The theft of the truth

Ukraine is rich in coal and its wheatfields could feed 350 million. So why are most of its people so

Donetsk, Ukraine. There is a saying in post-Soviet Ukraine that until Ukrainians learn where to put the bread plate, there will never be real economic progress. The country's profound backwardness and its peasant mentality, they say, are the chief agents of its inability to get started in the free-market world. It is now ten years since the sky-and-corn colours of the independent state's flag were first carried into parliament on 24 August 1991; students of the break-up of the USSR might recall that the first response of Leonid Kravchuk - later Ukraine's first president - to the Moscow putsch was to appeal to the Ukrainian people to make sure the harvest was gathered in on time.

That peasant reflex - that as long as the rural motherland is looked after, she will provide - is part of a dream that has persisted, through Stalin's famines, through the great and careless Soviet industrialisation, beyond independence. It persists even now, say educated Ukrainians, in the face of one of the country's latest export trades, that of its rich black chernozem soil, which is disappearing by the truckload over its borders.

The eastern city of Donetsk would seem to have achieved an impressive balance between identity and commerce. Substantial renovation of its centre, an understanding of the keystones of western urban ideals (open spaces, decent buildings and restaurants, adequate infrastructure and mixed planning), and the basic wealth produced by the metal and coal industries of the Donbass administrative district, have set it at a much higher level than other Ukrainian cities (which often feel as though they are just built-up versions of the countryside).

So it must have come as an unpleasant shock, a few days before the celebrations of ten years of independence, that a shaft at the Zasyadko coalmine right in the centre of Donetsk should explode in a lethal reaction of coal and methane gas. The disaster, on 19 August at 10.13 in the morning, eventually killed 54 miners. President Leonid Kuchma came to Donetsk the following day to speak, in shirtsleeves, over the bodies of the dead. He had been planning to visit five days later, on Miners' Day, 25 August, the day after the celebrations in Kiev: a visit intended to congratulate Zasyadko on producing a record four million tonnes of coal in the previous 12 months. Instead, the president was left promising the standard bitter crumbs in those circumstances: international help; his own government to fund a safety programme and recommend no further building of deep-shaft mines; and a two million hryvna (£255,000) compensation plan for miners' families.

Visiting Donetsk and Zasyadko, one feels the complicated relationship between the pleasure of wealth and the dangers of its creation. The day after I arrived, I walked down a scrupulously swept avenue just off one of the city's main streets to an apron of tarmac in front of the mine offices, where a hundred or so miners waited on benches under the trees for the buses that would take them to their shift. It was a pleasant spot to wait for a bus. Talking to a group of half a dozen men, I perceived jumpiness, vulnerability and simultaneous indifference. "The first time I went down again after the accident," one young miner remarked, "my hands trembled and I kept seeing flashes. But each time afterwards it was easier. I don't think about it now."

By any western standards, the conditions in Ukraine's mines are unacceptable. One-third are 100 years old or more, and most have had no reconstruction in the past 20 years: 700 metres is the average shaft depth, though the Zasyadko disaster took place much deeper than that, at 1,300 metres. At such unpredictable depths, the natural build-up of methane turns the task of extracting coal into Russian - or Ukrainian - roulette. The miners seem not to care, perhaps because they are among the best-paid workers in the country: they can earn $400 a month with production bonuses.

The fatalism of mining communities is often remarked on: the risks are so familiar, the hazards routine for men whose eyes are permanently rimmed with coal dust. "I could be run over crossing the tram tracks tomorrow," another Zasyadko miner said. But there is a difference here. The men at Zasyadko were nervous for another reason. They did not want to be seen talking to me, but as they went for their buses one man turned back and told how he had been involved in the accident two years ago that had killed several of his friends. "We were working at a face and we knew there was methane behind it, and it exploded. But we did it because we were supposed to get the job done quickly." He smiled gently.

And here it is possible to find a way to understand not only the Zasyadko accident, but the state of Ukrainian industry, and the state of Ukraine. I don't wish to turn the tragedy of a community into a figure of speech, but behind the grimness and grief of the accident, the sprawling mine with its atrocious safety record is also a metaphor that reverberates powerfully.

Kuchma's condolence speech on 20 August included none of the usual criticism of the mine's directors for lax safety standards. Perhaps - stretching a point - that is because standards at Zasyadko are not lax by comparison with other mines. Possibly, also, it is because there is another connection between the mine and the president in the white-haired, heavyweight form of Yukhym Zvyahilsky, the chairman of the Zasyadko shareholders' board. Zvyahilsky is an old political colleague of President Kuchma's, having briefly been prime minister in the mid-Nineties. When his political career ran off the road after he was said to have diverted somewhere between $40m and $250m of state funds into his own pocket, he avoided the hue and cry by emigrating to Israel for two years. The case against him was dropped for "lack of evidence", and he returned to Ukraine, where he became the mine chairman.

Some of the miners I spoke to said Zvyahilsky had agreed to pay back some of the allegedly stolen money, and that Kuchma forgave him. Other versions say that it was Kuchma himself who told him to leave the country for a few years, to allow things to settle down. It is said that he has acquired 60,000 hectares of prime Ukrainian farmland since his return. An informant who works in the agricultural sector has proof that Zvyahilsky owes 400,000 hryvna (£51,000) for seeds purchased for use on his farm.

There is no doubt that Zvyahilsky is a powerful man. At the offices of a Donetsk newspaper, I spoke to a journalist, who preferred not to be named. "Put it this way," he said, "in this region there are two clans. Mr Zvyahilsky is the head of one of them." He, too, was nervous of saying more. Would his newspaper publish anything negative about Zvyahilsky if it had proof? "No."

The obstruction of the press by business and political interests in Ukraine is a known fact (the majority of privatised Ukrainian businesses arrogantly hide their activity from public scrutiny: I was told that Zasyadko refuses to publish detailed production figures). But the wider reality is worse. Journalists in Ukraine live with the threat of violence, passively unable to practise their profession, reflexively airbrushing out negative truths about the oligarchic figures who bestride the Ukrainian economy, just as clumsy technicians once removed disgraced politburo members from photographs.

So, there are no criminals in Ukraine. There are only businessmen. And politicians. One of them is the first deputy prime minister, Oleh Dubina, who innocently strayed close to the truth when he recently observed that state-owned mines were being closed in Ukraine, but that nobody knew what was happening to the equipment. Zasyadko is open, and privately owned, but its safety record in pursuit of record outputs, and the reckless conduct of Ukraine's coal industry in general (deaths per million tonnes of coal have tripled from 1.54 to 4.44 in the past decade), illustrate the general filthiness that pervades the Ukrainian way of business.

The great mystery to most first-time visitors to Ukraine is how a country with its natural resources could possibly achieve such poverty. (Average per capita income is around $750 a year.) Ukraine itself is not poor: it is estimated that its rich steppe wheatfields could feed 350 million people, and annual exports of grain run into hundreds of millions of dollars. From sunflower seeds to its mostly illegal weapons business, via coal and metallurgy, it generates a vastly underaccounted GDP.

The answer, that the country is poor because of simple theft, seems too simple, although the Kiev Post recently estimated annual capital flight at well over $3bn a year. How do such sums end up in the foreign bank accounts of a small group of people? That answer is not difficult either. If everybody in the group agrees to do the same and not welch on each other, it's a cinch.

That was the reason for the expulsion, earlier this year, of the prime minister, Viktor Yushchenko, whose government had finally cracked down on a hopelessly corrupt energy sector and tried to clean up the barter and double accounting that enable mountains of money simply to disappear. It was oligarchic (and communist) factions that were responsible for ousting Yushchenko in a vote of no confidence.

Why is any of this important, outside of Ukraine? For two reasons: because Ukraine will one day have to be admitted to the broad church of European nations - for its geopolitics, its natural resources, its people's qualities of peaceableness - and because it has a history as a great centre of European learning. In the west, we have hardly reported on the country since Chernobyl. If we had followed its fortunes more closely since independence, they might have been different; journalists and ordinary Ukrainians might have drawn strength from our support, sufficient strength perhaps to challenge the lies.

Not merely those lies that go hand in hand with the theft of the country's wealth, but the lies of silence associated with the theft of the truth.