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UKRAINE TAPS INTERNATIONAL BOND MARKET FOR $800 MILLION. The Ukrainian government issued an $800 million tranche of 10-year, dollar-denominated bonds on 4 June at a yield of 7.65 percent, Interfax reported. The "Financial Times" noted on 5 June that a lack of regional bond issues contributed to favorable terms in comparison with the 10.4 percent yield on Ukraine's seven-year bond issue in 2000. The bonds marked Ukraine's first international issue since a debt restructuring three years ago, the paper added. JM


To judge by the conduct of a recent local election in Sumy in eastern Ukraine, the authorities have refined and improved the tactics first used to influence the outcome of last year's parliamentary elections, according to both Ukrainian opposition politicians and media commentators. During recent visits to Canada and Berlin, Ukrainian opposition leaders warned that if such tactics are employed during the 2004 presidential ballot, the results will not be fair. Those fears are shared by Ukraine's voters, 55 percent of whom do not believe the 2004 elections will be free and fair, according to a recent poll.

The OSCE's Warsaw-based Office of Democratic Institutions and Human Rights (ODIHR), which will shortly embark on preparations for monitoring the presidential ballot, has also been briefed on the authorities' interference during the local elections.

The 1994 and 1998 parliamentary elections were considered relatively free and fair, according to the OSCE. Fraud and falsification were more widespread during the 1999 presidential and 2002 parliamentary elections, reflecting the consolidation of authoritarian executive and oligarchic power.

The first time the Ukrainian authorities resorted to the large-scale de-registering of candidates was during the March 2002 parliamentary elections and elections to the Crimean Supreme Soviet. The OSCE final report on the 2002 Ukrainian parliamentary elections noted that 40 candidates were de-registered in the week prior to the ballot. "These late decisions made an appeal to the courts problematic, if not impossible," the OSCE concluded.

In addition, the Crimean Election Commission de-registered Crimean Communist leader and Supreme Soviet Chairman Leonid Grach on 25 February 2002 because he allegedly filled out his income declaration incorrectly. But the CEC did not remove Grach's name from the Communist Party of Ukraine (KPU) list in the national parliamentary elections. That discrepancy led many to conclude that Grach's exclusion from the Crimea ballot was politically motivated. The Crimean Appeals Court rejected Grach's complaint at his exclusion from the Crimea ballot only on 29 March 2002, just two days before the elections, when it was too late to reverse the decision in the courts. With Grach out of the way, the pro-presidential "party of power" in the Crimea, the Popular Democratic Party (NDP), which since 1998 had controlled the Crimean government, was able to expand its control to encompass the Crimean Supreme Soviet, which Grach had chaired until then. This mirrored a similar strategy in Kyiv, where the "party of power" also took control of all institutions after the elections.

The same ploy of stripping candidates of their registration at the last minute was used during the Sumy election last month when the joint opposition candidate, Serhiy Klochko, was accused of not properly declaring a miniscule donation and of allegedly not providing a truthful biography. The Committee of Voters of Ukraine NGO described this decision as "politically motivated."

As in the case of Grach in 2002, when a decision is made to remove a candidate the authorities produce the necessary financial "evidence" to disqualify him. In a country where half the GDP has been produced in the shadow economy since the 1990s, most Ukrainians have been forced to survive by not necessarily always following the law. As to items "presented wrongly" on a biography, these can be interpreted in different ways by the candidate and the authorities.

The Ukrainian opposition fears that former Prime Minister and Our Ukraine Chairman Viktor Yushchenko could also be disqualified on "minor technical grounds" days before the October 2004 elections. This would leave the field open to a repeat of the 1999 presidential elections where the "party of power" faced the KPU in the second round. In 1999, the unpopular "party of power" (in the person of incumbent President Leonid Kuchma) won because of the large number of negative votes against KPU leader Petr Symonenko.

Of the four opposition groups -- Yushchenko's Our Ukraine, the Yuliya Tymoshenko Bloc, Oleksandr Moroz's Socialists, and the KPU -- only the first three have tentatively agreed to unite behind one candidate (Yushchenko) for the 2004 elections. The KPU and Our Ukraine are mutually hostile and Symonenko is on record as stating he will stand as the KPU's candidate in 2004.

The authorities fear a united opposition candidate and would prefer that the leaders of all four opposition groups stand individually in the 2004 elections to split the opposition vote. If Yushchenko stands as a united noncommunist candidate (backed by Moroz and Tymoshenko), he would be guaranteed to enter the second round and would be unopposed in western, central, and northern Ukraine. The "party of power" candidate would then have a difficult task of beating Symonenko (the KPU vote averages 15-20 percent) to make it to the second round.

In the Sumy mayoral election on 18 May, joint opposition candidate Klochko, whom pre-election polls found to be the favorite, was de-registered two days before the election. The reason given was not declaring a miniscule donation of 50 hryvni ($10) to the Sumy Social Fund in Defense of Youth. Klochko's de-registration left the field open for a victory by "party of power" candidate Volodymyr Omelchenko, an adviser to Sumy Oblast Governor Volodymyr Shcherban.

A video was distributed prior to the Sumy election entitled "The Bare Truth About Oleksandr Moroz," which alleged that the opposition candidate, Klochko, also a Socialist, is a homosexual. Such discrediting tactics were used by the KGB in the Soviet era against Ukrainian and Armenian dissidents. Commenting on the Sumy election, Yushchenko characterized the present Ukrainian leadership as "a bandit regime that is not interested in transparent elections and demonstrates disrespect for its own citizens."

Two further local elections are to be held on 8 June in Zaporizhzhya, where Our Ukraine candidate Petro Sabachuk was encouraged to resign from his bloc in mayoral elections, and in Chernihiv for a parliamentary seat. In Chernihiv, the joint opposition candidate is Dmytro Ivanov against whom, a statement by Moroz's Socialists published in the parliamentary "Holos Ukrayiny" on 23 May claimed, "impermissible methods of provocations and slanders" are already being used.

The use of such election tactics suggests that, as elsewhere in the CIS, Ukraine's leaders do not believe in the concept of free and equal competition during elections that the "party of power" might lose. For the leadership of CIS states, election defeat means not just the loss of political power, but also the loss of their businesses, vulnerability to new and stringent anticorruption measures, and being called to account for their actions when they were in power. But at the same time, the continued resort to blatantly unfair elections will negatively affect Ukraine's efforts toward Euro-Atlantic integration.