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Ukraine: Yushchenko Walks Political Tightrope On Privatization Reviews

  • Valentinas Mite --> Viktor Yushchenko (file photo) Many ordinary Ukrainians want social justice and urge the government to look into shady privatization deals of the past. However, the new administration has no clear program how it should be done and on what terms suspicious deals should be revisited. This uncertainty together with high people's expectations might create problems for the new authorities.

Kyiv, 15 June 2005 (RFE/RL) -- Borys makes his living selling cigarettes at the entrance to a Kyiv metro station.

In his 70s, Borys has seen a lot of pain. He was wounded fighting the Nazis in 1945. But he says one of the biggest injustices he ever suffered was the privatization of Ukrainian industries following the collapse of the Soviet Union:

"Bandits must be punished, they are those people who made Ukraine a poor country," he says. "You need to do that because justice should prevail."

Many of those state sell-offs in the early 1990s amounted to handouts to the rich and powerful. And Ukrainian President Viktor Yushchenko, swept to power last year at the head of the popular Orange Revolution, has vowed to review the most questionable privatization deals.

Borys says he's angry that the "mafia" rules the Ukrainian economy. But he says his life has become a little bit easier than a year ago. He says the new authorities have increased pensions and finally he can almost make ends meet.

Aleksey Kostusev heads the Antimonopoly Committee of Ukraine and Antimonopoly Committee of the Commonwealth of Independent States (CIS). He told RFE/RL it is a priority of Yushchenko and Prime Minister Yuliya Tymoshenko to live up to their vows. However, he says there is still no consensus on how many privatization deals should be scrutinized and on what terms.

"[It is unclear] how many companies will be reprivatized," Kostusev said. "We hear figures from several dozens to several thousands. It is not known under what criteria companies will be included into this reprivatization list. It is not known how it [reprivatization] will be performed. It is not known what sums of money will be involved."
Some in the streets of Kyiv are cynical about any effort to bring social justice, be it through reprivatization or nationalization.

Kostusev says politicians are under the pressure to act, but the suspense in privatization matters is already scaring foreign investors away from the country.

On 14 June, the head of the Ukrainian Institute of Economics, Valeriy Getz, announced that Ukrainians have a very negative attitude towards privatization and private property on the whole. Getz said recent polls show that only 20 percent of Ukrainians support privatization. The majority of people also say they would prefer to work in a state-owned company, not for some private businessman.

Ukrainian politicians tend to avoid the word "nationalization," preferring instead "reprivatization," which means a decent privatization of former shady deals. But it seems that ordinary people make no difference between the two notions.

Some in the streets of Kyiv are cynical about any effort to bring social justice, be it through reprivatization or nationalization.

Oleh Abukov, a construction worker in his 30s, says it is naive to worry about social justice and insists that nothing has changed after the Orange Revolution. He says the same bureaucrats rule as before. "I go to our municipality and I see the same faces," he says. "Big business is owned by the same bigshots. Everyone is eager to steal if there is a possibility. This [stealing] is the essence of a [Soviet] man. The authorities are like the people and if society is happy with such authorities, it means it is similar to them."

Vadim is a film producer in the Ukrainian capital. He says he has no political sympathies and will work for anyone who pays. However, Vadim says he keeps a wary eye on those who want to revisit privatization because it might easily lead to nationalization and back to "a kind of socialism." Still, he thinks it is almost inevitable, as too many people "want this process to begin."

Yushchenko, for his part, appears caught between popular calls for social justice and the need to modernize the economy in hopes of one day joining the European Union.

As officials prepare a list of shady privatizations they plan to challenge, Yushchenko has criticized the government for casting its net too wide, saying it has sparked fear among investors. He said yesterday that only a select few allegedly shady deals should be challenged, and that privatized firms not under scrutiny should receive guarantees that their business is safe.