Ukraine faces renewed winter of discontent

THE recent political changes at the top in Ukraine are a strong sign that President Viktor Yushchenko will take personal charge of reforms in the run-up to crucial parliamentary elections next March. This will be his biggest test since being swept to power by the Orange Revolution. Pro-Russian politicians from the old regime will see it as a chance for revenge while Russian President Vladimir Putin will be watching the crisis with pleasure.



Yushchenko is now in the firing line after reacting to corruption scandals and growing divisions in his government by dismissing the prime minister, Yulia Tymoshenko, and her government, while accepting the resignation of the defence secretary, Petro Poroshenko.



He appears to have chosen to have a more docile prime minister in the shape of the moderate reformist Yuri Yekhanurov, an old ally who is likely to preside over a technocratic government while politics will be left to the president. Yekhanurov eschews controversy and will be loyal to Yushchenko. This will



be in stark contrast to Tymo­shenko’s pugnacious style.



The crisis was sparked by the resignation of the former presidential chief of staff, Alexander Zinchenko. As he quit he levelled corruption allegations at several senior Yushchenko aides, including Poroshenko, who had formed a parallel administration to the prime minister’s and had increasingly come into conflict with Tymoshenko.



Disputes between the presidential administration and the prime minister escalated over the past four months, focused on the direction and pace of economic reform and reprivatisations of companies sold corruptly under the preceding Kuchma administration.



Forced to intervene, the president overruled the prime minister on several occasions – most notably in May when she unilaterally and disastrously set the gas price in response to rising costs from Russia.



The two also disagreed over the number of suspicious privatisations to be investigated. Tymoshenko’s initial figures of more than 4,000 had spread uncertainty among investors, and was downsized by the more pragmatic Yushchenko.



These public divisions, coupled with economic slowdown, growing inflation and inconsistency on policy have tarnished the image of Ukraine’s new leadership. Polls show a sharp decline in the popularity of Yushchenko and Tymoshenko. In April both had personal approval ratings topping 60%; this had fallen to 40% by August.



Relations were not helped by the fact that Tymoshenko had a higher popularity rating than the president, or that her Motherland party was gathering substantial support at the expense of his Our Ukraine party.



Before next year’s election, the president will have to seek to make peace with Tymoshenko. Her political weight and popularity make it unlikely she will remain in the cold for long. Political logic dictates Yushchenko must seek to keep her close, especially as she controls the third-largest block in parliament.



But the president has not proved dextrous. Part of his discord with Tymoshenko stemmed from his desire to push ahead with biting economic reforms before the election. Tymoshenko advocated a cautious approach.



The president appears to have been foolhardy in firing her at this juncture, especially as Poroshenko and his parallel administration was the major source of animus. Poroshenko’s departure alone would have removed much of the disharmony. Disposing of Tymoshenko and her cabinet smacks of capriciousness and panic.



If the two remain at odds, it does not bode well for the reform programme.



Parliament was recalcitrant and fractious enough while passing reforms aimed at World Trade Organisation membership in July. Without Tymoshenko’s support, the legislative process will be even more arduous.



Her stance as a corruption fighter will be an effective weapon should Yushchenko fail to make headway against Ukraine’s pandemic corruption. She may even stand against him for the presidency in four years’ time.



Former Kuchma cronies will be looking to exploit divisions and recapture ground lost during the Orange Revolution. They and their parties are well organised, well funded and motivated. This is precisely the sort of crisis they have been hoping for.



Moscow is likely to make any mischief it can ahead of the March polls. On Yushchenko’s present form, Putin should have ample opportunity. The authoritarian regime in neighbouring Belarus will also be pleased at any weakening of the president’s position.



Poroshenko has denied the accusations of corruption and intends to sue Zinchenko. Nevertheless it is no secret that he favoured Russian oligarchs in privatisations and has overseen deeper Russian penetration of the Ukrainian economy. His actions have tarnished Yush­chenko’s image and will have ramifications in March.



Constitutional reform that will give parliament and the prime minister more power will put Yushchenko under more pressure. These reforms must be in place by March, unless Yuschenko can bury them in constitutional court.



Should the reforms go ahead, Tymoshenko and her allies will exploit the president’s diminished authority. Yushchenko’s impetuous decision ensures that the stakes for the parliamentary election will be high and the fight will be vicious, putting him and his position under increasing strain through the winter.



earlywarning, edited by Jonathan Fenby, is a global predictive news service. A free trial for our readers is available at: www.earlywarning.com/subscribe_here