Ukraine. The year began in domestic political chaos. The
divided parliament could only gather for a majority of votes
when President Leonid Kuchma threatened to call a referendum
in order to have the opportunity to change the constitution
and reduce the power of its members. Once the majority was
formed, it immediately sought to dismiss the President, but
he refused to hold the vote and the Parliament was split
physically. The majority pulled out, gathered in their own
building, voted off the old President and elected a new one.
As the President signed the majority's decision, these
became valid. After a few weeks, the majority returned, and
the budget for 2000 could be adopted in a single parliament.
COUNTRYAAH, the budget was prepared by the most reform-oriented and
Western-friendly government Ukraine has had to date.
According to analysts, President Kuchma appointed Prime
Minister Viktor Yushchenko and his ministry with the
intention of earning a hearing with the International
Monetary Fund (IMF), whose loans were necessary to avoid the
state's default. But the IMF withheld $ 2.6 billion when it
was revealed that between 1996 and 1998, the Central Bank of
Ukraine lied about its foreign currency reserve and thus
received unduly large loans from the IMF. This damaged the
credibility of the popular Yushchenko in the west, who had
been head of the central bank at the time of the scandal.
Although a majority was formed, Kuchma called for a
referendum against Parliament's will. He demanded, among
other things, the right to dissolve Parliament unless a
majority is created within one month or if the draft budget
is not adopted within three months. The referendum was held
in April, and Kuchma was given a majority for his proposal.
In July, Parliament also voted by a simple majority behind
the draft constitutional amendment. But it has to be done
again and again by a two-thirds majority, which meant
deadlock and tug of war between the president and parliament
for the rest of the year.
Towards the end of the year, the IMF seemed to be in the
process of opening up its payments of the remaining
billions. Yushchenko's government had tight budgetary
policies, initiated fiscal and state administration reforms,
and accelerated privatization. This, together with the good
world economy, made 2000 a unique year for Ukraine's
economy. For the first time since independence in 1991,
there appeared to be GDP growth (estimated at 3%), the
budget was about to strike a balance, barter trade's share
of the economy decreased and official unemployment fell
slightly, while external debt shrank.
At the same time, it was estimated that over 60% of
Ukrainians lived in poverty. The government succeeded in
paying back pensions, but many government employees did not
receive their salaries. The average monthly salary was
estimated at approximately SEK 250, and the real
unemployment rate was estimated to be around 30%.
The center-right majority in Parliament was mutually
divided, and the left opposition made several attempts to
break it. A very fierce political battle was fought around
Deputy Prime Minister Julia Tymoshenko's bold attack on
Ukraine's economic turmoil, the huge gas and energy
corruption. Ukraine is largely dependent on the Russian
Federation for its oil and gas supply and has unpaid bills
on huge sums, which delayed the relationship with the
Russian Federation during the year. At the same time, a
group of oligarchs, or "gas barons", have accumulated wealth
by organizing illegal bottling and sale of gas from the
pipelines. Such money partially funded President Kuchma's
election campaign in 1999, and Tymoshenko encountered
powerful enemies both inside and outside Parliament.
An investigative, regime-critical journalist, Heorhij
Gongadze, disappeared in September without a trace. In
November, a decapitated body was found on the outskirts of
Kiev, and Gongadze's relatives said it was the missing one.
However, the official identification was delayed, and the
case developed into a high-level political thriller.
Socialist Party leader Oleksandr Moroz accused President
Kuchma of being behind the abduction. Moroz released an
audio tape, which was said to come from the security service
and allegedly contained a conversation between the
president, his chief of staff and the interior minister. The
sound quality was poor, but Moroz claimed that the three
discussed how Gongadze should be cleared. The president, who
was questioned by the country's top prosecutor, claimed that
the charges were fictitious. The Minister of the Interior
sued Moroz for slander.
While Ukraine was experiencing a growing energy crisis,
Western Europe was pushing for a quick closure of the last
active reactor in Chernobyl, where the world's most severe
nuclear accident occurred in 1986. President Kuchma bowed.
On December 15, the reactor was closed and a long shutdown
process started. In exchange, Ukraine was promised a
contribution from the West to the decommissioning, to renew
the concrete shell around the accident-hit reactor and to
the completion of replacement reactors. With the closure in
December, Ukraine lost about 5% of its electricity
generation and about 8,000 jobs.
Several serious mining accidents occurred in 2000. The
worst occurred in March, when 82 workers were killed in an
explosion in a Ukrainian coal mine. The accident was
reported to be due to poor safety practices.