JOHN MARONE, KYIV
AN ECONOMY HELD HOSTAGE BY POLITICS
It’s no secret that Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko have not enjoyed good relations for a long time. But ever since the two politicians found themselves neck and neck in the stretch for the presidency, their simmering mutual antipathy has flared up into open hostility. And, unlike in the past, when the conflict was limited to the political arena, now it is being played out with serious economic consequences that will ultimately be felt by the voters whose loyalties are being fought over.
This week the Bloc of Yulia Tymoshenko (BYuT) and the traditionally pro-presidential Our Ukraine faction exchanged heated public rebukes, calling into question the future of their fragile pro-Western coalition.
“The tone which BYuT employs in its assessments of the Ukrainian president’s activities is intolerable and uncivilized,” reads a statement released by Our Ukraine.
The statement was in response to a speech given in parliament by BYuT mouthpiece Mykola Tomenko, who accused Yushchenko and his team, among other things, of blocking the government’s work and attempting to change the constitution to augment his own authority.
In a marked rise in the stakes, Tomenko dared the president to replace the Tymoshenko government with one from the pro-Russian opposition.
“He [Yushchenko] should have the courage to openly tell the Ukrainian people that he doesn’t trust this government,” Tomenko blared from the rostrum.
The so-called Orange coalition was formed after last September’s snap elections, which Yushchenko called to prevent former Prime Minister Viktor Yanukovych from muscling away his executive authority.
It was Yushchenko who had allowed Yanukovych, the villain of the country’s 2004 Orange Revolution, to return as prime minister in 2006, snubbing the candidacy of his co-revolutionary Tymoshenko.
Now, Tymoshenko is Mr. Yushchenko’s main rival for executive authority, although neither politician has been willing to publicly reveal their rivalry to Orange voters.
Instead, each has attempted to quietly undermine the other’s base of support while publicly playing up to voters’ concerns in the run up to next year’s presidential poll.
But as public popularity in Ukraine is more intertwined with economics than ever before, the closet conflict of Tymoshenko and Yushchenko threatens to damage the post-revolution prosperity that has enabled them to pursue their pro-Western platforms.
Always the populist, Tymoshenko has wasted no time in demonstrating largess to Ukrainian voters since returning to office in late December.
One of her first moves as premier was to announce that the government would compensate millions of depositors who had their savings in the state Savings Bank devalued during the break-up of the Soviet Union.
In doing so, the Tymoshenko government further aggravated the double-digit inflation facing the country for the second year in a row.
More recently, the Cabinet of Ministers agreed 25-percent annual wage increases over the next two years with the nation’s trade unions.
In an obvious bid for voter support, Tymoshenko signed the agreement herself.
For its part, Yushchenko’s Presidential Secretariat has not missed its chance to portray Tymoshenko’s social payments in a negative light.
Although Ukrainians have overwhelmingly welcomed the government’s generosity, they are also keenly aware of seemingly never-ending rises in the price of food and housing.
“The prime minister’s promises to completely tame inflation within five or six months look too optimistic. In fact, it would be more accurate to describe them as populist,” Presidential Secretariat chief Viktor Baloga was quoted by his press service as saying on April 15.
Painfully aware of Tymoshenko’s increasing voter support in the last two parliamentary polls – largely at the expense of his own party, Yushchenko allowed her to retake control of the government in the hope of blaming her for expected economic difficulties.
Tymoshenko not only inherited relentless inflation from the Yanukovych government but higher and higher gas prices exacted by authorities in Moscow, with whom she has continually butted heads.
That’s why Baloga has stopped short of calling for the government’s dismissal, instead only demanding the resignation of Tymoshenko’s economic team.
“The current government must work at least another five or six months in order to fulfill all the public promises made by the premier while doing something about the runaway inflation in the meantime,” Baloga announced on April 16.
“Ms. Tymoshenko is not going to be able to hide her head in the sand, pretending that she has nothing to do with rising inflation, skyrocketing prices and uncertainty over gas supplies for next year,” he added.
Indeed, the president’s team wants to let Tymoshenko hang herself with her own rope, but they are not opposed to kicking the stool out from underneath her for good measure.
Tymoshenko fully realized that financing of her public generosity had to come from somewhere. And what could be better than killing two political birds with one populist stone?
Already during her first stint as prime minister in 2005, Tymoshenko had earned a reputation as an anti-corruption fighter. In particular, she spearheaded the state’s return of a lucrative steel mill, Krivyrizhstal, which had been purchased for a fraction of its price during a controversial privatization deal, reselling it for a whopping $4 billion more.
In her second tour as premier, Tymoshenko has also used the courts to overturn the questionable sell-off of state assets, together with promulgating a bold privatization plan.
But President Yushchenko has already kicked the stool out from underneath her.
Starting on April 11, he suspended the government’s privatization plan and prevented the Cabinet from shaking up the country’s privatization team – holdovers from the government of Viktor Yanukovych.
In what appears to be a transgression of his executive authority reminiscent of the kind of tactics used against Yushchenko by Yanukovych, the president has effectively prevented Tymoshenko from paying for her popularity.
Tymoshenko’s right-hand man, Oleksandr Turchynov was quick to condemn the president’s latest tactics.
“Unfortunately, a series of decrees which completely block honest and transparent privatizations in Ukraine have recently been signed. I believe that, first of all, this is an example of abuse of office and, second of all, of an aggressive policy directed at the destruction of the country’s budget for this year,” Turchynov was quoted as saying by his press service.
Regardless of how one characterizes the recent moves by Tymoshenko and Yushchenko, it’s clear that they are not in the interest of the country’s economy, which could remain a hostage of its politics until the next presidential election.
John Marone, a columnist of Eurasian Home website, Kyiv, Ukraine
April 18, 2008
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