Issue No. 220 - April 26, 2001
Contents:

1. FRY/Montenegro: REFERENDUM STILL GOES AS PLANNED?
            By Slobodan Rackovic

2. FRY/Serbia: GREAT RELIEF?
            By Zoran Mamula

3. The Czech Republic: NOVA TELEVISION AND ITS DIRECTOR
            By Petruska Sustrova

 4. Special addition : NEW AT TOL
 


FRY/ Montenegro: REFERENDUM STILL GOES AS PLANNED?
    By Slobodan Rackovic
    Although coalition of parties fighting for independent and
internationally recognized Montenegro won a marginal victory over
parties that are in favor of FRY at the early parliamentary
elections on April 22, which gave arguments to the international
community to increase its pressure on this republic to remain
within FR Yugoslavia, the official Podgorica still hasn't
abandoned the idea of scheduling independence referendum at the
end of June.
    According to still unofficial elections results (official
results will be made public on Thursday) published by the Central
Election Commission, at the early parliamentary elections in
Montenegro held on April 22, Montenegrin block of political
parties won over Serbian-Yugoslav alliance, but the victory is not
nearly as formidable as has been announced. The coalition called
"Victory is Montenegro" made out of the ruling duo Democratic
Socialists' Party and Social democrat Party was led by the head of
this tiny state of 700,000 people, Milo Djukanovic. The coalition
won 42,05 per cent of total votes, and their greatest rivals, the
Serbian-Yugoslav coalition "Together for Yugoslavia" (Socialist
People's Party, Serbian People's Party, and People's Party) won
only two percent less - 40,67.
    However, the Liberal Alliance, a party that has been fighting for
Montenegrin independence ever since it was founded, won 7,65 percent
and these Albanian parties will have 3 seats in 77-seat
Montenegrin parliament thanks to special criteria.
    So with a total of 44 parliamentary seats, parties that
support the independent and internationally recognized Montenegro will
still be able to pass decision to hold referendum on independence,
scheduled for June.
    Milo Djukanovic himself promised it to his supporters before
the seat of government several hours after elections, although he
wasn't hiding disappointment with the marginal victory. The same
was promised by Montenegrin foreign minister Branko Lukovac.
    "We've made an important step on the road to Montenegrin
independence - 57 per cent of the voters secures us a significant
advantage in the parliament over Serbian-Yugoslav centrists. It is
a seven-mile step in enlivening the idea of Montenegro in the heads
of our voters. Still, we have much to do. We will get to work
right tomorrow, after we reach the agreement about constitution of
the government which will continue with its reformist and
democratic politics" - emphasized Djukanovic, stressing that there
was an ensuing rounding up of all democratic forces in order to
establish Montenegrin statehood. He left no doubts about whether
Montenegrin authorities will hold independence referendum in June.
    However, many  sober analysts in Podgorica and world ask
whether it is convenient to test public opinion about such a
sensitive issue among so greatly divided population, which will
certainly double already strong pressure of the international
community not to hold referendum. Warnings already began to arrive
not to go into it, while Serbian politicians from Belgrade warn
that with so tight election victory "Djukanovic shouldn't even
think about referendum".
    However, the impression is that nothing can distract
Djukanovic and his collaborators on the road to independent and
Europe-oriented Montenegro. Djukanovic's foreign minister Branko
Lukavac said in an interview for "Frankfurter Rundschau"
newspapers that "Montenegrin statehood is the issue solely of
Montenegro" and stubbornly held his story that referendum was set
for June. "We are absolutely certain that at the end the international
community will have to recognize the will of Montenegrin people
and that it won't introduce economic sanctions against us" - said
Lukavac.
    Even independent political analysts in Podgorica stress
immediately after the elections that one cannot underestimate a
respectable majority of pro-independence forces over Yugoslav
unitarians which is 57 per cent as opposed to 43 per cent. They
remind that Canadian province of Quebec remained under Canadian
sovereignty with only 1 per cent vote margin. To be honest,
Montenegro is no Canada and there are no democratic relations here
as they are in Canada, but one cannot oversee that there still
isn't notorious 7th battalion of the Yugoslav Army which
threatened Montenegro with war if it separated from Yugoslav
federation. Milosevic isn't in power anymore and the army is under
civil control.
    Supporters and voters of Serbian-Yugoslav block still
celebrated their election results with great enthusiasm. In their
public statements leaders of the "Together for Yugoslavia" coalition
didn't hide their tremendous pleasure saying that their results
meant that Montenegro remained within FR Yugoslavia.
    Despite tensions and contrasting political parties, elections
were uneventful, without any incident, with voters' turnover of
more than 80 pe cent which in its way confirms how important they
were.
                         ***
FRY/Serbia: GREAT RELIEF?
    By Zoran Mamula
    Results of parliamentary elections in Montenegro gave a great
relief to the official Belgrade. Fears that the ruling coalition
led by president Milo Djukanovic will have an overwhelming victory
and immediately hold independence referendum proved untrue. The
fact that pro-Yugoslav coalition headed by SNP and supported by
the federal government got only 1,5 percent less votes than
Djukanovic's block serves to create conditions for a more peaceful
dialogue with Montenegrin authorities, say Serbian politicians.
They are giving great attention to the forming of new Montenegrin
government and hope that, nonetheless Djukanovic will probably
enter into coalition with third most powerful party,
pro-independence Liberal Alliance, Podgorica won't rush with
referendum.
    They were encouraged by the EU emissaries last Wednesday who
repeated in Belgrade once again that Montenegro shouldn't
undertake any unilateral steps.
    Yugoslav president Vojislav Kostunica whom Djukanovic accused
of "meddling into internal affairs of Montenegro" during election
campaign, said that Montenegrin elections "proved that the idea of
common state between Serbia and Montenegro is still alive".
    "Explicit division of the voters means that political
agreement should be above all reached in Montenegro itself. I
believe that Montenegrin political parties and public will have
the wisdom and strength, as well as patience to come to an
agreement with talks with federal and Serbian political
institutions, complete tolerance and mutual respect", said
Kostunica.
    Other government representatives in Belgrade also don't hide
their pleasure with the results of Montenegrin elections.
President of the Serbian parliament Dragan Marsicanin said that
obviously there were too few of those who were in favor of
independent Montenegro. He added that the analysis of the results
is needed now, and then easing of tensions and talks on relations
between Podgorica and Belgrade.
    Marsicanin said that soon there would have to be elections for
the federal parliament in order to give more seats to
Montenegrins.
    "Those who insisted on politics of separation today definitely
cannot be happy over election results. At this moment, Djukanovic
has more space to form a coalition government. I congratulate
Montenegrin citizens because they responded in a democratic manner
to a very important issue" - said Cedomir Jovanovic, high official
of the ruling DOS and closest associate to Serbian prime minister
Zoran Djindjic.
    It is interesting that Djindjic, whom Djukanovic labels as the
only relevant negotiator in Belgrade, said nothing related to
election results.
    Contrary to the government, opposition thinks one shouldn't be too
happy with the results of Montenegrin elections. Serbian Socialist
Party still headed by imprisoned Slobodan Milosevic, former
Yugoslav president, said that the number of votes that were given
to coalition for separation of Montenegro from Yugoslavia, if one
takes into account also votes for openly separatist Liberal
Alliance, is significantly above 50 per cent. They added that it
is obvious that there are a sizable pro-independence forces in
that republic. Borislav Pelevich, president of the Party of
Serbian Unity founded by Zeljko Raznatovic-Arkan, even addressed
an ironic congratulation note to citizens and leadership of
Montenegro. "Have a lucky independence and may god forgive, since
you aren't aware of your actions", wrote Pelevich.
    Serbian political analysts think that Montenegrin government
won't give up the idea of Montenegrin independence, but that the
independence referendum will be postponed to some uncertain time
in the future.
    Srbobran Brankovic, director of Serbian agency "Medium" and
one of the best experts on Montenegro, thinks that position of
Milo Djukanovic is complicated. "The situation is such that scales
can be tipped by parliamentary seats of Liberal Alliance. They
will probably set a high price for entrance into coalition -
urgent referendum", explains Brankovic adding that Djukanovic will
be in a highly uncomfortable position since it seems that the
international community will demand Podgorica to initiate
negotiations with Belgrade and postpone the referendum.
    The fact remains that the urgent referendum would be very risky
for Montenegrin ruling coalition because it is questionable
whether an ordinary majority would be enough for such a huge
decision as is canceling common state with Serbia. One shouldn't
forget that, according to Montenegrin constitution two-third
majority is needed in the parliament to vote on change of
Montenegrin status, and the block of political parties led by Milo
Djukanovic is still far from such majority.
    Since referendum is not a real option, thinks Brankovic, in
the next period there will probably be negotiations with the
intermediaries of USA, Russia and EU. Djukanovic himself insisted
on international elements several months ago, but the question is
how he will like it now when the international community is explicit
in its idea of not supporting Montenegrin independence. One
shouldn't forget that official Belgrade is also against
international middlemen, but it is to be expected for both parties
to accept it if it would be insisted on, especially by USA and EU.
Much greater uncertainty is who will make up negotiating Serbian
and Montenegrin teams.
    After elections, Djukanovic said that he didn't want to talk
to the Yugoslav president Kostunica since "he is the man of the
past", accusing him of continuing "project of Greater Serbia
initiated by Slobodan Milosevic".
    Montenegrin president wants Serbian prime minister Zoran
Djindjic to be on the opposite side of the table since he sees him
as "modern politician trying to construct relations between Serbia
and Montenegro on the basis of a partnership". Such Djukanovic
attitude is well-expected also because Djindjic, although he
drafted a platform offering loose federation with Serbia together
with Kostunica, said many times that the document "wasn't the Holy
Bible" and that he was prepared for a compromise with Montenegrin
authorities. However, Kostunica insists that he should take part
in negotiations warning that federal state still exists and that
no future relations between Serbia and Montenegro can be decided
without federal administration. Situation is additionally
complicated by insisting of the Socialist People's Party (SNP), the
strongest pro-Yugoslav party in Montenegro, to participate in
negotiations since it won only 5000 votes less than the winning
Djukanovic's coalition. If we take into account that both sides are
unrelenting in the key areas, that Montenegrin government doesn't
want to give up on independence, offering  Serbia only an alliance
of sovereign states, while Belgrade insists on a "working
federation", one may expect long and difficult negotiations the
outcome of which is completely uncertain.

                         ***

 
The Czech Republic: NOVA TELEVISION AND ITS DIRECTOR
    By Petruska Sustrova
    Following the crisis in the Czech public Television station
towards the end of last year and early this year, the Czech media
have been kept busy for the past few months by the privately owned
 NOVA television station and, more particularly, by its Director
Vladimir Zelezny. Recently he was accused by the Czech authorities
of having committed tax and customs frauds and he frequently has
to spend several hours a day at police stations, undergoing
interrogations. The police claim that his TV station owes millions
in taxes; Zelezny himself owns paintings which he has purchased on
art markets all over the world and which were brought into the
Czech Republic by a third person so that no customs duty has been
paid on them. The sum he owes on customs duty is said to amount to
more than seven million crowns (almost  $200,000).
    Arbitration proceedings have been in progress (as of March 23,
2001) in Stockholm. The main shareholder of the US firm Central
European Media Enterprises (CME) demands that the Czech Republic
create conditions providing for the return of the lost value of
the firm's investments, especially to the CNTS company. Lauder
feels he has suffered losses since the Czech government originally
agreed that CNTS would hold exclusive rights to the license of
television broadcasting. After Lauder had invested his assets in
the Czech Republic, the government changed the rules of the game
and Lauder's firm in actual fact was deprived of the exclusive
broadcasting rights. The Stockholm arbitration procedure is
expected to last some ten days.
    The legal implications of relations between Lauder's CME, the
CNTS firm and Nova TV are fairly complicated. The Czech Republic
decided in favor of a dual TV system (i.e. public and private TV
broadcasting) at the beginning of the 1990s, and at the end of
January 1993 the Broadcasting Council granted the CET 21 Company a
broadcasting license for twelve years. The partners of CET 21 were
five Czech and Slovak intellectuals, and the program scheme for
which a license had been granted contained a multitude of
educational and cultural programs, concerts of classical music,
Czech films and other programs; it was a television program
for the discriminating viewer.
    The independent Czech television company (CNTS) was
established in May 1993. The capital was provided by Lauder's CME
and in part by the Czech Savings Bank; CET 21 was the third
partner who contributed the broadcasting license. At that time
Vladimir Zelezny was the sixth member of CET 21. He became the
Director of the new television station; Television NOVA started
broadcasting on February 4, 1994. The success of the new privately
owned nationwide television station exceeded all expectations.
Although the program was not in keeping with the scheme for
which the license had been granted, Czech viewers enthusiastically
welcomed the lively color TV station with gutter quality
programs. The number of viewers of TV Nova soon overshadowed
Czech public television while at the same time destroyed the myth
about the exceptional cultural maturity of the Czechs, which until
then had been widespread in the Czech Republic.
    There were many politicians and personalities who criticized
Nova for being superficial, for the fact that its news reporting
was full of blood and violence, for offering cheap entertainment
and for spoiling people's taste. It was evident that NOVA
exercised strong influence and was able to manipulate public
opinion; intellectuals criticized the Broadcasting Council for not
withdrawing the license from CET 21 even though it was clear that
TV NOVA was not adhering to the license conditions.
    The protests were of no avail; on the contrary, as of 1996 the
law on broadcasting was amended to the extent that holders of a
license were able to demand the abrogation of license conditions.
CET 21 immediately took advantage of this. The Broadcasting
Council also came to the assistance of TV NOVA at the end of June
1996 and called off the duty of CNTS to invest in drama
programs.
    The Director of TV NOVA, Vladimir Zelezny resorted to
long-winded and complicated transactions to become a majority
owner of the license, and in the spring of 1999 decided to get
round his American partners and exclude them from the game. He
transferred the rights and profits of CNTS to a different company,
which his employees set up in the fall of 1998, and in this way he
deprived Lauder and CME virtually of all their profits. On April
19, 1999 a special session of CNTS dismissed Zelezny from the post
of its Director General.
    That was when Zelezny decided to make a risky move: he started
a battle with CNTS (that is to say against Lauder). Early in June
the battle behind the scene was reflected even on the TV NOVA
screen. In the program "Phone the Director" where Zelezny
addresses his viewers every Saturday for half an hour precisely at
noon, the new Director of CNTS, Jan Vavra, was meant to take over.
But the broadcast was broken off and an inscription on the screen
described the program as a "pirate" broadcast. It was evident
that the conflict had gone too far.
    On August 5, 1999 TV NOVA started to broadcast from new
premises and totally broke off cooperation with CNTS. Since that
time dozens of court judgments have been pronounced - on
impounding, and then again on releasing Vladimir Zelezny's assets,
on protective labels of various TV Nova programs, on signature
tunes and graphic designs, etc. Several criminal proceedings and
complaints have been lodged against Zelezny.
    The body, more competent than any other, the Broadcasting
Council, did not fulfill a request and did not start administrative
proceedings on withdrawing the license because it maintained that
the conflict between Zelezny and Lauder was a commercial conflict
and its settlement was the responsibility of commerce courts.
Lauder was not successful at these courts and so he turned to the
international arbitration.
    But certain political circumstances also need to be explained
which could have exercised some influence on the decision of the
Czech authorities. Up to 1997 political parties were afraid of TV
NOVA: its news and documentaries often revealed certain scandals
and TV NOVA journalists managed to obtain a great deal of
interesting information. Scandals connected with the sponsoring of
the Civic Democratic Party broke out in the fall of 1997
(incidentally, also with the assistance of TV NOVA); the chairman
of the party, Vaclav Klaus was Prime Minister at the time. The
government coalition broke up and Klaus's government had to
resign.
    During that turbulent period, TV NOVA put out a report, which
claimed that Klaus owned a villa in Switzerland.  On November 30,
1997 Klaus vehemently declared that this was slander and that he
would demand compensation going into one hundred million from TV
NOVA. The journalists did not manage to discover a villa owned by
Klaus in Switzerland but there were no court proceedings.
    The fact is that at the end of February 1998, Klaus's
solicitor concluded an agreement with TV NOVA, the content of
which has never been published. There were speculations that as
compensation NOVA were to give Klaus's Civic Democratic Party
extra time on the air for its campaign prior to the planned
parliamentary elections. On June 12, 1998 (i.e. one week before the
early elections) TV NOVA apologized to Klaus and his wife Livia
and the entire affair was over. But the fact remains that the tone
of TV NOVA news programs changed since then: Klaus's Civic
Democratic Party ceased to be the object of investigations and
attacks, and when the Civic Democratic Party signed an
"opposition" agreement with the Social Democrats which in fact
brought the party into the government, TV NOVA even cut down its
negative reports on the social democrats.
    Vladimir Zelezny played his role also in the recent "war"
connected with public Czech Television. He vehemently took the
side of the newly appointed management and in his broadcast "Phone
the Director" he labeled the striking journalists as "anarchists
and Trotskyites" and even as "terrorists". But his television
station screened the draw of the biggest Czech lottery, which was
due to be held precisely at the time when the newly appointed
Director of Czech Television pulled out the plugs of that TV
station.
    In connection with Zelezny's activities and pronouncements,
many politicians and observers expressed the suspicion that the
actual objective of all the events around the public TV
manipulation was to help Vladimir Zelezny. Critics claimed that
pulling out the plugs and the general chaos was to deprive Czech
Television of all its credibility (and consequently also of its
audiences) so that at least one of the two public TV channels
could be privatized; these critics stated the suspicion that the
Czech representatives might offer the channel to Ronald Lauder in
compensation for his losses.
    In February 2001 the international arbitration ordered Zelezny
to pay 23 million dollars to the CME Company. But Zelezny was well
prepared for the arbitration and for possible penalties and
compensation: he transferred his assets to various companies; he
divorced his wife and now has no property. In addition, he intends
to lodge a complaint against the arbitration verdict.
    There can be no doubt that Zelezny's future fate is in the
hands of political personages. If Lauder is successful at the
Stockholm arbitration, its outcome will not affect Vladimir
Zelezny who has already deprived Lauder's CME of its income, but
the Czech state which failed to protect Lauder's investments. CME
is registered in the Netherlands and refers to a
Czechoslovak-Dutch agreement of April 1991 on the protection of
investments which the Czech Republic had taken over.
                           ***

 Special addition: New at TOL                            April 23, 2001
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    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    --- TOL WEEK IN REVIEW ---
    No Drama
    Djukanovic's pro-independence coalition wins a narrow
parliamentary victory in Montenegro.
    by Dragan Stojkovic
    http://www.tol.cz/week.html
    Gusinsky Freed, Independent Media Not
    Russian media battles intensify as more former Media-MOST
outlets face restructuring.
    by Maria Antonenko and Kevin Krogmann
    http://www.tol.cz/week.html
    Unripe Politics
    Ukrainian Prime Minister Yushchenko faces a no-confidence
vote, and probably the chopping block.
    by Oleg Varfolomeyev
    http://www.tol.cz/week.html
    Ten Years of Reconstruction Investors evaluate scattered
successes, fundamental failures at EBRD summit.
    by Julia Gray
    http://www.tol.cz/week.html
    Land for Labor
    EU accession negotiations hit bumpy ground over the prickly
issues of labor migration and foreigners' ability to buy land.
    by Petra Breyerova, Wojtek Kosc, Barbora Maroszova, and Laszlo
Szocs
    http://www.tol.cz/week.html
    MORE WEEK IN REVIEW:
    http://www.tol.cz/week.html
    `Slave Code' Angers Hungarian Trade Unions, Socialists.
    Pre-dawn Raid on Bosnian Croat Bank Provokes Reaction
    Former Romanian Securitate Officer Resigns From Post
    Rising Lithuanian Crime in Spain Prompts Official Cooperation
    Tensions on the Rise Again in Kosovo
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    --- OUR TAKE: No confidence in no-confidence vote ---
    The imminent sacking of Ukraine's reformist prime minister is
a big mistake.
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=16&NrArticle=767&ST1=body&ST_T1=wir&ST_max=1
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    - - - TOL MESSAGE - - -
    Be sure to visit our new mediakit. We reach 27.000 people with
this newsletter every week. Your future business partners,
customers and readers are probably among them. No one reaches the
region like TOL - visit our mediakit for more information:
    http://archive.tol.cz/mediakit/index.html, or e-mail us at
marketing@tol.cz.
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    --- ANALYSIS ---
    A Referendum Before a Referendum
    Montenegrins go to the polls. But the elections will not
change the deadlock on the independence issue.
    by Zeljko Ivanovic
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=3&NrArticle=757
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    --- IN FOCUS: Sweet and Sour Memories ---
    A glance at some of the region's more obscure museums and what
keeps them alive today.
    Socialist Realism at Its Finest Three friends have dreams to
remake a former socialist town in Poland into an open-air museum.
    by Wojtek Kosc
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=1&NrArticle=748
    Balkan Bethlehem
    The Tito museum in Croatia used to attract worshipers. Today
the cult of personality serves mostly commercial purposes.
    by Marijan Lipovac
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=1&NrArticle=751
    Putin's Pickle The Russian president's visit to a small
town--and his prized purchase--has the townsfolk and the local
museum besides themselves with pride and joy.
    by Vladimir Kovalyev
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=1&NrArticle=749
    Warhol, God of The Rusyns
    The director of the Warhol museum in Slovakia says the
artist's memory deserves more than the leaky roof, dim lighting,
and cold corridors of its current home.
    by Matthew J. Reynolds
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=1&NrArticle=750
    Musical Instruments of Kyrgyzstan A virtual museum showcases
the haunting sounds of Central Asia. from EurasiaNet
(www.eurasianet.org)
http://www.eurasianet.org/departments/culture/articles/eav011700.shtml
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    - - - INTERACTIVE DISCUSSION - - -
    The Battle For NTV
    TOL, in association with Washingtonpost.com, presented a live
online discussion on the Russian NTV crisis with media specialist
and TOL advisory board member Alexei Pankin.
    http://discuss.washingtonpost.com/wp-srv/zforum/01/world_pankin041801.htm
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    --- OPINION ---
    Main Principle, No Principle
    Russian centrists cheat opposition voters by consolidating to
form a new political system.
    by Elena Chinyaeva
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=3&NrArticle=756
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    --- FEATURE ---
    Jump-Starting Reform
    Uzbekistan's monetary isolationism faces day of reckoning. A
TOL partner post from EurasiaNet.
    by Gregory Gleason
    http://www.tol.cz/look/TOLnew/article.tpl?IdLanguage=1&IdPublication=4&NrIssue=21&NrSection=3&NrArticle=766
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    - Prague Watchdog (http://www.watchdog.cz) Prague Watchdog
monitors current events in Chechnya with a special focus on human
rights abuses, media access and coverage, and the humanitarian and
political situation.
    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
    --- OUR TAKE: No confidence in no-confidence vote ---
    The imminent sacking of Ukraine's reformist prime minister is
a big mistake.
    Rarely has a date on the calendar signified so clearly a
choice of direction for a country, and, in fact, an entire region.
On April 24, the Ukrainian parliament will debate a no-confidence
vote in the government of Prime Minister Viktor Yushchenko, a
reformer who has turned around the country's economy and limited
the power of a cadre of greedy business moguls. If, as expected, a
Communist-oligarch coalition teams up to ditch Yushchenko, Ukraine
will be taking not merely a step backward, but a full leap into
oblivion.
    Yushchenko, a former National Bank of Ukraine chair, was
appointed prime minister in December 1999, when Ukraine was on the
verge of a cross-default on its outstanding international debts.
Yushchenko managed to avert that danger in March 2000, when he
successfully restructured Ukraine's debt obligations. He also
pushed through long overdue reforms in the agricultural and energy
sectors, contributing to industrial output soared by more than 13
percent and gross domestic product by more than 6 percent last
year. Yet he shunned the oligarchs, and his liberal agenda
infuriated leftists. If those factions hold the line during the
vote, Yushchenko's cabinet is history.
    The prime minister's non-communist opponents say that liberal
and Western fears about Ukraine's further progress toward a free
market are unfounded. They argue that reforms will continue
without Yushchenko, saying the prime minister has only implemented
beleaguered President Leonid Kuchma's economic program, and the
president will stay put. Yet the Ukrainian government will no
longer be as independent in its economic decision-making as it has
been over the past year. With Kuchma weakened by the ongoing tape
scandal--in which he allegedly played a role in the disappearance
of an opposition journalist--the oligarchs connected to his inner
circle feel as strong as they ever have. They won't miss this
chance to install their people in government posts, ending the
short-lived period of Yushchenko's honest reforms.
    Even if Yushchenko, who has so far largely disregarded the
oligarchs' interests, remains, he will be forced to seek
compromises with the people who oppose his reforms in the energy
sector, or the transparent privatization he has advocated, or
maybe just his pronounced Western orientation. If parliament ousts
the government, Kuchma could appoint Yushchenko the acting premier
as a fig leaf to the West. But that would be only a temporary
position, restricting Yushchenko's freedom of action, and the
prime minister has indicated that he would not agree to such a
post.
    At least Yuschenko's fall might lead to a reassessment in the
West, especially among those who cling to the belief, regardless
of the tape scandal, that Kuchma is "their" man--the only one who
can really change the system. Kuchma could have been the valiant
hero in this story, stepping in at the last minute to save the
economy, and the country, from possible ruin. The president did
warn of a serious political crisis if deputies fire the prime
minister and has voiced support for some of the prime minister's
reforms.
    But after chastising Yuschenko for not spreading cabinet posts
to more factions and for not nurturing a productive relationship
with parliament, Kuchma said he would not intervene. No doubt the
president, jealous of Yuschenko's acclaim at home and abroad, is
hoping that he can cast aside the prime minister now before
presidential elections in 2004.
    And therein lies the only other silver lining to this
catastrophe. With every smear thrown at him in recent weeks,
Yuschenko has grown more popular, with his approval rating now
approaching 50 percent. If he is fired now, those rates--already
the largest around--could grow further, making him the most likely
victor of presidential elections. Three years, however, is a long
time to wait--especially when we're talking about a corrupt
country the size of France with a destitute population of 49
million. Ukraine's regression could encourage its nastier criminal
elements to come further out of the woodwork. And their spread
could serve to destabilize all of Eastern Europe.
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