Ukraine is not dead yet —this title of the country's national anthem is representative of a nation which is struggling for survival and identity after centuries of hard knocks. Ukraine has been conquered by the Poles, Germans and Russians, and has just emerged from more than 70 years under the Soviet thumb.
Now the nation is trying to put together the pieces of its past, forge a national identity and salvage its floundering economy. Russian has been replaced by Ukrainian as the official language, although purists shudder at the mixture of the two languages one hears spoken on the streets.
The National Bank of Ukraine replaced the nearly worthless national currency, the coupon, with the hryvna in September 1996, a move which experts say helped stabilize inflation and create a sense of pride in the country's money.
The government also ratified a new Constitution last summer, a document which grants freedom of speech, press and other basic human rights. It also stipulates ownership of private property, something previously unknown to a country dominated by the State.
But despite the legal steps, reports of widespread corruption are so prevalent that the United States Congress has threatened to cut aid to the country, or at least condition that aid on a government cleanup.
Citing the "ever-changing terms and conditions" of doing business in Ukraine, Motorola recently canceled its partnership with Ukrainian Radio Systems (URS) to set up a cellular communications network on the GSM 900 frequency.
Motorola joined forces with URS more than a year ago and contributed financially to the testing and development of the GSM 900 bandwidth, which required conversion from military standards to civilian use. Motorola was led to believe it would be given permission to use the frequency, but at the end of 1996 was told they would have to take part in a tender.
URS, Ukrainian Mobile Communications and KievStar were granted licenses to use the frequency. KievStar's owners include an adviser to President Kuchma, a Cabinet minister and a Ukrainian with links to organized crime, according to an April 9 New York Times article.
Government officials are reported to be members of powerful companies and often block reforms because it would cut into their own profits.
For example, Prime Minister Pavlo Lazarenko is reported to be an owner of United Energy Systems, a conglomerate that provides 15 percent of the country's energy with annual profits in the billions of dollars. The CEO of UES denies Lazarenko's involvement in the company.
This type of involvement has caught the attention of the U.S. Congress. "A few well-placed bureaucrats are lining their pockets and becoming millionaires while the majority of Ukrainians continue to live in poverty. This aid is meant to help the people of Ukraine," said Rep. Ron Packard (R-Calif.).
Corruption not only allegedly plagues the highest levels of the government, but also is said to contaminate other sectors as well.
The militia, for example, has a bad reputation. Westerners in Kiev are warned not to register their address with the militia as the law stipulates, because their names are likely to be sold to the mafia, thus making them possible targets for burglary.
Ukrainians say they fear walking alone at night, not because of potential attacks from criminals but from fear of harassment from the militia.’
Most locals have stories about being arrested or at least detained until they offer up a 10 hryvna note. In the most extreme cases, militia members are accused of beatings and out-right theft.
Eugene, a student who declined to give his last name, said he has had more than his share of run-ins with the militia. He has been beaten while walking along the streets of Kiev after dark and believes he is targeted because he wears Western style clothing and a Star of David necklace. When he is stopped, the militia call him "a Jewish bastard" and make fun of his Doc Marten shoes and bandanna over his hair. If he refuses or is unable to pay a bribe, Eugene said the militia don't think twice about giving him a knock with their batons.
His worst experience in dealing with the militia was after a car accident in January. Eugene was the sole survivor of an accident in which he saw his three best friends die. Eugene said as he was waiting to be pulled out of the wreckage, the militia were rifling through the pockets of his friends, taking money and jewelry from their bodies.
If corruption is a major headache, the same is true with the economy which is facing severe problems including rampant tax evasion.
A package of reforms has been stalled in Parliament since November
1996 and with the reform-minded Deputy Prime Minister for the Economy, Viktor Pynzenyk, resigning in disgust, it is any one's guess when the package will make it through Parliament.
The reforms represent a badly needed cure for an ailing economy that, according to international experts, has depressed wages and living standards.
Not only are the current tax rates high, but the reporting and collection system is widely viewed as extremely complicated, time consuming and unfair. By lowering the tax rate from 51 to 32 percent, the government hopes to bring businesses in from the shadow economy. However, the government must address other problems, such as the liberal tax exemptions policy, before any results will be seen.
"Right now the government promises everything to everybody and as a result no one gets anything," said David Snelbecker of the Harvard Institute for International Development. HIID is a U.S.-funded macroeconomics advising project that offered guidance on the reforms.
The social sector reforms are about making hard choices, eliminating subsidies to all sorts of people so the government can take care of those most in need, he said.
But in the meantime, the current system encourages businesses to operate in the shadow economy, or at least fudge their records. Many businesses pay their employees an officially low rate and then pass more to them under the table. Not only does this practice lower budget revenues, but skews official statistics and economic indicators.
The proposed pension reform offers a mix of good intentions and potential problems.
The pension system is in a crisis, with each worker supporting one pensioner who collects an average of 48 hryvnas per month (about $30). That one-to- one ratio is blamed on laws that give Ukraine one of the lowest retirement thresholds: 55 years of age for women and 60 for men.
One proposal being considered is the creation of individual pension savings accounts for all workers that are similar to IRA accounts in the U.S.
Reformers believe that this method of pension accrual will not only eventually ease the State's burden but will encourage more people to work in the formal sector of the economy. If the reform is approved, Ukraine could have one of the most progressive pension systems in the world.
However, fierce opposition in Parliament and protests from pensioners make the changes unpopular and unlikely.
One of the architects of the reforms, Deputy Prime Minister Viktor Pynzenyk, resigned in disgust over the stalemate and corruption within the government. Western observers have said Pynzenyk's absence from the government does not bode well for the economic future of the country.
The country's climate and fertile black soil has earned it the nickname of "the bread basket" of the Soviet Union, but an outdated collective farm system has led to a steady decline in production over the last six years.
Ukraine has rich coal reserves and deposits of manganese and iron ore, but an inefficient mining system and dangerous conditions have taken their toll. In 1996 President Kuchma signed a decree to reform the coal industry to make it more productive by closing inefficient mines and revamping promising ones.
It is in this climate that Ukrainians from the Diaspora have been arriving since the country opened up five years ago. Many come hoping to make a difference and others are sent there through firms hoping to make a buck.
However, many of the people arriving in a country they consider home have found themselves out of place and greeted with hostility. Many Ukrainian traditions were lost in the Russification or Sovietization of the culture and the Diaspora finds Soviet life unfamiliar. Ukrainian-Canadians and Ukrainian-Americans who grew up speaking Ukrainian and celebrating holidays the Ukrainian way often end up teaching distant relatives traditional Christmas rituals.
While some say it is nice to learn about a lost culture, many locals see the arrival of the Diaspora Ukrainians as an intrusion. "These people come over here with a superior attitude and try to tell us how to do things or they are here for their own financial gain," said Halia Pavliva, a journalist in Kiev.
Indeed, many Diaspora Ukrainians take a superior attitude and say they have preserved the true Ukrainian language and heritage, because at home Russian words have been meshed with Ukrainian. The Diaspora Ukrainians claim they have preserved the "pure" language, yet often lack the vocabulary for modem terms.
Others are welcomed by their long-lost relatives who seek knowledge of their past and donations from their "wealthy" Western family members.
With wage arrears of up to six months owed and the average Ukrainian income set between $70 and $80, most people are seeking outside income. To earn a few extra hryvna, people often set up stands on the street to sell baked goods or vegetables grown on plots of land at their dacha (summer home).
The majority of people see themselves as poor and even when employed the level of insecurity about the future is high. Under the Soviet system, the basics were provided and people were able to use their income to buy whatever luxury items were available. "People had no rent to pay, food was cheap—everything was provided, so people usually spent their money on clothes, books and electronics for their homes," said Elena Golets, a businesswoman in Kiev. With a dwindling economy, people have little discretionary income and barely enough to make ends meet.
The citizens traditionally have a high level of education, but this declining economy has left the government without money to pay its specialists and many people are underemployed. Engineers, physicists and immunologists with English-skills find themselves taking jobs as receptionists and secretaries in Western firms to make ends meet.
These are not happy times for Ukraine, but as the country's national anthem says: Ukraine is not dead yet.
