Publication: Monitor Volume: 5 Issue: 228

Ukrainian President Leonid Kuchma, re-elected to a second five-year term on November 14, delivered his inauguration address on November 30 to a television audience and the numerous foreign guests gathered in the luxurious Ukraina Palace in Kyiv. Expected to pledge his dedication to democracy and free market reform, Kuchma indeed did proclaim that Ukraine will not abandon its independence or swerve from the way of reforms. In general, however, the address was not quite up to the expectations of either the international community or the reformers at home. Kuchma failed to answer three vital questions. Will Ukraine proceed from words to real market reforms? Will radical steps be taken against the official corruption, which thrived over Kuchma’s first term of 1994-1998, depriving his government of both domestic and international trust? Will Ukraine pledge Euroatlantic choice in foreign politics? Surprisingly little time was devoted to economic issues. Kuchma promised to lay out a detailed economic program for 2000-2004 in his annual address to the nation.

In his November 30 speech, Kuchma flaunted such buzz-expressions as “liberalization and deregulation,” “agricultural reforms,” “developing business” and “private property.” But his wording suggested that radical reforms were in full swing and need only a few final touches to be completed “according to market design.” This, however, is far from reality. Ukraine’s market transition lags far behind its more decisive neighbors to the west, such as Poland and Hungary. The economy is overregulated; rising private business, if not connected to people in high posts, has little chance of survival under taxation pressures; administrative reform, promised to the IMF and the World Bank for loan eligibility, never took off. Kuchma promised to reduce bureaucracy and direct the government toward “a new generation of pragmatists and professionals.” But on December 2 he asked the parliament to re-appoint Premier Valery Pustovoytenko, who resigned on November 30 in compliance with a relevant constitutional norm, which prescribes the government to resign after a new president’s inauguration. Pustovoytenko, who is prone to command methods, is a reluctant reformer, and his attitude to reform of administration is very cautious at best.

Kuchma blamed Ukraine’s corruption and crime on the rudiments of the Soviet bureaucratic system. He did not explain, however, why elements of this system have lingered during his tenure and how they will be done away with over the next five years. Since his first election in 1994, Kuchma has surrounded himself with oligarchs prone to put personal business interests before state ones. Media magnate Oleksandr Volkov, steel tycoon Viktor Pinchuk and energy baron Hryhory Surkis, who raised their capital using their ties to the Kuchma administration, were key figures in his re-election campaign. The first two, suspected of siphoning illegal incomes off into foreign banks, have been targeted by parliamentary investigations (see the Monitor, July 17, September 28). Kuchma is set to further rely on those indispensable people. Now they are forging a pro-presidential majority in parliament on the basis of their factions, Regional Revival, Labor Ukraine and the United Social Democratic Party (see the Monitor, November 23, 30).

There was no mention of Euroatlantic integration in Kuchma’s address, which may be attributed to NATO’s unpopularity in Ukraine after the air strikes against Yugoslavia earlier this year. Instead, Kuchma emphasized Ukraine’s nonbloc status and “multivector” course, which means that Ukraine will remain a gray zone between an unpredictable Russia and an expanding NATO. Kuchma singled out the need to develop relations primarily with Russia and the United States, which he described as the main strategic partners. He proclaimed joining the European Union–Ukraine’s strategic goal. At the same time, he had to admit that this is a distant prospect, given Ukraine’s current economic weaknesses and a weak civil society. He stressed the need to improve Ukraine’s reputation in the Council of Europe, but said nothing about either banning the death penalty or loosening the state’s grip over the mass media–the two issues for which Ukraine has repeatedly faced expulsion from the Council of Europe.

Kuchma said nothing about a bicameral legislature, which he had advocated several months before his re-election (see the Monitor, October 23). Should Kuchma’s attempts at establishing a stable center-right majority in the parliament to back him on major issues against the leftist opposition prove successful (see the Monitor, November 23), the idea of bicameralism may be entirely abandoned. Kuchma sees the introduction of a second chamber as a means of taming the parliament, which has so far been dominated by opposition moods.

Kuchma described his re-election as a triumph of Ukraine and Europe in general. Now he has five years ahead to prove it. Kuchma’s actions during his second term should not be tempered by any consideration for the next presidential election, because according to the constitution the president can serve only two terms (UT-1, November 30; STB, November 2).