Ukraine baulks at the painful cost of freedom: Economic crisis is threatening to tear the country apart

IN PURSUIT of economic restructuring in Russia, reformers have got into the habit of simply pointing to Ukraine as an example of the dreadful consequences that await a country that does not take its bitter monetarist medicine. Russia may have been experiencing sharp market growing pains, but Ukraine is in such distress that some citizens fear that the state itself could disintegrate, torn between Ukrainians and ethnic Russians who may attempt to secede and rejoin Russia.

To the casual observer, Kiev looks as splendid as ever, with its solid buildings set in wide and snowy parks, and its atmosphere is distinctly less sleazy than Moscow's. Yet the country as a whole is an economic wasteland. A tourist seeing the huge bustling market at the Kiev stadium might say, 'What's the problem?' But the bazaar is the very symbol of Ukrainian misery.

Every Sunday they come, pensioners and physicists, pianists and paediatricians, to sell second-hand goods and cheap imports, in a desperate attempt to make ends meet. Local industrial and agricultural production has slumped, factories are closing, inflation is raging at

80 per cent a month, compared with 16 per cent in Russia, and the temporary Ukrainian currency, the coupon, exchanges at the laughable rate of 35,000 to one US dollar (67p).

Since only one in 12 Kievans has access to dollars, compared with about half of Muscovites, and since the average monthly salary here is 400,000 coupons (dollars 11) compared with 150,000 roubles (dollars 100) in Moscow, Ukrainians are forced into street trade so as not to starve. Many find it deeply humiliating.

'What do you want to talk about? Our wonderful lives?' asked an old woman holding up a pair of men's boots, in a market more crowded with sellers than buyers. She refused to give an interview. But Viktoria, a young woman trying to obtain dollars 30 for a pink angora sweater, reluctantly agreed to speak.

'I have higher education, you know,' was the first thing she said. 'I'm a qualified librarian, but I have to do this to earn a minimum for myself and my son.' She had bought the jumper on a shopping trip to Turkey. 'Some of us go there, some go to Russia, because goods are cheaper over the border. Then we employ the babushkas (grandmothers) to sell for us. If we declared our earnings honestly, 80 per cent would go in tax, so of course we fiddle. But we can't cheat the mafia (which would take a dollars 6 cut on the sweater).'

Viktoria looked tired, and nervous that she was wasting trading time. 'It's not a joyous life, as you can see. When I first came here, I hid my face if I saw a friend pass by. But I'm not ashamed any more.'

What has happened to Ukraine, which was used to be one of the most comfortable parts of the old Soviet Union, and theoretically should be among the wealthiest agricultural countries in Europe?

Ukrainian nationalists say the republic, independent only since late 1991, was milked by Russia, and is handicapped in its efforts to stand alone by the fact that it was forcibly integrated into the Soviet industrial system, which has now collapsed.

But worst of all, in their view, is the fact that Ukraine is dependent on Russia for energy. Only yesterday came an announcement that today the ill- fated Chernobyl nuclear plant will shut down a reactor, the first of several around the country, because Ukraine cannot afford to buy nuclear fuel from Russia. And there was a warning that all of them might have to close by 1995.

'We plan to build a new terminal at Odessa, which will take tankers from the Middle East, then we will have an alternative source (of oil),' said Oles Shevchenko, an MP for the moderate nationalist Ukrainian Republican Party.

Ukrainians also say it is not easy to recover psychologically after the brutal way in which Stalin collectivised their society. But Russians say Ukrainians have a plodding mentality and lack flair.

Whatever the reason, Ukrainians are not quick to change. When Mikhail Gorbachev introduced perestroika and glasnost to the Soviet Union, Ukraine was known as the 'land of the dinosaurs', so reluctant was it to adopt his reforms. Now that communism, with the basic guarantees it gave the population, has collapsed, little has been done to build capitalism in its place.

The small degree of economic freedom so far achieved has benefited mostly mafia hoods, who can afford to buy coats for their molls at the Jindo fur shop and treat themselves at the Peugeot garage, where cars start at dollars 14,000. Slavik, the watchman who guards them with his life, earns 600,000 coupons (dollars 17) a month: he would have to work for 70 years to afford the cheapest model.

Public discontent with economic hardship is widely assumed to be the explanation for the success of the ultra-nationalist Vladimir Zhirinovsky in Russia's elections in December. Ukraine is due to hold parliamentary elections in March. Is a Ukrainian Zhirinovsky waiting in the wings?

Kievans say no. Mr Shevchenko believes that the danger for Ukraine is that old Communists will be elected again.

Ukrainian democrats have learnt from the mistake of their Russian counterparts, who split the progressive vote in December, and are trying to unite to keep the apparatchiks out. Mr Shevchenko is setting an example by giving his safe seat in Kiev to a young politician, and going out into the countryside to challenge an entrenched Communist.

A new parliament and government may give Ukraine the boost it needs to realise its undoubted potential. But if the economic crisis drags on, some observers believe, this country, physically the largest in Europe with a population of 52 million, could be torn apart. West Ukraine is determined never to fall under Kremlin domination again. But East Ukraine and Crimea have substantial ethnic Russian populations, who see that life is better over the border, and would be glad to re- unite with Russia.

'Ukraine could literally split, and I don't think this could happen without bloodshed. It would be much worse than Yugoslavia,' said a Kiev businessman, recently retired from an army career.

His comment seemed alarmist. But last week the Washington Post reported that the CIA had reached much the same conclusion. Since Ukraine has yet to keep its promise to surrender its nuclear weapons, this is an appalling prospect not only for the republic but for the rest of the world.

(Photograph omitted)