Ukraine at the Crossroads

Ukraine, a nation of 52 million people covering a territory the size of France, occupies a central position in Europe’s geopolitical landscape. It has the continent’s second-largest conventional army and the world’s third-largest nuclear arsenal, and borders on seven states that are in the midst of transitions from communism—Russia, Belarus, Poland, Slovakia, Hungary, Romania, and Moldova. The establishment of an independent and economically viable Ukrainian state is, therefore, critical for the stability of Central and Eastern Europe.

Since the voters of Ukraine opted for independence on 1 December 1991, however, their country has been rocked by serious economic problems that, according to some experts, threaten its very existence as a unified and sovereign state. In 1991, a Deutsche Bank study labeled Ukraine the most economically promising of the former Soviet republics. Today, as the country enters its fourth year of independence, Ukraine is widely considered to be the most economically backward and corrupt country in Europe.

Ukraine’s 1993 inflation rate was nearly 10,000 percent—the highest in Europe. ¹ Since 1989, measured gross domestic product has declined every year, dropping by 10 percent in 1991, by 20 percent in 1992, by 18 percent in 1993, and by 22 percent in the first six months of 1994. ² The national currency, the karbovanets, was launched in February 1992 at the rate of 10 to the dollar; at the end of November 1994, it traded at 135,000 to the dollar. The average income of Ukrainian workers is one-eighth that of Russians, and Ukrainians’ purchasing power is 40 percent that of Russians. Although official unemployment stands below 2 percent, millions of workers have been “temporarily furloughed” for three to six months at a time or transferred to part-time employment, while millions of others are paid only after delays of one to three months.

Ukraine also labors under a mounting foreign debt. Its energy-intensive industrial base is woefully inefficient (Ukraine’s rate of per-capita energy consumption is more than four times that of Japan). Fuel imports, which account for 40 percent of its energy consumption, are increasing its external debt by more than $2 billion per year. Ukraine’s inability to service its debts to Russia, Turkmenistan, and other fuel exporters has raised concerns that these creditors may suddenly cut off energy supplies, provoking a social and economic crisis.

All these economic difficulties have contributed to a loss of popular support for Ukrainian statehood. Growing doubts among some Ukrainian citizens about the efficacy of sovereignty have in turn prompted many foreign experts and policy makers to question the country’s continued ability to cohere. Last year’s U.S. National Intelligence Estimates speculated that Ukraine’s pervasive social and economic problems could cause the country to split into three parts.

Public opinion indicators show a significant decline in Ukrainian citizens’ enthusiasm for the experiment with independence and a growing nostalgia for the stability of the Soviet period. Although Ukrainian voters overwhelmingly supported independence in the December 1991 referendum, a May–June 1994 poll by the Ukrainian polling group Democratic Initiatives (working in cooperation with Socis-Gallup) found that 47 percent would vote against independence while only 24 percent would vote for it. ³ In the southern and eastern regions, nearly one in three citizens indicated a willingness to support a socialist or communist for parliament and 32 percent expressed support for the restoration of the USSR. A Freedom House-supported survey by Democratic Initiatives in March 1994 revealed that the late Soviet ruler Leonid Brezhnev enjoyed a surprisingly high popularity rating among Ukrainians, with 40 percent of respondents viewing him positively and 37 percent negatively. In the eastern part of the country, Brezhnev got a positive rating from a majority of citizens.

It turns out, then, that only a fraction of the Ukrainian electorate—concentrated in the western part of the country and in the capital, Kiev—are steadfast supporters of the idea of national independence. Another group of voters—primarily inhabitants of the industrialized, Russian-speaking east—appear to have supported independence in the December 1991 referendum for more practical...