Blue &Yellow: Politics and Economics in Ukraine

When former  President Yushchenko congratulated his 2004 foe as the legitimately elected president of Ukraine he also said that Yanukovych's first goal is to consolidate Ukraine. However,  President Yanukovych first move will not be state consolidation, but political consolidation. President Yanukovych already declared that a new coalition would be created soon. 

Він зазначив, що ця коаліція "буде збиратися під нового прем'єра, і вже з наступного тижня ми, швидше за все, вже побачимо цю фігуру.

He noted that the coalition "will be collected under a new prime minister, and already next week, we probably already see the shape. 

 Yanukovych is president of Ukraine, photo from BBC Ukraine. The man denied the presidency five years ago now has his prize.Yushchenko apparently skipped the ceremony along with Tymoshenko. President Yanukovych first decree was to appoint an old Kuchma hand as head of the presidential secretariat,  Sergey Levochkin. 

The prime minister ended her legal challenge, after finally seeing the writing on the wall. The legal challenge was the last piece of political theater in the election. It was an action the prime minister had implied in her address last week that would not be successful. Today she confirms that the legal challenge had no chance of overturning the election. 

“There is no sense” in continuing the hearing, Timoshenko said in the statement. “The court has refused to find out the truth and I wanted to stop this performance that has nothing in common with justice.” The Kiev-based court agreed to accept Timoshenko’s retraction and will not consider the case, said the court’s spokeswoman Maria Shvynko, adding that the court rejects Timoshenko’s accusation. 

Now Tymoshenko can turn her attention to salvaging her coalition, something that may also turn out to be futile.

 Tymoshenko's case is currently being heard in the Higher Administrative Court.  The court suspended the CEC election result, but Yanukovych can still take the oath of office. The notion that Yanukovych would keep Tymoshenko seems more far fetched now. Yanukovych would do better to get rid of her and install someone loyal (and dependent) on him.  

• A look at the Obama's administration stance on Ukraine. [RA]
• How Yushchenko helped Yanukovych win the presidency. [Taras Kuzio]
• Yanukovych won't keep Tymoshenko as prime minister. [For-UA]
• Shakhtar players denied access to Harrod's. [The Guardian]

The economy contracted by 15% in 2009 its worse performance since 1994 according to BusinesWeek. The IMF had forecast a 14% contraction in GDP. Reuters' article on the economic news offers one reason for the sharp contraction by Ukraine last year. 

Analysts have long said reliance on steel -- a legacy from the Soviet days -- dictates the fate of the economy and until structural reforms are introduced, the country will continue to swing with the price of metals.

"Steel is a particularly bad commodity from the credit perspective because every time there's a credit crunch, people stop buying cars and houses," said Commerzbank analyst Dmitry Sentchoukov.

Few believe President elect Viktor Yanukovich, backed by wealthy industrialist and steelmen from the eastern regions, would usher in a period of such fundamental reforms.

The last bit (emphasis mine)  might be true, but it depends on how the economy recovers this year and how much the oligarchs push for increase economic integration with the EU.  In Revolution in Orange ("The Ancien Regime", pg. 13) Anders Aslund argued that the impetus for economic reform was  that "creditworthiness [of Ukraine] had to be restored." In this case, Regions could embrace major reforms, if the economic remains dire. 

Yanukovych's WSJ article contained the kind of empty language expected by a politician trying to shake off his image as the Orange villain and appear more like statesman. 

Let me say here, a Yanukovych presidency is committed to the integration of European values in Ukraine. Ukraine should make use of its geopolitical advantages and become a bridge between Russia and the West. 

Statements like the excerpt above mean nothing, European values in Ukraine-- lofty and vague.  Or making a bridge between Russia and the anthropomorphic West, perhaps he refers to a gas bridge?  It was a completely bland piece of work designed to reassure skeptics about his intentions as president. 

Some excerpts via Ukrainska Pravda and BBC Ukraine of Tymoshenko's address to the public and my comments. She accuses her opponents of massive falsification, flying in the face of international observers who called the vote clean. Not what I'd expected, I thought she was going to concede, but not resign. Instead she's going with the legal challenge. 

Янукович - не наш Президент. І як би не розгорталися далі обставини, він ніколи не стане легітимно обраним Президентом України

--"Not our president" and not the legitimately elected president, that puts to rest what she she thinks on the election.

Прем’єр заявила, що «понад мільйон голосів» було сфальсифіковано по всій Україні.

І саме тому ми будемо діяти тільки в правовий спосіб і тільки у суді.

Я дуже добре знаю, так як і ви, якість роботи наших судів. Але в той же час моя відповідальність перед вами, перед країною зобов'язує мене боротися за відновлення справедливості. Не піти сьогодні до суду означає здати Україну криміналітету без бою.

Tymoshenko is pursuing a legal challenge of the results. Her number two has said that the government will not voluntarily resign. While BYuT continues to attack the validity of the election, Regions claims that the courts have rejected BYuT's complaints. 

• So Yanukovych received an uninspiring 48% of the vote. [Interfax-UA]
• Best Western hotel chain in Ukraine. [via Marketwatch]
•  Tymoshenko may go into opposition or try to remain in power. [BusinessWeek]
• FT article reminding us of  Yanukovych's ambiguous commitment to economic reform. [FT]

Unlike the 2004 presidential election, this time Yanukovych has been recognized as the winner by the U.S., Germany, among other states. Yanukovych wants Tymoshenko to resign, but I think he should be urging her to give up her legal challenge.

If Yanukovych wins, he will control the presidency and the Constitutional Court, but Tymoshenko will, in all likelihood, remain the prime minister. Their power struggle will likely continue — at least until parliamentary elections give one or the other an advantage in the parliament. But their incentives to cooperate over policy will also be greater than at present. 

 Yanukovych could accept Tymoshenko as prime minister out of political necessity. However, unlike Yushchenko, Yanukovych has a party of power in the Rada that may already have enough votes to form a working coalition. He also has major economic problems that need to be addressed, which may force him to put up with Tymoshenko as prime minister for a short time. Tymoshenko would pass the needed reforms, than be dismissed. 

It is very difficult to determine the extent to which the U.S. election observation missions and those from other Western countries actually deterred fraud in different elections. The answer to that question lies with persons who might have been planning to commit fraud, and they are obviously unlikely to volunteer such information. 

Plenty of news coverage on the election outcome, no surprise considering that the "villain" from the 2004 election won this time. Naturally, there is a need to re-evaluate Yanukovych now that he has won the presidential election. Adrian Karatnycky writes in the WSJ with this in mind. His line of thought follows that of Alexander Motyl that Yanukovych's win could lead to a more coherent political situation in Ukraine.  That's possible, but haven't we learned from the post-Orange victory predictions that we are terrible at making predictions.The Economist makes a sound conclusion concerning this election.

In any event, this election was not about geopolitics but about Ukraine’s own governance and economy. The choice of Mr Yanukovich as president would be neither a disaster nor a breakthrough for Ukraine’s oligarchic political system. He would inherit a country with weak institutions, a struggling economy and a disillusioned population. He may not be able to deal with those. But at this stage it is less important than having a clear winner.

 
Well,Yanukovych seems to be on his way to victory in the second round of the presidential election, above polls come from Pravda. The count isn't finished so Tymoshenko isn't finished. A high number of "against all" votes according to the exit polls. In all polls that number would effectively give Tymoshenko the lead (or Yanukovych) or do nothing if evenly distributed between the two, but I wonder how genuine those protests voters are?

•  Q&A to the Ukrainian election. [BBC]
• Final rally before the second round of the election. [Ukrainiana]
• One explanation why the national exit poll was off in the first round. [WaPo]

 It is arguably less important which candidate wins Sunday’s second round than that the poll produces a clean result without lengthy protests, enabling political stability to be quickly achieved. With an economy still tottering after shrinking 15 per cent last year, Ukraine must urgently get a stalled $16bn International Monetary Fund bail-out programme back on track.

The law on the election of the Ukrainian president does not foresee situations in which commission members representing one of the candidates are absent at the appointed time for the opening of polling stations or the vote count. In such situations, district election commissions are banned from opening polling stations or from starting to count the vote due to the absence of a quorum. The law passed by the Verkhovna Rada on February 3 foresees such a situation and ensures a mechanism for a guaranteed quorum when people are to vote, [and for when] election commissions are to sum up the result of the election," reads the statement.

• One survey gives its verdict on the second round. [RIA Novosti]
• Tihipko profile by Radio Free Europe/Radio Liberty. [RFE/RL]
• FSB admits to espionage incident. [For-UA]
• Both presidential candidates support EU trade agreement. [Bloomberg]

"The important thing is that this empty spot will not become Ukrainian president," said Tymoshenko during the 100-minute debate-turned-monologue. "And although he is absent, I can sense a smell in this studio. This is the smell of fear. I don't want a banal coward to become the next leader of our nation." 

Yanukovich's Regions Party earlier pushed through parliament an amendment to electoral rules that will scrap the requirement for a quorum of representatives of both contenders to approve the count at individual polling stations.