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END NOTE: RIFTS EMERGE AMONG UKRAINE'S RULING ELITE xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
KUCHMA DECREES 'YEAR OF POLAND IN UKRAINE.' Ukrainian President Leonid Kuchma has signed a decree furthering organization of "Year of Poland in Ukraine" in 2004, Interfax reported on 27 January, quoting the presidential press service. Deputy Premier Dmytro Tabachnyk was tasked with working out a plan of measures within the project's framework aimed at deepening the Ukrainian-Polish strategic partnership and strengthening bilateral economic and humanitarian ties, according to the decree. Kuchma and his Polish counterpart Aleksander Kwasniewski are expected to open the Year of Poland in Ukraine on 1 April, during Kwasniewski's planned three-day visit to Ukraine. JM
DEEP CUTS PLANNED IN UKRAINIAN ARMY. Heorhiy Kryuchkov, the head of the parliamentary National Security and Defense Committee, announced on 27 January that the Ukrainian Army will be reduced by 80,000 personnel in 2004, from its current level of 355,000, UNIAN reported. Kryuchkov added that by the end of 2005, the Ukrainian Army will number 200,000. Defense Minister Yevhen Marchuk said on 28 January that personnel reductions in the military will begin after the Verkhovna Rada passes a relevant bill that has already been submitted to the legislature. JM
POLISH TELEVISION GETS NEW BOSS. The Polish Television Supervisory Council on 27 January elected film and television producer Jan Dworak as the new chairman of the management board at public broadcaster Polish Television, Polish media reported on 28 January. Last year, the Polish Television Supervisory Council announced an open, multi-round competition to find a chairman and four board members for Polish Television (see "RFE/RL Poland, Belarus, and Ukraine Report," 11 November 2003). On 11 January, the supervisory council selected three possible candidates for the post of chairman -- Andrzej Budzynski, Piotr Gawel, and Ryszard Paclawski -- but was unable to reach consensus for a majority vote. The supervisory council therefore turned to what it considered the 10 most suitable candidates, including Dworak. Polish Television is currently headed by Robert Kwiatkowski, who earlier this month withdrew from the competition (see "RFE/RL Newsline," 12 January 2004). JM
MOLDOVAN REINTEGRATION MINISTER HOPES NEGOTIATIONS WILL RESUME NEXT MONTH. Integration Minister Vasile Sova said on 26 January in an interview with RFE/RL's Romania-Moldova Service that he hopes negotiations with Transdniester under the so-called pentagonal format will be resumed next month. The five-party negotiations include Moldova and Transdniester, with the OSCE, Russia, and Ukraine as mediators. Sova said the resumed negotiations should aim at elaborating a new plan for the federalization of Moldova. Meanwhile, Romanian Foreign Minister Mircea Geoana said in Brussels on 27 January that the Russian plan for Moldova's federalization is "defunct," an RFE/RL correspondent reported. "Attempts to resuscitate that plan might be tactically useful [for Russia], but have no chance of success," Geoana said. MS
RIFTS EMERGE AMONG UKRAINE'S RULING ELITE
Despite the Ukrainian Constitutional Court's 30 December decision clearing the way for President Leonid Kuchma to run in the October presidential elections, Kuchma is unlikely to contest that ballot. The most convincing explanation for the Constitutional Court's decision -- on the grounds that he is in his first term under a new constitution -- arguably lies in the executive branch's fear that the pro-presidential elite might split into rival factions in the course of the election campaign.
Socialist opposition leader Oleksandr Moroz and Russian-speaking liberal Volodymyr Malynkovych expressed that argument in "Ukrayinska pravda" on 2 January. Both men said they believe the threat of a Kuchma candidacy will serve to deter any pro-presidential groups from "jumping ship." A second way of accomplishing that goal is to undo or prevent bridges being built between the more moderate opposition leader Viktor Yushchenko, who consistently leads in the polls, and eastern Ukrainian oligarchs. The standoff that emerged during Yushchenko's visit to Donetsk on 31 October was an attempt by the presidential administration, whose secret instructions to that effect were leaked to opposition media, to pit Yushchenko against the Donbas clan.
Presidential-administration head and Social Democratic Party-united (SDPU-o) leader Viktor Medvedchuk is as opposed to Yushchenko becoming president as he is to Prime Minister Viktor Yanukevych, who heads the Donbas party of power, Party of Regions, becoming president. The real power behind the Donbas clan is Renat Ahkmetov, Ukraine's wealthiest oligarch, who is reported to have held secret meetings with Yushchenko.
The same holds true for Viktor Pinchuk, the wealthiest oligarch in the Dnipropetrovsk clan's party of power, Labor Ukraine. Medvedchuk must tread more carefully with Pinchuk, however, as he is Kuchma's son-in-law.
The Donetsk and Dnipropetrovsk group of oligarchs are striving to achieve respectability as capitalist entrepreneurs after reaching the conclusion that the "robber-baron" capitalism of the 1990s will end when the Kuchma era is over. Becoming "respectable" will provide insurance, they believe, against the likely redivision of assets among the elite after Kuchma leaves office. Some members of the Ukrainian elite therefore understand that times are changing; parliamentary speaker Volodymyr Lytvyn called in September for Medvedchuk and Akhmetov to return their overseas assets to Ukraine.
This realization of the need to move with the times, which also took place in Russia in the transition from the Boris Yeltsin era to that of Vladimir Putin, is not shared by those oligarchs aligned with the SDPU-o, who prefer to continue to play by the old rules. Medvedchuk plays a similar role to Russia's former "gray cardinal" under Yeltsin -- Boris Berezovskii. It is no coincidence that Medvedchuk and the SDPU-o have been at the forefront in constitutional changes as they see Kuchma continuing in power as the best guarantee of their continued influence and power.
The oligarchs ready to change are not necessarily hostile to a Yushchenko victory, as he has ruled out reopening privatizations from the 1990s. If Yushchenko is elected president the SDPU-o will lose the most from any re-division of assets because of their unwillingness to play by the new rules and because of deep animosity between Yushchenko-Medvedchuk and the SDPU-o and Our Ukraine.
Oleksandr Zinchenko, the former deputy head of the SDPU-o, holds similar views to Pinchuk. Both understand that the transition from oligarchy to gentrification requires a divorce of politics from economics. This is a step that Medvedchuk categorically rejects because he believes that economic power can only be maintained by remaining at the hub of politics. Only the Zinchenko-Pinchuk view is not threatened by a Yushchenko victory and leaves open the possibility of future progress toward Ukraine's democratization.
Tension among the pro-presidential elite is as severe as that between Medvedchuk and the opposition. On 19 December, "The New York Times" published a full-page advertisement attacking Medvedchuk. Payment for the $125,000 advertisement came from the little-known Friends of Ukraine (FOU), who are clients of the Washington-based lobbying firm Barbour, Griffith and Rogers. The mid-December advertisement defended Russian businessman Konstantin Grigorishin, who refused in 2002 to transfer his assets in Ukrainian regional electricity suppliers to Medvedchuk. Grigorishin was subsequently arrested on seemingly trumped up charges but was supported by Pinchuk, who intervened to get him released. Grigorishin is thought to be behind the creation of the FOU. The FOU is promising further advertisements during the course of the election campaign.
Grigorishin and Pinchuk have lobbied Kuchma on behalf of Unified Energy Systems (EES) Chairman Anatolii Chubais's business plans in Ukraine. Chubais, whose company controls half of Georgia's and 80 percent of Armenia's electricity sector, purchased majority shares in 10 of 27 regional electricity companies in Ukraine in December. The move was backed by Pinchuk and Grigorishin, but strongly opposed by Medvedchuk.
The "Young Turks" within the pro-presidential camp are also restless. In September, the ministries of Foreign Affairs, Justice, and Economics and European Integration voiced opposition to Ukraine's admission to the CIS Single Economic Space. Justice Minister Oleksandr Lavrynovych deliberately distanced himself from proposed constitutional reforms in late January, telling visiting Council of Europe rapporteurs that he had nothing to do with them. The West regards those changes, which Medvedchuk supports, with suspicion.
This month saw the resignations of both Economics and European Integration Minister Valeriy Khoroshkovskyy and Inna Bohoslovska, who headed of the State Committee for Regulatory Policy and Enterprise. Both are Pinchuk proteges; he funded their failed 2002 electoral bloc, the Winter Crop Generation. Khoroshkovskyy and Bohoslovska cited deep disagreements with First Deputy Prime Minister and Finance Minister Mykola Azarov. The deputy head of the Party of Regions, Azarov is Ukraine's main lobbyist for participation in the CIS Single Economic Space.
Khoroshkovskyy is the son-in-law of People's Democratic Party (NDP) leader Valeriy Pustovoytenko and was a member of Pustovoytenko's 1997-99 government. The NDP, Ukraine's first unsuccessful attempt at creating a party of power under that government, has just 14 deputies, the minimum required for a faction.
In late 2003, Pustovoytenko complained in numerous interviews that the presidential administration was pressuring the NDP because of a cooperation agreement that the party had signed with Our Ukraine in June. That same month, the NDP protested at the removal of NDP member and Vasyl Shevchuk from the post of environment minister. Parliamentary speaker Lytvyn came to the NDP's defense, expressing support for Pustovoytenko's claim that unnamed political forces were trying to remove the NDP from parliament by forcibly co-opting its members.
By forcing through the controversial constitutional changes and pressuring the Constitutional Court to rule that Kuchma may run for a further presidential term, Medvedchuk has created tension not only with the opposition and within pro-presidential ranks, but also within his own SDPU-o. Zinchenko was expelled from the SDPU-o in September. Parliamentary deputy Volodymyr Nechyporuk resigned from the SDPU-o in December, the same month that Zinchenko dropped his membership of the pro-presidential majority to protest the 24 December controversial parliamentary vote for constitutional charges. One hundred members have resigned from the Mukachevo branch of the SDPU-o, citing a standoff between the SDPU-o and Our Ukraine over who won mayoral elections last June. In the Crimea, too, the SDPU-o is severely divided; many of its branches have called on the SDPU-o leadership over the past two months to support Yushchenko in the 2004 elections.