Blue &Yellow: Politics and Economics in Ukraine

Tymoshenko's desire for no new election may have been purely for political self-preservation, but the economic crisis certainly has shown why the political crisis must be resolved quickly. President Yushchenko believes that the internal Ukrainian market needs to be supported as the first move toward getting out of the crisis. His also concerned about exported oriented firms that have been hit hard by the economic crisis.   Meanwhile, the National Bank has once again devalued the hryvnia, the official exchange rate to the dollar is now 5.76 to 1. 

With the economy under dire straits, Tymoshenko and Yushchenko continue their political struggle. In Dzerkalo Tyznia, a recent piece noted how destructive this political brinkmanship is to the country. 

The general public was left out in the cold again: the NSDC never published its resolution. No one even took the trouble to explain the direction or objectives of the anti-crisis steps or what they would cost. It looks strange because after the NSDC meeting the President said that the anti-crisis measures would require “one colossal asset – the people’s trust” – which he called “the key factor of overcoming the crisis.” Is that the way the people’s trust should be gained?

The only concrete figure the public heard was disclosed by Prime Minister Yulia Tymoshenko: she said that 49 active laws and regulatory norms would have to be amended. She decided to put all draft bills into one basket – i.e. motion them in a single package. She must have shared Yushchenko’s suspicions that it would be “extremely difficult to get all political forces to support them.”

Both Yushchenko and Tymoshenko have been demonstrating a storm of “anti-crisis activity.” Yushchenko addressed the nation on TV and met with representatives of national and international mass media and the IMF, and his press service diligently rubber-stamped press releases. The tenor of this PR spurt could be found his utterance: “It is in the government’s exclusive competence to turn on the mechanism of support to the national economy.”

Tymoshenko also made a series of public appearances, addressing her compatriots and holding numerous consultative meetings with authoritative economists and bankers. After her meeting with IMF representatives on Monday, she said proudly that Ukraine had “practically completed talks with the IMF” and that an agreement on a multi-billion-dollar loan might be reached on Wednesday.

Nothing of the kind happened on Wednesday (according to some sources, the IMF experts were very much disappointed with a number of legislative innovations proposed by the government). All that the government showed the public was a package of 43 amendment bills. At a closer look, some of them have nothing to do with the financial crisis. The brief explanatory note does not say how the proposed amendments to the laws on melioration or thegeological service are supposed to lift the country out of the crisis.