Blue &Yellow: Politics and Economics in Ukraine

Prodan added that at the same time the administration expressed readiness to consider proposals from the protesters.

She also noted that the Tax Code could be sent from the parliament to the presidential administration no earlier than Friday evening, and preliminary conclusions would be ready only by Saturday morning. The conclusions on the Tax Code of the administration's group of experts will be ready only on Monday, she added.

Interfax-Ukraine writing about the changes to the tax code.The Yanukovych government has its first real political test as its tries to deal with the angry response from the public.

"There is a high probability that the code will be vetoed. But we will be able to talk about this after we consider the issues of the Tax Code on Thursday," Yanukovych said.

 President Yanukovych equivocating, but what is the problem with the tax code?

Economists cannot find justice in the new Tax Code either. According to the statement made by the Union of Economists of Ukraine (VSVE), none of their suggestions concerning the systemic taxation reform based on the principle of economic patriotism, fair distribution of tax load, and creation of the best imaginable conditions for the development of entrepreneurship, were reflected in the Tax Code passed by the parliament on November 19.

“VSVE emphasizes the high pro bability of grave negative social and economic consequences for the national economy in the event of enacting the present Code,” reads the statement. The VSVE scholars believe that such a crucial document as the Tax Code should have been adopted only after a serious independent nationwide scholarly consideration, at relevant conferences and roundtable debates, rather than after some obscure lobby talks and a parody of nationwide discussion.

From Den, discussing the proposed changes to the tax code. DT also analyzes the tax code situation, noting that the problem is not the changes itself, but whether the government will actually use its new powers fairly.

 

This isn't a bad outcome considering his erratic behavior over the years. He shouldn't have been re-elected in 2008, another poor decision by Yushchenko to support him.

Here is a snapshot of the local election results 2010 from Ukrainska Pravda and the second round of the presidential election 2010 (this map doesn't show the final result, but works for the purpose of this blog post).  Its a rough comparison  since the presidential election involved two individuals while the local elections involved political parties. However, I think that its fair to use the presidential election in comparing local elections results. It serves as a proxy for support for Regions and BYuT in February 2010, eight months ago.

The point is to show the shift in support in western and central  Ukraine from Tymoshenko to Regions or fringe parties. I think that the Ternopil election last year was an indicator of how the local elections would play out. Tymoshenko's party would be squeezed out of its strongholds and replace either by Regions or fake/fringe parties that have no change of receiving national support.

After his election a decade ago in Russia, it took Vladimir Putin his entire first term in office to accomplish what Yanukovych has undertaken in less than a year. Yanukovych has taken five steps to remove obstacles to the monopolization of power. The first to go were parliament, which has become a rubber stamp institution, followed by television whose oligarch owners rushed to prove their loyalty to the new regime. The third, on October 1, was Ukraine’s return to a presidential constitution and a month later the Party of Regions won a majority in local councils in a bitterly contested election.

These four steps were followed by a fifth, a coordinated attack on the main opposition force, the Fatherland (Batkivshchina) Party led by Yulia Tymoshenko. “October 31 will go down in history as the first day of an election without Yulia Tymoshenko,” observed Ukrayinska Pravda (November 1). Registration of clone, fake lists of Fatherland candidates removed Batkivshchina from two key strongholds, Lviv and Kyiv, while an “anti-corruption” campaign unveiled financial irregularities in the 2007-2010 Tymoshenko government that harmed her image.

The assessment by Taras Kuzio  for Eurasia Daily Monitor (Volume7, Issue 203- no link)  of the local elections neatly sums up the consolidation of power under Yanukovych. Many of the issues presented by Kuzio have been discussed on this blog, but not the next step for the president.

Ukrayinska Pravda analyst (September 24) Leshchenko positively portrayed the divisions within the Party of Regions suggesting “Maybe these will halt the final destruction of democracy in our state.” With Yanukovych having completed five stages in his political monopolization of Ukraine, the sixth –removal of oligarchs– could be his next target. The next two years will likely decide whether Ukraine becomes a Putin-style managed democracy without oligarchs or if the oligarchs fight back (EDM, September 22). 

Emphasis mine, Yanukovych heads into his first year as president with complete control over the political system. However, now comes the tough part, dealing with the oligarchs. Naturally, now that the local elections are over Ukraine will revamp its election legislation, but Regions denies there was electoral  fraud.

Lebedev, a billionaire who co-owns the airline Aeroflot and the Russian opposition newspaper Novaya Gazeta, said it would be wrong to link the two investigations against him in Russia and Ukraine. Nor would it be correct to blame Russia's prime minister, Vladimir Putin, he said.

Instead, he pointed to Ukraine's president, Viktor Yanukovych, a close ally of the Kremlin. He said Yanukovych had ordered in the tax police after taking offence at an article in this week's Evening Standard.

Hmm, a coordinated move by Kremlin and Kyiv against a perceived threat? Or just a big coincidence?

“Domestic and international election observation efforts, most notably those led by the widely respected domestic, non- partisan monitor OPORA, reported numerous procedural violations on election day,” the State Department said today in an e- mailed statement.

Ukrainian President Viktor Yanukovych’s Party of Regions received the most votes in the Oct. 31 elections held in 24 provinces and the republic of Crimea, according to an exit poll by the local office of GfK market research.

An excerpt from BusinessWeek's article on the local election results. Regions have won in every oblast, with Tymoshenko's party taken only 13.1% percent of the according to an exit poll from GfK. A strange election result for a party who did well in the last Rada election. Her party and its allies have called the elections rigged.

Roughly speaking, on a nationwide basis, exit polls show that the Party of Regions showed it commands the support of 35-40 percent of voters (the rough equivalent of first und support registered for President Yanukovych in the first election results from January 2010). While the Regions Party held on to its past levels of support, it made notable gains in Right Bank Central and Western Ukraine and emerged as the leading candidate for the mantle of Ukraine’s first pan-Ukrainian party capable of serious reach throughout the country. 

Adrian Karatnycky gives his post-mortem on the local election and its just as bad as the one he gave for the presidential election.For example, he notes that there were election irregularities for Tymoshenko's party, but dismisses the effect it had on the party's election fortunes.

This drop in support was further augmented by the unreported secret of these elections: the fact that Ms. Tymoshenko campaigned lightly for her slates in the municipal and regional elections and her central party apparat spent almost no money on billboards and advertising in the weeks leading up to the vote.

That choice, no doubt, was dictated by the limited impact of local legislatures on budgetary decision-making and policy, which are primarily determined now by the President and the government. But it was a choice that appears to have been consciously made with catastrophic results.

Emphasis mine, clearly Regions have an incentive to weaken Fatherland and it allies, but Karatnycky tries to argue that the party's decline is self-inflicted rather than a concerted effort by Regions. Karatnycky also makes the bizarre claim that President Yanukovych is a " founding father of the young Ukrainian state ", under such logic is Kravchuk, Kuchma, and Yushchchenko. Though technically, only Kravchuk actually founded an independent  Ukraine. 


Am I being picky? Probably, though the claim by Karatnycky that this not a descent into managed democracy is naive. Regions is interested in retaining and expanding its power. Perhaps BYuT would have done the same if Tymoshenko had won the presidential election, but she didn't. Instead Regions won and there is little to suggest the party is interested in maintaining a competitive democracy.