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UKRAINIAN PRESIDENT PLEDGES TO STICK TO MARKET RULES. President Viktor Yushchenko said at a business forum in Kyiv on 25 May that this month's fuel crisis in Ukraine should serve as a lesson to the government to respect the laws of the market, Ukrainian and international news agencies reported. "I will guarantee that the government will apply only market measures to respond to challenges on the fuel market, the market of meat, and other markets," Yushchenko said. Yushchenko rejected Prime Minister Yuliya Tymoshenko's earlier allegations that the fuel crisis in Ukraine resulted from a "plot" by Russian oil traders, which control four of Ukraine's six oil refineries. "There is no Russian conspiracy here, no Ukrainian conspiracy. The lesson to be learned is not to make up legends and myths," Yushchenko said. He also dismissed as "idle talk" rumors that he intends to sack Tymoshenko over her handling of the fuel crisis. JM

UKRAINIAN DEPUTY PREMIER ADVOCATES SYNCHRONIZING WTO ENTRY WITH RUSSIA. Deputy Prime Minister Anatoliy Kinakh said in a television interview on 25 May that Ukraine and Russia should synchronize and coordinate their efforts for joining the World Trade Organizations (WTO), Interfax reported. Kinakh also spoke in favor of Ukraine's active participation in the formation of the Single Economic Space (SES) with Russia, Kazakhstan, and Belarus. "This is a unique opportunity for the four states to create more favorable conditions for economic integration," he noted. Kinakh said the first stage in the SES formation should be establishing a free trade zone "without any restrictions and exceptions, on the basis of free movement of commodities and services." According to him, deeper integration within the SES is possible only after the four countries join the WTO and apply WTO and EU trade rules to such integration. JM

UKRAINIAN MINISTER SAYS ECONOMY ACCELERATES. Economy Minister Serhiy Teryokhin told journalists in Kyiv on 25 May that gross domestic product (GDP) will rise to 5.6 percent year-on-year in January-May from 5 percent in the first four months of this year, Ukrainian news agencies reported. According to Teryokin, the highest GDP growth rates are observed in the sectors of food processing (16 percent), chemical industry (14.3 percent), and machine building (11.9 percent). The government expects to achieve 8.2 percent growth in GDP this year, after last year's officially reported 12.1 percent rise. JM


RFE/RL Belarus, Ukraine, and Moldova Report Vol. 7, No. 20, 27 May 2005

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

WARSAW IN DIPLOMATIC FIGHT WITH MINSK OVER ETHNIC GROUP. A full-blown brawl flared up between Minsk and Warsaw earlier this month, with mutual diplomatic expulsions and a heated exchange of acrimonious accusations.

The clash is ostensibly centered on the Union of Poles in Belarus (SPB), which in March elected a new leadership that met with the disapproval of Belarusian authorities.

But the conflict has broader implications that could seriously affect bilateral relations on the EU's eastern border.

Polish media reported on 17 May that Marek Bucko, first secretary of the Polish Embassy in Minsk, has been declared persona non grata by Belarusian authorities. The report was not immediately confirmed by either the Belarusian Foreign Ministry or the Polish Embassy in Belarus, but "Sovetskaya Belorussiya," the newspaper of the Belarusian presidential administration, wrote in its 17 May edition that "according to accounts by members of the Union [of Poles in Belarus], one of the employees of the [Polish] diplomatic representation, Marek Bucko, tried to direct the organization."

Polish Deputy Foreign Minister Andrzej Zalucki announced on 18 May that his ministry had decided to expel an unnamed counselor to the Belarusian Embassy in Warsaw in response to the Bucko expulsion. The same day, Belarusian Foreign Ministry spokesman Ruslan Yesin said Bucko was expelled in response to the expulsion of a Belarusian diplomat from Warsaw "several weeks earlier." That expulsion somehow failed to attract the attention of either the Polish or Belarusian media at the time it took place, according to Yesin. At the same time, Yesin said the expulsion of Bucko was also prompted by his "vigorous activities oriented toward the destabilization of Belarusian society."

Bucko's duties at the embassy in Minsk included contacts with Belarusian political parties and nongovernmental organizations, as well as with the SPB. On 12 May, the Belarusian Justice Ministry declared that an SPB congress in March was "non-democratic" and invalidated its decisions, notably the election of a new leadership. "The attack on the Union of Poles in Belarus [following its March congress] was very brutal," Bucko told Polish media on 18 May. "Delegates to the congress have been seriously pressured, threatened with layoffs from their jobs, called for interrogations, and intimidated. All this was done for the sole purpose of keeping Mr. Tadeusz Kruczkowski in the post of SPB chairman." At the SPB congress in March, Tadeusz Kruczkowski was replaced by Andzelika Borys.

In an unprecedented step in the history of Polish-Belarusian relations, Polish President Aleksander Kwasniewski appealed on 19 May to the European Union for help in protecting the Polish minority in Belarus. Polish Foreign Minister Adam Rotfeld then said on 20 May that Warsaw had given Minsk a chance to reverse its decision on the SPB congress. "We created a chance for Belarus to reverse its decision and restore the legally elected authorities of the SPB," Rotfeld said. "If the Belarusian court takes such a decision, then we shall consider the matter closed. If there is an escalation, it will only be to the detriment of Belarus." The Warsaw-based "Zycie Warszawy" on 21 May published a purported list of a dozen Belarusian citizens who will be barred from entering Poland in connection with the conflict around the SPB congress. The list reportedly includes several SPB activists who support the Belarusian authorities' position in the conflict, as well as Belarusian Justice Minister Viktar Halavanau.

The Belarusian independent weekly "Nasha Niva" commented last week that the conflict around the organization of ethnic Poles in Belarus is essentially a clash between a group of SPB loyalists to the regime of President Alyaksandr Lukashenka (led by former SPB Chairman Kruczkowski) and a democratic wing of minority activists headed by a new SPB chairwoman, Andzelika Borys. The Belarusian regime, "Nasha Niva" argued, is going to stifle not only all political dissent but also any sprouts of civil society or pro-democracy activism in the country, and minority organizations are no exceptions in this drive.

The Belarusian government has launched a media campaign apparently intended to discredit the new SPB leadership in the eyes of the 400,000-strong Polish minority. Earlier this month, Belarusian Television showed a 40-minute documentary presenting the conflict around the SPB conflict as provoked by machinations from abroad, while the Polish-language weekly "Glos znad Niemna" in Hrodna, evidently inspired by the authorities, issued a special edition with materials discrediting Andzelika Borys and her associates in the SPB.

That something unpleasant is brewing in Polish-Belarusian relations became apparent during President Lukashenka's annual address to the nation on 19 April, when he slammed Poland for what he suggested was working to stage a revolution in Belarus, similar to the Orange Revolution in Ukraine. "I want to forewarn the Polish Embassy -- please don't take this as a threat," Lukashenka said in that address. "We know what's going on in your embassy, we know about your work. Don't think that Poles in Belarus are not Belarusian citizens. They are our citizens. We will see that no harm comes to them, and you will not bamboozle them either."

"You see, today they are working on what we will be doing in 2006," Lukashenka went on. "Ukraine is forming camps -- as if to say, 'we will send you revolutionaries from there.' The Poles are working in the western part [of Belarus], including through the Roman Catholic Church, but not much comes out of it. [Those] Catholics are our Catholics. We do not suppress them. We have known since long that you will be pressuring this part of the population in order to destabilize [the situation]."

Lukashenka's ire over Warsaw's clout among Belarus's Polish minority -- whose cultural and educational activities are generously sponsored by the Polish government -- might not be the only, or even the main, factor behind the current diplomatic row. Polish lawmakers in the European Parliament, along with their Lithuanian colleagues, have been trying vigorously for months to persuade Brussels to launch and finance radio broadcasts into Belarus from neighboring countries. If they succeed, the information blockade imposed on Belarusians by the Lukashenka regime might be somewhat eased. This cannot but disconcert Lukashenka ahead of the 2006 presidential election in Belarus.

Calls in Poland for taking a tougher stance toward the Lukashenka regime are now being heard primarily from the political center and right. Poland will hold parliamentary and presidential elections this fall, and all opinion surveys predict that the Democratic Left Alliance, which now runs the government, will lose ground in both votes to centrists and right-wingers.

It will therefore come as little surprise if the currently sour relations between Minsk and Warsaw continue to curdle after the likely installation of a new government in Poland later this year. (Jan Maksymiuk)


YUSHCHENKO, TYMOSHENKO CLASH OVER GASOLINE. The hottest news in Ukraine last week was not the Eurovision song contest in Kyiv -- an unusual event in this post-Soviet country by any standards. The real shocker was a report in the Kyiv-based weekly "Zerkalo nedeli" that President Viktor Yushchenko suggested that Prime Minister Yuliya Tymoshenko should tender her resignation over her incompetence in dealing with the country's fuel crisis.

To toss even more gasoline on that fire, the report asserted that the suggestion was made "half-publicly" during a heated Yushchenko-Tymoshenko exchange at a 19 May meeting with senior executives from the Russian oil sector, including Transneft, LUKoil, and TNK-BP.

Have the two heroes of the Orange Revolution already had enough of their partnership and resolved to launch an internecine war?

For the time being, it appears they have not. A string of statements from Yushchenko's and Tymoshenko's press services that followed the report on their 19 May meeting avowed that the relations between the president and the prime minister remain friendly and full of mutual trust. "I trust the prime minister, my generally positive assessment of the government's work is unaltered. Only those doing nothing make no mistakes," Yushchenko asserted in one statement. "We have found a formula to resolve the oil problem, because we have found courage in ourselves to conduct an open, public, and honest dialogue as well as to make hard and responsible decisions both within and outside [our] team," he stressed.

Moreover, on 22 May, during a solemn occasion at the grave of Ukrainian national poet Taras Shevchenko in Kaniv, Yushchenko and Tymoshenko renewed their earlier pledge to form a coalition for the 2006 parliamentary elections of Yushchenko's Our Ukraine People's Union, Tymoshenko's Fatherland Party, and the People's Party headed by parliamentary speaker Volodymyr Lytvyn. "I'm sure that the Orange Revolution and the values with which we came to Kyiv's Maydan [Independence Square] truly belong to these three political forces," Yushchenko said in Kaniv. Tymoshenko added, "I support with all my soul our union, our teamwork, our joint political activity for many years ahead."

But some skeptics in Ukraine immediately recalled another election alliance made in Kaniv, by four presidential candidates during the 1999 presidential campaign (Yevhen Marchuk, Oleksandr Moroz, Volodymyr Oliynyk, and Oleksandr Tkachenko), which lasted no longer than three weeks.

What actually transpired between Yushchenko and Tymoshenko on 19 May? According to the influential and usually well-informed "Zerkalo nedeli," which attributed its information to four unnamed participants in the meeting, Yushchenko apologized to the Russian oil traders for Tymoshenko's cabinet, which, Yushchenko claimed, had obstructed their work. Yushchenko purportedly said he wished he had never appointed Tymoshenko as prime minister. He also is said to have suggested that she might tender her resignation and join the opposition Social Democratic Party-united and the Party of Regions in order to "blow their pipes and beat their drums." To add insult to injury, Yushchenko reportedly invited everyone except Tymoshenko to the next room to have champagne. All this purportedly took place after Tymoshenko categorically and repeatedly disagreed with Yushchenko's assessment that she had dealt with the fuel crisis by way of essentially administrative and non-market levers.

Leaving aside the shocking nature of the Ukrainian "family quarrel" under the Russian eyes, as "Zerkalo nedeli" put it, one could argue that Yushchenko was to a large extent correct. Gasoline prices began to rise in Ukraine in early April, presumably stimulated by a more than 50 percent rise in the price of crude oil, a 30 percent increase in the excise tax, and increased tariffs for rail transport. Tymoshenko ordered in mid-April that prices for gasoline be stabilized at a level below 3 hryvnyas ($0.6) per liter. Simultaneously, the Ukrainian Economic Ministry warned Russian oil companies that it would guarantee their property rights for Ukraine's refineries only if they agreed to cut retail fuel prices -- which they did. But following the cuts, some Russian-owned refineries in Ukraine significantly decreased their daily output or halted it altogether for "planned repairs." As a result, Ukrainians saw long lines at gasoline stations run by LUKoil and TNK-BP, some of which reportedly introduced rationing.

Seeking more market-oriented methods to defuse the fuel crisis, the government hurriedly drafted a bill to abolish import duties on fuel; the Verkhovna Rada equally hurriedly passed the legislation earlier this month. The aim of the legislation is twofold -- to stop fuel prices from rising, and to create a more competitive environment for fuel imports from refineries not owned by Russians, notably from Lithuania and Romania. And the law seems to be working, at least for the time being. Fuel prices have now been fixed at 3.2 hryvnyas, 3 hryvnyas, and 2.85 hryvnyas per liter of A-95 gasoline, A-92 gasoline, and diesel fuel, respectively. And some suppliers have begun looking for Lithuanian fuel.

On the other hand, Tymoshenko's arguing that the fuel crises was a "plot" by Russian oil traders to destabilize the government that is not liked by the Kremlin, seems to convince many Ukrainians as well. A poll conducted by the Razumkov Center among some 700 Kyiv residents last week found that more than 50 percent of respondents attributed the fuel crisis to "Russia's economic pressure as a means of influence on Ukraine's policy," according to "Zerkalo nedeli." That should not come as a surprise, not only because of the popular belief in Ukraine that Russia is to blame for most of Ukraine's political and economic troubles but also because of the situation on the Ukrainian fuel market.

Russian oil traders control 75 percent of fuel supplies to Ukraine, which effectively creates an informal foreign cartel that can easily coordinate its pricing policies in Ukraine not only to secure higher margins but also to achieve other economic or political objectives, especially when such policies are consecrated by "market rules." Russian President Vladimir Putin said in an interview with "Komsomolskaya pravda" on 23 May that Russian companies need to apply market-based pricing policies in the export of energy resources. Referring specifically to Georgia and Ukraine, Putin said it is necessary to find "transparent, market tools for interaction" with these countries. But Putin singled out Belarus, saying it is an exception in Russia's market-based export policy, since, the Russian president explained, "We are trying to find a way to build a union state with Belarus." This seems to be a circuitous way of saying what Tymoshenko essentially, and less diplomatically, said about the roots of Ukraine's fuel crisis.

"There is no Russian conspiracy here [in the fuel crisis]," Yushchenko said at a business forum in Kyiv on 25 May. "I demand only one thing of the government: Learn lessons like that of oil markets." To which, according to Reuters, Tymoshenko, who sat alongside him, responded: "May my president forgive me."

But an equally essential question here is whether she has forgiven Yushchenko for his words during last week's meeting with Russian oil traders -- for what seemed to be a severe blow to her self-worth if not an outright humiliation. The answer to this question might also include an answer to the question about the viability of the current political establishment in Ukraine. (Jan Maksymiuk)

"RFE/RL Belarus, Ukraine, and Moldova 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.