Poland, Belarus & Ukraine Report: July 29, 2003

NOTE TO READERS:
The next issue of "RFE/RL Poland, Belarus, and Ukraine Report" will appear on 12 August 2003.
IS LUKASHENKA POSITIONING TO PROLONG HIS RULE? There seemed to be no evident need for President Alyaksandr Lukashenka to sack Prime Minister Henadz Navitski, as he did on 10 July. The Ministry of Statistics and Analysis reported in early July that the country's GDP in January-June 2003 increased by a robust 5.1 percent, compared with the same period last year. However, Lukashenka cast doubt on official statistics by charging that the government has falsified reports on the economic situation.

As on some previous occasions when he reshuffled the cabinet, Lukashenka on 10 July assumed a telegenically furious expression and performed a lengthy verbal whipping of some 40 cabinet members and regional executive officials in front of television viewers. This time Lukashenka's ire was focused on the government's failure to pay on time for milk and meat delivered by state-run farms to state-run milk- and meat-processing plants. As a result, overdue wages in the agricultural sector have amounted to some $10 million. According to official data, the average monthly wage in the sector is $56, slightly more than half the national average.

Aside from Prime Minister Navitski, Lukashenka sacked Deputy Prime Minister for Agriculture Alyaksandr Papkou, Agriculture Minister Mikhail Rusy, and State Concern for Food Industry head Anatol Kuzma. First Deputy Prime Minister Syarhey Sidorski became acting prime minister, other people stepped into the other sacked officials' shoes. However, the country's agricultural policy will hardly change following this reshuffle. In Belarus ministers just come and go. It is Lukashenka himself who determines the economic course. And this course, for purely political reasons, entails financial support for Belarusian state-run farms, sovkhozes and kolkhozes, of which an estimated 50 percent are loss-making and live at the expense of the other 50 percent that somehow manage to make ends meet.

Were there grounds for this cabinet shakeup? The immediate answer is that Lukashenka, as many times in the past, this time too resorted to his usual trick of whipping his ministers for what he should have been whipped himself.

Despite official reports about the constantly improving economic situation in the country, the financial situation of an average Belarusian family has not improved for the past several years. An estimated 42 percent of Belarusians are living below the poverty line. According to a survey by the Independent Institute of Socioeconomic and Political Studies, in a free presidential ballot Lukashenka can now count on support of only 26 percent of the electorate, which is his all-time low since he came to power in 1994. Therefore, the persistent wage arrears in the agricultural sector threaten to erode the remaining core of his political support, which is believed to be among both managers and workers of state-run farms. "The scenario [of Lukashenka's fits of anger] is clear: The tsar is good, but the boyars are bad and are to blame," opposition politician Mikalay Statkevich commented on the reshuffle.

But there is also another explanation. According to Belarusian commentators, Lukashenka's political behavior should now be perceived in the context of an upcoming referendum on introducing constitutional amendments allowing him to run for the presidency for a third time. Lukashenka's second presidential term ends in 2006, but some Belarusian commentators and opposition politicians assert that he may hold such a referendum even this fall. The timing, they argue, seems to be very convenient for Lukashenka, since the Kremlin, which could potentially prevent the Belarusian ruler from prolonging his rule, will be busy working on a parliamentary election in Russia this year and a presidential election next year and will have no time for Belarus.

If this is the case, then Lukashenka's cabinet shake-up was a quite logical move intended to intimidate those executive officials who could possibly dislike his intention to stay in power beyond 2006 and become uncooperative in organizing the referendum campaign and counting the votes. "There is no forgiveness for betrayal, deception, and hard drinking," Lukashenka told his ministers on 10 July, thus giving a rather clear hint that only absolute loyalty to the president can guarantee their remaining in the government.

An indirect sign confirming the supposition that Lukashenka may be planning some major political campaign is the recent clampdown on independent periodicals and nongovernmental organizations in Belarus. Belarusian authorities have suspended or blocked the publication of eight independent periodicals as well as closed several important nongovernmental organizations in the country in the past two months.

Lukashenka subsequently denied that the cabinet reshuffle on 10 July was motivated by some ulterior motive, including a desire to position himself for a constitutional referendum. But the Belarusian opposition has remained skeptical. The leaders of five major opposition parties held a meeting last week to plan countermeasures against Lukashenka's potential move to prolong his rule. According to the survey cited above, only 17 percent of respondents said they would approve in a referendum a constitutional amendment allowing Lukashenka to run for a third term. Good for the opposition. But, as in the past seven years, the opposition still has to find a way how to check the ballots people cast into ballot boxes when they go to the polls. (Jan Maksymiuk)

RUSSIA WANTS TO PUMP THROUGH ODESA-BRODY PIPELINE 'IN REVERSE.' Russian Premier Mikhail Kasyanov spent four days in Crimea on 17-20 July, where he hold meetings with his Ukrainian counterpart Viktor Yanukovych at a sitting of a Russian-Ukrainian commission on cooperation and in more informal circumstances. It was expected that the main result of the meetings will be the signing of an agreement on the transit of Russian oil through Ukraine in 2004-18, in the amount of 79.5 tons annually. However, this did not take place.

Kasyanov explained to journalists that the delay was due to uncertainty about the use of the Odesa-Brody oil pipeline. "Russia is expecting that the [oil-transit] agreement will encompass all Ukrainian oil pipelines, including the Brody-Odesa. When we solve this issue, we will sign the agreement," Kasyanov said. He expressed hope that this issue will be solved in a month.

Moscow expects that the Odesa-Brody pipeline, which was constructed to transport Caspian (Kazakh and Azerbaijani) oil to Europe, can be used in a "reverse mode," to pump Russian oil to Odesa in order to ship it further across the Black Sea. Thus, according to Ukrainian commentators, the Kremlin wants to prevent Ukraine from opening a new, independent oil-transportation route as well as to tie Ukraine's oil-transportation system to Russia even further. According to this line of argument, by delaying the signing of the prepared oil-transit agreement Moscow intends to force Kyiv into agreeing to the use of the Odesa-Brody pipeline "in reverse."

Russia's Tyumen Oil Company (TNK) proposed to the Ukrainian government in June the creation of a working group to study the possible use of the Odesa-Brody oil pipeline in the "reverse mode." President Leonid Kuchma seems to be pondering the idea of pumping Russian oil from Brody to Odesa until it becomes possible to pump Caspian oil to Europe. He said on 24 June that Ukraine will not use the Odesa-Brody pipeline in the reverse direction if the European Commission takes "specific steps" to use the oil pipeline in its planned direction. He did not elaborate but observed that the problem with the Odesa-Brody pipeline "perfectly characterizes the Ukrainian mentality." "First we did it, and then we asked ourselves -- why have we done this?" he said. The use of the Odesa-Brody pipeline for pumping oil in the "reverse mode" reportedly could bring Ukraine an estimated $60 million in annual revenues.

Meanwhile, Ukrainian Fuel and Energy Minister Serhiy Yermilov said in Gdansk on 14 July, at a meeting of Ukrainian and Polish officials and corporate representatives, that the Odesa-Brody oil pipeline will be used exclusively in accordance with its original purpose. Poland's Pern and Ukraine's Ukrtransnafta signed a protocol at the meeting on creating a joint venture to complete the Polish stretch of the Odesa-Brody-Gdansk pipeline. "The European direction is the most profitable.... It means 40 million tons of oil to be pumped annually,...while the reverse use could transit only up to 9 million tons," Yermilov reportedly said in Gdansk.

It is also noteworthy that outgoing U.S. Ambassador to Ukraine Carlos Pascual in his farewell speech in Kyiv on 21 July touched upon the Odesa-Brody pipeline, stressing that Ukraine has a "phenomenal opportunity" with the development of this oil-transportation route according to it original design. "Today there are interested buyers in Germany and in the Czech Republic, there is a mechanism to get that oil there through the pipeline route of Odesa-Brody linking into the Druzhba system, there are suppliers from the Caspian who are interested in providing the oil," Pascual said. "Indeed, some of the European refineries are already buying the very same oil, bringing it through the Bosporus, up through the Mediterranean to Trieste and to a pipeline. Ukraine has been able to demonstrate in its market analyses that it can do this more cheaply, through Odesa-Brody."

Our Ukraine said in a statement on 24 June that the use of the Odesa-Brody oil pipeline to pump Russian oil from Brody to Odesa would run counter to Ukraine's national interests. The statement called on Kuchma to take a clear stand on using the pipeline exclusively in accordance with its original design. However, Ukrainian commentators point that there is no unanimity of views regarding the pipeline even within Our Ukraine. For instance, Taras Stetskiv and Viktor Pynzenyk, prominent members of the Our Ukraine parliamentary caucus, think that the primary thing is revenue, therefore the Odesa-Brody pipeline may well be used for pumping Russian oil in the reverse direction (Jan Maksymiuk).

"This is the last chance for the governor of Minsk Oblast. [I order him] to count how many cows, bulls, tails, and pigs he has, how much haylage, silage, and grain he has.... He should do it personally, while you -- the State Monitoring Committee and the Ministry of Statistics -- should check his count and render him methodological assistance." -- Belarusian President Alyaksandr Lukashenka on 10 July, infuriated by what he deemed were falsified reports by his ministers and regional executive leaders on the situation in the agricultural sector; quoted by Belarusian Television.

"[Premier Viktor Yanukovych] has already begun speaking Ukrainian. For many Galicia residents this is important. I know many intellectuals in Lviv who [tried to] Ukrainianize [former Premier Pavlo] Lazarenko and claimed that...despite his being a resident of Dnipropetrovsk and a gangster, he might fall for the national idea and work for Ukraine. Many of our intellectuals are now doing the same with Yanukovych. If they tell Lviv that [Ukraine] needs a strong manager from the east [for the president], [one] who introduced order in Donetsk, I will advise [Our Ukraine leader Viktor] Yushchenko to take Lviv residents free of charge in busses to the places I will specify, to show them what order has been introduced in the Donetsk region." -- Our Ukraine lawmaker and political scientist Mykola Tomenko in an interview with "Lvivska hazeta" on 22 July.

"In a democratic state, to extend an incumbent president's term, or to add a third term, constitutes a change of the rules in mid-stream. This is not consistent with the spirit of the rule of law or the spirit of democracy. We are extremely pleased, and we congratulate President Kuchma, for the strong way in which he has consistently stated over the past weeks that the elections will take place in October of 2004. Our hope is that the pro-presidential camp will listen to his words and act on them." -- U.S. Ambassador to Ukraine Carlos Pascual in his farewell speech in Kyiv on 21 July; quoted by "Ukraine Report 2003" on 25 July. ("Ukraine Report 2003" is produced by the Ukraine Market Reform Group, the Global Jobs Initiative, and the Build Ukraine Initiative and distributed three times per week by the ArtUkraine.com Information Service, http://www.artukraine.com.)