Ukraine's march into nationhood leads to trouble Despite bumper crops, economy falters, and political system is in a shambles

September 19, 1993|By Kathy Lally | Kathy Lally,Staff Writer

KIEV, Ukraine -- Only two years ago, Ukraine marched bravely off to independence, confident that once freed of Soviet shackles it would thrive on its own rich, black soil.

It hasn't worked out.

This year's harvest has indeed been bountiful, but the plenty in the fields has served only to magnify the failures that daily confront a poverty-stricken people.

With grain in abundance, the citizens of Kiev have stood in line for hours to buy bread. Despite a bumper sunflower crop, weary shoppers search in vain for the sunflower oil on which every kitchen depends.

Two years of freedom have left the economy in shambles, the government in disarray and the nation near collapse. The political and economic systems of the old command have broken down and lie unused and unreplaced. The Parliament, president and prime minister are embroiled in all-consuming battle. Ukraine stands paralyzed, caught midway between past and future.

"What hope can we have?" asked Anastasia Sandratskaya, 33, as she furiously scrubbed a cafe window on Kiev's main street. "All we can hope for is new leaders. The only other way out is to lie down in the earth and die."

The level of mismanagement is astounding, resulting in horrifying statistics and rampaging inflation. Production is dropping precipitously, down 13.8 percent in the first six months of this year. Food prices shot up 67 percent in June alone. This month, the price for bread quadrupled and meat doubled. Spiraling prices have put 80 percent of the nation -- a country the size of France -- below the poverty level.

The Ukrainian currency, the karbovanets, makes the anemic Russian ruble look robust. It depreciated by 100 percent in one month alone. Originally pegged to the ruble, which now trades at about 1,000 to the dollar, the karbovanets sells for 8,000 to the dollar. During one panicky day in August, it fell to 19,000 to the dollar.

"Here I expect nothing," said Anya Kudim, 19, a music student, as she waited in line hoping to buy butter. "The only hope I have is to leave and go to the United States."

Both the conservative Parliament and the government have sought cautious reform, calling for slow, tightly controlled changes. But their desires for power and control over the process have led only to ferocious, unproductive wrangling.

Unable to agree between themselves on the best way to accomplish this, they have created a vacuum, which the National Bank of Ukraine has filled by rapidly printing money and issuing credits to keep old, unprofitable industries alive. The credits have resulted in a huge budget deficit, equivalent last year to 44 percent of the gross national product.

'Protest is inevitable'

The result has been disaster, with no meaningful reform in sight.

Those who favor faster reform assert that the political balance has become so tenuous that anything can happen.

"The people can't stand the situation any longer," said Volodymir M. Pylypchuk, a member of Parliament who wants quicker reform. "They don't believe in anything anymore. Protest is inevitable. We just don't know what form the protest will take."

These are unsettling sentiments in a country armed with nuclear weapons. Earlier this month, some of the anger began to emerge in bitter criticism of government plans to transfer the nuclear warheads based here to Russia for destruction. Another proposal to sell the Ukrainian share of the Black Sea fleet to Russia to pay off debt also roused nationalistic ardor.

And every day, things seem to get worse. Life has become so dark for Ukrainians that Russia appears positively prosperous by comparison. From here, Boris N. Yeltsin looks like a political genius of immense accomplishment.

Despite his own fractious Parliament and dismal economy, Mr. Yeltsin has created a sense of possibility. The stores in Moscow are filled now, though prices are high; the lines of a year and a half ago are forgotten.

"The difference is privatization," Mr. Pylypchuk said. "Yeltsin has made a great deal of progress with privatization. The bigger the private sector, the less the economy depends on government management."

Ukraine, he said, can produce enough grain, sugar and steel to pay for the ever-more expensive energy it desperately needs to buy from Russia -- if only it would accept the shock therapy of swift privatization and stanch the hemorrhaging money supply.

Reinventing government

"They still want to regulate production," Mr. Pylypchuk said. "Ukraine can provide itself with energy. There is nothing to prevent it -- except the ineffective management of the government."

Furthering the chaos, Prime Minister Leonid Kuchma resigned Sept. 9, admitting defeat, acknowledging he saw no prospects for compromise with the Parliament.

The next day, President Leonid Kravchuk prevailed upon him to stay on until Tuesday, when the Parliament convenes.

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