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Poland, Belarus & Ukraine Report: September 16, 2003

16 September 2003, Volume 5, Number 34
EU PRESSED TO GO FURTHER AND FASTER WITH EASTWARD TRANSPORT CORRIDORS. Governments of prospective European Union members and soon-to-be neighbors are pressing the EU to rethink its plans for upgrading transport facilities in the region. Two key routes should be reconsidered, they say: the second pan-Europe transport corridor (Berlin-Warsaw-Minsk-Moscow-Nizhnii Novgorod) and the proposed Rail Baltica (Warsaw-Kaunas-Riga-Tallinn-Helsinki) link.

Trans-European Transport Networks (TETNs) and their infrastructure are in fact an announced priority of the current, Italian EU Presidency, and a meeting of the EU Transport Council in October will debate their implementation and funding. According to the EU's daily gazette, "Bulletin Quotidien Europe," No. 8497, at the start of the current presidency, "New momentum must be given to developing the TETNs, taking account of...the possibilities opened up by the EU's new geopolitical framework." In preparation for that debate, prime ministers and transport ministers of future members and neighbors of the extended EU are making their complaints known.

As far as the Berlin-Nizhnii Novgorod corridor is concerned, the countries concerned would like it to go further -- to Yekaterinburg in the Urals, where it could pick up freight from Southeast Asia, China, and Japan, currently carried either by sea or by the slow and congested Trans-Siberian Railway. Speaking at the recent third International Euro-Asiatic Transport Conference in St. Petersburg, Polish Deputy Prime Minister Marek Pol noted that if only 5 percent of the present seaborne cargo traffic from Asia to Europe were shifted to this route, this would mean 500,000 containers annually. Although the Poles -- whose container terminal at Slawkow would service the route -- would be the major beneficiaries, all countries in the route would gain.

Accordingly, on 11 September, the transport ministers of Germany, Poland, Belarus, and Russia signed a joint memorandum to the European Commission asking for permission to extend the corridor to Yekaterinburg. The commission has yet to reply, but it seems unlikely to reject the idea in principle, since in July of this year, the incoming (Italian) presidency noted Southeast Asia as a target area for expanding economic relations. The financial and logistic aspects, however, will undoubtedly evoke considerable debate.

With Rail Baltica, the main complaint is the timetable. The scheme is included on the list of priority projects selected by the EU High-Level Group chaired by Karel Van Miert, but only in the third grade of priorities (somewhat confusingly called "List 2" -- since the top priority projects are designated "List 0"). The four List 2 projects are, according to the Van Miert group, "to be achieved in the longer term," since "at present [July 2003] they have not been approved by the member states concerned [as] regards financing or the line such routes should take." Since List 0 projects are to be completed by 2010 at the latest and List 1 projects started by 2010 and completed by 2020 at the latest, the governments of the five countries involved (Poland, Lithuania, Latvia, Estonia, and Finland) take this to imply that List 2 projects are scheduled to begin only after 2010. And this, they feel, is not good enough. At the beginning of September, the five prime ministers decided to press the EU to think again about their schedule of priorities: since the link is of "strategic importance to the whole region" and ought therefore to be launched immediately after EU enlargement.

In fact, the Van Miert recommendations do indicate that List 2 projects could begin earlier if an agreement is reached between the states concerned, in particular, regarding route and financing. And financing is liable to be the key issue. Back in April 2003, the EU announced that it had insufficient public money at its disposal to implement the TETNs projects foreseen at the end of the 1990s for the existing member states, let alone those made necessary by enlargement. Public-private partnerships and a thorough overhaul of existing financial structures -- new arrangements for loans and guarantees -- would be necessary.

Assuming that these financial problems are resolved, the Van Miert group also named certain links of "special interest" for the development of foreign trade and freight transit to and through the new member countries. Belarus and Ukraine were specifically named among such links. Such future links are already attracting interest -- during the visit to Georgia last week of Lithuanian President Rolandas Paksas, it was revealed that the Georgians favor the idea of such a transit corridor to the Baltic states via Ukraine, to replace the present route via Russia.

(This report was written by Vera Rich, a London-based freelance researcher.)

BELARUS, RUSSIA TO SWITCH TO MARKET PRICE FOR GAS. Belarusian President Alyaksandr Lukashenka met with his Russian counterpart Vladimir Putin in Sochi, Crimea, on 15 September to discuss recent controversies in bilateral relations, primarily the Kremlin's decision to stop selling natural gas to Belarus at preferential prices and Minsk's reluctance to sell a stake in the Beltranshaz gas-transportation company to Gazprom and adopt the Russian ruble as the Belarusian currency as of 2005 (see "RFE/RL Poland, Belarus, and Ukraine Report," 9 September 2003). Judging by the news conference that both leaders held following their six-hour informal talks in Sochi, the above-mentioned controversies have not been overcome in full.

The most important outcome of the meeting seems to be both presidents' agreement that Moscow and Minsk should now switch to "market relations" in the gas sector. "We have come to the conclusion that it is necessary to change over to market relations in this sphere without stopping the negotiations about the creation of a joint venture [to operate] a single gas-pipeline system," Putin told journalists. He added that Moscow may also consider allowing Belarusian enterprises to participate in gas extraction on the territory of the Russian Federation.

At present Gazprom sells gas to Belarus at about $29 for 1,000 cubic meters. How much will Belarus have to pay after switching to the "market relations?" Lukashenka said Putin assured him during the talks that a new price of gas for Belarus will be determined in talks with Gazprom and that it will not be higher than that paid by Russia's other CIS partners. Lukashenka said Minsk will react to the higher gas price by increasing tariffs for the transit of Russian gas across Belarus, to which Putin reportedly agreed. And Lukashenka presented his own calculation, according to which Belarus will not lose on this forthcoming price switch. "Ukraine takes $1.5 for the transit [of 1,000 cubic meters] of gas from Gazprom, while Belarus takes $0.40, that is, three times less," Lukashenka said. "If Gazprom starts selling gas to us at the Ukrainian price [$50 for 1,000 cubic meters], then our tariffs for transit will become equal to the Ukrainian ones, and in such a case neither we nor Gazprom lose anything."

Both presidents also discussed the introduction of the Russian ruble in Belarus. Addressing Lukashenka's recently voiced demands that Russia provide guarantees that Belarus's sovereignty will not be impaired in the planned currency union, Putin said during the news conference that Russia sees no need for providing such guarantees since the currency union "has no relation to sovereignty." To alleviate Lukashenka's fears about the introduction of the Russian ruble, Putin cited examples of the present EU currency union and the late currency union between Belgium and Luxembourg -- in these monetary unions, Putin claimed, no country had to surrender its sovereignty.

Lukashenka, however, seemed to be unconvinced. He repeated his position voiced earlier this month in a letter to Putin that the introduction of the Russian ruble in Belarus should be connected with the adoption of a constitution of the Russia-Belarus Union. "We see a currency accord within the framework of a constitutional act [of the Russia-Belarus Union] and a broad package of [other] agreements," Lukashenka told journalists. "For the time being, we are not leaving these positions, even if we concur with the Russian side that we can take any issues out of this process and resolve them, including monetary ones." Lukashenka pledged to continue talks on the currency union with Russia.

The question of whether and when the Kremlin will make Minsk pay higher gas bills is open. But one thing seems to be obvious after the 15 September meeting between Putin and Lukashenka: Moscow has solidly placed its relations with Minsk on a pragmatic foundation and is firmly set to pursue economic integration rather than a political one. It is not clear, however, whether Lukashenka fully realizes this new situation. Some of his pronouncements in Sochi testify to the fact that he may not yet have grasped these new circumstances.

"There are some bad processes going on behind our backs, but I think our meeting will help put an end to all sorts of insinuations coming from both sides," Lukashenka told Putin in Sochi. "I will tell you face to face what is going on behind our backs, but those processes are bad and I think the unity -- the aspiration for unity between our two peoples -- has suffered a most serious blow." Russian journalists immediately took the clue and asked Russian Prime Minister Mikhail Kasyanov -- who ordered Gazprom to stop selling cheap gas to Belarus and who, moreover, is often seen behind Putin's back on official occasions in the Kremlin -- if he is the instigator of those "bad processes" Lukashenka referred to. Kasyanov said Lukashenka's words have no relation to the Russian government. Putin in Sochi also seemed to be ignorant of any wicked deeds being done behind his back. This may mean that what Lukashenka sees as "bad processes" in Russian-Belarusian integration is what Moscow perceives as politically appropriate and expedient.

Apart from his warning against the allegedly backstage "bad processes," Lukashenka seemed to have no other weighty arguments to support his vision of Belarusian-Russian integration. "We in no way should move down to a lower level [of integration] than we are now," Lukashenka said in what Belarusian commentators heard as a reference to the 1999 union treaty he signed with then-Russian President Boris Yeltsin. In particular, this treaty provides for the creation of supranational bodies with controlling powers over the Russia-Belarus Union. But the Yeltsin days in Belarusian-Russian integration are long over. Now the Kremlin appears to have "forgotten" some political provisions of the 1999 treaty while pushing for the economic integration that will arguably give Moscow considerable levers of political control over Belarus without surrendering any political control over Russian affairs to Minsk.

"I want to confirm once again that Belarusians and Belarus, including Lukashenka, have never opposed and will never oppose the unity of our nations. For Lukashenka it would mean political death," Lukashenka said during the news conference in Sochi. The first assertion seems to be fairly questionable. The second one -- about Lukashenka's possible political demise in the event he drops the integration game with Russia he began nine years ago -- may be prophetic. (Jan Maksymiuk)

COMMUNISTS COME TO THE RESCUE OF KUCHMA, AGAIN. Ukraine's ruling elites are fearful of the end of the Kuchma era. President Leonid Kuchma and his oligarchic allies have no candidate agreeable to the three main clans who could win an election and act as a neutral "umpire" between them. Prime Minister Viktor Yanukovych, head of the Donbas clan's Party of Regions, is unacceptable to Viktor Medvedchuk, head of the presidential administration and the rival Kyiv clan's Social Democratic Party-united (SDPU-o).

Medvedchuk is more fearful than the other two principal oligarchic clans of a victory by Viktor Yushchenko. The Washington-based Carnegie Endowment's Anders Aslund believes that whereas the Donetsk and Dnipropetrovsk clans are evolving from oligarchs into businessmen, Medvedchuk's SDPU-o has no future. In his opening speech at this month's Verkhovna Rada session, parliamentary speaker Volodymyr Lytvyn indirectly attacked the SDPU-o for leaving its accumulated riches abroad, rather than reinvesting them in the Ukrainian economy. The crisis within the SDPU-o can be seen by its expulsion of first deputy parliamentary speaker Oleksandr Zinchenko, who unsuccessfully attempted to modernize the party and one of its television channels, Inter.

Renationalization and a reversal of the insider privatization that took place in the 1990s is unlikely. But a Yushchenko victory will be accompanied by intense pressure to launch investigations into high-level corruption. A recent poll found that 78 percent of Ukrainians believe that state action against corruption is purely "cosmetic." During the Yushchenko government Aslund calculated that between $2 billion-$3 billion was returned to the state budget from the oligarchs. National Bank Chairman Serhiy Tyhypko, himself leader of the Dnipropetrovsk clan's Labor Ukraine, admitted that capital flight in 2002 had totaled a record $2.27 billion.

Ukraine could follow Russia, where President Vladimir Putin supposedly made a deal with the oligarchs whereby they would keep their wealth in return for staying out of politics. Such a deal in Ukraine would remove at a stroke the centrists from the political arena. But, as Kuchma points out in his new book, "Ukraine Is Not Russia," Putin has a KGB background and was trusted as outgoing President Boris Yeltsin's successor. Yushchenko would be elected as an opposition candidate without Kuchma's blessing, making the issue of mutual trust more difficult.

A Yushchenko presidency would be forced to grapple with two additional issues. He would be unlikely to allow the oligarchs to continue to monopolize the media, particularly television. Here, Medvedchuk and Labor Ukraine oligarch Viktor Pinchuk would lose out most. Another area would be the need to clean out the Interior Ministry special forces who are accused of involvement in criminal and political violence.

Different oligarchs are pleading for Yushchenko to not launch criminal cases and other actions against them if he is elected. Ironically, these are the same kinds of activities that the authorities are themselves undertaking against the opposition, such as criminal cases against radical oppositionist Yuliya Tymoshenko.

If Kuchma's political reforms are adopted by parliament, the 2004 elections are more likely to be free of violence and fair because Kuchma and the oligarchs will then have nothing to fear from a Yushchenko victory. Mykhaylo Pohrebynskyy, an adviser to Medvedchuk, said in a recent interview in "Ukrayinska pravda" that if the reforms are not adopted, there will be a violent and nonfree election campaign, especially in the oligarchs' eastern Ukrainian heartland.

Three constitutional drafts have been drawn up by the executive to attempt to deal with the Yushchenko threat. The first two attempted to lengthen Kuchma's term in office by postponing next year's elections until the parliamentary elections in 2006. This was blocked by the opposition and Kuchma withdrew his second draft in early August.

The third draft has successfully co-opted the Communists (KPU) from the opposition. The double standards here are palpable; when the national democrats cooperated with the KPU in opposition, Kuchma attacked them for working with "antistate forces." The KPU did not back the parliamentary resolution on the 1933 artificial famine.

This is not the first time the Communists have come to Kuchma's and the oligarchs' rescue. In April 2001 the Kuchma/oligarch-KPU alliance brought down the Yushchenko government. During the height of the Kuchmagate crisis from November 2000 to the March 2002 elections, the KPU remained neutral, thereby allowing Kuchma to ride out the crisis. After the elections the KPU failed to reach agreement with Yushchenko's Our Ukraine on the elections for parliamentary speaker. This allowed pro-Kuchma factions to elect former presidential administration head Volodymyr Lytvyn, who won by one vote, that of KPU member Mykhaylo Potebenko. As prosecutor-general during the Kuchmagate crisis, Potebenko shielded Kuchma from allegations of his involvement in opposition journalist Heorhiy Gongadze's killing.

In July, a month before the third draft, the KPU openly came out against Yushchenko. Interviewed by the "Kievskii telegraf" newspaper and the website, both owned by the Labor Ukraine clan, KPU leader Petro Symonenko said, "In my view, the coming to power of Yushchenko is a threat to both the state and the people of Ukraine." In Symonenko's view, Yushchenko is "not a patriot of Ukraine."

The third draft of constitutional changes outlines plans to transform Ukraine into a parliamentary-presidential republic by changing the election of the president from direct popular vote to a two-thirds majority of parliamentary deputies. Until the 2006 elections pro-Kuchma factions will possess a slim majority in parliament. Pro-Kuchma parliamentary majority leader Stepan Havrysh claims that he has 241 deputies. These, together with 62 Communists, give a slim majority of three to change the constitution.

In reality, the majority have only 226-228 deputies and the KPU only 60, giving them less than the 300+ votes required (i.e., only 286-288). Speaker Lytvyn has therefore predicted that the third draft will not be adopted before the October 2004 presidential elections.

If the lack of 12-15 votes is overcome and the constitutional changes are in fact adopted, Kuchma could be elected by his parliament majority to become prime minister, to whom many of the current powers of the president would pass. Although Kuchma is constitutionally unable to be elected president for a third term, he could therefore still survive politically by entering government, thereby postponing any problems surrounding his immunity. Thanks, of course, to "antistate" forces.

(This report was written by Dr. Taras Kuzio, a resident fellow at the Centre for Russian and East European Studies and adjunct professor, Department of Political Science, University of Toronto.)

CORRECTION: The sentence "Furthermore, Europe experienced dozens of religious conflicts and thus including the phrase 'religious heritage' in the preamble might not be the best possible compromise" in the last paragraph of the article "European Constitution Draft Sparks Controversy" in "RFE/RL Poland, Belarus, and Ukraine Report" on 9 September 2003 should read: "Furthermore, Europe experienced dozens of religious conflicts and thus including the phrase 'religious heritage' in the preamble might be the best possible compromise" (dropping "not").

"It is possible that the Russians have advanced and understood more in this process [toward a Russia-Belarus Union]. After all, they know more about this process because Russia was created on the basis of a vast empire, with some experience -- an empire in a good sense, the Soviet Union. They have more experience. We have less experience, so we want to understand everything that we are doing. So we may be lagging behind in understanding some of the processes." -- Belarusian President Alyaksandr Lukashenka in Sochi on 15 September, following his talks with Russian President Vladimir Putin; quoted by RFE/RL.

"The League of Expellees [Bund der Vertriebenen] says in its statements that the resettlements [of Germans after World War II] were 'acts of lawlessness' and demand the restitution of lost properties or compensations. One should recall, however, that following the unconditional surrender of Hitler's armed forces, Germany lost all of its capability for international actions. The occupation of Germany was not an ordinary military occupation under Hague Convention IV of 1907. The supreme authority in Germany was exercised by the four great powers which were capable of adopting all decisions regarding Germany's borders and population. And such decisions were made in Potsdam. The resettlements conducted by the postwar governments of Poland and Czechoslovakia were in fulfillment of the Great Four's decisions. I would be very cautious today in launching a discussion on whether these actions were lawful. It is like opening Pandora's box. In such a case, were other decisions made by the victorious great powers against Germany lawful? Are the postwar borders in Europe legally justifiable? I don't want to exaggerate, but it is worth recalling that the troubles on our continent that effectively lead to the outbreak of World War II began from questioning the Versailles Treaty [of 1919]." -- Polish President Aleksander Kwasniewski in "Rzeczpospolita" on 15 September.

"What is the main holiday for Catholics, and what is the main one for us? They have Christmas -- Christ was born; we have Easter -- Christ rose from the dead. In Ukraine, in order to be understood, you have to die first." -- Ukrainian President Leonid Kuchma in an interview with "Izvestiya" on 11 September.