23/02/2006 - Analysis
On 26th March, fifteen months to the day after the election of Viktor Yushchenko as President of the Republic (Our Ukraine), the Ukrainians will be electing the 450 members of the Verkhovna Rada (Parliament). It will be a true test of popularity for the heroes of the Orange Revolution and these general elections will decide the future of the reforms launched by the new team. The election is forecast to be a difficult one for Viktor Yushchenko's supporters. According to an opinion poll published in December by the newspaper Ukrayinska Pravda (www.pravda.com.ua), three quarters of Ukrainians (72%) say they are dissatisfied with their country's political and economic situation, more than four in ten (42%) believe that their material situation has worsened over the last year and more than half believe that the new government has not kept its promises (58%). The country is divided into three camps: Our Ukraine, that rallies the supporters of Viktor Yushchenko; Batkyvchina (The Homeland), the electoral Bloc led by Yulia Timoshenko former Prime Minister and mastermind of the Orange Revolution who describes herself as the revolution's martyr; and the Regions Party, a pro-Russian movement led by Viktor Yanukovych, former Prime Minister and Viktor Yushchenko's unfortunate rival during the presidential election of December 2004, at present in the lead in the pre-electoral opinion polls. The extreme dissipation of the political community – 127 political parties are registered and therefore able to take part in the elections on 26th March – makes it difficult to win an electoral majority. As a priority, the political parties must therefore form alliances with one another in order to win a majority that is able to govern.
The results one year after the Orange Revolution
Over the last few months Viktor Yushchenko's popularity has dropped dramatically from 73% of positive opinions in April 2005 to just 50% in October. The economic difficulties experienced by the Ukraine recently are certainly linked to the darkening of the Orange Revolution leader's image. In 2005 the GDP growth was lower (by half: 6% versus 12% in the previous year), unemployment has increased affecting 12% of the working population and inflation is rising considerably (the price of meat, sugar and petrol have all increased significantly) greatly reducing the visible effects of the increases in salaries and retirement pensions granted by the new government. Finally the revaluation of the national currency (the hrivnia) by Yulia Timoshenko's government had a major effect on the Ukrainian economy which is mostly invested in dollars. Privatisations and the amount of social expenditure committed in order to honour the Orange Revolution's promises have somewhat discouraged foreign investors. Finally Viktor Yushchenko's image was damaged by the scandal revealed by the press about the opulent lifestyle of his eldest son Andrij along with the latter's attempt to use "orange" as a trademark.
In spite of these problems over this first year in power the new government team has started to change the face of the Ukraine, introducing transparency and democracy into society, privatising industry, notably the Krivorijstal complex (metal, iron ore, uranium and titanium production), abolishing censorship in the media – two weeklies and two dailies have been born over the last few months- and establishing a true programme against corruption (dismissal of 18,000 civil servants, a clean-hands operation undertaken within the various ministries, the public prosecutor's office, the police forces and fiscal administration) a task, that Viktor Yushchenko himself admits, is in its beginnings since corruption is so omnipresent in society. Although much remains to be done the Ukraine has become a free and democratic country.
Apart from the decline of the socio-economic situation that is not entirely to blame on the new team (the former leaders had indeed promised much before the presidential election in 2004), the rivalries and division within the Orange clan have greatly helped in disappointing the Ukrainians. On 3rd September, Olexander Zintchenko, Secretary General of the Presidency of the Republic and Viktor Yushchenko's former electoral campaign director initiated the first serious crisis at the head of State by resigning from his position to – he declared in a press conference – "denounce the blocking of information" on the part of some leaders close to the President of the Republic who just think "of using their positions to grab hold of whatever they can." The Secretary General's resignation was followed by those of Olexander Tourtchinov, head of the security services (SBU), Mykola Tomenko, Deputy Prime Minister and another member of the government, Mykola Tomenko.
"I am aware that some people steal and some resign. In many cases the process is going beyond what was happening during the Leonid Kuchma era, extending to the regional and central structures. The phenomenon is systematic. I do not want to take responsibility for other people who have created a corrupt system," maintained Olexander Zintchenko during his press conference convened on his resignation – he added "Ukraine is led by two competing governments: that of Yulia Timoshenko and that of Petro Porochenko. It is not too late but if steps are not taken a counter-revolution might take place." In particular Olexander Zintchenko accused those close to Viktor Yushchenko and demanded the resignation of Olexander Tretiakov, the President's chief advisor, Nikolai Martynenko, head of the Parliamentary group "Our Ukraine" and especially that of Petro Porochenko, otherwise known as "the Chocolate King" due to his activities in the confectionary industry. Head of the National Security Council, the latter was appointed by Viktor Yushchenko to counterbalance Yulia Timoshenko whom the President had appointed as Prime Minister. The former is an oligarch who joined the Orange Revolution at a late date and which he financed– his father was one of the richest businessmen in the Ukraine – he is also the owner of the TV channel Kanal 5. Mentioning "an insidious coup d'Etat" Olexander Zintchenko accused him of having used his position and personal influence over the public prosecutor's office and over other ministers to do business.
Before the crisis affecting his men Viktor Yushchenko decided on 8th September last to dismiss Olexander Tretiakov and Petro Porochenko, taking advantage of the occasion also to dismiss Yulia Timoshenko, with whom relations had become increasingly tense – he then appointed Yuri Ekhanourov as Prime Minister. The 57 year old economist and former governor of the region of Dniepropetrovsk, is loyal to the President of the Republic whom he also served as Deputy when Viktor Yushchenko was Prime Minister (1999-2001). "There will not be a press conference everyday but regular, daily work to bring the country out of this crisis," declared Yuri Ekhanourov as he took office, implying that Yulia Timoshenko had spent most of her time looking after her own image than really working in the interest of the country. Twelve ministers of the previous government resumed office.
"Should I have kept quiet about the corruption and continue to pretend that everything was fine whilst I had vainly warned the President of the Republic about this on several occasions?" Olexsander Zintchenko now asks concluding that "sooner or later everything would have been revealed." Since then the latter has created his political party and will present candidates in the general elections on 26th March next. Petro Porochenko accuses Yulia Timoshenko of all the crimes and particularly of having sold herself to Russia out of personal ambition. He has called for reconciliation and complains of having been made a scapegoat. "It was very difficult for me to prove my innocence in the wake of the corruption accusations made by Olexander Zintchenko, accusations which he has given no proof of. I have won all of my trials and the parliamentary commission who investigated the subject concluded that I was innocent," he stressed. President Viktor Yushchenko finally decided to accept the presence of his former National Security Council chief on his party's lists for the upcoming general election after having promised not to do so thereby giving, according to Yulia Mostova, the editor-in-chief of the weekly Zerkalo Nedeli, "an impression of inconsistency."
"There has been political adventurism and amoral behaviour. The Majdan ideals (Majdan Nezalejnosti, is Independence Square in Kiev, where the supporters of the Orange Revolution gathered in December 2004) have fallen victim to this and millions of people are disappointed. We have lost precious time and we shall make up for this by undertaking a winning policy," admitted Viktor Yushchenko, on 19th November last during his visit to Paris. A month later in the same place that witnessed the birth of the Orange Revolution and before a crowd that had come to celebrate the first anniversary of his election as President of the Republic he declared, " I say to those who have given up: my friends, as President of this country I maintain that we are following the only way, and that is of freedom and justice for each and everyone of us." Finally as he reviewed the results of the Orange Revolution he said, "the Ukraine has become open, sometimes too open maybe. The President who preceded me lived within a context where discussion was impossible. Life was undoubtedly much simpler then. But for the nation, for the people conditions were appalling. The Orange Revolution has brought us a totally different kind of quality of government. It involves dialogue which is complex. But I enjoy this believe me, because I see before me the growth of true political competition."
The Political System
Since its independence proclaimed on 24th August 1991 the Ukraine has had a unicameral Parliament, the Verkhovna Rada that comprises 450 members elected for a four year period. On 2nd April 2004 a law pronounced by the former President of the Republic (1994-2004), Leonid Kuchma, modified the way that the general elections took place and increased Parliament's powers to the detriment of that of the President of the Republic. Whilst previously 225 representatives were appointed by a majority vote within a constituency and the other 225 by proportional vote from a national list the general elections now take place by proportional vote across the entire country. In addition to this the minimum threshold necessary required of a political party to be represented in Parliament decreased from 4% to 3%.
This constitutional reform that was adopted in December 2004 and which came into force on 1st January last strengthens the powers of Parliament by transferring a share of the President's powers over to the Supreme Council. The latter now appoints the Prime Minister as well as most of the members of government except however for the Foreign and Defence Ministers, sectors which remain under the control of the President of the Republic. Finally this institutional reform removes Members of Parliament's right to change the parliamentary group whilst it is in office.
A former President of the Republic (1991-1994), Leonid Kravtchouk, who originally said that he was in favour of the reform now, warns of the danger that it makes Parliament the central element of political life. "It really is dangerous, Parliament might become the tool of the lobbies," he stressed observing that the oligarchs who finance political parties are ready to pay a great deal in order to gain a place on the electoral lists.
The Gas War
The Ukraine is a member of the Common Economic Area an organisation created in 2003 by the Russian, Belarusian, Kazakh and Ukrainian presidents. The survival of President Viktor Yushchenko who constantly has to deal with countries from the Community of Independent States (CIS) depends mostly on the compromises he manages to put through and his skill in maintaining balanced relations with Russia. In effect the Ukraine depends on its Russian neighbour for one fifth of its exports and for a great part of its imports, notably with regard to energy. This dependency explains why it is so important to Viktor Yushchenko for his country to have a privileged partnership with the European Union. "Our priorities with regard to foreign policy are still the same. Joining the European Union is the Ukraine's main strategic objective," he declared on 23rd January last adding, "on our agenda there is also a clear restructuring of Ukraine-Russian relations." On 1st December last Brussels granted the Ukraine the status of market economy, a clear victory for the President of the Republic and a decision that enables the protection of Ukrainian exporters against anti-dumping measures.
The gas crisis that started nearly a year ago is the perfect example of the Ukraine's problem in freeing itself from Russian control and in asserting itself in the international arena. In the spring of 2005 the Russian company Gazprom decided to put an end to the system dating back to the Soviet era in accordance with which the Ukraine took a part of the gas on transit through its territories for Western Europe. On 8th June Gazprom announced that it intended to raise its tariffs to market level, bringing 1,000 m3 of gas from 50 up to 230 dollars. Russia provides one third of the gas used by the Ukraine, whose industries notably the steel and chemical industries, are great consumers.
The Ukraine did not oppose the raising of the prices but requested a progressive increase so that its industries could adjust themselves to the new tariffs. Both countries negotiated for months without finding a compromise. The Ukraine refuses Russia's proposal to relinquish control of the pipeline which it considers a vital installation for its security, in exchange for a preferential price of 47 dollars per 1,000 m3. Finally on 1st January last Gazprom decided to suspend its gas deliveries to the Ukraine. On 4th January after a three day gas cut both the Russians and Ukrainians finally came to an agreement that was signed for a five year period during which the President of the Republic, Viktor Yushchenko accepted to import most Ukrainian gas via a company registered in Switzerland – RosOukEnergo, which is under strong suspicion of laundering money; it is half controlled by Gazprom and half by an investment fund administrated by the Austrian bank Raiffeisen whose beneficiaries are kept a secret. Some months previous to this the Ukrainian prosecutor's office launched an investigation into this very same company. The agreement says that RosOukEnergo will purchase the gas at 230 dollars per 1000 m3 and sell it back to the Ukraine for 95 dollars after having mixed it with gas from Turkmenistan (that has now announced that it will not renew the agreement in 2007), Uzbekistan and Kazakhstan. Two thirds of the gas will come from Central Asia and the price of 95 dollars is only set for a six month period. Economist Andrij Ermolaev qualifies the agreement as the "Brest-Litovsk" treaty (in reference to the treaty signed between Russia and Germany in 1917 in order to end the war between the two countries), "will only be valid the time for both countries to establish new strategies." A number of experts believe that the new strategy might easily enable Gazprom and RosOukEnergo to siphon off great sums of money.
Recently Viktor Yushchenko started to strengthen energy co-operation with Russia and decided to boost the mixed consortium project for the transport of Russian gas through the Ukraine, a project that he had dismissed when he first came to power. "The gas crisis is not an economic problem. It has been invented by a Vladimir Putin full of hatred so that he can play a role in the general elections. The Russian President wants to rock and change the government and even install Viktor Yushchenko's adversary in power i.e. Viktor Yanukovych," analyses Myroslav Popovych. "The very fact that Viktor Yushchenko is in power is unacceptable for Russia; he proves that a democratic scenario is possible in the former USSR," says Yulia Mostova adding, "the saddest things is our leaders' irresponsibility who instead of coming together in the gas war took advantage of it to reap short term dividends." For his part the Russian President says that the Ukraine is financed by Western banks and is fully able to pay for Russian gas at the market price. "We are talking of billions of dollars, this is perfectly sufficient to acquire the necessary volumes of gas at market price from Russia," he maintained.
After the problem with the gas Viktor Yushchenko had to face a new crisis when Parliament rejected the agreement made with Russia and dismissed the government. According to representatives this agreement would simply lead to rises in gas prices for private parties. Viktor Yushchenko declared that the Supreme Council's decision was "unconstitutional", accusing Parliament of wanting to destabilise the country and demanding that representatives go back on their vote which he qualified as "incomprehensible and illogical." According to the President the dismissal of government, voted by those close to Yulia Timochenko and Viktor Yanukovych, can only be a result of a vote by at least 150 members of parliament or a motion censure on the part of the Head of State. As a result of this Viktor Yushchenko declared that Yuri Ekhanourov's government enjoyed "full power" and would remain in office until the general elections, a decision that was finally accepted by the Supreme Council. The Constitutional Court which is the only organisation able to take a decision on this is prevented from doing so since it does not have the required number of judges in order to convene (several appointments were prevented by Parliament). Following this crisis Viktor Yushchenko immediately withdrew his signature from the co-operation memorandum that he had signed in September 2005 with his former rival to the Presidency. "I am withdrawing my signature because the other party violated the fundamental principle of this agreement, that of co-operation for the stability of the political situation," he stressed. According to the daily Kommersant dated 23rd September 2005 Viktor Yushchenko committed himself in the agreement to presenting two amnesty laws to Parliament, one covering those who cheat in the elections and the other extending parliamentary immunity to local representatives. In addition to this he is also supposed to have promised to end the doubt surrounding the privatisation of the metallurgy and chemical industries.
The opposition forces have wasted no time in taking advantage of the anger caused by the crisis with Russia and of the population's mistrust of their Russian neighbour to weaken the presidential camp and to reposition itself with the general elections on the horizon. Within this perspective members of Yulia Timoshenko's group have drawn closer to supporters of Viktor Yanukovych with whom they voted a moratorium on energy, transport and community services' prices. However the former Prime Minister did call for a reunification of the Orange camp at the start of February. "I am prepared to guarantee that no coalition will be made with the Regions Party with my participation. I would also like Viktor Yushchenko and Olexander Moroz (leader of the Socialist Party, SPU) to also sign this promise. We cannot envisage any type of coalition with Viktor Yanukovych, since our positions differ in nearly every way with regard to the interests of the Ukraine whether this implies domestic and foreign policy. We cannot envisage our party joining another coalition but with that of the Orange coalition," she declared, denouncing however, "the errors of government and of the President of the Republic's camp."
"We are now in an electoral campaign, the gas agreement with Russia is more a pretext than a true reason for crisis," reassures political expert Mikhaïl Pogrebinski. "All of the changes that have taken place have only aimed to prevent a political force from taking full power," maintains," Sergueï Telechoun, professor of political science. By accepting to grant the supply of Ukrainian gas to RosOukEnergo, Viktor Yushchenko has taken a risk which in the end might cost him more than the previous gas cuts undertaken by Russia. But could the Ukrainian president really refuse this agreement? "The government was guided by the Ukraine's national interests," declared Prime Minister Yuri Ekhanourov, as he defended the agreement signed with Russia.
In spite of the number of problems that the country has had to face the next general elections will be free. "The elections on 26th March next are not those of Parliament or the Prime Minister but they are the answer to the question of whether we are succeeding in maintaining what we won twelve months ago and what we call Ukrainian freedom and democracy," declared Viktor Yushchenko at the end of December. "We are living in the chaos of transformation. It is however better than the order of decomposition that reigns in Russia," maintains Sergueï Evtouchenko, director for international relations for the Pora Movement (meaning "It is time" in Ukrainian), the spearhead of the Orange Revolution which was recently transformed into a political party.
An opinion poll undertaken between 20th-27th January last by the Sotcis Centre for Social Science and Political Studies revealed that the Regions Party came out highest in terms of voting intentions. Viktor Yanukovych's party is credited with 22% of the vote, Batkyvchina (Homeland), Yulia Timoshenko's Electoral Bloc with 14.7% and Our Ukraine with 13.8%. These three parties are followed by the Socialist Party (SPU) that is due to win 6% of the vote, Volodymyr Lytvyn's Popular Bloc (5.8%) and the Ukrainian Communist Party (KPU), 5.4%.
Reminder of the General Election Results on 31st March 2002 in the Ukraine
Participation rate: 69.4%
Source Central Electoral Commission