Perspectives on independence, democracy, and reform
Serhiy HOLOVATY, People's Deputy of Ukraine
Ukraine is at a critical crossroads in its development as an independent
state. It is confronted with choices which will determine the future of
democracy in Ukraine and impact upon the security and stability of Europe:
whether to pursue a course like Poland's, of further integration into the
European family of nations, or to follow Belarus into a murky pan-Slavic
union led by an economically crippled, increasingly chaotic Russia.
Two events this month have painted these options in stark relief. The
first was the symbolic vote on March 3 by Verkhovna Rada to join the CIS
Parliamentary Assembly. The second was the admission of Poland, the Czech
Republic and Hungary to NATO. Ukraine's choices are clear. However, the
route it will ultimately choose is more ambiguous.
At its root, the debate over Ukraine's future course belies a profound
struggle within the Ukrainian nation to identify its place in the world;
a world which it only feebly comprehends and which poorly understands Ukraine.
Ukraine's history of foreign domination, colonial servitude and divided
rule has left deep scars on the national psyche. It has left the new state
woefully unprepared to define its national ideals and objectives in a brave
new world. The country's leadership, Ukraine's legacy from the Soviet Union,
is more interested in pursuing and preserving selfish commercial/financial
interests than it is in defining and securing Ukraine's strategic interests
and in building a prosperous, democratic nation for the benefit of present
and future generations. Lacking direction and poverty-stricken, Ukraine
is sinking into a morass of creeping despotism.
THE EUPHORIA
It did not have to be this way. With the euphoria of independence, Ukraine
anxiously sought ways to secure its new freedom against Russian hegemony.
Accordingly, it embarked on a European-oriented nation-building exercise.
Ukraine successfully laid out the framework for the development of vital
democratic institutions - a balance of power between Parliament, President,
and an independent judiciary, the provision for local self government,
and constitutional guarantees of human rights and freedoms, property rights,
and the like. Ukraine achieved membership in the Council of Europe (ahead
of Russia); it solemnly promised to enact reforms to transform post-Soviet
Ukrainian society in accordance with the democratic values, norms and standards
of human rights required of Member States. Only three years ago, the passage
of the Constitution of Ukraine was heralded by the Council of Europe as
the embodiment of European constitutional progress.
On the economic front, Ukraine defeated hyperinflation, achieved a respectable
degree of macroeconomic stabilization, successfully introduced a new currency,
privatized most small and medium businesses and established a legislative
framework for market development.
To facilitate this process, Verkhovna Rada not only passed laws on privatization
and foreign investment, it has since 1993 delegated to the government and
the President extraordinary powers to regulate the economy by decree.
DISAPPOINTMENT
The tragedy of these efforts is that, with few exceptions, Ukraine has
only imitated real reform. The economy has shrunk every year since independence.
Most of the private sector has fled to the shadow economy, hounded to the
periphery of legal entrepreneurial activity by state over-regulation, unfair
tax collection measures, and the blind corruption of officials. Millions
of pensioners, teachers, doctors, and other state employees await payments
which are more than a year overdue. Privatization and other reforms have
stalled, foreign financial aid is in constant jeopardy of being suspended,
and democracy is weaker than at any other time since independence. The
government interferes with local and parliamentary election results and
harasses the media with impunity. Ukraine is on the verge of being suspended
from the Council of Europe for violations of human rights, electoral fraud,
repression of the media, and interference with the independence of the
judiciary.
Ukraine's nation-building efforts have not resulted in Polish-style
economic vitality, but in stagnation and economic collapse. As the twenty-first
century approaches, Ukraine is confronted by the specter of unrelenting
misery for its people, debt default, currency collapse, the imperial embrace
of Russia, and resurgence of the Communist-led Left. Popular attitudes
toward democracy, reform, and the national ideal are characterized by cynicism,
skepticism, and fatigue rather than by hope, faith, and contentment.
NOMENKLATURA AND
THE RISE OF OLIGARCHS
Where did Ukraine go wrong? What are its future perspectives?
The response to these questions goes to the heart of the Soviet legacy
in Ukraine. A defining characteristic of post-Soviet society is the continued
depth and breadth of power exercised by the state over every aspect of
a citizen's life. The Soviet nomenklatura was able to retain power in Ukraine
after independence in 1991. During the Soviet period, it wielded tremendous
administrative control over the people's lives and activity. Today the
nomenklatura continues to exercise a virtual monopoly on state power, its
decisions immune from public scrutiny. With control by the Communist Party
over its activities now only a faint memory, its actions are practically
accountable to no one. As a result, the nomenklatura is now unfettered
arbiter over the distribution and use of state property.
This phenomenon has bred rampant corruption in every branch of the civil
service, degraded the development of democratic institutions, retarded
the constitutional imperative of devolving authority to the regions, and
stymied economic reform.
Over the past five years it has also fostered the emergence of another
post-Soviet phenomenon: the oligarchs. As in Russia, the current structure
of government is propped up by so-called clans of financiers and industrialists
who enter into cozy and lucrative relationships with the nomenklatura to
divide up the wealth and power of the state. They specialize in rigging
privatization programs in order to cheaply acquire state assets. As respected
economist Anders Бslund has noted, Ukraine has effectively become a closed
joint stock company caught in the grip of its oligarchs.
The oligarchs were initially content to merely become obscenely rich.
However, the allure of power proved too strong. With the parliamentary
elections held last year, the oligarchs emerged from the shadows to run
for seats in Parliament. They invested heavily in their campaigns, attracted
by the immunity from prosecution their commercial activities would enjoy,
the veneer of respectability they would gain, and above all, the direct
power and influence they would wield not just over the distribution of
state property, but the direction of the economy as well.
The result has been the effective criminalization of Verkhovna Rada.
From an institution of democracy, the Ukrainian Parliament is being transformed
into a shelter for the criminally inclined.
The oligarchs sitting in Parliament have united with the clans represented
in the Presidential Administration to rally around the President's bid
for a second term. Their support is dictated by calculated self-interest:
President Kuchma has provided the conditions for the accumulation of their
wealth and power; his possible defeat jeopardizes their holdings and influence.
The President, on his part, has sought to shift criticism for the lack
of progress on reforms onto Verkhovna Rada, accusing it of blocking his
reform efforts. The President tries to portray the situation as an epic
power struggle between a reform-oriented President and Red revanche in
Parliament.
This portrayal, developed largely for consumption by Western donors
and financial institutions, is not credible. Far from being held back by
Parliament in a radical reform effort, the President and the government
have had a virtually free hand to conduct and direct economic reform by
grants of extraordinary privileges. First as Prime Minister and then as
President, Kuchma demanded from Verkhovna Rada, and was granted, extraordinary
powers to enact economic reforms by decree. These were even enshrined in
the transitional provisions of the Constitution for a period of three years.
Thus, in one leadership capacity or another, Mr. Kuchma has held in his
hands the essential levers of economic management in Ukraine for seven
years.
The fact remains that this power has been squandered by a combination
of cronyism and incompetence. To date, the President and his government
have failed to put before Parliament any coherent or systemic reform strategy
for its consideration.
SLAVIC UNION
AS A THREAT
TO INDEPENDENCE
The question thus arises: how much more can Ukraine afford to continue
with policies of this nature without jeopardizing its independence? The
President is becoming more desperate in the face of the decline in living
standards. He is under pressure from the Council of Europe, Western donors,
and international financial institutions to take hard decisions about substantive
reforms.
Yet, in the prelude to presidential elections in October, President
Kuchma increasingly adopts positions, which merely pander to popular prejudices,
reaffirming Soviet-era themes and values, while espousing positions that
require the least effort at reform. If implemented, they would bring Ukraine
closer to Moscow than to Strasbourg or Brussels. They also ensure him and
his allies maximum power and minimum accountability. In this context, advocating
closer ties with Belarus and Russia would gain votes among the Communist
constituency as well as preserve existing privileges.
The effect on Ukraine's economy of further integration with Belarus
and Russia would be catastrophic; its impact on the Eurasian geopolitical
theater, profound. It could easily occur as follows. In the near future,
Ukraine could default on its debt obligations and face the type of financial
meltdown which prostrated Russia. Ukraine would come under immense pressure
from Russia to recreate, along with Belarus, a so-called "Slavic common
market," which would in turn form the economic basis for reconstituting
the Soviet Union in the form of a "Slavic Union". The partners would devise
a closed ruble zone, reestablishing an economic curtain between their Slavic
Union and the West. Moscow will be more than content to renew its place
as the political center of such an arrangement and again begin to throw
its weight around the Eurasian playing field, a role denied to it following
the collapse of the Soviet Union.
Ukraine's hitherto tentative westward-leaning foreign policy would then
collapse. As a result of weak and corrupt government, the current leadership
in Ukraine is incapable of deciding between the competing tendencies of
the Polish and Belarus models. Consequently, a number of voices claim to
speak in the name of Ukrainian foreign policy. The President's foreign
policy is ambiguous to say the least, that of the Speaker of Parliament
is distinctly pan-Slavic, while the Foreign Ministry tries to take a pro-European
integration line. Unclear as to what its own strategic security interest
is, Ukraine has voluntarily, at least for the moment, become a political
buffer between East and West. Its only coherent strategy is to play off
the desire of the West to help secure Ukrainian independence against the
West's interests in seeing real reforms which would entrench democracy
in Ukraine.
Tempting as it would be under this scenario, it would be a grave mistake
for the West to turn its back on Ukraine. A Russia reeling from economic
collapse would soon look to Ukraine to provide it with goods and produce
within a closed market. Russia would become more belligerent and Ukraine
more xenophobic. A lager mentality would prevail within the Slavic Union,
endangering Western security interests. Hence, the West must pursue separate
strategies regarding Ukraine and Russia. With respect to Ukraine, however,
such a strategy must be far more insightful and subtle than it has been
to date.
SECURITY INTERESTS
AND STRATEGIES
On the one hand, the issue of Ukraine's place in the world is of significant
importance to the West. As the Draft Report prepared for this annual meeting
suggests, substantial security challenges await the West arising out of
the weakness of post-Soviet states. Western countries must consequently
try harder to bolster all of the states on Russia's fringes. Yet, it is
patently obvious that Ukraine is unwilling and unable to fully safeguard
its own security. It can only do so with the understanding and active assistance
of the West.
The West can positively nudge Ukraine toward the Polish option. Promoting
democratic values in countries like Ukraine and facilitating the construction
of institutions of civil society remain in the long term interests of peace
and security in Europe. By helping empower non-governmental organizations,
civic associations, along with professional and business groups to demand
greater accountability and services from their government, conditions will
be set for an improvement in governance, especially at the local level.
The infusion of western liberal values will, over time, break the government's
stranglehold on power, and facilitate democratic and market reforms.
Further, the NATO Partnership for Peace Program serves to promote Ukrainian
self-confidence in withstanding Russian territorial aspirations (especially
vis-И-vis the Crimea) to foster among Ukrainians a sense of belonging to
the European democratic political community, and to blunt the attraction
of a Slavic Union. It also reinforces a message the West should consistently
repeat to Russia: that Russian bullying of any of its neighbors will not
be tolerated.
Ukrainian decision-makers, on their part, find engagement with NATO
at this level convenient. The relationship poses little risk and allows
Ukraine to keep its options open. The leadership fully realizes that NATO
is not prepared to offer Ukraine partnership in the Atlantic alliance any
time soon.
On the other hand, there are two ways in which the West is actually
making the current situation worse. First, it is foolish to think that
the West can buy reform by giving money or loans to the current regime
in exchange for the performance of certain conditions. The recipient, the
Ukrainian government, has no investment in the reform process and could
ultimately reject it as having been externally mandated. There is thus
no sustainability and predictability to the reform effort. Western donors
and international financial institutions have allowed themselves to be
cynically manipulated by Ukrainian officials and have nothing to show for
their efforts but frustration. The current leadership leverages Ukraine's
geopolitical importance to the West, safe in the knowledge that, despite
flouted conditions, Ukraine will get most of what it has been promised.
These are classic Soviet tactics, executed by skilled practitioners.
This raises a second issue. The West is now faced with a dilemma of
its own making. Initially, donors believed the President's rhetoric that
Ukraine was pursuing pro-Western policies and that the Ukrainian leadership
was genuinely interested in economic reform. The West, particularly America,
having made out President Kuchma to be a reformer, is now not sure what
to do about him. Although it has seen through the rhetoric, the West feels
it has no choice but to continue to back the existing regime, however reluctantly,
in the face of the so-called Red revanche.
This position is as dangerous as it is wrong. Things are seldom what
they seem in the former Soviet Union, and playing politics by betting on
one politician is a fool's game. Politics in Ukraine is not a zero-sum
game. Palatable alternatives from the Right and Left exist for Ukraine
from among the current potential candidates for President and need to be
objectively assessed by Western policy analysts.
FUTURE PROSPECTS
FOR REFORM
More profoundly, Western strategy toward Ukraine should focus on medium
term interests, beyond the upcoming presidential race. Indeed, the election
is only the first stage in determining Ukraine's future course. The real
prize comes in three years, when the next parliamentary elections will
be held. The West should set itself the goal of supporting the victory
by democrats and reformers at that time.
Thus, it does not follow that a victory in October 1999 for President
Kuchma constitutes a victory for the democratic process over the Communist
hordes he would like the West to see in Parliament. In fact, it is best
for the development of democracy in Ukraine that President Kuchma not
be reelected. Another term will only perpetuate further social and economic
stagnation along with instability. Based on the results of the President's
policies to date, in a new term we can expect further expansion of the
state's monopoly of power, further suppression of dissent, further criminalization
of the Ukrainian economy through the influx of Russian capital, a continued
poor investment climate for Western capital, the continued spread of corruption,
and the continued degradation of the rule of law and democratic development.
If he loses, like former President Kravchuk, he will go into opposition
to a new President. A fresh team would come to power, breaking the grip
of the existing oligarchs over the country.
Having cloaked himself in the garb of reform and democracy, President
Kuchma will continue to profane both concepts in the eyes of the people.
Inept and corrupt government policies inevitably give credibility and credence
to Communists and others who crave a reconstituted Soviet Union. Just as
President Kuchma needs the Communists to oppose him to have any chance
for a second term, so too the Communists need a Kuchma victory to drive
the economy further into the ground, further discredit the concepts of
reform and democracy, and assure them a future majority in Parliament.
In short, President Kuchma's reelection will ensure the ultimate victory
of the very Red revanche he is ostensibly trying to keep at bay.
Ultimately, what distinguishes Ukraine from Belarus and Russia is the
pivotal role Verkhovna Rada plays in determining Ukraine's future course.
In 1991 Moscow envisaged a model of development for the states of the former
Soviet Union based on a strong President and a weak Parliament. The result
in Russia and Belarus has been a slide toward autarchy. Ukraine went a
different route, building into its Constitution a reasonable balance and
separation of authority between the executive, legislative, and judicial
branches of power based on democratic principles.
Verkhovna Rada, like all of Ukraine's embryonic democratic institutions,
is imperfect. It is not generally viewed as a catalyst for reform in Ukraine,
yet all Ukraine's achievements in the twin processes of reform and democratic
development are associated with Parliament. This supposedly leftist institution
laid the constitutional foundation for democracy in Ukraine. It initially
proclaimed sovereignty, then independence for Ukraine. It initiated the
interim Constitutional Accord to diffuse tensions with the executive, then
passed a very democratic Constitution, one which the President opposed.
Parliament, therefore, is a key institution in Ukraine's democratic
development. Under present circumstances, is a vital bulwark to Ukrainian
national security against any unconstitutional expansion of executive power.
There is a need for a leadership change in Ukraine for Ukraine to reach
its democratic potential and become a fully integrated member of the European
family of nations. The West must maintain its engagement with and pressure
on Ukraine over the short to medium term. This will buttress the forces
in Ukraine interested in serious change. While a frustrating partner at
present, Ukraine in a Slavic Union would be a destabilizing influence on
the region and European security as a whole.
At the end of the day, I believe that if given a democratic choice,
the people of Ukraine historically, culturally, and psychologically would
affirm the same path Poland took. They will choose Europe. We need to ensure
that Ukraine's leaders are as wise.
Text of a paper read at the Trilateral Commission Annual Meeting
of March 13-15, 1999 in Washington, DC







