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Ukraine: Five Years of Independence--Economically Stressed, Politically Stable

Prague, 23 August 1996 (RFE/RL) -- Officials in Ukraine's Zaporizska region decided yesterday to allow turning the hot water on in private residences during weekends. The region, which is home to more than two million people, was without hot water for over a month.

The decision was to mark the fifth anniversary of Ukraine's declaration of sovereignty. But it is temporary, depending on a local thermal plant's ability to pay energy bills.

The case provides a telling illustration of the sort of problems Ukraine is facing as it enters the sixth year of independent existence.

The country proclaimed its sovereignty August 24, 1991. But most of its ordinary citizens are worse off today than they were five years ago. Industrial output in many important sectors is still declining, as is agricultural production. The government experiences major difficulties in collecting taxes from state enterprises: they are either incapable or unwilling to pay. There is little hope that things will significantly improve any time soon.

Once heavily dependent on the Soviet economy as a whole, Ukraine continues to rely on Russian supplies of energy resources, and is still linked to Russia through a multitude of economic and trade ties. These links are certain to continue in the future, notwithstanding, a massive influx of aid from the West. Ukraine is, for example, now the third largest recipient of U.S. aid after Israel and Egypt.

Four months ago the International Monetary Fund (IMF) granted Ukraine a major stand-by loan, reversing an earlier decision to halt lending, pending improvement in economic performance.

Last week, the IMF opened talks with Kyiv officials on a $1.5 million currency stabilization loan needed for monetary reform. Ukraine is planning to introduce a new currency, the hryvna, to replace the karbovanets.

There is every reason to believe that Western aid will continue in the years to come, largely because of Western determination to help in maintaining political stability in Ukraine.

Ukraine is, in fact, one of the most politically stable of the former Soviet republics. A member of the Moscow-dominated Commonwealth of Independent States (CIS), Ukraine has refrained from taking part in joint military structures of that alliance, and based its policy on firm and developing ties with Western institutions.

Speaking two months ago in Poland, Ukraine's President Leonid Kuchma said his country's main foreign policy goal "is to gain full recognition as a Central European country." He added that such a recognition would imply eventual acceptance into the major European institutions such as the European Union and the West European Union -- a western defense organization allied with NATO.

Ukraine has already joined NATO's "Partnership for Peace" program, and has gained acceptance to the Council of Europe.

In relations with immediate neighbors, Ukraine has secured almost uniform recognition of its border. Only Romania and Russia have failed formally to recognize Ukrainian borders. It has signed a series of cooperative and friendship treaties with most of them. A treaty with Russia has not been signed because of the continuing dispute over the Black Sea Fleet.

The country is in the process of adopting a new constitution to strengthen its basic political institutions and permanently delineate legislative, executive and judicial powers.

Ukraine's consolidation of statehood has reinforced broader changes in East Central Europe. It has established a new independent state on Russia's western border, reducing somewhat Moscow's influence in both the region and Europe as a whole.

Marking Ukraine's anniversary of independence, U.S. President Bill Clinton said in a special message that Ukraine has gained a position "as a stabilizing force in an evolving and undivided Europe." Clinton has also promised that the United States "remains committed to supporting Ukraine" in its quest for internal development and an eventual integration into Europe.

There is little doubt that this view is shared by many other Western and Eastern leaders.