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  •   Ukrainians Try to Emulate the Polish

        Olga Ivanusa Olga Ivanusa deals in macaroni, coffee and cookies – mainly from Poland.
    (By Daniel Williams – The Washington Post)
    Fifth in a series
    of occasional articles

    By Daniel Williams
    Washington Post Foreign Service
    Saturday, October 17, 1998; Page A13

    RAVA-RUSKA, Ukraine – About the last thing you see before you cross the border into Ukraine from Poland is a sign beckoning Ukrainians to sell their jewelry before going home. In a part of the world where gold and gems historically have been a commodity that gets you through war, natural disaster or political upheaval, this is a painful invitation: Are Ukrainians so bad off that they would surrender the gold off their ears on impulse?

    The answer is yes. Ukraine, a broad, rolling country regarded by many in the West as a key to stability in central Europe and a bulwark against Soviet resurrection, is in bad shape.

    Ukraine is trying to be Poland and not Russia. It wants to thrive in a new, free-market economy, not collapse into economic chaos, not be mired endlessly in social decay, not withdraw from the road race of global capitalism. But it takes only a few minutes' drive in from the frontier to perceive how much Ukraine's problems resemble Russia's. A shoe factory is shut, a radio plant shuttered, a shop that made railway ties abandoned. Farmers wrestle with horse-drawn plows as if stuck in a 19th-century engraving. There are run-down schoolhouses and blighted hospitals. News on the car radio sounds like it comes right out of Moscow: parliament and president in a deadlock over reforms; industrialists pressured to pay back taxes; a mine disaster kills dozens.

    Parallels with Russia are so striking that Ukrainians wonder whether their economic woes are going to drive them along the same path Moscow is now taking. One choice is for Ukraine to continue pursuing tight money policies, sound currency and openness to outside commerce, a mix the government and many citizens associate with the West. Another is to veer into heavier government spending, a devaluation free fall and efforts at self-sufficiency, a blend regarded as the Eastern – read Russian – approach.

    And if they copy their neighbor, some Ukrainians believe, will they end up in a tight political embrace? "The real question of the economic crisis is just where the real border of Europe lies – to our east or to our west," said Olexander Tkachenko, head of Nova Mova television, a private public-affairs broadcast company.

    Rava-Ruska, a depressed border town is geographically and psychologically far from Russia. It is a place whose Uniate and Roman Catholic population has long looked west rather than east for cultural and national nourishment. Snuggling up to Poland as it does also gives Ukrainians a glimpse of what is possible in the transition from communism to capitalism – a rough journey that nonetheless produced growth and stability.

    Yet the moans of economic pain and even nostalgia for the Soviet past echo loudly in Rava-Ruska.

    At a meager market where most of the consumer goods, and even such basic commodities as noodles, are Polish-made, weary traders complain that the steady devaluation of the country's currency, the hryvnia, and rising prices have discouraged consumers. "There are just no buyers," said Sergei Matselko, a traveling auto-parts salesman. "If people have a salary, it is low, and the prices rise faster than they can keep up."

    Matselko was a welding teacher whose vocational school closed for lack of government funds. He turned to selling grain alcohol in the early years of independence. Last March, after the government cracked down on foreign liquor imports, he started peddling fan belts and windshield wipers. Despite holding his own in the free market, he would like the government to try to revive local industry, even if it means printing hryvnia to provide wages and spur demand – the option in vogue in Moscow. "We can't just buy things from Poland," Matselko said, adding that Polish sausages were inferior to Ukrainian. "We have traveled in a circle. In Soviet days, we sold things to the whole union and to Eastern Europe. Now we sell little even to ourselves and buy lots from East Europe. We have to find a balance."

    He accepts the likelihood that Russia, whether prosperous or not, will continue to exert strong influence on Ukraine.

    Nearby, Olga Ivanusa deals in macaroni, coffee and cookies – also mainly from Poland. She was an accountant at the local Progress shoe factory, but it closed down three years ago, a victim of at least three catastrophes: the closure of the old Soviet and Warsaw Pact market where many of the goods were sold, a currency crash that killed demand inside Ukraine and made trading abroad impossible, and fumbling managers who never got around to paying salaries. The workers were paid in shoes. It's an experience Ivanusa doesn't want to repeat.

    "What I notice in Poland is not that the people are better off. Many dress much like we do. I see that in their faces there is a tranquillity. They know where they are going. We do not. Whatever happens, we need tranquillity," she said.

    These days, economic problems have nudged aside the issue of whether Ukraine will formally join the West or attach itself to an alternate region centered on Russia. The issue is complicated by the presence of a large Russian minority in eastern Ukraine who have ties to Mother Russia.

    An odd coincidence of events recently showed that the question still arouses passions, regardless of the deepening economic gloom.

    The city of Lviv, an old, stately regional center 30 miles southeast of Rava-Ruska, celebrated Ukraine's potential geo-strategic self-importance: It granted honorary citizenship to Zbigniew Brzezinski, former president Jimmy Carter's national security adviser and a fervent defender of a strong and independent Ukraine.

    Brzezinski regards Ukraine as insurance against a return of the Soviet empire, and dignitaries present during the ceremony warmly received his opinion of Ukraine's geopolitical value. Under chandeliers and Lviv's old coat of arms, the mayor presented him with a chessboard to symbolize Brzezinski's strategic thinking.

    "Ukrainian independence is strategically vital for Europe," said the Polish-born Brzezinski. "Ukraine is culturally and politically a central European state."

    He urged Western countries to help Ukraine's economy, which was a major contributor to the Soviet Union's economic and military well-being. Ukraine, which during Soviet times possessed an economy similar in size to Poland's, is manageable enough to benefit from Western help, he emphasized. "The huge size of Russia's economy makes it impossible for the West to save Russia," he said.

    A few days later in Kiev, the capital, a different tune was sung by Gennady Seleznev, the chairman of the State Duma, Russia's lower house of parliament. Seleznev argued for a "strong union" of Russia, Ukraine and Belarus "without borders, without customs barriers, and with our citizens having the right to live, work and study in any of the three states without the feeling of being foreigners.

    "I'm convinced that such a union will be supported by most of our citizens," he said.

    His speech caused an uproar. Nationalist lawmakers walked out, and others shouted "troublemaker," while Communist legislators applauded. Seleznev cut his speech short.

    Later the same day, Ukrainian President Leonid Kuchma said at a news conference that he "categorically" opposed a union of the three states.

    Despite the strong words, Ukraine continues to look more like Belarus and Russia than like Poland. Although many industries have been privatized, agriculture and the remnants of the country's arms industry are stagnant. Burdensome tax policies cripple fledgling industry, while state-owned firms get away with paying neither taxes nor electricity bills.

    As in Russia, the country's economy has shrunk since the Soviet Union broke up in 1991, although signs of growth surfaced last year. Last spring, Communists and other left-wing groups made a strong showing in parliamentary elections.

    When Russia's ruble collapsed in August, Ukraine suffered from the fallout. A run on the ruble led to steady devaluations, and the central bank has been reluctant to step in and spend hard currency to prop it up. The government, trying to avoid outright default, is offering complex debt-swap schemes to reduce the costs of loans to domestic and foreign creditors alike. The International Monetary Fund recently underwrote Ukrainian reforms with more than $2 billion in loans.

    "The painful thing about this is that the latest crisis exploded just as people were beginning to have hope," said Natalie Jaresko, executive vice president of the Western NIS Enterprise Fund, a U.S. government-supported firm that invests in small- and mid-size companies.

    Pro-Western Ukrainians fear that the clock is running out on Ukraine's aspirations to join Poland, the Czech Republic, Hungary and the Baltic states in gaining political and economic entry to Western organizations. Poland, as it moves toward European Union membership, is being pressured either to tighten its border with Ukraine or end the free passage of Ukrainian goods and people.

    For Slavic Makeev, a purveyor of knock-off Puma sportswear in Rava-Ruska, the message is clear: The West could end at the Polish-Ukrainian border if the country doesn't catch up fast. "This could be like the Berlin Wall," he said. "We are helping construct it ourselves."

    © Copyright 1998 The Washington Post Company

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