS WITH BAGHDAD. Serhiy Borodenkov, Ukraine's Foreign Ministry press service chief, told journalists on 16 April that "Ukraine has not sold, is not selling, and does not plan to sell any weapons to Iraq," adding that the Ukrainian leadership has not been involved in any illegal arms deals with Iraq, UNIAN reported. Borodenkov's statement comes in the wake of recent media reports alleging that in 2000 President Leonid Kuchma approved a sale of $100 million worth of radar systems to Iraq in contravention of UN sanctions (see "RFE/RL Newsline," 15 April 2002). JM

ALTERNATIVE VOTE COUNT DIFFERS FROM UKRAINE'S OFFICIAL RESULTS. According to an alternative vote count of Ukraine's 31 March parliamentary elections conducted by the For Fair Elections committee, Our Ukraine obtained 25.04 percent of the vote, the Communist Party 21.2 percent, For a United Ukraine 9.4 percent, the Yuliya Tymoshenko Bloc 8.6 percent, the Socialist Party 7.9 percent, and the Social Democratic Party-united 6.3 percent, Interfax reported on 15 April. Yuliya Tymoshenko said For Fair Elections -- which was formed by the Yuliya Tymoshenko Bloc, Our Ukraine, the Communist Party, and the Socialist Party -- counted votes as they were recorded in official protocols from 97 percent of Ukraine's polling stations. Compared to the alternative vote count, the official results (see "RFE/RL Newsline," 15 April 2002) show a higher gain of For a United Ukraine and lower gains of all the other parties. Tymoshenko claimed that while vote-rigging in the election took place, its scale was "significantly smaller than that planned by the authorities." JM

OUR UKRAINE LOSES SEAT FROM SINGLE-MANDATE CONSTITUENCY. The Appeals Court in Zaporizhzhya (southern Ukraine) has invalidated the election results in constituency No. 82 where, according to a preliminary report, the seat was won by Oleh Oleksenko from Our Ukraine, UNIAN reported on 15 April. The court ruling is not subject to appeal. JM

COURT IMPROVES RE-ELECTION CHANCES FOR ANTI-KUCHMA LAWMAKER. The Supreme Court has invalidated the election results in eight polling stations of constituency No. 35 and obliged the Central Election Commission to recount votes in this constituency without taking into account ballots cast in those eight stations, UNIAN reported on 15 April. The court ruling followed a complaint by proxies of lawmaker Oleksandr Zhyr, the chairman of the temporary parliamentary commission investigating the murder of journalist Heorhiy Gongadze, who wanted the election to be invalidated in the entire constituency (see "RFE/RL Newsline," 12 April 2002). Zhyr's proxies claimed that the election commissions in those eight polling stations rigged the vote results against Zhyr. According to them, Zhyr has a good chance to be re-elected to the Verkhovna Rada as a result of the court ruling. JM

UKRAINIAN OPPOSITION LEADER SAYS 'WORKABLE' LEGISLATIVE MAJORITY IS IMPOSSIBLE. Yuliya Tymoshenko, the leader of the eponymous election bloc, told journalist on 15 April that a "real, workable majority" in the newly elected Verkhovna Rada cannot be created, Interfax reported. Tymoshenko said there are no "basic principles" on which such a majority can be formed. "We can only speak about a situational majority," she added. She appealed to deputies elected in single-mandate constituencies not to join the pro-presidential For a United Ukraine bloc. She also announced that her parliamentary caucus will initiate an impeachment procedure against President Leonid Kuchma in the new parliament. JM

MINISTERS INSPECT SLOVAK-UKRAINIAN BORDER. Slovak Interior Minister Ivan Simko and Defense Minister Josef Stanko inspected the Slovak-Ukrainian border on 15 April, "Sme" reported the next day. Simko has called protection of Slovakia's borders a national priority. Both ministers said steps are being taken to stop illegal immigration and organized crime, particularly human trafficking. Simko estimated that it will be necessary to invest hundreds of millions of Slovak crowns to upgrade the border, most notably for a monitoring system to prevent illegal immigration. AS