INTERVIEW: Oleksander Moroz, candidate for president of Ukraine

The interview below with Oleksander Moroz, leader of the Socialist Party and a candidate for president of Ukraine, was conducted in Kyiv by Stefko Bandera, a Kyiv-based writer who works for the Canadian political consulting firm Romyr and Associates.

Q: When you were in the United States last year, the media reported that you are categorically opposed to the privatization of land in Ukraine. In the West, this is perceived in a negative light. Ukraine's greatest assets, perhaps, are the land and its people. If you are against the privatization of land, how do you propose Ukraine use this resource and regain its status as breadbasket of Europe?

A: The fact is that when Ukraine was the breadbasket of Europe, land was also not for sale. The success of the agricultural sector does not depend on who owns the land, but on organizing the way in which the land is used, by providing necessary support for farmers and allowing them to reap the benefits of their work. Laws for improving this organization already exist, but there are at least three more fundamental measures that can only be realized with the help of the state.

First of all, the entity that works the land, be it a collective or private farm, farmers or agricultural firms, needs to have access to credits. These credits must be offered at reasonable rates that will allow repayment by reasonably profitable enterprises. If the credits are offered, as they are today, at interest rates in excess of 80 percent, then no one will take advantage of them. Let the farmer have the right to sell his land 20 times over, and even use land as collateral, but he will never be able to pay these credits back [at current rates]. This is unacceptable. I don't know of a single country in the world that allows for this type of arrangement. This is one of the first issues that need to be settled.

Secondly, the tax burden on the farmer needs to be significantly alleviated. Working towards this, the parliamentary committee I head has developed a number of legislative acts that will decrease the tax pressure on the farmer, and even create tax breaks for a few years, thus giving the agriculture sector an opportunity for revival.

The third step the state needs to take is to establish minimum price levels for selected staple agricultural goods like seeds, sugar, vegetable oil, meats and poultry. This is not an unusual practice; similar policies are pursued in various forms in the European Union and the United States through subsidies, fixed prices, etc.

If these three measures are implemented, then the issue of whether or not to sell the land will lose the urgency certain Westerners place on the matter. In fact, current legislation allows for various forms of ownership, including private ownership. In 1992, 25 percent of Ukraine's agricultural lands were already out of the state's hands. However, at this time of deepening crisis, when our currency is being devalued, with the "dollarization" of our economy occurring even at the basic, consumer level, allowing for the sale of land would be simply criminal.

There are a few examples when, in defiance of the Constitution, but based on presidential decrees, several farmers took the risk of selling their land. They sold it for $10 (U.S.) per hectare! You don't have to be a specialist to understand the absurdity of that price. I am categorically opposed to these type of scenarios. There are successful agricultural enterprises in Ukraine that prove that the sale of land is not necessarily the only answer, and show that more emphasis should be placed on creating economic conditions favorable to the development of agricultural enterprises.

The value of the land should be included in the price of the final product, along with the cost of maintaining the land and operation, i.e., the costs of fuel, energy, farm equipment, herbicides, other chemicals, etc., at current world prices. If the land's value is not included in the price of the final product, this will result in the economic discrimination against farming activities and wages will remain very low.

This is also unacceptable. This is basically my stand on the issue of privatization [of land]. To make land a commodity will mean losing it. I do not want to see that happen because I am a Ukrainian patriot and would not want to see non-Ukrainians doing as they please with our land. If investors are interested in working with us on our land, then we can explore different options for privatizing individual land plots, subordinating them to privatized manufacturing and industrial enterprises, for example.

Q: After Ukraine has managed to bring its agricultural affairs in to order, which markets can the country expect to service? Can Ukraine ever regain its status as "breadbasket of Europe"?

A: I don't think Ukraine will ever become the "breadbasket of Europe" that it once was because Europe has managed to develop its own agricultural sectors to the point that the European countries are able to satisfy their own demands. Certain Ukrainian goods can be sold in Europe, especially our vegetable oils, which cannot be surpassed in quality by any other country's product, except perhaps by a small part of Argentina. These oils can claim their own niche on European markets. Ukrainian apples, grapes and melons can also be sold in most of Europe. Our hard grains can claim yet another niche. Ukraine's eastern regions have the right climatic conditions for growing hard wheat, and its successful sale alone will significantly strengthen our agricultural sector.

Ukraine's markets are to the East and Middle East, but first and foremost we need to focus on completely satisfying our domestic demand. So, you can see that Ukraine's land does have a future.

First, however, we need to change the way crop rotation is practiced, increase the sowing of feed grains, grasses, etc. This will be easier on the land and will also allow for our agricultural sector to develop animal husbandry, for example. This is especially important for the country's southern regions, including the north of the Crimean peninsula, because the sowing practices there over the past few decades have depleted the land of its nutrients, and farming there means incurring significant maintenance costs. In order to keep costs down, we should limit the use of farm equipment to ensure that the tractors, combines, etc., spend less time in the fields.

And this will happen only after significant structural changes in the agricultural sector are implemented, while the industrial manufacturing sector of the economy is given a new impetus. This all means that basic changes in agricultural policies are required. These changes can be intensely and swiftly implemented only after Ukraine's agricultural goods improve their market positions within the country, in the East and, to an extent, in Europe.

Q: In 1998, the International Center for Policy Studies in Kyiv reported that a bumper sunflower harvest was sold abroad at world prices. Meanwhile, domestic sunflower oil manufacturers were underemployed, because they couldn't compete with those foreign manufacturers who were able to pay the price for Ukrainian sunflowers. In the end, Ukrainians ended up purchasing the more expensive, imported sunflower oil that was made from Ukrainian sunflower seeds. This is a classic colonial arrangement. Why can't Ukraine export its own sunflower oil instead? Who in Ukraine benefits from this "colonial" status?

A: After the period of artificially created hyperinflation in the early 1990s, many Ukrainian farmers and agricultural enterprises lost their basic operating capital. Moreover, a barter system of payments was introduced that led to the violation of price parity and lowering of agricultural product prices. Basically, energy and fuel were purchased by farmers at world prices, but they paid in goods, not cash. The middleman in the barter system simply dictated the value of the farmers' goods to the farmers. For Westerners this type of arrangement may be difficult to understand, because it is basically a leftover from the Stone Age. The farmer was told, and accepted the fact that his production must be sold at a significant discount, because the costs of manufacturing and the middleman's services will be included in the final product's consumer price.

So, when it came down to determining the comparative price for the sunflower seeds, or any other agricultural product for that matter, in relation to the price of fuel and energy, the volume of produce required to "pay" world prices was artificially high. The produce, consequently, fell in value. This created conditions that were extremely unfavorable for the farmer.

All of these barter arrangements (in some regions 70-80 percent of all transactions were conducted on this basis) made the agricultural producer completely dependent on the middleman. At the end of the day, the farmer already "owed" his production even before he had sown his fields. The tragedy of all of this lay in that the producer essentially gave away the fruits of his labor at a price far lower than their actual market value. He was forced into this arrangement because otherwise he wouldn't have any produce, be able to sow his fields and operate his farm.

I believe that we currently have an opportunity to change this "system" in Ukraine, and we are preparing to take the necessary steps via legislation and state regulation of these processes. There are factories like the Lenin Factory in Dnipropetrovsk that produce very high quality sunflower oil. This factory is even ready to pre-pay farmers for their sunflower production. Farmers, however, already owe their produce to someone else, and cannot take advantage of the offer. The factory is ready to pay the equivalent of $211 per ton of sunflower seed, but the farmers cannot sell it to them because his harvest is already committed as payment for the costs of maintaining the farm. This calls for state intervention into the matter, even more so because the value added to sunflower seeds after they are processed into oil is approximately six times the price of the harvested seed. For the good of Ukraine's economy and the state budget, it makes sense for that value to be added within the country. No one can disagree that the full employment of our processing facilities with our own raw materials is a desirable goal. If it is up to me, this will be done.

Q: What role should Western investors play in Ukraine? Are they welcome here, does Ukraine need foreign investments? Or can the country make it on its own?

A: In the last few years, Ukraine has taken a 40- to 50-year step backwards in terms of economic development. At the time of independence, our investment funds were already relatively old, because the USSR focused its capital investments primarily in the eastern and northern regions of the union where new territories were being developed.

Ukraine simply cannot manage without foreign investments. The fact that we need them is undeniable. The operating conditions offered in return for investment are designed to be attractive. The current law "On Foreign Investment" has been analyzed by both foreign and Ukrainian specialists and economists, who have commented that investor interests are very favorably treated in the law.

There is still another objective reason the West should invest in Ukraine. It lies in the fact that one of the biggest problems in Europe today is that of unemployment. At the European Socialist Congress earlier this year, this topic was a subject of heated discussion, and the congress passed a resolution on combating unemployment in Europe. This is characteristic of current priorities for Europe. Combating unemployment has never had such widespread, concerted support in Europe as it does today. This also reinforces the powerful idea of the complete socialization of European society.

At the same time, and in the context of European progress, there exists an attitude that Ukraine is not exactly developing along the same lines. Ukraine needs to be reoriented on a path of development that will correspond to Europe's. Europe will not be able conquer the unemployment problem on its own, even if combating unemployment become top priorities in Ukraine and Russia. The common unemployment concern can be tackled in two ways. One, Europe produces goods for mass consumption and sells those goods, for example, in Ukraine, thus creating a consumer market here for European producers. Or Europe can research and develop new means of production and then, by creating technology sector jobs and other forms of capital, invest in our economy. This will create jobs in Ukraine to produce products that will satisfy the domestic market and be exported. I am for the latter approach. My discussions with leading Western corporations have shown that they, too, are interested in this type of cooperation. I believe that our future lies therein.

Q: What is your view on concessions as a means of attracting foreign investment?

A: I consider concession agreements to be acceptable. Each project that involves concessions, however, needs to be looked at closely in terms of its economic sense, because there are both current and long-term benefits to be reaped. We need to observe and analyze the worldwide market in terms of dynamics, trends and developments. Then the process of implementing concessions must be planned beforehand. I do not have any specific reservations because concessions are a normal practice used around the world, and we, too, can benefit from such arrangements.

Q: Analysts have suggested that the incumbent president's campaign managers' greatest fear is a Kuchma-Moroz showdown in the second round of elections. Why do they fear you so?

A: This is the ideological situation at hand: they want to maintain their status. And there is no other candidate that is an adequate substitute for the incumbent, from their point of view. Their campaign is based on certain stereotypes, and their underlying message is that a candidate cannot be allowed to lead the country. This is specifically intended for the West in order to secure support for the incumbent and the existing regime. This explains our position, and indicates that if we come to power, we will replace the existing regime. I do not want to lose the opportunity to do so.

Q: In your opinion, what is the greatest threat to Ukraine's national security today?

A: The economic threat.

Q: By this you mean "dollarization," colonization?

A: Yes, all of these are components, but the most significant threat to our national security lies in the fact that unemployment and the current social malaise can lead to the type of cataclysms that will leave an indelible mark on Ukrainian statehood. Everything must be done to create employment for the people and pay their wages.

Q: About Ukraine's entry into the CIS Inter-Parliamentary Assembly. As a politician, do you think that this bring about real change? Will Ukraine be better off, or will the country simply be forced to contribute financially to this institution?

A: Ukraine can't be a mere observer when discussions concerning legislative models for CIS IPA member-countries are underway. I think this is yet another vehicle for representing Ukraine's interests. Ukraine's sovereignty and independence cannot be guaranteed by simply being or not being members of various international organizations. Pursuing smart politics in these types of institutions, however, will serve as guarantees. The task at hand is to represent Ukraine's interests in all available manners, to take advantage of all possibilities and options.

That is why I think that membership in the IPA will not present even an elementary threat to Ukraine's sovereignty. The objections to IPA membership are not grounded in genuine concern about Ukraine's interests, but are more ideological in nature, basing themselves on slogans such as "Away from Moscow!" In my view, this is an unwise slogan, and will be quickly forgotten once the benefits of IPA involvement are seen through the preparation of various legislative acts that will guarantee effective economic cooperation among the member countries. The rest, in my view, cannot be taken seriously. No one considers Ukraine's membership in the Parliamentary Assembly of the Council of Europe to be a threat to our sovereignty.

Q: This year, 1999, marks the 65th anniversary of the Great Famine in Ukraine. This anniversary appears to have been largely ignored on the official level. At the same time, we see demonstrations, left-wing rallies, with people carrying images of Stalin. Ukrainians vote for the Communist Party, the party that created the Great Famine. In the West, this appears to be very contradictory, and even serves to lower the opinion held about Ukrainians because some Ukrainians talk about a Great Famine while others vote the Communists into Parliament where they command the largest faction. Is it possible that the Great Famine never happened?

A: This is not an altogether accurate assessment. Christians, for example, have no problems calling themselves Christians despite some controversial periods in the history of Christianity. It is a system of beliefs and ideas, and even though the Church has made mistakes in the past, Christianity as an idea has not been discredited.

In the same way, I would not associate the Great Famine exclusively with the Communist Party, although I understand that the Western reader does have preconceived notions on the subject. I was a member of the Communist Party for 18 years and can say honestly that I served the people of Ukraine honestly and conscientiously, and defended our national and social interests.

The Great Famine was very brutal in the village where my family comes from, and I heard about it first-hand from my grandfather and parents. Interestingly, I remember that when my grandfather spoke about the Great Famine, even during the 1960s (a period of relative liberalization), he never attributed the Great Famine to the activities of the Communist Party. He simply spoke about it as historical fact. He spoke about why it happened, and the reasons he cited were not unlike the rationale offered by the (post-Stalin) Communists who spoke about the "objective" reasons.

When I analyze those years, I think that we, today's politicians, cannot forget about those terrible times, but more importantly we must make sure that they will never be repeated. That would be perhaps the best way to show what we think about those times. Everyone should know the truth about those events, know about the criminal actions of Stalin and his regime and call things by their real names. But, I repeat, attention should be placed on the current state of affairs and not allow them to get any worse than they already are. I think that is possible.

Regarding those people who show up at parades and sometimes carry relics from the past. They believe in them. This is not something welcomed by myself or our party. Moreover, Stalinism and the dictatorial regime were condemned and that is clearly stated in our party's program. But, if a person walks around with a sign, then it reflects the type of person. Did you know that placards with Stalin's picture were not carried between the 1960s and 1990s? Where these people kept them, I do not know.

Q: Imagine people in Berlin today walking around with pictures of Hitler in public.

A: Why imagine? There are people that do it in Berlin. It's all a matter of time. It will pass, and too much attention shouldn't be paid. No one, for example, condemns Austrian social democrats who demonstrate in the center of Vienna on May Day with red flags. The Austrian chancellor sometimes even addresses these gatherings.

Q: When did you realize that the Soviet Union would be no more? Did it come as a surprise to you?

A: It was 1990, and I remember speaking about it with my colleagues-parliamentarians. When Gorbachev began talking about a new union agreement, which basically initiated the demise of the old union, I remember saying that we should welcome a new union not as a weight around our neck, but as a form of independence. We should have sat down, enlisted the services of a specialist who could have determined what belongs to us and what does not in terms of the energy sector, defense, debts, responsibility for Chornobyl, matters concerning the fleet, etc.

This wasn't done because matters were settled in a manner not uncommon for us and first we broke "the clay pot" into thousands of pieces and then took those pieces and tried to figure out where they belong. Had we taken a calmer approach, and itemized all of our concerns and interests, then Ukraine would be a very different place today. Today, nobody in Moscow knows where all of the gold, financial assets, etc. disappeared. In Ukraine, those who once cried out "Away from Moscow!" are now talking about mutual forgiveness, audits and the like. Who is going to take up the matter today?

Q: Which political leaders or style of leadership appeal to you?

A: I admire Roosevelt of the 1930s. I have read quite a bit about him, and there are a lot of interesting lessons to be learned. Recently, while in Bonn, I visited their historical post-war museum and also found it very interesting. It's a testament to the transition of a society from totalitarianism to democracy. It is very convincing and should be utilized in education about the importance of living in accordance with the rule of law. As it turns out, this is the most important cause.

Q: A question on geopolitics. Ukraine seems to be in a position where it is being pulled in two different directions at once by the Russians on the one hand, and the Americans on the other. Is Ukraine nothing more than the subject of deals struck between these two powers? Does Ukraine have any independent influence in international politics?

A: Perhaps (Ukrainian poet) Vasyl Symonenko's words are appropriate today when he wrote about Ukraine:

Pearls for the soul I sow for you,
And create and ponder for you,
Be away America and Russia
While I am conversing with you.

People are constantly asking: "Where is Ukraine headed - East or West?" Ukraine has nowhere to go right now but up and out of the hole it finds itself in. In this sense, the roads of progress will lead to greater economic integration with both Russia and the West. But Ukraine should remain an independent and influential player on the international scene. In my view, not only Russia, because that isn't the full picture, but also America, shouldn't use other states for political barter. And if certain people consider nations to be geopolitical "goods," then that is truly a sad state of affairs, even for those states that engage in it.

Copyright © The Ukrainian Weekly, September 5, 1999, No. 36, Vol. LXVII

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