Beware further privatizations

Stealing the Khryvorizhstal steel mill went so well for the Ukrainian elite that they've got other prime industrial assets lined up, but they shouldn't get away with it
the pockets of Ukrainian power-brokers Viktor Pinchuk and Rinat Akhmetov, the first of whom is President Leonid Kuchma’s son in law. That happened thanks to an apparently rigged tender that favored these men while excluding foreign steel groups interested in paying top dollar for the prized mill. Pinchuk and Akhmetov made out like bandits, as the saying goes, while the Ukrainian people were ripped off to the tune of nearly $1 billion dollars.

The Kryvorizhstal scam worked so well that the country’s too-rich and too-greedy are planning other, similar privatizations – and the sooner the better as far as they’re concerned, given that a Viktor Yushchenko victory in the presidential election this fall could mean an end to the gravy train. Or so think some economic observers, according to a Post story this week (see Page 9). At least one observer thinks the State Property Fund is about to auction off (in shady tenders, we’d suspect) more valuable assets: the Dnipropetrovsk oblast-based Pavlohradvuhilya coalmine holding; the Ukrrudprom holding, which controls shares in ore mines around the country; the Odessa Portside Plant, which produces ammonia, carbamide and other chemicals; and the state phone company Ukrtelecom.

Each of these assets is, so to speak, a goldmine.

The Kryvorizhstal auction was distinguished by its shamelessness. There was no strong attempt to disguise what was going on; the robbery was accomplished in the open. Such is the contempt that Ukraine’s elite has for its fellow Ukrainians. In the face of such open contempt, it’s hard to know how to react, since denunciations (like this editorial) are useless.

One thing that can be done is for foreign diplomats from responsible countries to be vocal about what’s going on. Aside from U.S. Ambassador John Herbst, top foreign diplomats here were insufficiently critical of the Kryvorizhstal outrage, and we fear they’ll be too-little attentive to the next phony auction. They’re diplomats, of course, and so pledged to the diplomatic nicety that can preclude naming criminality for what it is – but we can always hope they’ll be more proactive. They need to observe these auctions like hawks, and, if necessary, try the brigands in the court of international opinion – perhaps the only court that the recipients of the State Property Fund’s sleazy largesse need to fear.

There is already a precedent for a trial-by-international-attention in the drubbing that Ukraine has received in the international media about the steel mill tender. It could even have a beneficial effect, in that the next Wesley Clark or George H.W. Bush whom Viktor Pinchuk invites to Ukraine might decide not to come. That’s very small justice, but for the moment, that’s the position we’re in.

We call on foreign diplomats to make the upcoming privatizations their business. There are worse things they could be doing than trying to ensure that Ukraine’s rulers don’t rob the country blind.

And while we’re on the topic, why don’t native Ukrainians rouse themselves from their customary passivity and raise a cry? That’s the least you should do when these thieves are making off with your property.