Clinton heads for bright spot -- Ukraine MEETING IN MOSCOW

May 11, 1995|By Will Englund | Will Englund,Moscow Bureau of The Sun

MOSCOW -- Ukraine, where President Clinton arrives today, was for three years the place where the post-Soviet disaster was supposed to unfold -- but somehow never did.

A year ago the country was hopelessly split along regional and ethnic lines. It had made no efforts at economic reform, its energy bills were skyrocketing, its finances a shambles. It faced a breakaway movement in the Crimea and nothing but difficulties in its relations with Russia.

None of those problems has been solved. But Ukrainians have fended off total collapse, and the government installed in July finally seems to have found the will to push for economic reform.

Moreover, the security issue that had appeared the most dangerous is being resolved -- the disposition of the nuclear weapons Ukraine inherited from the Soviet Union. Under a deal brokered last year by the United States, Ukraine is shipping its nuclear missiles to Russia for dismantling, and the process is moving along smoothly.

So Mr. Clinton's main mission is to engage in a little cheerleading, to celebrate a warming in relations between Washington and Kiev at a time when the United States' dealings with Moscow have become more difficult.

Leonid D. Kuchma, Ukraine's president, plans to talk to Mr. Clinton about expanding economic ties between the two countries. He may also ask for the United States to help settle the drawn-out dispute with Moscow over the ownership of the Black Sea Fleet -- perhaps asking the United States to serve as a mediator.

Recently, President Boris N. Yeltsin of Russia began talking about linking the Black Sea Fleet negotiations to Ukraine's repayment of its enormous debt to Russia, a move that Kiev strongly disapproves.

The economy is what worries the country most. Few businesses have been privatized, and for three years the government fed inflation by subsidizing industry and agriculture. The country has an enormous unpaid bill for natural gas -- $5.1 billion, most of it owed to Russia. That bill is largely the result of the government's having subsidized 60 percent to 90 percent of the retail price.

Mr. Kuchma's government says it will change all that. The president, once the director of a large missile-building factory, now subscribes to the ideals of private enterprise. He says he is committed to dismantling the administrative economy.

The Cabinet this year prepared a budget that will reduce the deficit enough to qualify Ukraine for loans from the International Monetary Fund. And there is talk by the central bank of issuing a new currency by the third quarter of the year.

This all has made Mr. Kuchma very popular among Western financial experts.

The only question is whether the government can do what it says it wants to.

The big state-run factories, in league with the Ukrainian Communists, are opposing the economic program. Opposition leaders say the government must spend more to provide social services during the transition to a free-market economy.

The Parliament, which is controlled by the Communists and their allies, is already trying to rewrite the budget.

"A very long process of struggle is going on under the carpet," said Sergei Tikhy, a journalist in Kiev.

But few think that struggle will stay hidden much longer.

It was just a year ago that Mr. Kuchma ran for president as the candidate of big industry and of ethnic Russians. But immediately after his election, he began favoring more liberal economics and became more conciliatory in his ethnic politics.

Now his old allies are trying to resist his new policies.

"I hope Clinton can convince the forces of the left in Parliament of the need for more fiscal discipline," said Markian Bilynskyj, a political analyst in Kiev. "I have my doubts whether he'll be successful. What you're talking about are primary values."

In other words, the choice is between free-market economics and social protection, Mr. Bilynskyj said. He doesn't see much room for compromise between them. Both sides think they have already conceded as much as they can.

"Reform can only take place once this political confrontation -- this political deadlock -- is broken," Mr. Bilynskyj said.

As soon as Mr. Clinton is safely on his way back to Washington, Mr. Kuchma seems likely to call for a referendum that will be a nationwide vote of confidence in his administration. It would, presumably, be a prelude to a new constitution and a new Parliament.

And Mr. Kuchma is far more popular than his parliamentary foes. If he can get a boost out of Mr. Clinton's visit, he may decide that the time has finally come to act.

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