 For the last few months Kyiv's diplomatic community and the far-flung capitals to which the diplomats report have been in an almost total state of confusion in their dealings with the Ukrainian state. The dilemma that faced both diplomats and Ukraine's citizens was a result of the lack of a single decision making center.
Not long after Viktor Yanukovych was installed as prime minister, he hurried off to NATO headquarters in Brussels where he made policy statements that were clearly at odds with the stated external policies of President Viktor Yushchenko. The constitution of Ukraine is very clear on this issue, stating in part: "The President of Ukraine represents the state in international relations, administers the foreign political activity of the State, conducts negotiations and concludes international treaties of Ukraine."
For Yanukovych, the visit to Brussels was a clear and blatant affront to presidential authority and an opportunity to mark his territory in a battle in which each side appears to be playing by totally different rules. Scuttling Ukraine's previously agreed NATO plans and aborting the annual NATO training exercises on Ukrainian territory that had been a fixture for over ten years was just the beginning of a power shift that has become more apparent.
For Yushchenko, the so-called constitutional reform agreement struck prior to the beginning of his term as president turned out to be a poisoned chalice that saw his presidential powers drastically eroded. However, when the 2006 parliamentary elections became in effect a very unsatisfactory report card on the Yushchenko presidency to that time, coupled with the parliamentary election of Yanukovych as prime minister, matters became even more muddled.
In retrospect, one can only assume that in the Orange revolution afterglow, Yushchenko really believed that he could overturn the constitutional reform agreement and restore those powers that he had agreed to cede to the parliament. The reality turned out to be totally different. Rather like wolves gorging on fresh meat, those in the parliament had no intention of foregoing their newfound powers, and a weakened president had few tools with which to fight the battle that he was destined to lose.
 This has led to a situation in which the president has busied himself with discussing principles of political morality and national unity while the prime minister places stalwarts of his Regions of Ukraine party into virtually every position of power in the country. The state energy sector, budget and other strategic spheres are all now firmly in Blue hands with the president left with little more than ceremonial duties.
Game Over
Those who quite successfully engineered the Orange revolution that brought Yushchenko to the president's office fully expected to use the power that flowed from it, but now find themselves out of power and with little chance of recovery before the next parliamentary elections, still more than four years away. The "Orange team" that came to power with Yushchenko now find themselves not only out of power, but also in reality not at the second but the third level in Ukrainian politics. The recognized leader of the opposition is not the president, but Yulia Tymoshenko, the prime minister that he fired within a year after becoming president.
The overwhelming political failure at the state level surprised very few. With the firing of Tymoshenko, the facade of Our Ukraine unity began to crumble and looks unlikely to ever be reassembled into anything like the brief power surge that was the pre-presidential bloc, Our Ukraine.
This was evident at both fall assemblies of Our Ukraine, when Yushchenko openly criticized the party leaders, but at the same time, failed to offer any constructive proposal for sake of party consolidation. The lack of strong leadership has seen the Our Ukraine bloc splintered into warring factions that are unlikely to ever rejoin in any meaningful way.
One of the OU principals, Mykola Katerynchuk has established a new grouping with similar ideology. Other OU leaders, discredited with corruption and all sorts of other scandals, started the rebranding of the bloc. This idea seems to be needed, but it will hardly help Our Ukraine to win back its electorate.
There has been a lot of brave talk from Yushchenko and Tymoshenko members of parliament about abolishing the constitutional reform through court action. However, very few political observers believe there is any chance Ukraine's Constitutional Court would grasp that nettle in a way to benefit Yushchenko. Just as the court read the political tea leaves at the height of the Orange revolution, they are likely to be equally adept at reading current political realities. The court is no doubt aware that reaching a decision that could almost certainly not be sustained in reality would only add to the already widespread confusion in the country's affairs.
Of course, any action that might bring the constitutional reform issue before the court is likely to be met by strong counteraction. For example, according to some behind the scenes discussions Regions MP and ex-chairman of the Central Election Commission Serhiy Kivalov is ready to highlight some juridical proofs making the December 2004 re-vote, which brought victory to Yushchenko, illegal. This appears to be nothing more than a threat with no real action to follow. However, even discussion of such possible court action is perfectly suitable for putting additional pressure on an already frustrated Yushchenko.
Keeping the president off balance seems to have become one of the favorite intra-mural sports in the parliament and there are more than adequate opportunities to play this game. At least theoretically the appointment of the foreign minister and defense minister are the absolute province of the president. However, the ability to appoint does little to protect these two important ministers from constant harassment by the parliament, which has the option to dismiss the appointees and to generally make their service uncomfortable and eventually perhaps even untenable. Both Borys Tarasyuk and Anatoliy Hrytsenko may eventually find that the desire to serve the president who appointed them is more than counterbalanced by a political death by a million cuts inflicted by the parliament.
Money Back
The financial and industrial groups and their allies that came into big politics under the Party of Region banners didn't waste time adapting to new conditions. To reap the dividends from their multi-million investments into parliamentary campaign 2006, the Regions' bosses immediately took under control the country's strategic sectors: fuel and energy, and the financial sphere (through the Ministry of finance and Ministry for Economics).
Mykola Azarov, the First Vice Prime Minister and Finance Minister revived the free economic zones (FEZs), abolished by the previous government. During this past summer the parliament's budget committee restored the special tax regime for FEZs, which are to be priority development areas.
Also, Azarov restored the practice of paying VAT rebates to exporting companies. The first wave of rebates went to the Donetsk region. According to media reports, the Donetsk region has already received more than originally planned.
The expansion of Donetsk influence was also clearly visible in the energy sector. A number of national energy companies were given new, Regions-blessed top management. No wonder, since the energy sector in the government is controlled by one of the party key players, Andriy Klyuyev.
Regions did not ignore other industries and producers as well. On the regional level they have started replacing senior management of state-run companies, from the largest coal mines to the smallest bakeries.
The very aggressive power grabbing by Regions' leaders at the local level may sooner or later face the resistance of other local elites. The latter, squeezed by the current government, could rise against the policies of the new power bloc. However, these fingers can hardly form the fist, as they have neither a leader that could consolidate them nor a central program or ideals that could amalgamate them into a viable political force.
There is, of course, one leader who may have the political and other skills needed to consolidate the opposition into a cohesive force, and that is Yulia Tymoshenko, widely regarded as the best female politician Ukraine has produced. Her popularity ratings are much higher than those of the president, and she relishes the give and take of political debate, something that has never appealed to Yushchenko.
Welcome to Ukraine!
The coming winter will be a sort of barometer of Ukraine's relations with the global key players, Russia and the United States. The December schedule of Prime Minister Yanukovych includes a visit to Washington and further contacts with the Kremlin. The second part is inevitable - Ukraine, deeply dependent on Russian gas, will have to talk with the northern neighbor to, at least, preserve the status quo and avoid further increase of gas prices as occurred with the intractable Georgians.
Russian political analysts are quite open in their statements that, should Ukraine decide to return to Russia's sphere of interest, it would get privileged energy prices and all sorts of trade benefits. However, they are equally bold in saying that should Ukraine decide against the role of subservience, it would be treated as a state-competitor with correspondingly rough treatment. There are those who suggest that President Putin liked President George Bush's famous "If you're not with us, you're against us," statement so much that he has adopted this as Russian policy toward Ukraine.
Of course, just what the benefits of following the Russian line might be is hard to discern. No one has tried harder to dance with the Russian bear than the Belarussians, only to find that subservience only resulted in demands for greater subservience - and little in the way of benefits.
Most political observers in Ukraine believe that Yanukovych's policies will be designed to stay on the good side of the Russians. However, Yanukovych's NATO and EU-skepticism may have a very high cost for Ukraine's economic future. Foreign investors, who perceive a country's membership in Euro-Atlantic structures as a stability indicator, could close their investment portfolios for Ukraine.
After a significant rise in foreign direct investment in 2005, accounted for mostly by one large sale of state property and the increasing competition for banking assets in Ukraine by European banks, FDI in 2006 has been slowed by the uncertain political situation.
Future developments on FDI appear to be most closely tied to positive forward motion on Ukraine's bid for World Trade Organization (WTO) membership. In a recent, very deft bit of negotiation, agricultural and trade figures in Ukraine reluctantly accepted legal language to which they strongly object in regard to value-added taxes on agriculture. However, officials of the European Union have convinced the most vocal of the opponents that there is great flexibility in negotiating details, once a deal is signed, that should allow the greatest part of the agriculture and trade-related problems to be settled amicably.
There appears to be a developing consensus that Ukraine and Russia might be approved for WTO membership almost simultaneously, alleviating fears that one getting approved ahead of the other would lead to a wide number of problems. Full membership is still some time in the future, but a meeting at WTO headquarters scheduled for mid-December should provide a forecast of future developments for both countries.
WTO membership would enable Ukraine to start negotiations in regard to a free trade zone with the European Union, and keep alive the hope-at least of certain officials- for eventual full EU membership for Ukraine.
Ukraine's relations with its giant neighbor to the north and the rest of the world have always been a very delicate balancing act. The accession of the Donetsk-oriented Party of Regions to the central power position in Ukraine has done little to change that situation.
The Russian-speaking citizens of eastern Ukraine have for many decades exhibited a strong Moscow centric orientation. However, the leaders of the Regions party and the business leadership of the industrial Donbas understand that their economic future is tied not only to Russian energy resources, but also to access to the markets of the European Union.
Yanukovych may be riding a power crest for the time being. But even those at the crest cannot ignore the need for extremely careful and well-considered relations with Russia while at the same time doing nothing that impedes future expansion into the European markets so badly needed and wanted by such industrial tycoons as Rinat Akhmetov.
Conclusion
It is almost impossible to escape the conclusion that Ukraine's fate is to lurch from one election to the next, with one campaign flowing almost seamlessly into the next. The next important election date is set for Sunday, January 31, 2010, when Ukrainians will again go to the polls to elect a new president or re-elect an old one.
Barring totally unexpected circumstances, that next presidential election seems destined to pit Yulia Tymoshenko against Viktor Yanukovych, who by that time will have had almost five years as prime minister to establish himself firmly as the favorite. Few believe that Viktor Yushchenko will be a serious contender for re-election, and it is considered entirely possible - some say likely - that he may choose not to run.
To those unfamiliar with Ukrainian politics, it may seem extreme to predict over four years of continuous campaigning for the presidency but based on Ukraine's history so far as an independent nation, that is exactly what you will see and experience.
|
