1996: THE YEAR IN REVIEW

Ukraine: at last, a new Constitution

Although Ukraine was preparing to observe its fifth anniversary as an independent state in 1996, it seemed it would mark that milestone while retaining its Soviet-era constitution. And, though Ukraine was the last of the former Soviet republics to ratify a new Constitution, its Verkhovna Rada did so in dramatic style as the culmination of an all-night intense session that went on for more than 16 hours without a break.

The big event occurred in the morning hours of June 28. The mood was euphoric and the atmosphere reminiscent of the day when Parliament had declared Ukraine's independence on August 24, 1991.

The historic new Constitution established Ukraine as an independent, democratic, social, law-governed and unitary state with single citizenship. It enshrined Ukrainian as the official language, while guaranteeing the "free development" of the Russian language and other languages spoken by the citizens of Ukraine.

The new Constitution of Ukraine guarantees basic democratic freedoms and rights, establishes a Western-style judicial system, guarantees the right to private property and the right to own land, and clearly divides power between the executive and legislative branches of power.

"We have joined the league of European nations - nations that have chosen democracy and freedom, and there is no going back,"said Serhii Holovatyi, one of the principal authors of the Constitution. Mr. Holovatyi later gave up his seat in Parliament to tackle the duties of justice minister (he did so in accordance with the new Constitution, which stresses a clear division of powers). On June 28 - now a legal holiday in Ukraine called Constitution Day - the national deputies also passed a measure banning lawmakers from serving concurrently in another branch of government or working in commercial ventures and state enterprises.

This hotly debated issue was still a major point of contention at year's end. Verkhovna Rada Chairman and Socialist Party leader Oleksander Moroz has led the drive to force deputies who hold other jobs to make a choice and quit one post. He has sued many of them in court over the issue - including First Vice Minister for Foreign Affairs Anton Buteiko, whose case is pending.

The majority of the deputies also took an oath of allegiance to uphold the Constitution on July 12 - the last day of the fifth session of the 13th convocation of the Ukrainian Parliament. Sixty-three deputies have continued to refuse to take the pledge. Of these, 57 are members of the Communist faction. Although refusal to take the oath, according to the new Constitution, results in the loss of a deputy's mandate, the Communists have argued that the Constitution was adopted and the oath was established after they were elected deputies, and therefore is not binding for this convocation.

Although there were power struggles between many political and regional forces in 1996, the real power struggle occurred during the constitutional process between the legislative and the executive branches.

A Constitutional Committee, composed of representatives from the Parliament, the president and the judicial system, kept redrafting the draft constitution, hoping that the Verkhovna Rada would adopt the fundamental law before the Constitutional Accord signed in June 1995 expired and before independent Ukraine celebrated its fifth anniversary. Communists proposed their own draft of the constitution, the Constitution of the Ukrainian Soviet Socialist Republic.

When President Leonid Kuchma on June 27 issued a decree that he would take the constitution to the people via a national referendum in September, the deputies in Parliament reacted. They refused to be labeled ineffective and unproductive by the nation's president. Feeling challenged by President Kuchma's move - which implied that the legislative branch would be bypassed in adopting the Constitution and thus negated its importance - the Parliament chairman rose to the occasion.

Political observers who spent the long night of June 27-28 in the press gallery of the Parliament said it was Mr. Moroz who played a pivotal role in getting the Ukrainian Constitution adopted, as he refused to take breaks, worked diligently and sought compromise among the factions.

The adoption of the Constitution was a dream come true for President Kuchma. During his New Year's Eve greeting on December 31, 1995, he had expressed hope that 1996 would bring Ukraine a new fundamental law.

Economic woes

Economist Oleh Soskin, director of the Kyiv-based Transformation of Society Institute, told The Wall Street Journal in the summer of 1996: "The government still has little idea of where it is headed on the economic front. They see the past reform policies haven't worked ... and so they want to keep administrative control of the economy."

President Kuchma had hoped that 1996 would also bring economic transformations, which the majority of Ukrainians would see as changes for the better. But, 12 months later, on the eve of 1997, he told reporters that his biggest disappointment in 1996 was the budget. He called it "an absolute failure" because it was adopted with a huge hidden deficit and was managed improperly, which resulted in wage, pension and stipend arrears.

Many state workers suffered as a result of the economic situation in 1996; miners, teachers, doctors, retired folks, students and many others went without wages for months. A comprehensive yearlong study of poverty in Ukraine, funded by the World Bank, determined that 29.5 percent of the country's citizens live in poverty.

Many of the poor are elderly who live on measly pensions of less than $20 a month, and there is little they can do to change their lives. The willing and able - miners, teachers and students - protested their economic straits, taking to the streets to demand back pay.

President Kuchma has promised to make their cause his No. 1 priority in 1997. Viktor Yushchenko, the chairman of the National Bank of Ukraine, said in December that the Ukrainian government owes its citizens over 3.625 billion hryvni in back wages.

Mr. Kuchma emphasized that the Verkhovna Rada must pass a state budget as soon as possible so that these matters of social protection and labor can be resolved. "If the same thing happens to the 1997 budget as did to the 1996 budget, those who are to blame will bear responsibility," said President Kuchma during a meeting with journalists on December 21. He also reaffirmed his intention to run for a second term, saying that "everything will depend on the economic situation. If it changes for the better, I will decide finally whether I will participate in the elections or not, because only a long-term program can be fruitful."

President Kuchma had first announced on September 16 that he would run for re-election in order to see through economic reforms. Presidential elections are scheduled for October 1999, but already President Kuchma's likely contenders include former Prime Minister Yevhen Marchuk and Parliament Chairman Moroz, and there is even speculation that Prime Minister Pavlo Lazarenko will take up the challenge.

During his meeting with the media, President Kuchma cited some positive achievements in the Ukrainian economy, including relative financial stabilization.

Ukraine had overcome inflation; whereas in 1993 it had peaked at 10,155 percent for the year, in 1995 it was down to 182 percent, and this year economists estimate that it will level out at 38.5 percent - the lowest rate since Ukraine declared independence in 1991.

The highlight on the economic scene in 1996 was the introduction of the long-awaited hryvnia. Almost like a fifth anniversary present to Ukrainian citizens, the government made the announcement on August 25, amid holiday celebrations.

The Ukrainian government, which had launched a wide-reaching public relations campaign aimed at its citizens, was pleased with the monetary reform results. The National Bank of Ukraine set its exchange at 1.76 to the U.S. dollar, 1.18 to the deutschemark and 1 to about 3,000 Russian rubles, and the rates remained pretty much stable until the end of the year.

A public opinion poll conducted in Kyiv a week after the new currency was introduced showed that citizens of the capital were upbeat about the hryvnia: 58 percent said that the introduction of the new money would change the situation in Ukraine, while 29 percent said it would not and 13 percent could not venture an opinion.

Changing faces

Mr. Marchuk, who made a name for himself as the head of the Ukrainian Security Services, as vice prime minister and finally as prime minister, being appointed to that post by President Kuchma in June 1995, was sacked less than a year later in May 1996. According to the president, Mr. Marchuk "failed to ensure the effective and stable functioning of the government." He was also accused of spending too much energy on building his own political image. He was immediately replaced by Mr. Lazarenko, Mr. Kuchma's political ally from Dnipropetrovsk, who had served as Ukraine's first vice prime minister.

After winning approval for his prime ministerial candidate, the president began streamlining the Cabinet of Ministers, dissolving various ministries and creating state committees in their place. Among the liquidated ministries were the Chornobyl Ministry and the Civil Defense Headquarters, merged and replaced with the Ministry for Emergency Situations; and the Ministry for Youth and Sports, replaced with a state committee.

But many of the players in the Kuchma government remained the same. Among those replaced were civilian Defense Minister Valerii Shmarov, who resigned in July. Lt. Gen. Oleksander Kuzmuk was named to the post of defense minister.

Mr. Lazarenko's ascent to power also added fuel to the fire of rumors concerning clan wars between two eastern Ukrainian regions, Donetsk and Dnipropetrovsk, and claims that the Dnipropetrovsk "mafia" was running Ukraine.

No sooner was Mr. Lazarenko approved as prime minister by the Parliament than an attempt was made on his life. On July 16, while traveling to Kyiv's Boryspil Airport to catch a plane to Donetsk, where he was to meet with striking coal miners demanding back wages, a remote-controlled bomb exploded along the roadway.

Investigators called it a professional job, but to date no one has been found guilty of the terrorist act. Mr. Lazarenko became the first high-ranking official in post-Soviet Ukraine to be the object of a terrorist act. Until he came to power, Kyiv had felt only the reverberations of scandals and shoot-outs that occurred in Crimea and eastern regions of the country.

Yevhen Scherban, a national deputy from Donetsk and the president of Aton, an international trading firm that deals with the energy and metals markets, was not as lucky as Mr. Lazarenko. He was killed in a gangland-style hit while disembarking from a plane in Donetsk. The 50-year-old's wife and a Donbas Airlines technician also were killed in the attack on the tarmac.

Mr. Scherban, considered one of Ukraine's wealthiest businessmen, was long thought to be connected with racketeers and was at times mentioned as tied in some way to the July assassination attempt on Mr. Lazarenko.

However, the biggest surprise was the firing of Presidential Chief of Staff Dmytro Tabachnyk, 33, who was dismissed on December 10. No explanation was given for this move, although there has been much speculation. Mr. Tabachnyk, who had served as President Kuchma's press secretary while the latter was prime minister and later ran his successful presidential campaign, was sacked "in connection with his transfer to another job," according to the official announcement.

To date, Mr. Tabachnyk, who was widely regarded as one of the country's most influential politicians, has not reappeared on the political scene. President Kuchma has named a new chief of staff: Yevhen Kushnariov, 45, head of the Kharkiv City Administration and the mayor until his appointment by President Kuchma. He has also served as the president of the Association of Ukrainian Cities and leader of the Nova Ukraina association.

Of crime and corruption

Unfortunately, in 1996 Ukraine saw much crime and corruption. A Ukrainian vice minister for internal affairs recently reported the following statistics to Parliament: the authorities registered 109 contract killings in Ukraine for the first 10 months of 1996, but only 17 of them, or 16 percent, have been solved; the regions with the highest murder rate are the Autonomous Republic of Crimea and the Odesa and Donetsk oblasts.

Another report recently released by the Internal Affairs Ministry cited 1,800 cases of bribe-taking. According to Serhii Puhachov, deputy chief of the state service to combat economic crimes, 150 of these bribes were registered in the trade sector, 110 in the privatization sector, 71 in the financial and credit sector, over 60 in the foreign economic sector and 28 in the banking system.

In the first 11 months of 1996, said Internal Affairs Minister Yurii Kravchenko, the number of murders in Ukraine increased by 0.2 percent; and the militia uncovered over 880 organized crime groups. He added that 59 militiamen were killed in 1996 - 21 of them in the line of duty.

However, Minister Kravchenko said the crime rate in Ukraine had actually decreased by 4 percent during 1996. "A decrease in criminal activity is the first sign of successful economic changes conducted in the country," he said.

In December, the criminal trial of doctors and local officials in Lviv accused of selling babies to the West began, but as the year came to a close no verdict had yet been reached.

Though the Parliament finally had lifted the moratorium on foreign adoptions in January, the law only went into effect in July, and the establishment of a national adoption center, as stipulated by the law, was viewed as an effective way to ensure that a baby scandal, such as the one uncovered in 1995 in western Ukraine, would never recur.

The international arena

Foreign Affairs Minister Hennadii Udovenko, speaking at the 51st session of the United Nations General Assembly on September 26 in New York, warned that his country is concerned about the possible deployment of nuclear weapons on the territories of Ukraine's neighbors. Should NATO expand into Central and Eastern Europe, Ukraine, a non-bloc state could be flanked by nuclear weapons to the east and west, pointed out the seasoned diplomat.

And, the North Atlantic Treaty Organization heeded his words: meeting in Brussels on December 10, the member-states passed a resolution declaring that NATO has no intentions, plans or reasons to deploy nuclear weapons on the territories of its new member-countries, which will be announced next summer.

NATO member-states spoke highly of Ukraine's initiative and reaffirmed their regard for Ukraine as a serious partner on security issues. They also emphasized the development of a close long-term relationship between Ukraine and NATO as an important aspect of the future European security system, a relationship that goes beyond the Partnership for Peace program.

And, Ukraine reaffirmed this position. During NATO Secretary General Javier Solana's visit to Kyiv on April 15 (the first-ever by a NATO chief), Foreign Affairs Minister Udovenko emphasized that the special relationship between Ukraine and NATO includes Ukraine's active participation in the Partnership for Peace program, its involvement in NATO's Cooperation Council, its commitment to peacekeeping with the IFOR troops in Bosnia, as well as official visits between NATO and Ukraine.

"Ukraine intends to move toward NATO, not into NATO," President Kuchma told reporters after a meeting with Secretary-General Solana. Later in the year he said "the highest success of Ukrainian diplomacy" was the fact that at the last NATO summit it was officially announced that the alliance will not deploy nuclear weapons on the territories of its future members. "Ukraine started to play its role in international politics," he said.

Ukraine also forged closer ties with such European institutions as the European Union and the Western European Union during 1996. In December the EU outlined its plans for Ukraine, expressing its willingness to support and develop Ukraine's civil society, and its economic and energy sectors, increase political dialogue and encourage Ukraine to form a European safety system.

But Ukraine did experience some trouble regarding its Council of Europe membership, to which it was admitted in November 1995. Full membership in the council means adherence to its requirements, such as the adoption of a democratic Constitution and the abolition of capital punishment. While Ukraine adopted a new Constitution in June, it did not cancel the death penalty. As a matter of fact, Ukraine was ranked second only to China, with 89 people sentenced to death in 1996, according to the London-based Organization on Human Rights Protection.

Ukrainian-Russian relations

Perhaps the thorniest issue in Ukraine during 1996 was Ukrainian-Russian relations. Throughout the year, Ukraine kept moving closer and closer to Europe and the West, and farther and farther away from matters involving the Commonwealth of Independent States. At the January meeting of CIS heads of state, Ukraine resisted pressures for further integration with former Soviet republics. President Kuchma said Ukraine did not participate in discussions about CIS symbols since it is not a signatory of the CIS charter and only an associate member of that body. He noted that the "Commonwealth today has a significant role as a consultative body."

And despite several attempts throughout the year by the Communists to get the Ukrainian Parliament to join the CIS Inter-Parliamentary Assembly, their efforts failed.

President Kuchma commented on the influence of the Communists in Ukraine in February: "The one big problem with the Communists today: they want to build a Soviet socialist republic, while I want to build a civilized, lawful state."

There were fireworks in March when the Russian Duma voted to reconstitute the Soviet Union, a move regarded both by Ukraine and Western nations, including the United States, as highly irresponsible.

"President Kuchma was certainly correct when he said that the tide of history cannot be turned back. Ukraine and other countries of the former Soviet Union are independent, sovereign nations. Any unilateral attempt to change their status will be rejected by the international community," said U.S. Secretary of State Warren Christopher during his March visit to Ukraine.

When the Duma and the Federation Council of Russia, respectively, the lower and upper houses of the Russian Parliament, were not trying to revive the defunct Soviet Union, they were making claims to the Ukrainian city of Sevastopol on the Crimean peninsula, or unilaterally calling for the suspension of the Black Sea Fleet's division.

In the autumn, the Duma, Moscow's influential mayor Yurii Luzhkov and recently fired National Security Advisor Alexander Lebed all declared that the Crimean city of Sevastopol, which is the home of the Black Sea Fleet, is part of Russia. It is an issue that has stirred controversy and distrust between Ukraine and Russia virtually since the Soviet Union fell apart in 1991.

President Yeltsin's press spokesman, Sergei Yastrzhembsky, said that at their meeting at the Barvikha Sanitarium prior to Mr. Yeltsin's heart surgery, the presidents of Russia and Ukraine had agreed all the issues regarding a treaty of friendship between the two countries had been resolved and that "the big treaty between the two states is completely ready." He said it would be signed after Mr. Yeltsin recuperated, perhaps in November, but the end of the year came and President Yeltsin made no moves to come to Kyiv.

Foreign Affairs Minister Udovenko stated unequivocally that Ukraine would not conduct any negotiations with Russia over Sevastopol. "Sevastopol has been recognized as Ukrainian territory, and this cannot be thrown into doubt," he said in December. He observed that current claims by Russian lawmakers were the result of domestic political developments and the fact that Mr. Yeltsin had not been at the helm for the past few months.

Western nations supported Ukraine: the EU issued a statement on December 20 supporting Ukraine's territorial integrity and denouncing any Russian claims to Sevastopol; U.S. Ambassador to Ukraine William Green Miller on December 19 discussed U.S. concerns regarding Sevastopol and the Black Sea Fleet with First Vice Prime Minister Vasyl Durdynets. Mr. Miller said Ukraine can count on further U.S. support in resolving such difficulties.

With the New Year comes hope. And President Kuchma's hope is that he will finally meet with President Yeltsin to resolve matters of importance to both countries.

"I am confident that the situation will change when Boris Yeltsin returns to work in the Kremlin," said Mr. Kuchma on December 21. [President Yeltsin was to report back to work on December 23.]

The Ukrainian leader said the Verkhovna Rada must pass a law defining terms for stationing foreign troops on Ukrainian territory in order to solve the Black Sea Fleet issue; as for the fleet, he noted that "confrontations must be avoided, and the realities must be reviewed."

"Ukraine and Russia need each other," President Kuchma told journalists recently. "Not only does Ukraine depend on Russia - from a strategic point of view, Russia depends on Ukraine also. We suggest having a normal relationship with Russia. Ukraine will never act like Belarus while Kuchma is president," he said.

During a year-end meeting with journalists President Kuchma underscored: "Ukraine's foreign policy is based, first and foremost, on Ukraine's national interests."

Copyright © The Ukrainian Weekly, December 29, 1996, No. 52, Vol. LXIV

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