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Ukrainian Hangover

by soj Fri Sep 9th, 2005 at 05:41:51 AM EST

bumped by Jerome in view of the new developments, i.e. the sacking by President Yuschenko of his cabinet, starting with Prime Minister Yulia Tymoshenko. See the short article added below the fold, and Soj's perceptive comments, as usual 2 days before everybody else...

It looks like the predicted hangover after the big party in Ukraine last December has finally hit home.

The Ukrainian Secretary of State, Oleksandr Zinchenko, resigned on September 3, saying that corruption was now "even worse" than during the previous reign of Leonid Kuchma:

Zinchenko accused Petro Poroshenko, the head of Ukraine's Security and Defense Council, of being one of the most corrupt members of the government. He also criticized Oleksandr Tretyakov, a top aide to Yushchenko, and Mykola Martynenko, who heads the pro-presidential faction in parliament.

Poroshenko attended the news conference, which was broadcast live, and stood in the back frowning as Zinchenko spoke. When Zinchenko completed his prepared statement, lengthy applause broke out in the room.

update by Jerome

Yushchenko sacks government

President Viktor Yushchenko fired the government of Yulia Tymoshenko and dismissed National Security and Defense Council Secretary Petro Poroshenko today, opting for a radical solution to a long-simmering conflict in the power camp.

Speaking at an urgent press conference, Yushchenko said he could no longer act as a "peacekeeper" between his wrangling allies while the Ukrainian economy was slowing down and there was no end in sight to the political bickering.

"We are witnessing a paradox - many new faces have come to power, but the face of power has not changed. Ukraine is again being criticized for corruption and shadowy economic processes," Yushchenko said.

The president appointed his long-time and reform-minded ally, Yuriy Yekhanurov, as acting prime minister and ordered him to form a new government.

Yekhanurov, 57, is a moderate and neutral figure with extensive political experience. As chairman of the State Property Fund in 1994-97, he pioneered Ukraine's mass privatization program. He then briefly served as economy minister and head of the State Committee for Entrepreneurship before becoming first deputy prime minister in the newly appointed government of Viktor Yushchenko in December 1999. He was elected to parliament on the Yushchenko party's ticket in March 2002 and, after Yushchenko won the presidential elections last December, was appointed to serve as head of the Dnipropetrovsk regional administration.

end update

I don't know what's more ominous, that Zinchenko is right or that ordinary Ukrainians broke out into unscripted applause for his statements.

Ukrainian politics is super difficult to understand from a more western point of view because there aren't any "angels", just varying degrees of corruption and inbreeding. Zinchenko used to be a close ally of Viktor Medvechuk, who was a Kuchma darling, but later aligned himself with the rising Yushchenko-Tymoshenko axis in the battle royale last winter.

Zinchenko's resignation was so serious that President Yushchenko had to cancel a visit to Poland planned for this week to handle the crisis. As far as I can tell, Yuschenko hasn't spoken publically about the situation but that won't last too long.

Zinchenko's resignation is the first among the "super team" that won the hearts and minds of the west to the Orange Revolution, with its Pora backbone, that wants to effect similar changes in Azerbaijan and Belarus. Oddly enough, the color orange was chosen because all the other primary colors except for purple were already taken.

It looks like Zinchenko's axe to grind is with Petro Poroshenko and Olexander Tretyakov. According to the FT this resignation is symptomatic of a fault line between Yushchenko and his media favorite PM Tymoshenko, who are building separate alliances with Poroshenko in Yushchenko's camp.

As odd as things are in Ukraine, the way the reports are coming in, it looks like Tymoshenko is portraying HER allies as the more "pure" ones and that Yuschenko's crew are the ones trying to get in on the lucrative privatization deals and control of key government ministries. Poroshenko is an ally of Boris Berezovsky, whom you may have remembered me writing about when Yushchenko hired him earlier this year.

So to sum it up - in countries like Ukraine, when they become "democratic", there is a strong urge to plunder state industries and sell them off to well-connected oligarchs. The other key industries get grabbed so that contracts can go to associates. Yushchenko hired Berezovsky to be his "investment" guy to lure in Russians to buy off some state companies. At first it looked like Yushchenko was going to sell the whole lock stock and barrel until western investors got jittery that the situation stank just a little too much of cronyism. So Yushchenko backed down. I might add here Tymoshenko has recently "un-sold" a state-owned company and got a tongue lashing from Yushchenko for doing it.

Poroshenko is quite good buddies with Berezovsky and before Tymoshenko was elected Prime Minister, it looked like perhaps Poroshenko might have won. And if Tymoshenko resigns or is forced to resign, he's most likely next in line. So Zinchenko has been pushing on Yushchenko to reign in his wheeler dealers' corruption and felt like resigning was the only way to get everyone's attention. I might add here that Poroshenko has a tight grip on the media in Ukraine and has sold a lot of it to his Russian capitalist buddies already.

Tymoshenko won her position because she was a crowd favorite and certainly the most telegenic of all these old Communist-era fogies. Meanwhile corruption remains endemic throughout the Ukraine and from what I can gather, little has changed since the Orange revolution except for a few cosmetic changes. Sigh...


for me this highlights a complex truth that is a recurring discussion in my family (the Indian side, anyway.)

Take two monster countries, population and size wise, India and China. Make one a democracy and the other an authoritarian state.

50-odd years later, what are the differences? Economically? Human Rights? "Development?"

Various members of the family (born trouble makers, the lot of them... ;-)  ) will choose democracy every time, knowing that they are not the types to doffr the cap and corrupt their way to the top of a communist party...

But at the same time, there's an enduring sense that democracy doesn't address all the challenges of development and where institutions are missing, things can go very wrong indeed.

</late night musing>

by Metatone (metatone [a|t] gmail (dot) com) on Wed Sep 7th, 2005 at 06:39:43 PM EST
Yulia is a bit too populist for many but I like her because she seems to be the straightest shooter among all of them.  I think she is much less corrupt than Yuschenko and therefore feels freer to say what she means.  Of course, this lack of diplomacy rankles a lot of people but it is exactly what this place needs.  As capitalism goes here, many people are losing faith in it because of the endemic corruption.  If they could clean it up, capitalism may yet be saved here and show itself a force for good.  However, Yuschenko screwed up big time in letting Tymoshenko go.  He did it because he had to.  Why?  Because Poroshenko knows all the skeletons in Yuschenko's closet and has him by the balls.  It will be interesting to see how it turns out but if Tymoshenko is not back in, Yuschenko is a lame duck from no until the next presidential election because he will lose in a big way in March when the next parliamentary elections are held.
by lgrooney (kns@kns.net) on Thu Sep 8th, 2005 at 10:25:10 AM EST
From IHT article, "Ukraine President fres his cabinet":


At the heart of the internal divisions - and evidently the source of the accusations of corruption - have been the government's efforts to review some of the dubious privatizations that took place during Kuchma's presidency. Tymoshenko, the prime minister, had advocated reviewing dozens of privatization deals, at times contradicting Yushchenko's more modest goals to review only some of them.(...)

It remains to be seen whether Yushchenko's action will staunch a slippage of popular support among Ukrainians, whose enthusiasm for his democratic, market-oriented changes appears to have diminished because of inflation and signs of an economic slowdown, as well as the government's infighting.

It is not even certain that the Parliament, fractured into blocs led by many of those dismissed Thursday, will confirm Yekhanurov as prime minister or the cabinet he forms.

Tymoshenko, who leads her own faction in the Parliament, did not immediately comment on her dismissal, but aides said she would hold a news conference in Kiev on Friday.

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia

by whataboutbob on Fri Sep 9th, 2005 at 05:57:32 AM EST
Yep, it seems like Tymoshenko (who, BTW, is not a communist holdover like soj implied - she is an oligarch newcomer) was the cleaner, and ended up as the big loser of the powerplay that gathered steam with the exposure of someone in the other camp.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Sep 9th, 2005 at 06:15:09 AM EST
[ Parent ]
Nosemonkey's top post is about this too, with a number of good links, if you want to dig deeper on the issue:


"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia

by whataboutbob on Fri Sep 9th, 2005 at 07:29:35 AM EST
An here's a good one: Orange Ukraine:


"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia

by whataboutbob on Fri Sep 9th, 2005 at 07:32:55 AM EST
[ Parent ]
This government crisis has not come out of the blue. Since the December 2004 "Orange Revolution" brought a pro-Western regime to power, Ukraine's economic, social and political situation has rapidly deteriorated. The three main reasons for that are a fierce power struggle within the new regime, accelerated corruption and the gross mismanagement of the country and its economy. From the very beginning, Timoshenko tried to wrest control of the country from Yushchenko. Timoshenko and Yushchenko each supported two competing and uncompromising groups of oligarchs, which exacerbated the internal power struggle that preoccupied government officials and led them to neglect the economy. Timoshenko's administrative measures to regulate the economy worsened the situation, as did the ongoing energy crisis brought about by her attacks against Russian and other companies -- such as TNK-BP, part of the BP energy empire -- that supplied Ukraine with Russian oil and gas. On top of all this, Ukraine's relations with Russia were quickly spoiled, and promised aid from the United States and other Western countries -- which are disappointed with Kiev's violation of market economy rules -- has not come.

Thus, the new regime found itself increasingly unpopular domestically, with many of its recent supporters -- those who helped the "Orange Revolution" happen -- growing angry with Kiev's erratic policies. The parliamentary elections coming in spring 2006 have added an element of urgency to resolving the ongoing crisis. Yushchenko had wanted to dismiss Timoshenko for a long time but feared such a move would break up the regime. However, after Timoshenko refused to go to the parliamentary elections as part of Yushchenko's "Our Ukraine" coalition and initiated a corruption investigation against Yushchenko's main supporter Poroshenko (also called "Yushchenko's wallet," as he financed the president's campaigns), Yushchenko was left with no choice but to dismiss the prime minister.

However, dismissing Timoshenko and her Cabinet came with a heavy price: Trying to distance himself from the high-flying charges of corruption, Yushchenko had to part with Poroshenko as well; Poroshenko tendered his resignation, and Yushchenko accepted it. Immediately, the Ukrainian Parliament deprived Poroshenko of membership status, and he could well end up behind bars.

The government crisis is in full swing and far from resolution. Yushchenko seems to be losing support in Kiev; his appointing Yuri Ekhanurov -- who is an ethnic Buryat, not a Ukrainian -- from Yushchenko's home city of Dnepropetrovsk, as new prime minister indicates Yushchenko is seeking support from his home clan. However, the Dnepropetrovsk clan itself is sharply divided; Yushchenko's foes, Timoshenko and former Ukrainian President Leonid Kuchma also belong to that clan and enjoy support from large segments of the clan.

by Greco on Fri Sep 9th, 2005 at 10:58:49 AM EST

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