Ukraine's woes deepen, with Russia at its border

Moscow's influence looms after coalition defeats prime minister

April 29, 2001|By Will Englund | Will Englund,SUN FOREIGN STAFF

KIEV, Ukraine - With Russia expectantly standing by, Ukraine is looking forward to 11 months of debilitating political turmoil after a vengeful coalition of business tycoons and Communists last week forced out the popular reformist prime minister.

This country of 49 million once cherished its friendly relations with the West. Some of Viktor Yushchenko's allies believe that his departure from the government, almost a full year before parliamentary elections, leaves little to keep Ukraine from slipping inexorably back into Moscow's orbit.

Ukraine is weak. Ukraine's president, Leonid Kuchma, is weaker. Tape recordings that appear to be authentic reveal him to be tolerant of corruption, quick to abuse his power, willing to use the police against his enemies. The tapes, which came to light late last year, also show him apparently discussing what could be done about an investigative journalist named Georgy Gongadze - whose headless torso was found outside Kiev soon afterward.

Kuchma has few friends left, but among them are the business tycoons - known here, as in Russia, as the "oligarchs" - who couldn't abide Yushchenko's economic reforms and efforts to conduct fair and "transparent" sales of state-owned enterprises.

Kuchma's other friends, in his weakness, are in Russia.

"Russia looks after its own interests," said Igor Lutsenko, one of the leaders of a group called Ukraine Without Kuchma. "After eight years they found Kuchma in a very weak position, and of course they're using that."

Russian President Vladimir V. Putin has voiced his support for Kuchma, and the Russian press has picked up the cue.

At the same time, Russian investors have been snapping up one major Ukrainian company after another - seven in the past several months - in privatization deals that could be described as murky at best.

This year, the Zaporizhe aluminum plant was sold off to Avtovaz, a Russian company, for $69 million, even though a Ukrainian group had offered $101 million. Yushchenko pushed for the higher offer, but Kuchma steered the sale into Russian hands. Viktor Pinchuk, a suave member of parliament who controls a television and industrial empire and is the common-law husband of Kuchma's daughter, had lobbied for the winners.

The Russians, said Pavlo Movchan, an opposition member of parliament, have become Kuchma's guarantor.

Over a glass of grapefruit juice in the serene surroundings of the Grand Club, across the street from parliament, Pinchuk argued that Ukraine has no reason to fear Russia, which he said is "an incredibly strategic country for us."

To the contrary, he said, it is Western organizations that are pursuing a "planned action" to disrupt Ukraine. He offered no evidence to support this contention, but he said there are "proofs" to back him up.

Turning against U.S.

Ukraine's press, which is almost entirely controlled by either the government or such tycoons as Pinchuk, has been vilifying the United States recently - where once America could hardly do any wrong.

The attacks raise the specter of an America dictating every move to subservient Ukraine, although, if anything, Western involvement in Ukraine is falling off. Western businesses have been shut out of all major privatization deals.

"The coming of Western investors would have meant investments in these industries," said Sergii Rakhmanin, of the independent weekly newspaper Zerkalo Nedeli. "The coming of Russian investors is likely to mean the stripping of assets."

What Yushchenko accomplished in his 16 months as prime minister was this: He restructured the foreign debt, paid down the domestic debt, eliminated arrears in wages and pensions, oversaw the first solid growth of Ukraine's economy since independence a decade ago, pushed hard for transparent finances in the energy sector and reined in tax breaks for favored companies.

All this hurt the oligarchs, who control about a third of the parliament, and led to widespread public support for Yushchenko - which gave the unpopular Kuchma cause for concern.

On Thursday, the oligarchs' faction in parliament joined with the Communists - who oppose any move toward a free market - to oust the prime minister and his Cabinet. In public, Kuchma said he regretted the decision, but he had made no attempt to save Yushchenko. And as soon as the vote was taken, he blamed Yushchenko for losing it.

`I need democracy'

Pinchuk elaborated on that theme. Yushchenko's whole problem, Pinchuk said, was that he tried to run the government without consulting the oligarchs, who had backed Kuchma. Yushchenko, he said, seemed unable to tell the difference between "criminal oligarchic gangs" and decent businessmen who had been forced to make up the rules as they went along in Ukraine's transition to capitalism.

"Who are the oligarchs?" Pinchuk asked. "I'm called an oligarch. I'm an industrialist, I own many enterprises. Really, I consider myself a reformer. I need democracy, I need transparency to prosper."

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