A Crisis of Incapability

29 August 2011, 12:58

The turbulent years of the overthrow of Soviet regimes in Eastern Europe and the collapse of the USSR – a time of quick decisions and realization of historical opportunities – offered several different scenarios for the transition to a new, post-Communist life. There were two basic means for the success of quick reforms, the establishment of democracy and economic development. The first was the unification of the political establishment and the opposition around independence. This is what happened in the Baltic States. In an interview with the Ukrainian Week, Vitautas Landsbergis, the Lithuanian Member of the European Parliament, succinctly pointed out their motivation: “We all wanted democracy to renew our independence”. The other anticipated a “velvet revolution”, similar to the one in Czechoslovakia or a successful roundtable between the government and the opposition, (such as in Poland and Hungary). According to their results, Communist political establishment was replaced by counter-elites. Other means, such as counting on a strong-hand policy, delayed reforms or attempts to pay off historical scores with neighbours, led to Communist dictatorship being replaced with a new despotism – with which George W. Bush scared Ukrainians in his infamous “coward” speech on 1 August 1991, Ukrainians as he tried to convince  MP’s to drop their struggle for independence. Ukraine is always walking a fine line, both in terms of its independence, and many other issues. It has succeeded in avoiding the worst scenarios, but has failed to take full advantage of the opportunities presented during the collapse of the USSR.

In the late 1980s and early 1990s, the USSR suffered a slew of systemic crises, the most prominent of which was the collapse of the Soviet economy, paralysis of the governance system and the expansion of the battle for power in Moscow.  

The economic crisis forced both the establishment and the public, including all social classes from intellectuals to the military, to look for new ways of survival. First autonomy, then independence, was seen as a tool for protection from these looming economic troubles.

The Soviet centrally planned economy had exhausted itself long before the 1980s – attempts to reform it had begun as far back as 1965. However, the then government had entrenched a basic contradiction in the reforms, combining such market regulators as profitability and income, with a deepening of centralization. For example, it set up 40 all-union ministries and agencies during 1965 –1985 which took 90% of all enterprises in the Ukrainian SSR under their control. This was command economy managed by government officials rather than business managers. We can see the consequences of this mentality in Ukrainian economic policy to this day.  

Meanwhile, the structure of the economy of Soviet Ukraine was ill-balanced, where the share of industries working for the consumer market did not exceed 29% of total gross output, compared to 50-60% and more in developed countries. The rest of the economy was consisted of Group A enterprises, more specifically coal mining, metallurgy and mechanical engineering. Production plans for the Ukrainian SSR were drafted in Moscow. The distortion of the economy resulted in not only a shortage of goods, but also aggravated environmental, demographic and social problems.

Throughout the 1970s, FMCG products imported from the revenues of oil and gas sold to the West partially removed the structural distortions of the economy. However, the influx of oil dollarsl came to an abrupt halt as a result of plummeting energy prices. In 1986, the USSR only earned 5 bn convertible rubles from the export of oil and oil products, compared to the previous annual 10-12bn. As a result, the country lost nearly 40bn convertible rubles in 1986-1988 alone.

The attempts of the USSR government to improve the situation by administrative means, by increasing output and improving its quality failed. Most types of goods remained uncompetitive.

Partial liberalization in the late 1980s also failed to resolve these issues. A cooperative movement was permitted under unfavourable conditions, including taxes amounting to 65% and up to 30 supervisory authorities. There were no mechanisms to support the production business, such as loans, or to control abuse of office, when small enterprises and joint ventures were set up around large state-owned companies for the purpose of selling off the latter’s assets. Research-technical youth associations, established on the basis of Komsomol committees were yet another good way to siphon off the cash allocated for the party and Komsomol into what served as the foundation for many oligarch empires of today.    

The soviet administration was unable to find a way of overcoming the economic crisis. This angered the public, particularly since the ideology no longer played its mobilization role, while the Chornobyl disaster which the government tried to cover up and the unpopular war in Afghanistan undermined loyalty to those in power.  

Moreover, the might of the Moscow core was shaken from within. The RSFSR government, led by Boris Yeltsin, strove to take power in the largest republic of the Soviet Union, which would have been impossible without the undermining of the all-union government. Ultimately, the RSFSR became virtually the first republic in the USSR after the Baltic States to declare its sovereignty on 12 June 1990, more than a month prior to Ukraine’s declaration.

New alternative union-wide organizations either did not exist or played a marginal role in politics. Unable to deal with the economic crisis and meet the growing hunger of all republics for cash and goods, the leadership of the USSR turned a blind eye to the attempts of local administrations to solve these problems on their own, until these efforts transformed into the construction of an economic basis for the independence of the republics.  

Thus, the imperialistic kernel was unable to use all available leverage to influence the situation in its republics, particularly Ukraine. The conditions that emerged should have been taken advantage of, however the key players in Ukraine at that time proved to have been unready for this.  



In 1990, the mindset of the ruling Communist elite in the Ukrainian SSR experienced a dramatic turning point. The 1990 election launched the ideological and political adjustment of the Communist elites to the new conditions of the erosion of the role of the Communist Party and the collapse of the union kernel. The following factors in the transformation of the political focus can be singled out:   

1. The inability to overcome the economic crisis and to resolve military and political conflicts undermined the confidence of Ukrainian Communists in the USSR’s omnipotence.

2. The protest campaign with hundreds of thousands of people filling city streets during 1989-1990 scared the “partocrats”. In spring 1990, the country was in the throes of a wave of miners’ strikes, which in contrast to those taking place in the 1960s, the government decided not to bring to a halt by force.  

3. Glasnost revealed the truth about the crimes of the soviet regime, leaving many people disenchanted with Communist ideals.

4. Inthe early 1990s, some members of the Ukrainian Communist Party and governing elite felt that they had the opportunity to get even with the Kremlin for its arrogant attitude experienced in previous years – a “complex of offences” of the Moscow-based elite.    

5. Most members of the highly-qualified Communist Party elite quickly realized the career opportunities that were available as a result of the expanding powers of republican bodies.

Thanks to this position of the Ukrainian establishment, it managed to pass a series of political and administrative acts to prepare Ukraine for independent life as a state. However, it did not become an administrative and political (national Communist) elite that would be able to launch the process of Ukraine’s separation from the USSR from the top, as was the case in the Baltic States. According to various estimates, people born and raised in the Soviet Union constituted 25 to 30% of the central political establishment. Their integration into the empire not only made them extremely loyal to the Kremlin, but also meant that the most talented and ambitious ones did not see their future in the Ukrainian SSR, but had Moscow in their sights. Therefore, the quality of personnel remaining in Ukraine was not on the same level as that the Baltic republics or even Transcaucasia.   

As a result, the goals were much more grounded and directly linked to the interests of the ruling circles, who wanted to receive all necessary resources from the center but did not allow its interference in domestic, particularly commercial processes within Ukraine. In fact, back in mid-1991, the local elite was ready to accept a new Union Agreement granting the Ukrainian SSR expanded powers, including its own system of power and law enforcement as well as the minimization of the economic influence of union-wide authorities on the decision making process in Ukraine. These two elements shaped most laws passed in 1990-1991after the signing of the Declaration of Sovereignty of the Ukrainian SSR.   

However, the power crisis in the USSR and the coup of 19-23 August 1991 considerably accelerated the collapse of the Soviet Union. The Ukrainian leadership then took the lead in the independent country and became responsible for the resolution of its economic, social, political and security problems. However, the new establishment failed or was incapable of coming up with an ideology for the building of a new state. For this reason, the “Baltic scenario” of the quick and successful establishment of a new country proved impossible for Ukraine. Moreover, the country had no counter-elites who could shape its vision of what the establishment should be, and replace it.



The growing influence of powerful individuals and organizations as an alternative to the party nomenclature affected the outcome of elections to councils at all levels, which were held on 4 March 1990. Yet, they only proved once more that the elites had not really changed.

Despite the fact that the majority of the Verkhovna Rada of the Ukrainian SSR was made up of partocrats or supporters of the USSR and a pro-Communist regime, 90% of the parliament changed and now included 25% or 126 members of the democratic human rights and patriotic camp. The latter won a majority in the Lviv, Ternopil, Ivano-Frankivsk and Volyn Oblasts, and Kyiv.

With time, the Verkhovna Rada of the Ukrainian SSR split into two groups – the pro-Communist one was called “For a Soviet Sovereign Ukraine” or simply “Group 239”, and the opposition – “Narodna Rada” (the People’s Council).

On the one hand, “Narodna Rada” was referred to as the “moral majority” since it introduced clear demands for autonomy and in time, independence for Ukraine to the parliamentary agenda. Taking into account  the fact that its sessions were aired live on TV and radio, parliament became a platform for the propaganda of national and state independence. Yet, there was no proper reliable counter-elite, capable of taking upon itself the responsibility for the state of affairs in the country. The 1990 election and the consequent party establishment process revealed an extremely negative trend, which would affect future processes in Ukraine – the leadership of opposition groups were largely comprised of representatives of the humanitarian sphere and those who came from agricultural regions, few of whom had managerial experience or proper background and qualifications for taking important economic and business decisions.

It was the managerial incompetence of the then opposition leaders that often discredited the idea of Ukraine’s democratic revival and the establishment of conditions for the mass plundering of state-owned assets in the first years of independence.

The worst consequence of all was that the opposition was run by many people who used the situation to their benefit while ignoring the everyday process of building the country. As a result, the opposition failed to either articulate the concept of an independent Ukraine or come up with a specific transformation plan.

Therefore, even though in the early 1990s the People’s Movement of Ukraine consisted of more than 600,000 members and even more sympathizers, including quite a few intellectuals with a technical background and business managers of all levels – even top managers, this element of the party was barely used. The leaders, who had grown used to conducting rallies, had no idea what they should do at each stage of state-building. They had nothing to offer those who wanted to work constructively.   

All of this kept Rukh from growing into something similar to Solidarity in Poland or the National Fronts of the Baltic States. 

At the beginning of 1990, Ukrainian opposition forces did not have any groups which would raise the question of Ukraine’s exit from the USSR. Even the program of Ukrainian Helsinki Human Rights Group didn’t say anything about this, only mentioned the transformation of the USSR into a confederation. The provision about Ukraine’s renunciation of the USSR appeared in the Narodniy Rukh Ukrainy (People’s Movement of Ukraine, which only appeared in October 1990, while the vision of specific steps to be taken for this apparently never emerged.  

The turning points that could have launched an all-Ukrainian independence movement were largely wasted. During the miners’ strikes in the spring of 1990, the connection with Narodniy Rukh Ukrainy was, for the most part, declarative, although the two movements actively drafted slogans together, and virtually came to a halt on their conclusion. In October 1990, the Granite Revolution, a hunger strike arranged by more than 200 Ukrainian students, shook the country. One of the demands was that the signing of a new Union Treaty by the government of the Ukrainian SSR should not be allowed. The latter fulfilled only one demand though, which was the resignation of Prime Minister Vitaliy Masol. No-one controlled what happened to the rest of the students’ demands. Eventually, 19 August 1991, the first day of the coup, served as a perfect demonstration of the oppositions’ weak mobilization skills. According to the most optimistic estimates, only a few thousand people came out onto city streets. 

All these examples mark a dangerous trend that has already haunted democratic forces in Ukraine for more than two decades. It is their inability to arrange continual work with the social groups who would support them and whom they could in turn represent.

This can partly be explained by the inertness of society itself whose proactive members had been killed by soviet repression, while the “strong” peasants – a prototype of the middle class – had been exhausted by the famine. As early as 1991, when the question of Ukrainian independence was raised, 58–59% of our compatriots claimed that “as long as everything was okay in the country”, they did not care who was in power  

By year-end 1991, a mere 5% of Ukrainians were members of political parties or civic and political movements, 3% took part in rallies and 2% were attending party meetings. Only 7% of those polled said that they could take measures if the government ruled against the interests of the nation.

The opposition of that time failed even to hold pre-term parliamentary elections although this was an integral element of the successful transformation of Central European countries. The new parliament could have been more disposed to conducting necessary reforms, but the opposition allowed itself to be lulled asleep with the allusions of the government regarding the necessity “to build the state together.” As a result, the Communist majority in the Verkhovna Rada of the Ukrainian SSR attempted to build an independent Ukraine and a market economy in the first three years of its independence – a kind of “mummification of soviet traditions.

The background, qualification and motivation of the key players in Ukraine’s struggle for independence in 1991 prevented them from shaping an integral vision of the already post-soviet independent and democratic Ukraine and giving the relevant signals to the administrative apparatus. Instead, society, with virtually no elite, was unable to either insist on vital reforms or generate a social class, which could have acted as an ally to changes. This lesson from the first years of independence should be also learned by Ukrainian activists, currently striving for power. A mandatory element of success, both in exercising powers and developing the state, is a clear vision of changes offered to the country, a specific step-by-step plan for their implementation, as well as firm and natural, rather than transparent and decorative links to social classes that are essentially the allies of market reforms, civic liberties, the impartiality of legal proceedings and a strong and sustainable state. These are the social groups that are joined together by the notion of the “middle class”. In the case of Ukraine, the middle class has developed not due to, but in spite of government policy.

To be continued…

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