Poland, Belarus & Ukraine Report: June 22, 2005

REGIME SET TO REIN IN ETHNIC POLISH ORGANIZATION. A Minsk-Warsaw diplomatic clash in May over the Union of Poles in Belarus (SPB) took a new turn earlier this month after the Belarusian authorities deprived the SPB of the possibility to print its weekly, "Glos znad Niemna," and produced two bogus issues of the publication. Warsaw, which sponsors the activities of the SPB, has reportedly suspended financing "Glos znad Niemna," demanding that Minsk recognize the SPB new leadership elected during a congress in March as well as the new editorial staff of the weekly that was appointed after the congress. Some Polish minority activists in Belarus believe that Minsk's recent steps against the SPB are being orchestrated by the KGB.

Last month the Belarusian Justice Ministry said the SPB congress in March was "nondemocratic" and invalidated its decisions, including the election of SPB Chairwoman Andzelika Borys, who replaced Tadeusz Kruczkowski. According to Justice Minister Viktar Halavanau, there were irregularities in both the nomination of delegates and the congress itself. However, SPB activists argue that the authorities invalidated the congress because they want to reinstate a group of loyalists to the regime of President Alyaksandr Lukashenka, who are led by former SPB Chairman Kruczkowski, in the SPB leadership. According to this line of argument, Borys personifies a democratic and intellectually independent faction within the organization and therefore is disagreeable to the authorities.

The Warsaw-Minsk standoff over the SPB culminated in May in reciprocal diplomatic expulsions and Warsaw's demand that Minsk back down on its decision annulling the March congress. Moreover, the Polish government reportedly compiled a list of SPB activists who support the Belarusian government in the conflict, as well as of some Belarusian officials, who are to be barred from entering Poland. The list, however, has so far not been officially released or confirmed. In its turn, Minsk took more decisive steps in the conflict.

First, in late May a printing plant in Hrodna refused to print an issue of "Glos znad Niemna" prepared by the editorial staff headed by Andrzej Pisalnik, who became the weekly's acting editor in chief following the March congress. This month the same printing plant printed two bogus issues of "Glos znad Niemna," which carried articles presenting official Minsk's stance in the conflict over the SPB. Pisalnik said he knows none of the bogus issues' contributors, except for Kruczkowski. Pisalnik appealed to the police and prosecutors over the illegal use of the newspaper's nameplate, but there has been no reaction so far. The bogus issues are being disseminated among subscribers through the state postal service.

"It is a de facto nationalization of an independent publication," Andrzej Poczobut, another Polish minority journalist in Belarus, told RFE/RL. "This is the first time we see such an occurrence in Belarus. If you ask my opinion about who's behind [these bogus issues], I'm sure it is the KGB, the only institution in our country that is able to carry through such a special operation -- to issue an illegal newspaper and deliver it to readers."

Tadeusz Gawin, founder and first head of the SPB, is also convinced that some sinister hand is working behind the scenes in the standoff over the SPB. "Kruczkowski does not belong to himself any longer -- he is simply an object of manipulation," Gawin told the Polish regional daily "Kurier Poranny" last week. "Unfortunately, the morals of this man have proven to be very weak. Accusations [of Kruczkowski] have been suddenly circulated regarding bribery, fraud, and sexual exploitation of female students. But there were no formal charges [against him] during all these years [when he headed the SPB]. The authorities simply have a hold over him. I pity this man. He had a great chance to become a major figure in the Polish national renaissance in Belarus but he has lost everything."

Both Belarusian and Polish observers agree that Minsk's behavior toward the SPB does not pursue the goal of ethnic discrimination but is motivated primarily by the regime's desire to have the country's largest nongovernmental organization under tight control. The SPB, which claims a membership of more than 10,000, represents the nearly 400,000-strong Polish minority, which lives mainly in Hrodna Oblast in the northwest of the country. President Lukashenka's annual address to the nation in April appeared to confirm such suppositions. In that speech, Lukashenka accused Warsaw of destabilizing the situation in Belarus ahead of the 2006 presidential election by putting pressure on the country's Polish community (see "RFE/RL Belarus and Ukraine Report," 25 April 2005). Ukraine and Lithuania were also categorized by the Belarusian president as inciters of instability in Belarus.

Furthermore, Lukashenka's concerns about a potential export of a "colored revolution" from abroad have quite recently been confirmed by a peculiar incident involving Georgia. Earlier this month the Belarusian Foreign Ministry announced the abolishment of visa-free travel for Georgians. The official explanation held that Minsk needed to coordinate its foreign policies with Russia (which introduced visas for Georgians five years ago) and thwart illegal migrations of Georgians who allegedly used Belarus regularly as a transit country for entrance into the Russian Federation.

The Georgian parliament reacted immediately with an ingenious, "asymmetrical" response, drafting a bill to ban Lukashenka from entering Georgia. Lukashenka apparently realized that he, a fervent proponent of CIS reintegration, lost in that propaganda duel -- Minsk banned all Georgians from traveling without visas to Belarus, while Tbilisi banned just him, thus differentiating between the autocratic leader and the people. Therefore, Belarusian Foreign Ministry Syarhey Martynau was given the task of backing off on that unfortunate decision. In a misty and unconvincing statement on Belarusian Television, Martynau claimed that Lukashenka only instructed the Foreign Ministry and law-enforcement agencies to look into the possibility of introducing visas for Georgians, but did not introduce them in actual fact.

At the same time, perhaps involuntarily, Martynau admitted that Belarus would not hesitate to introduce visas for Georgians should Tbilisi attempt to export "some revolutions or pseudo-revolutions" to Belarus. Many Belarusian commentators maintain that it is essentially the same fear of a "revolution" exported through the Polish minority from Poland that underlies the authorities' current efforts to rein in the insubordinate SPB. Georgia responded toughly, using the language Lukashenka normally uses with regard to his adversaries both at home and abroad. And Lukashenka had to back out. Will Poland be able to find an equally tough response to Lukashenka's clampdown on the SPB? (Jan Maksymiuk)

GOVERNMENT SEEKS TO RECOVER INVESTORS' TRUST. Ukraine held a World Economic Forum roundtable in Kyiv on 16-17 June at which senior Ukrainian officials sought to allay investor fears surrounding previously announced plans to reverse some privatization deals. Officials also wanted to reassure the business sector that the country is firmly set to follow a path of market-oriented reforms made possible by 2004's Orange Revolution.

Kyiv has solemnly pledged to embark on a reformist course in the second half of 2005, pursue an active privatization policy, and guarantee property rights for all assets in Ukraine aside from those contested by the courts.

However, it appears that investors will exercise caution before the March 2006 parliamentary elections, when the level of legislative support for the post-revolutionary government's reformist agenda should become more clear.

President Viktor Yushchenko told the Kyiv gathering -- which was attended by the presidents of Poland, Estonia, Georgia, Azerbaijan, and Moldova as well as nearly 200 international businessmen -- that the country will speed up reforms later this year so that every Ukrainian can enjoy the "fruits" of last year's democratic revolution. Ukraine's economic growth this year will not fall below 7 percent, according to Yushchenko, thus providing favorable conditions for both domestic and foreign businesses. He stressed that privatization will be continued and pursued even more actively than before, naming the much-coveted Ukrtelekom telecommunications company as one of the major state-run businesses to be offered for sale in the near future.

To make his point even more strongly, Yushchenko -- jointly with Prime Minister Yuliya Tymoshenko and Verkhovna Rada speaker Volodymyr Lytvyn -- signed a memorandum pledging government guarantees to property rights in Ukraine. The memorandum stresses that the government will conduct future privatizations strictly in accordance with the constitution and laws, create a favorable climate for investors, and seek the resolution of potential property disputes through amicable arrangements.

"The memorandum signed just now means that Ukraine is putting a full stop in the discussion of privatization processes that has been pursued for several recent months," Yushchenko commented. "The properties that have been privatized with violations of privatization tenders or the law in force will be contested in the courts."

The memorandum represents a significant departure by the Ukrainian government from the rhetoric it has pursued so far, following Yushchenko's repeated pledges to demonstrators on Kyiv's Independence Square in November-December 2004 that the new authorities would return to the people everything that was "stolen" from them. What was "stolen" in Ukraine has never been precisely defined, but it was widely understood during the Orange Revolution that the description applied to many companies privatized by Ukrainian oligarchs under questionable circumstances, particularly since Yushchenko himself named the metallurgical giant Kryvorizhstal, bought by Ukrainian oligarch Renat Akhmetov and Viktor Pinchuk, as one of such "stolen" assets.

Yushchenko, Tymoshenko, and other Ukrainian officials have on numerous occasions announced the release of a list of dishonest privatizations that would be reversed by the government. There were disagreements, however, about the length of that list. Yushchenko talked about some 30-40 companies, while Tymoshenko suggested at one point that it might include no fewer than 3,000 names. Little wonder, then, that current and potential investors in Ukraine reacted with bewilderment and distrust.

Tymoshenko subsequently changed tack and began to assert than no such list is necessary, as the government was working out a bill on revaluing privatized assets that would presumably address the issue of re-privatization en masse, without the need for any re-privatization inventories. That did not appear to improve the atmosphere for investors. Calls were heard among political and economic pundits, both at home and abroad, urging Yushchenko to sack Tymoshenko as the main proponent of administrative and non-market methods for running the Ukrainian economy.

However, the real problem for the Yushchenko-Tymoshenko tandem is that it urgently needs money to continue making what appear to be economically disastrous social outlays, in light of last year's massive pension hikes by the previous government and this year's lavish wage increases for public-sector employees to keep potential voters happy with an eye to the 2006 parliamentary elections. The easiest idea for replenishing state coffers -- backed by three-fourths of Ukrainians -- was either to resell some "stolen" assets to new owners for higher prices or to make their current owners to make additional payments to the government to close the gap between purchase prices and what was referred to as "real market prices."

The 16 June memorandum on property rights does not kill this idea altogether, but it introduces some important modifications. Now the task of squeezing more money from the owners of dishonestly privatized companies appears to have been shifted from the government to the courts, while the threat of new privatization tenders has been replaced by an evidently more palatable proposal of "amicable settlements" between the government and the owners. Such a settlement has reportedly been proposed to the government by the Industrial-Metallurgical Union, the nominal owner of Kryvorizhstal, in the ongoing legal dispute over its privatization. Kryvorizhstal was sold in 2004 for some $800 million, a sum significantly lower than offers by other bidders.

If the government and the Industrial-Metallurgical Union strike a friendly deal in the dispute and the latter agrees to pay an extra sum to the state, it could prove an auspicious sign for everyone concerned. It would mean that Ukraine has taken a small step away from its command-economy past and toward a more civilized economic model. And, no less important, the government would receive the money it wants to maintain popularity for its reformist agenda among the electorate.

But if, as some predict, the Kryvorizhstal dispute drags on in front of international panels of judges, the big loser will be the Ukrainian government. Kyiv would then find it difficult to persuade investors through memorandums or business forums that it truly has their interests in mind. (Jan Maksymiuk)