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Inching Back Into Mother Russia's Arms


International Outlook

INCHING BACK INTO MOTHER RUSSIA'S ARMS

Three years ago, when the Soviet Union disintegrated, Ukraine and Belarus grabbed at the chance for independence. The West, unsure how to respond, was slow to extend aid and investment. Now in dire economic straits, the would-be nation-states are returning to Mother Russia's arms like wayward sons who couldn't make it on their own.

That's the message from the surprise July elections that brought in pro-Russian and pro-free-market Presidents in both countries: Leonid Kuchma in Ukraine and Alexander Lukashenko in Belarus. Both rode a wave of disillusionment stemming from 40% to 50% plunges in output blamed in part on the separation from Russia. These new leaders argue that reintegration with the Russian economy offers the best shot at salvaging falling standards of living.

But some analysts fear that Russian President Boris Yeltsin will be tempted to try to take advantage of these republics' economic weakness to reassert control over them politically. "Russia is going to try to retake the empire," says Paul A. Goble, a senior associate at the Carnegie Endowment for International Peace in Washington. "It will fail, but there will be bad consequences." He warns, for example, that Russian heavy-handedness could spark nationalist violence against the millions of ethnic Russians living in Ukraine and Belarus, tempting Moscow to intervene militarily.

TOO FAR? Western critics of Russian muscle flexing argue that the U.S. should pressure Moscow not to interfere with the republics' independence. But the Clinton Administration, which has been accused of favoring Moscow in dealing with former Soviet republics, shows no sign of shifting gears.

Ukrainian nationalists also are watching the reintegration and vow to launch potentially violent protests if it goes too far. "The big danger is that Ukraine will create an economic union with Russia and then a political union," says Volodymyr Cherniak, an adviser to Rukh, the leading nationalist group.

Over the next few months, economics will be the focus of talks between the three Slavic states. They are discussing setting up an organization modeled on the European Union to succeed the Commonwealth of Independent States. Kazakhstan and other former Soviet republics may join--creating a trade bloc including most of the former Soviet Union. This would be dominated by Moscow, which far outweighs the others in both military might and economic resources such as energy.

Ukraine and Russia are already eliminating tariffs on trade. Another plan, says Nikolai P. Burmistrov, a Ukrainian Foreign Ministry official, is to create giant, partly state-owned companies with Russia in key sectors such as `il, steel, and vehicle production. Russia also may subsidize its energy exports to its resource-poor neighbors.

Since Russia is further along with reform than Ukraine or Belarus, closer ties are likely to nudge them in the direction of open markets. Both of the new leaders say they want to speed up stalled privatization drives.

But with major economic improvement a long way off, some Russians, including Victor Kremenyuk, an analyst at Moscow's Institute for the U.S. & Canada, worry that Ukraine and Belarus will prove an expensive burden for already-strapped Russia. Kiev is several billion dollars in debt to Russia for oil and gas. Belarus hasn't much to offer besides a cheap and well-educated labor force that Russia doesn't need. "The question," says Kremenyuk, "is what price Russia is willing to pay?" The answer may be quite a bit, if that helps Moscow regain lost power and prestige.EDITED BY STANLEY REED By Peter Galuszka in Moscow, with Roma Ihnatowycz in Kiev and Christopher Pala in Minsk


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