• Українська
  • Русский
  • English
Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert
2 February, 1999 - 00:00

cul-2

ECONOMY FOR THE WEEK

Enduring Friendship in the Name

of a Bright Future


If a poll had been carried out last week to find out which of the recent
political developments were most important for the development of Ukraine's
economy, the respondents would surely offer views polarized precisely pro
rata their respective niches in that economy. Their commentaries would
be much to the sociologists' and political analysts' surprise, considering
that these experts traditionally attribute people's sentiments to whether
they originate in Western or Eastern Ukraine.

Last week Ukraine did its best to prove that its so-called multidirectional
foreign economic policy was indeed directed along so many vectors. The
following is a far from complete listing of countries where Ukrainian politicians
undertook to defend their nation's interests:

Ukraine: preparatory talks completed with the IMF; talks started with
the Italian President and Canadian Prime-Minister; France: a Ukrainian
parliamentary delegation presents its credentials to the PACE; Belarus:
Ukrainian Speaker Oleksandr Tkachenko arrives to strengthen fraternal ties
with the Belarusian President Lukashenka; Russia: a group of comrades from
Ukraine renders moral support to the Council of the Federation members
for ratifying the Grand Russo-Ukrainian Friendship and Cooperation Treaty.
Meanwhile, the Ukrainian President enjoying a well-deserved holiday at
the Swiss winter resort of Davos meets and holds talks with the US Vice
President, leaders of European countries, and other annual World Economic
Forum participants.

This all looks impressive, but every "vector" was determined not so
much by the scope of a given event as by the Cabinet's chosen economic
strategy.

Take Poland: last week Polish farmers, chagrined by government policy,
took to the streets demanding that the Polish borders be closed to cheap
European products. What chance do the protesters stand? Not much, it seems.
The Polish liberals are not likely to adjust the country's "Europe-oriented"
economy to the farmers' isolationist requirements, although the latter
are quite understandable. Several years ago the Polish government adopted
a strategic course aimed at joining the European Union. Economists tend
to regard this strategy is being prompted by political rather than economic
considerations. In other words, the transitory benefits which Poles can
receive by their forced adoption of European-type business norms (actually,
in the market economy) were not were not clear to ordinary Poles. Lifting
restrictions on European imports made local noncompetitive producers' life
difficult; they were simply no match for their European counterparts in
terms of both government subsidies and farming costs (the latter being
higher in Poland). Simultaneously, trying to keep pace with Europe was
of tremendous importance as Poland had once and for all adopted a system
of values acceptable and understandable the world over. There is every
reason to expect its economy to measure up eventually. Ukraine is a different
story altogether.

Last week saw Ukrainian politicians busy doing what they usually do:
begging for money in the West and strengthening the foundation of that
very structure in the East which this money, when and if borrowed, will
effectively destroy. So this is Ukraine's much-advertised "multivector"
approach, the reader might wonder. Yes, supposedly, except that it does
not exist. The Speaker, apparently not much of an expert on political hypocrisy,
spoke of this quite frankly at Minsk Airport Wednesday night: "Disunity
has not benefited our peoples, as one and all realize only too well these
days. Hence, the fraternal independent nations of Ukraine, Belarus, and
Russia must restore all those severed economic and cultural ties, raise
their political cooperation to a new level, both within the CIS and on
the international arena," Oleksandr Tkachenko declared. It should be noted,
however, that both Ukraine and Belarus are far from being in the best of
shape, as both are "shaken by deep-going economic crisis." Mr. Tkachenko
summed the "treatment prescriptions" borrowed from foreign "well-wishers,"
saying they would not cure but only aggravate this disease, and that "even
people recently markedly trustful of overseas sages are aware of the fact,"
adding that "under the circumstances we must soberly assess the situation
that has developed, make the best of the experience accumulated over the
past decades, and correct the mistakes made in the last several years.
We will, of course, overcome this economic chaos and make our countries,
which are independent yet united by common goals and actions, strong and
prosperous. Only this approach will allow us to take a worthy place in
the international community as full-fledged and truly respected members
with whom everyone else will have to reckon, never daring to impose their
will."

This seems logical: foreigners have to foot the bills, especially during
the presidential campaign, and Ukrainians ask Belarus's and Russia's advice
on how to spend this money. Incidentally, "Batska" (Papa) Lukashenka had
an opportunity to acquaint himself with advanced socialist experience "in
a hostile environment." Not so long ago the Belarusian President signed
an edict restoring government price controls and planning. Belarusians,
standing in lines for low quality goods in short supply, still look back
to the bright Soviet past with lingering hope, yet the outcome of this
strategy (granted extremely consistent official steps) will be more like
North Korean or Cuban present realities.

Another event last week called forth the emotions of all exponents of
fraternal friendship with Russia: the Federation Council decided to postpone
ratification of the Grand Treaty with Ukraine to February 16. President
Kuchma said the only reaction to this could be "disappointment and uncertainty
about tomorrow."

In fact, this intermediary result, as well as the treaty itself, received
markedly differing comments from those opposing and supporting Ukrainian-Russian
economic integration. The opponents attribute this period of coolness in
Ukrainian-Russian relations to the strengthening of ties with the West,
something small business craves. They further believe that the economy
may evolve interpreted by contradictory factors: the harder it is to maintain
contacts with Russian politicians in business, the stronger the dependence
of Ukraine's politicians in business on Western capital. Indeed, many in
Ukraine envy the Baltic states, for they have benefited from Russia's energy
blackmail, winning their economic independence. Apparently, domestic businessmen
adopt such an unpatriotic stand because of prompting by the powers that
be. Oleksandr Razumkov, responsible for Ukraine's economic security, seriously
believes Ukrainian bankrupt entities will be better of by enhancing ties
with Russia's "virtual economy." Early in 1998 various estimates placed
Ukraine's energy supply debts to Russia at $600-800 million US. Now it
is about $1.5 billion. So who has consumed all this gas and who is going
to pay for it? Apparently, it was consumed by those allowed to make things
nobody needs and at their selling prices. Otherwise enterprises would be
forced to produce only that which they would be sure to sell and pay their
natural gas bills. Those not measuring up would have to change ownership
or even close down. See how unreal all these requirements to the current
Parliament and Cabinet sound? Thus their only alternative is returning
to Russia's tender embrace.

In other words, all those domestic exponents of return to union with
Russia crave the treaty as an instrument that will allow them to count
on Russian resources to try to keep the Ukrainian economy afloat. Their
Russian counterparts, in turn, hope that this alliance will make it possible
to get live money or property for at least some of the energy supply arrears.
It is also true, however, that the Russian opponents of the treaty also
have certain "virtual dividends" in mind. They oppose it because the treaty
will mean a redistribution, implying benefits not only for them, but also
for their Ukrainian counterparts.

By Iryna KLYMENKO, The Day

 

cul-2
Issue: 
Rubric: