Blue &Yellow: Politics and Economics in Ukraine

Пані Богатирьова також наголосила, що позиція лідера Партії Регіонів Віктора Януковича щодо визнання незалежності Абхазії та Південної Осетії є одноосібною і не є колективним рішенням партії, яке може бути іншим.

Above is a statement by the secretary of the National Defense and Security Council Raisa Bohatirova concerning her party leader's, Viktor Yanukovich, recognition of Abkhazia and South Ossetia. She says that "it is not the collective decision of the party, there can be others". Raisa is in US to discuss the Georgian crisis and its implications for Ukraine. Raisa "often had been accused of her pro-presidential position". Now she has paid for going against the party leadership, today she was kicked out for the party.


Where shall she go now? Perhaps the new presidential party United Center? And who will follow her to her new party?

Tymoshenko government looks at the issue of Russia Federation in light of the recent Georgian crisis. Cabinet acknowledged the decree passed by Yushchenko. Minister of Defense said that they will be working with represenatives from the fleet on this issue. Tymoshenko may feel some pressure to answer critics and accusations by the Presidential secretariat over her silence during the war and accusations of"betraying national interest". 

Since the Russian invasion of Georgia there have been many articles running the same argument about renewed imperial ambition of Russia. Here is one such example by noted Ukraine scholar Taras Kuzio in the Kyiv Post.

Russia's imperialism in Georgia will also return support levels in Ukraine for NATO membership to their pre-Iraqi invasion levels when a third of Ukraine's population backed membership. Obtaining 51 percent in a referendum is easier to accomplish when your starting base is 33 percent, rather than 20 percent. Any attempt at repeating the Putin Doctrine in the Crimea would increase support in Ukraine for NATO membership to over a third.

However, former Ambassador to NATO Robert Hunter told Radio Free Europe that there is no chance of military conflict between Russia and Ukraine. According to the ambassador, 

I think people are watching the Georgia situation because it was attacked by the Russians. Most people here in the United States are not paying attention to Ukraine at all -- except in the context of the support here for countries in Central Europe who are democratizing and want to be part of Western institutions. If indeed the Russians were to do anything toward Ukraine, then the interest in it would rise instantly. But right now, from Ukraine's perspective, not being a center of American attention is probably a good sign.  

Two related articles from DT about the accusations levelled by the presidential secretariat on Tymoshenko. The third concerns the size of the presidential secretariat. I add it only because it points out how absurd it is that Ukraine has a secretariat with over 600 people working in it. First summarizes (in Ukrainian) the results of a poll asking respondents whether they believe she made a deal with Russia ahead of the next elections in return for keeping quiet on the Georgian crisis. 52.7% said it was election related conflict. between the two sides, Yushchenko and Tymoshenko. Only 10.4% believe the accusations.

The second article by Yulia Mostovaya discusses the accusations levelled by the secretariat. Mostovaya notes that ,

conversations between Ukrainian and Russian leaders, the lasting tradition has been to promise everything and to do nothing, or next to nothing. In fact, this was the main reason for the souring of relations between the two countries. Ukrainian leaders could never follow suit of their Kazakh counterparts who have always been firm in advancing their national interests, vocal in defining the “negotiation margin” and consistent in implementing the reached agreements.

Mostovaya presents a few reasons why Tymoshenko would want a deal, one reason being that,

a gas price that, in her opinion, should not rise more than by 25%-30% and exceed USD 230, given that the transit tariff remains unchanged (a tentative agreement thereon was reached before her vacation)

The accusations appear to be part of a black PR to discredit the PM before the presidential elections,

First, the Secretariat people are sure that the case of high treason is a long-term project that will, eventually, ruin Tymoshenko’s ratings. Viktor Yushchenko has to deactivate or weaken Tymoshenko as a primary presidential candidate.

Most probably, his spin doctors are planning to portray the head of state as a leader of anti-Russian forces and public opinion. In fact, they will be using a method of splitting the nation, akin to that applied by Yanukovych’s consultants in 2004

One interesting comment concerns the apparent weak oversight and control that the president has over his own secretariat

According to our sources in the Secretariat, Yushchenko did not know the contents of half of the censuring letters sent to Tymoshenko on his behalf. The scandal with the presidential decree on appointing Mykola Shvest governor of Dnipropetrovsk oblast, with a facsimile of the President’s signature was also most indicative of the situation in the Secretariat. The most recent in this chain of absurdities was the appointment of the Chief of Odessa Oblast SBU Division, of which SBU Chief Nalyvaichenko learnt from the Internet.

Picture from Ukrainian magazine the Week, putting into pictures the view by some that Ukraine will be under threat next by Russia.

This article from DT discusses a poll taken after the conflict began and asked respondents their take on the conflict. The poll results reflected the regional differences in attitude among Ukrainians. It alo showed that Ukrainians did not agree with Saakashvili's decision to invade in response to the shelling.

Appraising the steps taken by Moscow against Georgia, 44.4 percent of respondents called them “an aggression against a sovereign state” while 41.4 percent called them “a peacekeeping operation.” As we can see, two diametrically opposite opinions are shared almost fifty-fifty and differ territorially. Russia was called an aggressor by 72.9 percent of respondents in the west of the country, 62.5 percent in the Kyiv region, and 58.5 percent in the central parts of the country. At the same time, Russia’s military actions in Georgia were called “a peacekeeping operation” by 67.1 percent of respondents in the southern regions (an impressive 73.2 percent in Crimea) and 52.2 percent in the east. The figures partially prove that Ukrainian society is split and disprove some expert forecasts of possible political consolidation over the events in the Caucasus.

It is symptomatic that Russia looks like an aggressor in the eyes of 60 percent of respondents aged between 18 and 19 while 52.3 percent of respondents aged over 60 view it as a peacemaker.

Opinions about Georgia’s actions are quite interesting as well. On the one hand, 50.9 percent of respondents (74.6% in Crimea and 27.1% in the west) called the use of force against South Ossetia “an act of aggression”; 38.3 percent (64.9% in the west, 46.7% in the Kyiv region, and 44.5% in the central regions) believe that it was necessary for preserving the country’s territorial integrity.

On the other hand, very few respondents were positive about Georgian President Mikhail Saakashvili’s decision to bomb and shell the breakaway republic and bring troops there. Only 19.5 percent called it “a normal reaction to the firing attacks on Georgian villages from South Ossetia. Notably, this opinion is shared almost equally in all parts of Ukraine – from 22.5% in the center to 17.6% in the east. Quite unexpectedly, 57.4 percent of respondents (61.5% in the center, 60% in Kyiv, 58% in the west, 56.3% in the east, and 53.5% in the south) called the use of force against South Ossetia “an unjustified and overemotional reaction to Russian provocations.”

Another important detail from the article concerns support for joining NATO.

51.4 percent said they were “strongly against” it. The total figure – more than 63 percent – looks very impressive. So is the very insignificant number of undecided respondents – a mere 3.3 percent.

Another 12% are against joining NATO but not as strongly as the 51.4 . More interestingly,

As many as 47.1 percent of respondents acknowledge the probability of an armed conflict between Ukraine and Russia

Article about Ukraine, its main focus is about Ukraine and NATO. The author, James Sherr, asks what Ukraine would do if it didn't get into the alliance's MAP later this year or in 2009.
Interesting little nugget about how realistic are Ukraine's chances of opting for neutrality if there is no MAP

Will Ukraine’s neutrality be consistent with its eventual membership of the European Union? For the overwhelming majority of the country, the natural answer is ‘yes’. But do they understand that the old, simplistic notion, ‘NATO does security, the EU does economics’, no longer corresponds to reality

However, earlier in the article he discusses some of the major turning points in post-independence Ukraine.

In contrast, the Orange ideologists, particularly those of the presidential wing, have a strong national tradition, and most of them are convinced democrats. But they lack a state tradition and the managerial and professional instincts that accompany it. Their understanding of government is personalised rather than institutionalised, their inner circles of decision-making are inbred, and their public and personal interests intertwined rather than demarcated.

Who is he referring to in this piece? I didn't realize there were Orange ideologists, does he mean Baloha? My impression of the president and his men is that they lean toward strong presidential control with a weak parliament (quasi liberal authoritarian regime). You can read the rest here.

Here's a an article about the sources of inflation in the Ukrainian economy from Dzerkalo Tizhniz (not good at transliterating). They discuss a National Bank of Ukraine analysis about this, NBU writes that

during the last five years, 36% of total inflation was contributed by demand-pull inflation and 64% – by cost-push. This confirms the aforementioned information on the 35% share of demand-pull inflation in total inflation during the last 12 months.

Haven't read the NBU report, but found this article interesting to read because Ukraine expert and economist Anders Aslund argues that its the hryvnia pegged to the dollar. While NBU appears to blame structural problems in the economy, Aslund points to politics. According to him the NBU didn't change the exchange rate because

The NBU is subordinate to President Viktor Yushchenko, who, despit naming Tymoshenko as prime minister, seems more interested in harming her politically than in capping inflation.

Radio Free Liberty has a great story that illustrates some of the challenges facing Ukraine's quest for EU membership. A short excerpt from the article,

Geographically speaking, the issue is uncontroversial -- no one maintains that Ukraine is situated anywhere else than Europe. But politically, the definition would open the door for Ukraine to apply for EU membership, which critics say would be a step too far.

The current economic crisis may furher motivate the EU to avoid any promises and to keep the relationship at a an arm's length. Perhaps with the return of prosperity in the EU will come  an offer of membership to Ukraine.