Leadership Conference reviews five years of Ukraine's independence (10/20/96)

Leadership Conference reviews five years of Ukraine's independence

by Yaro Bihun
Special to The Ukrainian Weekly

WASHINGTON - Ukraine's accomplishments and shortcomings during the first five years of its independence came under review at the 1996 annual Leadership Conference of The Washington Group, and the many speakers and expert panelists gave the country a mixed report card: high marks in the area of geostrategic relations, domestic politics, democratization and human rights; marked improvement in economic reforms; but lagging far behind in energy and health care.

The conference, held October 11-13, heard from President Bill Clinton's point man on relations with the new independent states Undersecretary of State Strobe Talbott; former U.S. representative to the United Nations, Jeane Kirkpatrick, who spoke on behalf of President Clinton's Republican presidential challenger Robert Dole; Ukrainian Supreme Court Judge Oleksandr Volkov; and some 20 other experts representing the U.S. and Ukrainian governments, the World Bank, the International Monetary Fund, academic institutions, think-tanks, corporations and foundations dealing with Ukraine.

About 300 persons from throughout the United States and Canada attended the three-day event, which was co-sponsored by the Embassy of Ukraine, the U.S.-Ukraine Foundation and the Ukrainian Medical Association of North America.

Undersecretary Talbott set a positive tone in a major foreign policy address outlining the Clinton administration's assessment of Ukraine's accomplishments and of Washington's relationship with Ukraine.

Listening to his speech preceding a reception at the Ukrainian Embassy, in addition to conference participants, were the ambassadors of Azerbaijan, Georgia, Romania, Russia, Slovakia and Uzbekistan as well as the director of the Central Intelligence Agency, John Deutch.

Mr. Talbott cited the various steps Ukrainians took in building a strong nation, from the declaration of independence to the passage of a new Constitution in June, and in reforming its economy, which went from a period of hyperinflation to the introduction of its new currency, the hryvnia, in September, when the monthly inflation was down to 2 percent.

"There is much hard work still to be done," he said "But Ukraine does not face the challenge alone." The Clinton administration has joined in supporting Ukraine by calling on the international community to secure $1.9 billion in cash commitments in 1996, and "has gone beyond the mandates of Congress to provide Ukraine with $330 million in bilateral grants and $860 million in trade and investment credits."

"We've done it and we'll keep on doing it...because it is in our own nation's interest to see an independent, secure, democratic Ukraine survive, succeed and prosper," Mr. Talbott said.

Speaking about Ukraine's relationship with NATO and Europe, Mr. Talbott quoted Secretary of State Warren Christopher's statement that "a critical goal of the New Atlantic Community is to achieve Ukraine's integration with Europe." As a "vigorous" participant in the Partnership for Peace program, Ukraine "is already cooperating closely" with NATO, but only Ukraine can decide if it is to become a member of that Western alliance, he stressed.

"Let me underscore two simple statements of fact - and of principle: first, Ukraine and only Ukraine will decide what associations or memberships it aspires to in the future; and second, NATO and only NATO will decide whom to admit to its ranks," Mr. Talbott said.

[As he left the Embassy, Mr. Talbott was asked about the U.S. reaction to Russian Security Chief General Alexander Lebed's remarks about Sevastopol being a Russian port. He said Washington does not view this statement to be Russian government policy. "The Russian government has been repeatedly and unambiguously clear that it regards Crimea to be part of Ukraine," Mr. Talbott said. As for the United States, he added, "We have supported the territorial integrity of Ukraine within its current borders from the day that Ukraine was born."]

The Dole position

Two days later, the issue of NATO enlargement came up during an address to the conference by Jeane Kirkpatrick, who stressed that "nobody wants to push or pull, or even encourage, Ukraine into NATO [and] no one wants to create problems for Ukraine by pushing or pulling other Eastern European countries, Central European countries into NATO."

"We want them to be able to do what they want to do. I think it's just that simple," she stressed. "It's what I want about NATO. It's what Bob Dole wants. And, I suppose, some of you, it must be what you want, too."

As for President Clinton's position on Ukraine, Dr. Kirkpatrick said Mr. Dole feels the administration "has not been quite as helpful to Ukraine as we think it should have been. We think it's had a tendency to Russia first," she said.

"We feel that on economic aid, for example, or some opportunities for institutionalized cooperation, the administration has not given as fair a shake to Ukraine as we think maybe should be the case," she said, adding that Mr. Dole and the Republicans in the Congress are committed "to supporting it in the future, as in the past, and to working as hard as they can to make certain that monies appropriated are, in fact, delivered."

In response to a question, she said that both she and Bob Dole were critical of President George Bush's "Chicken Kiev" speech and of Secretary of State Jim Baker's "Chicken Belgrade" speech.

Constitution's significance

The working sessions of the conference began on Saturday morning, October 12, following an address by Ukrainian Supreme Court Justice Volkov. Justice Volkov said the acceptance of the new Constitution June 28 began a new phase in the development of the separation of powers and the establishment of an independent judiciary in Ukraine.

A major task now before the justices, the Verkhovna Rada and the president, he said, is to draft new legislation, setting up the court system as well as criminal, civil and administrative court procedures. "Much remains to be done," Justice Volkov said. "Our task now is to create an independent judiciary. We feel that this will gain the people's respect for the judicial system, for the national government, and this will be for their own benefit. And we will do our utmost to achieve this."

The first panel discussion, on Ukraine's geostrategic position, was chaired by Roman Popadiuk, America's first ambassador to Ukraine.

Presenting the Ukrainian government's view, Volodymyr Belashov, political secretary at the Ukrainian Embassy, said the enlargement of NATO should enhance security in Europe and that Ukraine does not oppose it. Nor does it oppose any new NATO-Russian agreement in conjunction with this enlargement, he said. Ukraine would like to see NATO enlargement be a gradual process done in parallel with the expansion of relations between NATO and Ukraine.

Ukraine sees the Commonwealth of Independent States as a "useful framework" for bilateral and multilateral contacts, Mr. Belashov said. Ukraine places a high priority on its relationship with Russia and is working hard to resolve such problem areas as the Black Sea Fleet and trade issues, he said. But there are dangers, he added, resulting from the uncertainties caused by President Boris Yeltsin's health.

As for the United States, Mr. Belashov said, Kyiv is satisfied with its "strategic relationship" with Washington and grateful for the U.S. assistance it receives, especially for bringing about market reforms.

Ilya Prizel, professor at the Johns Hopkins University Paul Nitze School for Advanced International Studies, concentrated on Ukraine's relations with its large East European neighbor, Poland. The relationship is high on symbolism - Poland was the first of its neighbors to recognize Ukraine's independence, Dr. Prizel said, but added that Poland's top priority is joining NATO and the West; everything else is secondary.

Poland views Ukraine, like Russia, as a competitor and not as a partner, he said. Dr. Prizel pointed out that, in many ways, the Ukrainian government has been more astute than the Polish government, especially in recognizing that the expansion of NATO must be slow and transparent.

But Ukraine should learn from Poland's economic development, he said, pointing out the importance of small private business, which has been the driving force behind Poland's 6-7 percent annual economic growth. Ukraine's future will depend not on the production of its old behemoths, but on its small private businesses, he said, adding that this is what will stabilize its security and its currency.

Sherman Garnett, senior associate at the Carnegie Endowment for International Peace, poured some cold water on some of the "warm language of yesterday" (Undersecretary Talbott's speech). He said the U.S.-Ukrainian relationship was riding on the momentum of past accomplishments. While Ukraine's government is coherent on where it stands, the same cannot be said about Ukrainian society, Mr. Garnett said.

There are still many misunderstandings in the trilateral U.S.-Russia-Ukraine relationship, which, he said, is dying. Europe is still rather uninvolved in Ukraine, he added, and the United States must make this a topic of discussion with its Western European allies.

Andrij Masiuk, the director general of the International Management Institute in Kyiv, paraphrased a frequently asked question in the U.S. presidential campaign, in his opening remarks about Ukraine's economic reforms: "Are you better off today than five years ago?" he rhetorically asked of Ukraine.

Economic milestones

He got a response from Yuri Yakusha, alternate executive director for Ukraine at the International Monetary Fund. Micro-economic stability has been achieved, Mr. Yakusha said, and Ukraine has passed several remarkable milestones: one-half of Ukraine's GDP now comes from the private sector; small enterprise privatization is complete; the 1993 hyperinflation has been brought down to 1 percent per month in recent months, and was 2 percent in September; and the value of its currency increased 10 percent against the dollar last year.

Financial stability is not enough, however, Mr. Yakusha said. Economic reforms must continue, especially in reducing taxes and broadening their base, in reducing the budget deficit, in cutting red tape and regulations, and in securing a social safety net. Mr. Yakusha pointed out that Ukrainian exports were rising, although they encounter protectionist hurdles in Europe as well as in Russia, which, he added, "is not in line with Russia's responsibilities to international financial institutions."

"In general, I must admit that the IMF is optimistic about what's going on in Ukraine," Mr. Yakusha said. And that's amazing for a country that five years ago had fewer people working in the foreign ministry than countries that recognized its independence, he said.

The American business analysis was provided by Kathryn Dickey Karyl, director of international operations at the Eli Lilly and Co., which began its activities in Ukraine in 1992. Eli Lilly produces insulin for diabetes, cancer products and medication for central nervous system and heart diseases. The company opened eight centers for diabetes testing in Ukraine and has had no problems finding talented employees to staff them, she said. Much of its work has been charitable, she said, although the operation in Ukraine may break even this year, she added.

In the future, Eli Lilly wants to focus on research and development, to invest and test products in Ukraine, which is not being done now. But Ukraine must provide incentives for such investment. "Ukraine is competing not only against its neighbors, but with the world," she said. Health, unfortunately, is not high on the government agenda, she added.

Building a democratic society

Ukraine's progress in building a democratic society was the subject of the last panel discussion October 12, moderated by Orest Deychakiwsky, a staff member of the Commission on Security and Cooperation in Europe. Mr. Deychakiwsky, who recently returned from monitoring the elections in Bosnia (he had monitored Ukrainian elections as well), said he did not see the possibility of a Bosnia-like scenario in Ukraine, as was suggested in a recent article in Forbes magazine.

"Among the reasons is the Ukrainian government's positive treatment of minorities over the last five years - in being inclusive, rather than exclusive, in having a progressive law on citizenship - and in the ability to resolve inter-ethnic tensions through peaceful democratic means," he said.

Judge Bohdan Futey of the U.S. Court of International Claims, who has traveled to Ukraine many times over the past five years to help it establish its legal system and draft its new Constitution, pointed out that Ukraine was the last former Soviet republic to adopt its own Constitution, and that the Parliament would not have adopted it, were it not for President Leonid Kuchma's threat to bring it to a national referendum.

The document is a Western-style, democratic charter, but it has some problem areas, including what Judge Futey calls "claw-backs," which allow certain rights to be limited by future laws adopted by the Parliament. And many sections of the Constitution still require enabling legislation, he said.

Markian Bilynskyj, director of the U.S.-Ukraine Foundation's Pylyp Orlyk Institute in Kyiv, took a critical view of Ukraine as a civil society. He noted that while Ukraine had most of the attributes of a civil society - it held elections; power changed hands peacefully; and there are civic organizations - the view is not as bright when looked at more closely.

He pointed out that public opinion polls show that most Ukrainians would accept totalitarianism for the sake of stability, for example; the Parliament has a 2 percent positive rating and a 50 percent negative rating; there are 40 political parties, but most are limited numerically and geographically; and while there are 740 registered non-governmental organizations in Ukraine, most are not real or are commercial enterprises.

Ross Chomiak, who spent a year and a half as the grant administrator of the International Media Center in Kyiv, gave an overview of press freedom in Ukraine. The press in Ukraine is "really free," more so than in neighboring countries, and "somewhat irresponsible," he said.

In 1996 there were 5,000 periodicals published in Ukraine. And as of September, Ukraine finally has an independent national newspaper Den (Day). The other two national newspapers are government-subsidized - Holos Ukrainy (Parliament) and the Uriadovyi Kurier (Government).

Another thing that makes Den different, Mr. Chomiak pointed out, is the fact that it has a circulation manager. Ukrainian newspapers, for the most part, continue the old Soviet practice of letting the Post Office handle their circulation, he said.

The last day of the conference began with a presentation of the Oral History of Independent Ukraine Project by its co-directors, Sarah Sievers and Margarita Hewko. In a series of videotaped interviews, this project chronicles Ukraine's role in ending the Soviet Union and its decision to pursue full independence.

To date more than 70 interviews have been filmed and transcribed. They include Ukrainian political leaders - from President Leonid Kravchuk, to Rukh leader Vyacheslav Chornovil, to Communist leaders Petro Symonenko - as well as leaders of neighboring countries, including the coup plotters in Russia.

The state of health care

The panel discussion on health care in Ukraine was organized by the Ukrainian Medical Association of North America and moderated by Dr. Roman Goy, a member of the UMANA board.

Myroslaw Kohut, an international health-care consultant who has worked with the World Bank and USAID in Ukraine, said that one can predict the health of a people by their income. In Ukraine, unfortunately, the needs of nation-building do not leave much resources for health care. He noted that the population is growing older and the health care system is breaking down. The fact that there have been five ministers of health in the last five years is another indication of the system's problems, he said. At the same time the system is shifting its function from that of a social safety net to that of an employment mechanism. The number of hospital beds per person continues to remain much higher than in the West, as do hospital stays (nine days for a typical birth).

Mr. Kohut proposed a number of recommendations for improving Ukraine's health care system, among them instituting cost-control mechanisms, focusing on quality, creating an environment of performance expectations and introducing evidence-based management techniques and clinical decision making.

Yaroslav Voitko, first secretary of the Ukrainian Embassy, presented government data about the state of health care in Ukraine based on testimony presented five days earlier in the Verkhovna Rada by the new health minister, Dr. Andriy Serdiuk. Mr. Voitko, as did Mr. Kohut, praised the new minister as a dedicated professional.

According to official figures: there is an increase in Chornobyl-related diseases; the birth rate is down; 6 million Ukrainians suffer cardiovascular disorders; 1.2 million are mentally ill; 700,000 have oncological diseases; 700,000 have tuberculosis; 1.5 million are disabled - 10 percent of them children; officially there are 56,000 drug addicts; every fourth person has a contagious disease; the number of infectious diseases such as AIDS is growing; and the population of Ukraine has decreased by more than 276,000 in 1995. And as for funding, as Minister Serdiuk reported, the entire health care budget is now being used for wages.

Ukraine is grateful for the assistance it receives through USAID and the American International Health Alliance which have some "very good programs" in Ukraine, Mr. Voitko said. Between 1992 and 1996, USAID spent close to $12 million for health care programs, he said, but added that this was but 42 percent of the amount initially approved for Ukraine.

Dr. Zirka Kalynych, a senior staff physician at the Henry Ford Hospital in Detroit, shared her observations from her experience in the Lviv Oblast. Among the rampant preventable health care problems there, she cited alcoholism, smoking, poor nutrition and pollution, which causes asthma, cholera and cancer. She pointed out that hospital stays are long for social rather than medical reasons; that the biggest cause of death in infants is ear infections, which are treated with microsurgery rather than antibiotics; throw-away devices are re-used many times; and there is an increase in traumas from auto accidents and at work.

Focusing on the health of women, Dr. Kalynych pointed out that for every 100 babies born, 150 are aborted; contraceptives are not available. Nor is breast cancer screening available and self-inspection is not taught. Over all, she said, people should be taught that they themselves should take responsibility for their health.

The crucial energy sector

The final conference panel discussion dealt with Ukraine's energy sector. Carlos Pascual, director for Russian, Ukrainian and Eurasian affairs at the National Security Council, explained that, in fashioning a $2.5 billion package for Ukraine, the G-7 chose to tackle its energy needs in a broader fashion than just shutting down Chornobyl and replacing its power capacity by finishing the Khmelnytskyi and Rivne nuclear power plants. The $655 million earmarked for the completion of these plants, which the Ukrainian government would like to receive this year, will probably be released in mid-1997, after the analysis of the project is completed, Mr. Pascual said.

The World Bank has had a role to play in reforming the energy sector in Ukraine, and the bank's principal economist for infrastructure development in Europe and Central Asia, Laszlo Lovei, reported on these efforts. Mr. Lovei pointed to significant progress in reforming Ukraine's electricity sector, with the break-up of its monopoly and the establishment of a competitive wholesale market and a new regulatory system.

He also said that reforms in the coal sector, which started this year, are progressing rapidly; there is less progress in the gas industry, where the government has not fully adopted a comprehensive reform program; and in the oil industry, reforms which began early, have not been carried through to conclusion.

As for Ukraine's energy security, Mr. Lovei said that one may ask the question, "What is really threatening Ukraine's energy security? Is it that it is dependent on other countries for the import of energy - which many other countries are - or is it that it is unable to pay for its imports?"

Robert Archer, deputy chief of USAID's Energy and Infrastructure Bureau for Europe and the NIS, noted that energy efficiency is one of the least costly approaches and, therefore, "strongly applicable" in Ukraine. "Whatever is done has to be paid for," he said. "And it is going to be a process where people look for the least costly ways of answering their energy problems."

The TWG Leadership Conference also had a cultural side of its program. During the banquet Saturday evening, The Washington Group presented its "Friend of Ukraine" award to Hobart Earle, music director and principal conductor of the Odesa Philharmonic Orchestra, in recognition for his "outstanding contribution to Ukraine's efforts to take her rightful place in the international cultural community of nations."

Since taking over the reins of the Odesa orchestra five years ago, Mr. Earle has expanded its repertoire to include works by Ukrainian and Western composers, and has taken the ensemble on tours to Europe, North America and Australia. He was the first foreigner to be awarded the title of "Distinguished Artist of Ukraine," and under his direction the orchestra was awarded national status.

And, following the Sunday brunch, members of the Yara Arts Group performed a retrospective "In Verse," highlights of their past performances. Directed by Virlana Tkacz, this innovative intercultural theater group is a resident company at La Mama Experimental Theater in New York.