U.S. officials air concerns about Ukraine at Action Ukraine Coalition meeting in D.C. (04/04/04)

U.S. officials air concerns about Ukraine at Action Ukraine Coalition meeting in D.C.

WASHINGTON - The first of a planned series of working lunches focusing on Ukraine and U.S.-Ukrainian relations was held here on Wednesday, March 17, at the initiative of the Action Ukraine Coalition, comprising of the Ukrainian American Coordinating Council, the Ukrainian Federation of America and the U.S.-Ukraine Foundation.

The luncheon was to have featured Rep. Curt Weldon (R-Pa.), co-chair of the Ukrainian Congressional Caucus, member of the House Armed Services Committee, and chairman of its Tactical Air and Land Forces Subcommittee. Although a crucial committee session in the House of Representatives prevented Mr. Weldon from attending the AUC luncheon, the participants engaged in a dynamic and fruitful wide-ranging analysis and debate on Ukrainian issues.

The close to 50 attendees represented U.S. government agencies, including the departments of State, Treasury and Commerce, contractor organizations working through the U.S. Agency for International Development, the Office of Personnel Management and the Library of Congress. Representatives from international organizations, development banks, think-tanks, the media, and the Embassy of Ukraine also participated. The Citizens Network for Foreign Affairs provided a conference room at its Washington headquarters.

Morgan Williams, AUC coordinator and editor of AUC's Action Ukraine Report 2004, organized the event. Ihor Gawdiak, president of the Ukrainian American Coordinating Council, served as moderator.

The meeting covered considerable ground, including the upcoming Ukrainian presidential election, the controversial constitutional reforms of the Ukrainian political system, attitudes of the U.S. government towards Ukraine, Ukraine's membership in Euro-Atlantic institutions, freedom of the press, access to Ukrainian radio audiences for U.S. government broadcasters (VOA and RFE/RL) and economic issues, among others.

Mr. Gawdiak opened the session by asking what, if anything, can be done by the U.S. government to ensure a truly fair and democratic election campaign preceding Ukraine's fall presidential election and to influence a more democratic and judicious approach to the controversial "reforms" being contemplated in Ukraine.

Vera Andrushkiw, director of the U.S.-Ukraine Foundation's Community Partnership Project, pointed out that it is important in attempting to understand the current situation to take into account the effect upon Ukraine of the accession of the country's neighbors to the European Union.

Dr. Bill Gleason, chair, Advanced Ukrainian Studies, and coordinator of Eurasian Studies of the Foreign Service Institute at the State Department, noted that, at a conference co-sponsored a week earlier by FSI, "great concern was expressed by several members of the conference that the OSCE [Organization for Security and Cooperation in Europe] is not moving aggressively enough and that it is focused too much on the final election result and not enough on the events leading down to the election."

He emphasized that this is what needs to be talked about now; otherwise, the "damage will be done, or could be done, and it may be too late" to ensure a fair election in Ukraine. He also noted that some participants at the FSI conference felt that the Azeri model - between "East and West" with a lot of control in the hands of the presidency - is the most pertinent model for the Ukrainian situation.

This last assertion was categorically opposed by Nadia Diuk, director for Central Europe and Eurasia, at the National Endowment for Democracy, Stephen B. Nix, director for Eurasia at the International Republican Institute, and by Ukrainian Embassy representatives Olexander Scherba, political counselor, and Volodymyr Samafalov, first secretary and head of Information Section, as an inaccurate model.

"Ukraine fatigue?"

The Ukraine Desk political officer at the U.S. Department of State, Dr. Paul Carter, emphasized that the U.S. also views the coming election in Ukraine "as a critical event in Ukraine's history," that "will set the stage for Ukraine's relationship not only with the U.S. but internationally for years to come." He pointed out that, "if the election does not go well, this could set Ukraine's membership in NATO back for quite some time."

Furthermore, he said, "there are certain psychological factors at work here. It's not just a question of the formal things, like memberships in certain organizations or not, that's important here. If this election goes poorly, Ukraine will be lumped in with other countries - I don't want to pick out any particular country to the East - that have not done well on the democracy front, and 'Ukraine fatigue' so to speak will set in. People will just not be interested. There is an awful lot hanging on this for Ukraine."

Dr. Carter described a recent series of bilateral meetings with Ukraine at the State Department. These meetings, known as the Foreign Policy Committee, are held semi annually, and it was the U.S.'s turn to host the talks. Vice Prime Minister Volodymyr Yelchenko led the Ukrainian delegation at the two-day meetings, which covered the upcoming election, NATO and U.S. briefings on a broad range of issues, including South Asia and Iraq.

"We stressed throughout the importance of the elections. We don't support any particular candidate; our interest is in a free and fair electoral process. We would be willing and quite happy to work with whoever is elected in a free and fair electoral process," Dr. Carter contined. "One thing in terms of the election to keep in mind is Ukraine's aspiration toward a closer relationship with Euro-Atlantic institutions, including NATO. Ukraine has expressed interest in joining NATO and the United States supports this action."

It is a matter of timing, he said. "If the election goes well, and we have made this point quite often, the U.S. will be much more inclined to support an early decision regarding membership in NATO for Ukraine."

Dr. Carter went on to note: "One of the participants on the Ukraine side at the Foreign Policy Committee meeting said, 'There is too much focus on this election in the international community. Who remembers what happened to the election in Poland in 1939?' Our response to that was that we certainly don't think that is a good way to look at it. But if this election does go poorly, maybe we won't remember it. Fifty years from now, we may think of it only as another bad election in that part of the world. That this election went nowhere and Ukraine went nowhere."

Responding to a query, Dr. Carter avowed that the Bush administration has certain sanctions in the planning stage should the upcoming presidential election indeed prove to have been fraudulently carried out. He declined to offer any details.

On the positive side, Dr. Carter gave recognition to many in the room who are carrying out important, "workaday" assistance to Ukraine in the attempt to build a civil society and promote democratic reform. Another positive sign, he said, was President Leonid Kuchma's recent move to cut inspections of the mass media by the tax police. "But," he added, "we are watching the implementation of this very closely."

Mr. Scherba, political counselor at the Embassy of Ukraine in Washington, responded to Dr. Carter's remarks by noting that the United States tends to emphasize everything that is negative about Ukraine but ignores positive developments in that country. Mr. Scherba stated the U.S. pays far more attention to Russia than to Ukraine, and that it ignores Ukraine's considerable and steady economic progress. Everyone, he said, is aware that this year Ukraine faces critical changes.

As for the coming presidential elections, Mr. Scherba stated that a potential presidential election victory for Viktor Yushchenko is not viewed in Ukraine as some completely remote possibility. The United States, therefore, should not be telling Ukraine how to behave and threaten it with some sort of sanctions, but should treat Ukraine as an important partner and accept the results of the coming elections as a legitimate expression of the Ukrainian electorate.

Dr. Carter admitted to this unequal treatment but countered by saying that the U.S. administration is harsher on Ukraine than on Russia because of Ukraine's stated desire to become part of Europe and join European institutions. Thus the question of democratic progress in Ukraine is very important for the United States.

He responded to a question on what was meant by "if the elections go well," by saying that it was what would lead up to the election that is important - what things have to stop, like pressure on journalists, harassment of opposition at rallies, as happened at Donetsk, and the like. If these things were to stop, that would be a very positive step he noted.

Christopher Grewe, international economist and Ukraine Desk officer at the U.S. Treasury Department, agreed with the two participants from the Embassy of Ukraine that Ukraine has been doing well economically. He noted that the beneficial influence of the policies set in place in 2000 and 2001, under Mr. Yuschenko's term as prime minister, are still being felt and that the first half of last year was also a good period for economic policies.

Ukraine's macroeconomic policy has been good, Mr. Grewe observed, and Ukraine has also been "very lucky." Ukraine has a good central bank that has been reasonable and has had a fairly good fiscal policy. "You have to have stability if you are going to have economic growth. Our concerns are for the future. While we applaud what has happened, we always point out that Ukraine is not there yet; some substantial distortions still exist," he said. The time to address these distortions is now because some of these reforms will cause pain, so it is better to suffer that pain when the economy is doing well, observed Mr. Grewe.

Misdirected resources

For U.S. Treasury officials looking at Ukraine's situation, the energy sector is a major concern. "It is still one of the least transparent, most corrupt sectors in the economy" and provides subsidies to Soviet-era industries, even so far as to make them turn a profit. These resources are being misdirected," Mr. Grewe asserted.

The second major area to improve is the business climate. Mr. Grewe stated that there is a tremendous amount of potential in Ukraine for people to set up new businesses. He pointed to great trade ties with the EU and former Soviet republics, and the fact that the old Soviet system did not kill the entrepreneurial spirit. Instead of favoring some groups over others, however, there needs to be a transparent way for the government to obtain the funding that it needs.

On the political side, the Treasury Department's concern is that free and fair elections support a free market economy. This is a well-established correlation throughout the world. "You can get economic growth without a democracy, as we have seen many times, but a really well functioning market economy really requires a free society, otherwise resources can't move within the economy because they are blocked by political concerns," Mr. Grewe noted.

Acknowledging the positive side, Mr. Grewe observed that Ukraine has had its fifth year of growth. It's a balanced growth with growth in consumption, in investments and in exports. All these different parts of the economy growing are very encouraging signs, especially in view of the economic situation in Ukraine in the 1990s. "In looking at this growth and the good outcomes, one of the questions we have asked is what is driving this? Where is the growth coming from?" Mr. Grewe said. It is really coming from Russia. Russia is growing in a very stable manner. Ukraine has reduced its share of exports to Russia, but Russia is still its major trading partner, he concluded.

Arriving at the meeting representing Rep. Weldon, Xenia Horczakiwskyj, the congressman's legislative director, relayed his apologies and explained that legislative priorities required him to stay on Capital Hill. Ms. Horczakiwskyj heard direct appeals about broadcasting concerns from participants who spoke on behalf of the Voice of America and Radio Free Europe/Radio Liberty.

Asta Banionis, special assistant to the president for public outreach at RFE/RL, and Jaroslaw Martyniuk, regional research manager, InterMedia, which does audience research in Ukraine for Radio Liberty and Voice of America, both spoke about Ukraine's clampdown on media outlets in Ukraine for international broadcasts.

Mr. Martyniuk observed that the only means of getting the signal to Ukraine currently is by short wave, but that the short wave signal to Ukraine for Ukrainian broadcasts is much weaker than the one for Russian-language broadcasts, as it has always been. Since 1996, broadcasters found a way around this through access to FM stations, but now that these are no longer available, the strength of the short wave signal is a critical issue.

He urged that the U.S. assign a stronger frequency to Radio Liberty, at least to the Ukrainian short wave, but warned that this would have to be done almost immediately in order for the U.S. to have an impact on elections six months ahead.

Ms. Horczakiwskyj promised to relay this appeal to Rep. Weldon and to work directly on the problem. She also announced that the Congressional Record for March 17, carried a floor statement by Mr. Weldon regarding his views on the troubled media situation in Ukraine.

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