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Jewish World Review June 6, 2001 / 16 Sivan, 5761

Doug Bandow

Doug Bandow
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Ukraine's boiling cauldron -- KIEV, Ukraine | Russia is working assiduously to tighten its grip on Ukraine. With Defense Secretary Donald Rumsfeld set to visit Kiev early this month, the Bush administration should begin drawing that nation back toward the West.

A year ago, Ukraine felt optimistic. Its decade of independence had been hard, but, unlike Russia, Kiev managed to avoid destructive ethnic and religious conflicts.

In 1999, President Leonid Kuchma defeated the Communist candidate. He appointed liberal-leaning Viktor Yushchenko as prime minister.

Last year, centrist reformers, led by Viktor Medvedchuk, now the Rada's first deputy chairman, took control of the legislature. Together they pushed economic liberalization, and the economy responded. Kiev was also looking West. When I interviewed President Kuchma, he said he hoped for "a strategic partnership" with the United States.

However, in September Internet journalist Heorhiy Gongadze disappeared, followed by the release of tapes apparently tying Kuchma and government officials to the crime. Although the digital recordings are impossible to authenticate, they blackened Kuchma's reputation and threatened his hold on power.

He appears to have successfully faced down demands for his resignation, but the Rada's ruling coalition splintered and in late April legislators ousted Yushchenko.

The reform process is now sputtering and Western governments publicly criticize Ukraine. Unfortunately, as Kiev has stumbled, it has slipped back toward Russia's orbit.

Shortly after the Gongadze scandal broke, Kuchma switched foreign ministers in what some saw as a nod to Moscow. At the February summit with Kuchma, Russian President Vladimir Putin used his country's large natural gas shipments and extensive debt holdings to apply pressure.

Moscow has also relied on culture and propaganda. For instance, Russian-language television, which remains influential in the eastern section of the nation, attacked Yushchenko as the heel of an American shoe.

Now, Putin has appointed former Prime Minister Viktor Chernomyrdin as Russia's ambassador to Ukraine. Chernomyrdin is also a major shareholder in Gazprom, which supplies Ukraine with much of its energy - and to which Kiev is heavily indebted. American businessmen active in Ukraine tell me that they fear Chernomyrdin will mix political and economic coercion.

Kiev's chaotic politics has left it vulnerable to Moscow's intrigues. Kuchma has been gravely weakened, but there is no organized political opposition along Western lines.

Parliament is split among leftists, centrists and nationalists. For a time, the last two groups offered varying degrees of support for Kuchma, allowing reform to move forward.

Last year, Medvedchuk told me that his goal was to create a "stable environment for investors."

But now reforms are taking a back seat to vitriolic political struggles.

Still, there is good news in Ukraine. Kuchma's appointment of Anatoly Kinnakh as prime minister may help stabilize the political scene. Kinnakh, a former deputy prime minister and first deputy prime minister, heads the Union of Industrialists and Entrepreneurs - roughly the equivalent of the National Association of Manufacturers.

Valeriy Kolomoytsev, a member of the Rada's budget committee, told me that Kinnakh is "very pragmatic" and believes strongly in re-forming "laws to encourage business," including foreign investment. An American businessman involved in Ukraine also praised Kinnakh, saying that he had helped resolve regulatory problems with the government. Kinnakh "acted instead of just talked," he explained.

Moreover, the forces of freedom have advanced far over the last decade. Despite worries of government pressure, Kiev's independent newspapers shower Kuchma with invective. Karatnycky observes that "Any moves toward full-scale repression, the surrender of sovereignty, or the opening of Ukraine's economy to a Russian takeover would likely be resisted by large segments of the Ukrainian public, its business leaders and regional officials."

Washington's influence is limited, but the United States can help. Particularly important is the continued growth of a market economy.

That most obviously requires economic reform in Kiev. But the United States has something to offer: permanent normal trading status.

Although Kiev wins a waiver every year, it remains symbolically outside of Washington's circle of economic partners. This galls leading Ukrainians. Why not grant Ukraine the same commercial rights as other nations to acknowledge Ukraine's place in the international economic order?

The Bush administration should also treat Kiev more seriously as a strategic partner. For instance, when I recently interviewed Volodymyr Horbulin, chairman of the State Commission on the Defense Industry of Ukraine, he sounded like a Bush appointee in describing how the ABM Treaty is outdated and missile defense should move forward.

Washington should include Kiev in talks on the future of the treaty regime. Especially when doing so would help embarrass Russia by undercutting its argument against missile defense.

Ukraine is in dangerous political waters, making its slide toward Moscow all the more worrisome. Washington may be able to do little more than nudge Kiev back toward the West, but nudge Kiev it should do.

JWR contributor Doug Bandow is a senior fellow at the Cato Institute. Comment by clicking here.


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© 2000, Copley News Service