Central Europe Review: politics,
society and culture in Central and Eastern Europe
Vol 2, No 11
20 March 2000

Ukraine NewsC E N T R A L   E U R O P E A N   N E W S:
News Review for Ukraine
All the important news from Ukraine
since 12 March 2000

Natalya Krasnoboka

Last week began with several days of national mourning as families, friends and colleagues buried 80 miners, ranging in age from 22 to 64, killed by an explosion 11 March 2000, the country's largest single mine disaster. The tragedy was particularly devastating because, while the Ukrainian mining industry has one of the world's worst death rates, these are generally the result of smaller, isolated incidents.

The country suffered a further misfortune on Sunday, when the latest rocket from the Sea Launch Project failed after take-off, crashing into the ocean. The Sea Launch Project is an international initiative between the United States, Norway, Russia and Ukraine, with Ukraine's role being the construction and provision of Zenit-3SL three-stage rocket boosters. The rocket boosters were designed by the Yuzhnoye Rocket Design Bureau, a plant formerly headed by Leonid Kuchma prior to his ascension to the posts of prime minister and, later, president.

While two previous launches were successful, this latest attempt had been delayed several times, for reasons which the international partnership has not made public. In Sunday's launch, the Zenit rocket crashed into the ocean 467 seconds after launch, taking with it a payload of satellites for ICO Global Communications Ltd., an international telecommunications consortium. In an effort to apportion blame, the countries involved are now undertaking an extensive postmortem designed to elucidate the factors responsible for the rocket's failure.

In addition to the foregoing, Ukraine is also facing a new ecological tragedy, following an environmental accident at another mine in northwestern Romania, in which a dike collapsed, releasing heavy metal pollutants into the Ukrainian section of the Tisza. In total, some 20,000 tons of metals including manganese, copper, lead and zinc were spilled just 45 kilometers from the Ukrainian border. Although Ukraine fared relatively well compared to other Central European countries affected by the last Romanian spill into the Tisza, the proximity of this spill will mean otherwise, and Ukrainian authorities have already requested that Romania pay for damages incurred. In the wake of the catastrophe at Chernobyl, Ukrainians are already more than familiar with the terrible impact of industrial accidents on the physical and mental health of the populace.

A scandal is also brewing around the Ukrainian National Bank, concerning the data on its reserves it has been providing to experts at the International Monetary Fund (IMF). The issue, which was a major topic of discussion in Ukraine this past week, has already become an international issue, and may even call into question the legitimacy of the national referendum slated for 16 April 2000.

"It appears that a number of transactions in 1996 to 1998 gave the impression that Ukraine's reserves were larger than was actually the case," the IMF reported. IMF representatives appear confident that, had Ukraine revealed the actual size of its reserves, it would not have been eligible for IMF loans it received from 1997 to 1998. On the other hand, Radio Free Europe reported, the National Bank of Ukraine explained the discrepancy by claiming that the "difference of opinion" over Ukraine's reserves may have resulted from the fact that, until 1998, "Ukraine employed a Soviet system of accounting that differed from that in the West."

At the same time, President Leonid Kuchma has declared that politics, not economics, have been the hallmarks of recent relations between Ukraine and the IMF. According to him, these relations have also been affected by the current Presidential campaign in the United States. These thoughts have been developed further by the Ukrainian national newspaper Fakty. Referring to the opinions of "several observers," Fakty reported that recent problems between the IMF and Ukraine have been profitable for those opposing current Vice President Al Gore's presidential bid. Gore is known for his sympathy to Kyiv, "just because of this", continues Fakty, " the British Financial Times has started to publish materials which exposed the National Bank’s misuse of the reserves."

Den’, another Ukrainian newspaper, says that facts which are only now being noticed by the IMF have, in fact, been well known in Ukraine since May 1998. At that time the commission of the national parliament, which over saw the activities of the National Bank, informed parliament about possible porblems. On top of that, Viktor Suslov, the head of that commission, sent corresponding documents to the IMF, asking them to clarify the situation with its credits. As we can now see, the IMF's answer was a long time coming.

Natalya Krasnoboka, 11 March 2000


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