Monday, November 29, 2004

A Wall Street Journal on the Ukrainian situation, courtesy of a reader with access to the WSJ.

The Communist Curse

November 29, 2004; Page A14

The confrontation over the Ukrainian presidential election results
will determine the future not only of Ukraine but also of Russia. In
this sense, the decision that will be made by Ukraine -- whether it
will be ruled by laws or by men -- is the most important that has
faced a former Soviet republic since the fall of the Soviet Union.

The Ukrainian election campaign bore absolutely no resemblance to a
fair contest. Viktor Yushchenko, the opposition candidate, was denied
media coverage and was almost certainly poisoned. Viktor Yanukovich,
the prime minister, won because, according to an independent watchdog
group, 2.8 million ballots were falsified in his favor. There were
impossibly high turnouts recorded in Yanukovich strongholds, for
example, 96.3% in the Donetsk district and 88.4% in Lugansk, and all
but nine opposition poll watchers were barred from 2,000 polling
stations in these regions.

Despite this, Vladimir Putin congratulated Yanukovich on a "convincing
victory" and the elections were described as "transparent, legitimate
and free" by observers from the Commonwealth of Independent States.
The support by Russia for obviously tainted elections has been
attributed to Russia's desire to prevent Ukraine from slipping out of
Russia's "gravitational field." Mr. Yushchenko, who is pro-Western,
supports Ukrainian membership in the European Union and NATO whereas
Mr. Yanukovich is against Ukraine's early adherence to either
organization and supports instead its participation in a "single
economic space" including Russia, Belarus and Kazakhstan.

More important than the blow that a Yushchenko victory would give to
Russia's desire to dominate the former Soviet space, however, is the
blow it would deliver to the emerging authoritarian regime in Russia.
The last three presidential elections in Russia were no fairer than
the one in Ukraine, and if the Ukrainians are successful in assuring a
peaceful transfer of power, it will give new hope to those who want to
see democracy triumph in Russia as well.

Mr. Yanukovich is the candidate of the government of President Leonid
Kuchma, a regime that is corrupt and criminalized even by the unsavory
standards of the Commonwealth of Independent States. Mr. Kuchma, the
former director of a Ukrainian rocket factory, handed the Ukrainian
economy over to a group of communist bureaucrats-turned-businessmen
who proceeded, as in Russia, to use their corrupt connections to
officials to pillage the country's resources at the expense of its
hapless population.

The root of the oligarchs' wealth was Russian gas bought at low prices
and sold in Ukraine at a huge markup. The oligarchs enjoyed
government-sanctioned monopolies, so their profits were enormous and
they often did not even pay for the gas because the government
guaranteed their credit. The oligarchic clans expanded into regional
conglomerates, taking over steel, energy and chemical production, and
insulated themselves against competition with the help of tax
exemptions and government subsidies.

The oligarchic system did little good for Ukraine, once, by some
measures, the most productive of the Soviet republics. GDP fell by 10%
a year in the '90s and Ukraine attracted less foreign investment than
even Romania and Moldova. In 1997, the World Economic Forum ranked
Ukraine 52nd out of 53 European countries in terms of competitiveness.
The system remained in place, however, because the regime controlled
parliament, suppressed the media, and, when all else failed, resorted
to terror.

Each of Ukraine's three dominant oligarchic clans has its own
parliamentary party. The Kiev-based clan of Hryhory Surkis and Viktor
Medvedchuk, which has a stake in the gas industry and power utilities,
controls the Social Democratic Party, which has 39 seats. The
Dnepropetrovsk group, headed by Viktor Pinchuk, who is married to Mr.
Kuchma's daughter, controls four big steelworks and directs the Labor
Ukraine faction, which has 42 seats. The Donetsk group, a regional
conglomerate that became rich on coal subsidies and is headed by Rinat
Akhmetov, is represented by the "Regions" faction, with 40 seats.
After the March 2002 elections, the grip of the nine oligarchic
factions in parliament was weakened but they still controlled a
majority of the 450 deputies.

The only break in this situation came with the appointment of Mr.
Yushchenko as prime minister in late 1999, after the Russian financial
crash in August 1998 threatened to push Ukraine into default. In his
brief tenure, Mr. Yushchenko cut state funding, reducing corruption
and creating equal conditions that increased competition and
production. He also made serious efforts to crack down on bribe-taking
and reform the gas sector. He was removed in a no-confidence vote
organized by the oligarchic parties and the communists in April 2001.

Besides controlling parliament, the regime manipulates the press.
Hostile newspapers were shut down and independent journalists
threatened. Channel 5, the only independent TV station, has been
disconnected in one region after another, its managers subject to
arrest. At the same time, the non-resisting media has been controlled
by secret instructions from the presidential administration. So the
four state-controlled national TV stations ignored Mr. Yushchenko
during the election campaign while giving saturation coverage to Mr.

Finally, oligarchic control is enforced with contract killings. In the
'90s, Ukraine was the scene of hundreds of such killings, the victims
including journalists and politicians. Suspicions that the authorities
were themselves behind a large number of these killings were always
widespread. The event that, for many, removed all doubt, was the
murder of Georgy Gongadze, editor of Ukrainskaya Pravda, an Internet
publication that specialized in exposing corruption among oligarchs.
In November 2000, his headless body was discovered in the woods
outside Kiev. A month later, a leader of the socialist party played a
tape in parliament in which Mr. Kuchma is heard suggesting to aides
that Gongadze be got rid of: "Deport him. Let the Chechens kidnap
him." The tape was provided by a guard who secretly taped Mr. Kuchma's

When the Soviet Union collapsed, the republics that emerged as 15
independent states shared an unenviable inheritance. Presented as an
economic system, communism, in fact, was an attempt to absolutize
political goals for the purpose of destroying morality. This
unprecedented attempt to substitute the man-made for the God-given
could not but destroy the sense of individual responsibility for
millions of people who lived in the former Soviet space.

A result of the absolutization of power in the former Soviet Union is
that democracy has taken root only in the Baltic republics. In the
other republics -- with the possible exceptions of Moldova and Georgia
-- elections exist to confirm a decision that the authorities have
already made. Until a few days ago, it appeared that Ukraine was about
to strengthen this tradition. It was symbolic of the cynicism of the
present Ukrainian leadership that the deputy head of Mr. Kuchma's
administration reacted to the apparent poisoning of Mr. Yushchenko
that has left his face pockmarked and partially paralyzed by
suggesting that he should hire a food taster.

The popular revolt against the falsified election results in Ukraine
has now spread from Yushchenko partisans to members of parliament,
journalists working for state TV, and even members of the security
forces. It could, if successful, reverse the relationship between
rulers and ruled in Ukraine in a way that is dramatic enough to change
the entire political psychology of the former Soviet space. It is for
this reason that Mr. Putin has been so adamant in congratulating Mr.
Yanukovich on his "victory." The example of a free Ukraine will
morally isolate the Russian leadership, making clear that Russia can
either join the civilized world or preserve authoritarian rule, but
not do both. In this, Ukraine may repay a country that brought it
communist enslavement with an example of freedom, and with the
preconditions for a new start.

Mr. Satter, affiliated with the Hoover Institution, the Hudson
Institute, and Johns Hopkins, is the author of "Darkness at Dawn: The
Rise of the Russian Criminal State" (Yale, 2003).