ANALYSIS: Ukraine after Yuschenko (05/20/01)

ANALYSIS

Ukraine after Yuschenko

by Taras Kuzio

On April 26, by an overwhelming margin, the Verkhovna Rada passed a vote of no confidence in Prime Minister Yuschenko's government, thereby bringing down the most successful administration in the country's post-independence period.

The vote confirmed the country's division into three political forces: Communists; center-right national democrats; and an ideologically amorphous group that represents oligarchic interests and is aligned with President Kuchma.

Mr. Yuschenko was brought down by a coalition in the Rada between Communists and the oligarchic group.

The Communists were adamantly opposed to Mr. Yuschenko's pro-Western foreign policy. Domestically, they were alarmed that their support, which has averaged 20 to 30 percent during the 1990s, could be undercut by a successful government that increased GDP and paid back wage and pension arrears.

The oligarchs had for several months been concerned that the erosion of their economic power caused by the Yuschenko government's energy sector reforms. These had been led by former vice prime minister Yulia Tymoshenko, who was selected because of her experience as a member of the oligarchic group that ran United Energy Systems in the mid-1990s.

Ms. Tymoshenko and former Prime Minister Pavlo Lazarenko are the only oligarchs to have opposed President Kuchma; both are currently facing criminal indictments. Oligarchic groups voted with the Communists after Mr. Yuschenko refused to allow oligarchic representatives into the government.

Aside from the tension between Mr. Yuschenko and the oligarchs over energy sector reforms, the prime minister's perceived successes caused tension with President Kuchma. The president was unhappy that his long-standing ally, Valerii Pustovoitenko, who served as prime minister between 1997 and 1999, was denied credit for the advances made last year.

Indeed, Mr. Yuschenko regularly accused the previous government of incompetence, in particular over the build-up of nearly $2 billion worth of pension and wage arrears. President Kuchma-controlled state television responded by attacking Mr. Yuschenko and questioning his achievements. The attack was intensified after the United States granted asylum to Mykola Melnychenko, a security service officer who had leaked tapes which appeared to implicate Mr. Kuchma in the abduction and murder of journalist Heorhii Gongadze.

This media assault marked the country's first large-scale anti-U.S. campaign. Washington was accused of having used Mr. Melnychenko as a tool in an attempt to bring down President Kuchma and replace him with Mr. Yuschenko; the prime minister was also implicated in this, and attacked for having a U.S.-born wife.

Despite the rivalry between Messrs. Kuchma and Yuschenko, the country's most popular politician, the prime minister was useful to the president. These benefits have now been lost.

Mr. Yuschenko encouraged an impression in the West that Kyiv remained committed to reform, which was essential to secure the resumption of international lending. Washington's decision to grant asylum to Mr. Melnychenko underlines Ukraine's diminished standing; less aid will now be forthcoming.

Mr. Yuschenko also ensured that the parliamentary non-left majority held together, which was essential for President Kuchma to secure constitutional changes in line with the April 2000 referendum to strengthen the presidency. Implementation of these changes is now impossible.

The ousted prime minister divided the anti-Kuchma factions, as some opposition remained passive while Mr. Yuschenko continued in office. This division among the anti-Kuchma camp has now been removed.

Prime ministerial vacancy

President Kuchma will struggle to have a new prime minister confirmed. The oligarchs and Communists who joined forces to dismiss Mr. Yuschenko are not united and cannot agree on a new candidate.

The oligarchs do not have the 226 votes required to elect their own prime minister; at the most they command the loyalty of 140 deputies. The Communists hold 120 seats and party leader Petro Symonenko said on May 1 that his party would nominate four candidates. Perhaps more likely, the party will demand positions within the government in return for supporting an oligarch-backed prime ministerial candidate. The 100 center-right (anti-Kuchma) deputies will be hostile to any candidate from either camp.

There are three broad scenarios:

1. The country will be left in political paralysis, unable to form a government before the parliamentary election due in March next year. According to the constitution, Mr. Yuschenko will remain prime minister for 60 days after the no confidence vote. It had been rumored that Mr. Kuchma would ask him to stay on for longer, but Mr. Yuschenko has ruled that out. Moreover, he has indicated his strong preference to vacate the post as soon as possible.

2. The oligarchs, who are deeply divided and compete fiercely among themselves, will unite and buy support from elsewhere to install one of their own as prime minister. For the oligarchs, victory in the parliamentary election is essential for their business interests, and their poll prospects would be boosted by the numerous advantages of incumbency in the run-up to the election. Thus, it is possible that either the Rada chairman, United Social Democrat leader Viktor Medvedchuk, or Labor Ukraine leader Serhiy Tyhypko could become prime minister. Mr. Tyhypko worked in the Pustovoitenko government, and briefly in the Yuschenko government, and has some support in the United States as a "reformer." Mr. Medvedchuk has no such track record, and his presidential ambitions threaten other oligarchic groups.

3. President Kuchma could propose a compromise candidate acceptable to the Communists and the oligarchic interests. While it is possible that a political unknown could be selected, the two leading contenders are Mykola Azarov, head of the newly formed Regions of Ukraine faction, and Kyiv Mayor Hryhorii Omelchenko. Mr. Azarov could have difficulties being accepted, because his position as head of the widely feared State Tax Administration would mean that, as prime minister, he would be in a position to influence the 2002 election. He would be most unlikely to win oligarch support, although his Donbas background would appease the Communists.

Clear choices

As a consequence of the dismissal of the Mr. Yuschenko government, the Verkhovna Rada's non-left majority - the cornerstone of economic progress in the last year - has been swept away. This has made clear the following choices facing the electorate at next year's general election.

1. Communists: Communist parties (of which there are several) seek to gain power through elections as their counterparts have done recently in Moldova and offer a similar policy program - constitutional reform to create a parliamentary republic, the adoption of Russian as a state language, and reintegration with the Slavic former Soviet states on a basis similar to the Russia-Belarus Union.

2. Center-right: Mr. Yuschenko has now joined the center-right national democrats, including Rukh and Ms. Tymoshenko's Fatherland Party. These entities form the basis of the anti-Kuchma movement. This has gained prominence since the Gongadze case became public and includes the Front for National Salvation, Ukraine Without President Kuchma, and the student movement For Truth. Mr. Yuschenko will attempt to unite these disparate forces into one "democratic bloc" for the March 2002 parliamentary election. Mr. Yuschenko has denied that this bloc will be opposed to anybody, but it is clear that its support will derive from those who are hostile to Mr. Kuchma and the oligarchs, and also to the Communists.

3. Oligarchic corporatists. The third group is the most amorphous and includes parties with names that do not reflect their programs or ideologies, such as the United Social Democrats, the Greens, the Democratic Union, Regions of Ukraine, Labor Ukraine and Yabluko. All of these voted with the Communists against Mr. Yuschenko. Although the oligarchs and President Kuchma officially support "reform" - particularly when dealing with Western governments and international financial institutions - they prefer a political-economic model that lies between the Soviet command-administrative system and a market economy, where business interests have a clientelistic and rent-seeking relationship with the authorities. This corporatist model implies dominance of the political sphere by means of controlling and manipulating the media, civil society and political parties.

* * *

It is not clear what form of government Ukraine will have leading up to the 2002 general election, but it will certainly be less pro-reform than the outgoing administration. While the non-left majority in the Parliament has been irrevocably broken, the electorate now faces a clear choice for 2002: Soviet-style reintegration, oligarchic corporatism, or pro-market policies.

Taras Kuzio is a visiting fellow at the Watson Institute for International Studies at Brown University. The article above originally appeared in the East Europe Daily Brief of Oxford Analytica; it is reprinted with permission from the author.

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