[Ohio UZO News] Ukraine: FT(2); WoE(2); EDM

[Deychak, Orest]

Financial Times 

www.ft.com

Survival in face of mounting troubles

By Stefan Wagstyl and Roman Olearchyk 

Published: May 18 2009 

Even by Ukrainian standards, life this year has become extremely difficult for the country's political leaders.

Not only are they having to cope with Kiev's perennial domestic turmoil, natural gas disputes with Moscow, and the general challenges of running a sprawling country of 46m people wedged between two powerful neighbours in the form of Russia and the European Union. They must also now manage a global economic crisis that has hit Ukraine harder than any other European nation.

So big are Kiev's difficulties that it is a wonder the country is not under greater strains than it actually is. Even with gross domestic product likely to fall 10 per cent this year, Ukraine is not on the verge of financial collapse - at least, not yet. Nor have its political institutions ceased to function, despite deadlock between the three top leaders - president Viktor Yushchenko, Yulia Tymoshenko, the prime minister, and Viktor Yanukovich, who heads the parliamentary opposition.

Ukraine has been saved by the timely intervention of international financial institutions, headed by the International Monetary Fund, which last October assembled a $16.4bn rescue package, and by the survival instincts of its political leaders and its population. The leaders have repeatedly pulled back from the brink, as for example, in the recent stand-off between Mr Yushchenko and Ms Tymoshenko over control of the national gas company in which armed security services officials were deployed. It could have ended in bloodshed but somehow Ukraine avoided disaster.

Meanwhile, ordinary Ukrainians, having endured many difficulties since their country emerged from the Soviet Union, seem to have accepted the latest twists of fate with remarkable calm. Crisis-linked protests have been a pale shadow of much larger demonstrations further west - in Greece and France, for example. Many Ukrainians are bitterly disappointed that the 2004 Orange Revolution, which propelled the pro-western Mr Yushchenko to power, has not brought greater political stability and accountability. They are upset that a long period of unprecedented credit-fuelled economic growth has come to a dramatic end, that unemployment has soared and that pay arrears are mounting. But they are not pouring into Kiev to tear down the railings.

That is no reason for complacency. As Igor Burakovsky, of the Institute of Economic Studies and Policy Consulting, says: "We have lots of uncertainty about how Ukraine will get out of this deep economic recession. The fierce political infighting is not helping to produce a consolidated effort to handle all these deep challenges."

The political conflicts date back to the Orange Revolution, which left Ukraine with a revised constitution that transferred powers from the presidency to parliament but left the division of authority unclear. Having been through one presidential and two parliamentary elections since late 2004, the warring leaders are shaping up for another presidential poll, which will be held this year or early in 2010.

Mr Yushchenko is the most pro-western figure, having campaigned for membership of Nato as well as the European Union. Mr Yanukovich is loosely seen as Russia-oriented because he represents Russian-speaking eastern Ukraine. But he is strongly backed by the region's industrialists, who are keen to have good relations with Moscow, without letting bigger Russian competition challenge their positions in Ukraine. Ms Tymoshenko has courted both the west and Moscow and has recently won some support from Vladimir Putin, the Russian prime minister. But none of the three is looking to subjugate Kiev to Moscow and all broadly back closer ties with the EU. They, and the big business chiefs who surround them, are fighting less over policy than power.

Even when the economy was doing well, these conflicts had subverted efficient decision-making and slowed down reforms, such as the laws needed for Ukraine's entry into the World Trade Organisation. But with Ukraine plunging into recession, the dangers are much greater.

The country entered the economic crisis with a huge burden of corporate foreign debt, which threatened to overwhelm Kiev when the global credit crunch hit hard last autumn. Ukraine quickly brought in the IMF. The programme was delayed amid arguments over budget management, but these were resolved earlier this month with an agreement on a 4 per cent of GDP budget deficit target.

The economy has reacted with unexpected speed to the external shock of collapsing demand for the country's main exports of steel and chemicals, and the internal blow of plunging property prices. Companies slashed costs, including payrolls, and imports plunged, helped by a rapid 40 per cent drop in the hryvnia last fall. A current account balance which doubled to nearly 7 per cent of GDP in 2008 has shrunk, and could turn slightly positive this year.

However, the combination of economic and financial distress has put pressure on banks. Following stress checks on the largest banks, the authorities are nationalizing five of the top 20 and two other institutions, all locally-owned. Foreign banks, which own about 40 per cent of the sector by assets, have agreed in principle to refinance their subsidiaries with assistance from the European Bank for Reconstruction and Development and other international institutions. But, with bad debts mounting, it is a sweat. Sweden's Swedbank this month announced an unexpected group-wide loss for the first quarter, including big write-downs for its Ukrainian subsidiary.

Oleksandr Shlapak, a presidential economic adviser, says he sees some signs of recovery with the currency decline assisting exports and a big grain harvest in view. In the financial sector, the stress has been eased by the recent upswing in global markets which has helped raise Ukrainian stocks by over 100 per cent since their mid-March lows. But few people are calling the end of the recession or even the beginning of the end.

Internationally, Ukraine has failed to make progress with is bid to join the European Union and Nato. But it has secured from Brussels increased co-operation through the newly launched Eastern Partnership, and is negotiating free trade. Mr Yushchenko has forecast a deal within a year.

But, Ukraine's external political position remains tense. Russia last year underlined its claims to primacy in the former Soviet Union by imposing its will militarily on Georgia and forcing the west to delay plans for bringing Georgia and Ukraine into Nato. Moscow also rattled its sabre over Crimea, reminding Kiev it was in no mood to pull its fleet out of the port of Sevastopol where it has a lease until 2017.

To complicate life for Kiev, the US, a traditional ally of Ukraine, seems less inclined to involve itself deeply in the region than before. How much ground, if any, president Barack Obama, may concede to Moscow remains to be seen. But, with his main foreign policy interests lying elsewhere in the world, the former Soviet Union will not be a priority.

The international tensions in the region were compounded by the winter gas dispute, which saw supplies to Ukraine and some eastern EU states cut for two weeks. While Kiev and Moscow each blamed the other for the failure to reach agreement earlier, the effect was to remind Ukraine - and the EU - of Russia's readiness to turn off the tap. Ukrainians, with large domestic reserves did not go cold, but the turmoil highlighted the country's strategic insecurity. With arguments continuing over the role of intermediaries in the trade, the multi-billion-dollar gas business remains murky and unpredictable - with murky and unpredictable consequences for Ukrainian politics.

Financial Times

Calm election looks unlikely

By Roman Olearchyk 

Published: May 18 2009 

Ukraine is set for further twists in its endless political saga, as the country heads into a fourth significant election in six years. Voters will choose a president for the first time since the Orange Revolution of 2004, when protesters reversed a rigged election and propelled the pro-western Viktor Yushchenko to power over Viktor Yanukovich, a Moscow-backed candidate.

It is not clear whether the presidential vote will be held this autumn or in January 2010. Ukraine's constitutional court on May 13 cancelled a parliamentary resolution that would have cut Mr Yushchenko's term short. It is also uncertain whether lawmakers will change Ukraine's constitution before the vote, to shift more presidential powers to the legislature. Nevertheless, the campaign is well underway, and the stage is set for another cut-throat battle.

"The situation will be very tense. All signs suggest the next election will be very ruthless," says Oleksandr Chernenko, director of the Committee of Ukrainian Voters, an election watchdog.

Polls show the race is wide open, in part because a growing number of voters are fed up with the three candidates whose relentless wrestling matches have dominated Ukrainian politics since 2004. With state institutions and political culture still weak, "there could be rampant violations that could, as in past elections, test Ukraine's ability to hold a democratic vote," adds Mr Chernenko.

Political groups could abuse influence over television and state institutions to sway results, and corrupt courts could be utilised to cancel voting in districts where opponents show strong results, he fears.

Mr Yushchenko was once seen as a revolutionary hero but is now thought of as a lame duck. Polls give him little chance, with less than 5 per cent support. Mr Yushchenko's rival during the Orange Revolution, Mr Yanukovich, has a strong chance with about 20 per cent support. But he is neck-and-neck with Yulia Tymoshenko, the current prime minister.

A former ally of Mr Yushchenko, she vows to balance a pro-western policy with harmonised relations with Russia. Backed by Ukraine's industrial east, Mr Yanukovich supports EU but not Nato membership.

Squeezed by recession, citizens really want improved living standards and a fresh face in politics. Recent polls suggest they may have found one in 34-year-old Arseniy Yatseniuk, a former central bank chief, economy and foreign minister. Polls show he is catching up with the top contenders, with about 15 per cent support.

Analysts attribute Mr Yatseniuk's popularity surge to positive television coverage, courtesy of several Ukrainian billionaires. Experts, however, question his ability to handle the balancing act of being Ukraine's leader.

The election, and its outcome, will test the ability of Kiev's political elite to make their country's domestic and foreign policy more coherent, according to Yevhen Bystrytsky, executive director of the Soros Foundation in Ukraine.

"Will Ukraine remain locked up in rivalries, with the political fiefdoms jousting for power? Or will enough consensus materialise to make economic reforms and a civic society gains top priority? We see some light, but no way out of the tunnel yet and no clear dedication from top candidates," he says. 

Window on Eurasia: Moscow Views Ukraine as 'Failed State,' Ripe for Seizure, Shcherbak Says

 

Paul Goble

 

            Vienna, May 21 - Yuri Shcherbak, Kyiv's former ambassador in Washington, says that some Russian leaders are actively considering the possibility of seizing all or part of Ukraine and are preparing public opinion in Eurasia and the West for such a move by pushing the notion that Ukraine has become "a failed state."

 

            In a lengthy article in today's Kyiv newspaper, "Den'," Shcherbak says that "aggressive conversations relative to Ukraine and the possible dividing up of its territory are being conducted" now in Moscow by a variety of Russian nationalist politicians and analysts (www.day.kiev.ua/274238/274238 and www.day.kiev.ua/274251/).   

 

            Among the people he names are the followers of Konstantin Zatulin, the first deputy head of the Duma committee on compatriots and director of the Institute of CIS Countries, Aleksandr Prokhanov, the novelist and "Zavtra" commentator, and Aleksandr Dugin, the leader of the Eurasian Movement.

 

            And while these individuals are notorious for their openly imperialistic views, Shcherbak says that he is convinced that "the idea of the division of Ukraine into parts is completely seriously being worked out at various levels of the powers that be in Russia." And he reminds that it was not so long ago that Bolshevik "fantasies" informed Moscow's "bloody reality."

 

            Moreover, he adds, many Russians took note, even if few in the West did, of Russian Prime Minister Vladimir Putin's comments at the Bucharest summit when he burst out: "Ukraine is not a state! What is Ukraine? One part of it is Eastern Europe, but another - and a very large part - was given by us!"

 

            Such statements, the former Ukrainian diplomat warns, "are called in military language the ideological-propagandistic preparation of a future operation for the seizure of the territory of a sovereign state."  And like most such efforts, they rely on a mix of facts and fictions in order to appear plausible to the greatest number of people.

 

            The idea that Ukraine is a "failed" state, he continues, is simply not true.  According to one recent international ranking, neither Ukraine nor Russia falls in the category of a failed or failing state, but Ukraine's obvious problems combined with Moscow's vastly more powerful propaganda effort has allowed Russia to put Ukraine in that box.

 

            Indeed, two articles by Russians have appeared in the last 24 hours that appear to provide evidence of the Ukrainian ambassador's point.  In one, Andrey Stavitsky pointedly asks "has the sentence already been returned" on Ukraine in the current economic crisis? And will that entity thus "disappear as a state?" (odnarodyna.ru/articles/6/666.html).

 

            And Konstantin Zatulin yesterday wrote that Moscow must view the Russian diaspora in Ukraine and elsewhere as an ally, "in the same rank with the army, the fleet and the Church," thus making a direct appeal for Russia to act before ethnic Russians in Ukraine disappear through assimilation (www.russkie.org/index.php?module=fullitem&id=15609).

 

            Many in Ukraine, the West and even in Russia will be inclined to dismiss Shcherbak's article as an overreaction to overheated Russian nationalist commentaries in Moscow. One very much hopes that such a dismissal is appropriate, but unfortunately, there are increasing indications that at least some in the Russian government are actually thinking about partition.

 

            In the wake of Moscow's invasion of Georgia and the West's failure to take tough action to punish the Russian government for this breach of international law, more and more people in the Russian Federation are thinking about the possibility of redrawing borders in the post-Soviet space.

 

            An example of that is provided by Mikhail Chernov, the secretary of the Movement for a Single Ossetia which wants that nation to unite under the aegis of the Russian Federation, in an interview he gave to the Israeli journalist Avraam Shmulyevich that was posted online in Russia on Tuesday (www.apn.ru/publications/article21616.htm).

 

            In the course of the wide-ranging interview, Chernov suggested that incautious actions by Georgia's Mikheil Saakashvili could again lead to war and to the Russian conquest and dismemberment of that Caucasus republic. Indeed, he suggested that such an event could lead to further redrawing of the borders in the region.

 

            Asked whether Russia might be "playing with fire" if it pushes for further border changes, Chernov replied that "it is impossible to stop this process" and that if Russia wants "to survive," Moscow must have "its own projects for the redrawing" of the map of the world before others can achieve their goal of "the destruction of the Russian state as a single whole." 

 

Window on Eurasia: Crimean Tatars Say Stalin's Deportation of Their Nation 'Continues'

 

Paul Goble

 

            Vienna, May 20 - Beginning 65 years ago this week, Stalin deported more than 200,000 Crimean Tatars to Siberia and Central Asia accusing the entire nation of collaboration with the Nazis. But even though many of them have been now returned, most believe that the many unresolved problems their community faces mean that their nation's deportation continues.

            "Even their children, who were born in Crimea," those who managed to survive Stalin's persecutions say, "remain de facto deported as well since up to now their rights have not been fully restored and neither they nor their parents and grandparents have been formally rehabilitated" (islam.com.ua/articles/actuality/reviews/445/).

            And the lack of resolution on that point, Refat Chubarov, the first deputy head of the mejlis of the Crimean Tatar people says, is "the greatest problem which is slowing the resolution of all the other problems" that nation faces, including questions involving land, language, education, culture and religion.

            Over the course of three days in May 1944, on orders from Soviet dictator Joseph Stalin, units of the Red Army and forces of the NKVD deported approximately 190,000 Crimean Tatars from their homeland. To their number were added a little later Crimean Tatars who were fighting in the ranks of the Red Army. They were deported on their return from service.

            Of those deported, between 25 percent (the government figure) and 46 percent (that of the National Movement of the Crimean Tatar People) died, as a result of the inhuman conditions under which they were forced to live and the brutality of the Soviet officials who dealt with what these officials viewed as "enemies of the people."

            Beginning almost immediately upon their arrival at their place of exile, Crimean Tatars launched their struggle for return. Sometimes this took dramatic and at other times tragic forms.  As a result, many activists were thrown into Soviet prisons, where they languished for decades, or even driven to suicide.

            Only in Gorbachev's time were the Crimean Tatars able to begin to return to their native land, but obstacles put up first by the Soviet government and then by the Ukrainian one mean that there are still some 60,000 to 100,000 Crimean Tatars living in the places to which they were deported.

            But, according to their leaders, Vladimir Pritula writes on the Islam.com.ua portal this week, "the overwhelming majority of the 270,000 [Crimean Tatars] who have returned or even have been born in Crimea consider that the deportation [begun by Stalin 65 years ago] continues to this day for the entire Crimean Tatar people." 
            Crimean Tatar historian Gulnara Bekirova told Pritula that "such a prolonged deportation has destroyed practically all the nation's infrastructure-theaters, newspapers, schools, universities, scientific institutions, a large part of the archives, and religious structures were liquidated and destroyed."

            Moreover, she says, besides this and "democratic losses," what has been equally important is "the moral aspect" of the situation, "the continuing denigration of the entire Crimean Tatar people ... and also the "ethno-cultural aspect - the erosion of Crimean Tatar culture and language and the almost complete destruction of Crimean toponymy."

And despite almost two decades after having returned, the Crimean Tatars have not been able to make up any of these losses.  For most of the time, they have not been permitted to declare their nationality in official documents.  And what is especially serious for the future, they have not been able to reestablish a network of native language schools.

As a result of the deportation, Pritula notes, "hundreds of Crimean Tatar schools were closed.  Now there are only 15 schools (out of 650) on the peninsula offering any instruction in Crimean Tatar, and of those, 13 offer it only in the first three grades. As a result, Crimean Tatar educator Safure Kodzhametova says, younger Crimean Tatars do not know their language.

Equally serious have been the efforts by Ukrainian and ethnic Russian officials there to prevent the Crimean Tatars from rebuilding their Islamic institutions.  Mufti Emirali haji Ablayev says that the government has blocked the construction of traditional mosques even though it has allowed non-traditional Muslim groups to operate.

The mufti, who heads the Muslim Spiritual Directorate of Muslims of the Crimea, says that it is his view that the authorities have taken these steps because they want to play up religious divisions within the Crimean Tatars in order to weaken the community relative to the Slavic majority there. 
            More familiar to outsiders are the fights between returning Crimean Tatars, on the one hand, and Russians and Ukrainians, on the other, for control of land.  Most of the repatriants were former urban residents, but they have been pushed into rural areas because Russians and Ukrainians have taken over their properties in towns and cities.

For all these reasons an, although it is seldom commented upon, "land for the Crimean Tatars is more than simply a piece of ground," Pristula notes. It is at the core of who and what the nation is and whether it will have the resources necessary to survive. Crimean Tatars see the land of their ancestors not just as personal property but as "part of the culture of their people."

But as important as land is, there is another more important political question.  Up to now, 65 years after the deportation, the Crimean Tatar nation has not been rehabilitated politically.  Its members do not fall under "a single Ukrainian law concerning the restoration of the rights of people suffering from the actions of the Soviet regime or its vassals."

Since the 1990s, the Ukrainian parliament has had various bills before it about the restoration of the rights of those deported on the basis of nationality, but none of these has passed.  According to Chubarov, if Kyiv adopted these laws, that would go a long way to integrating the Crimean Tatars into the Ukrainian state.

But more important still, until such laws are passed and until they and other measures restoring the rights of the Crimean Tatar nation are fully implemented, the deportation of1944 will not be an event in histoyr but rather a continuing tragedy, one that will fester for many years to come even if those who now ignore it assume that they can make it disappear.

 

Eurasia Daily Monitor

May 21, 2009

Yushchenko Accepts Resignation of his Aide Baloha

Ukrainian President Viktor Yushchenko has launched a major reshuffle of his team ahead of the upcoming presidential election and a possible early parliamentary election. Yushchenko accepted the resignation of the controversial head of his secretariat, Viktor Baloha, and replaced him with his long-time ally Vira Ulyanchenko -also appointed to chair his party, Our Ukraine People's Union (NSNU). Baloha who recently quarreled not only with Yushchenko's rivals but also with his allies, came to be regarded as an electoral liability. Ulyanchenko will try to revive the NSNU and raise funds for Yushchenko's re-election campaign.

Baloha tendered his resignation on May 12 (Kommersant-Ukraine, May 19). Yushchenko accepted it, characterizing it as part of reshuffling his team ahead of the presidential election. Yushchenko suggested that Baloha might play a role in his election campaign (Delo, May 19).

Yushchenko tried to downplay the extent of conflict between himself and Baloha. The deputy chief of the National Security and Defense Council Stepan Havrysh, said that Baloha's resignation had been prompted by conflicts between him and "the many political managers who work for the president" (Ukrainski Novyny, May 18). He also blamed Baloha for provoking disputes between Yushchenko and parliament (ICTV, May 18). Baloha declared that he resigned over disagreeing with Yushchenko's intention to run for a second term. "I am sure that you have no moral right to run for president. I will not help you in this," Baloha said in a statement written in his usual belligerent manner (Ukrainska Pravda, May 19).

The weekly Zerkalo Nedeli suggested that Baloha resigned in protest against what he perceived as attempts to undermine his influence. Baloha's protégé the deputy chief of the Security Service (SBU) Tibery Durdynets, has been placed on an Interpol wanted list following scandals involving the alleged wiretapping of top prosecutors by the SBU and Durdynets's refusal to obey court orders to resign. Yushchenko rejected Baloha's suggestion that his United Center (YeTs) party should replace the NSNU as Yushchenko's party. Finally, Baloha opposed Yushchenko's plan to promote Ulyanchenko to chair the NSNU's political council, apparently viewing her as his main rival in Yushchenko's team (Zerkalo Nedeli, May 16).

Yushchenko carried out his plan to promote Ulyanchenko. She was elected to chair the NSNU's council on May 16 and another long-time ally of Yushchenko, Roman Bezsmertny who founded the party in 2005, was elected head of the NSNU executive council. Ulyanchenko did not rule out cooperation with YeTs but she said that the NSNU will now be Yushchenko's only party. Ulyanchenko's tasks will include purging its ranks of Prime Minister Yulia Tymoshenko's supporters, including the NSNU parliamentary caucus leader Mykola Martynenko, and gathering the funds needed for the party to fight the election (Ukrainska Pravda, May 18). After Yushchenko's election as the NSNU chairman late last year, several prominent businessmen withdrew their sponsorship. The NSNU suddenly became so underfunded that its regional branches could not even afford to pay for electricity and telephone.

Ulyanchenko, who will continue to serve concurrently as Kyiv Region governor, reportedly has good relations with several Ukrainian "oligarchs" - the most politically influential businessmen - including Rinat Akhmetov from the Party of Regions (PRU) and Tymoshenko's allies Vitaly Hayduk and Bohdan Hubsky. Apart from fundraising, her remit may also include forging links with Yushchenko's rivals. Her peaceful style contrasts with Baloha's controversial behavior. It is widely believed that Baloha provoked several of Yushchenko's conflicts with former prime minister Viktor Yanukovych, as well as his successor Tymoshenko.

Baloha has also proven undiplomatic in his foreign policy statements. For example, he threatened that the country will re-introduce visas for the EU if it failed to liberalize its visa regime for Ukraine (EDM, April 3). This statement was counterproductive, delivered ahead of the crucial May 7 EU Eastern Partnership summit.

Even without Baloha, it might be difficult for Yushchenko to persuade Ukrainians to vote for him, as his popularity has declined from over 50 percent in 2004 (when he became president) to under 3 percent. Yet he has time to improve his standing. On May 13 the constitutional court ruled in his favor in a dispute with parliament over the presidential election date. The court said that parliament's decision to schedule the election for October 25 was illegal (Channel 5, May 13). Parliament now has to propose a new election date. It will most likely be held in late January 2010, allowing Yushchenko's team three more months to restore popular trust.

Yushchenko remains optimistic that in Baloha's absence his team can successfully restore the image of the president and the party. Addressing the NSNU council on May 16, he repeated his earlier idea that the presidential election should be held concurrently with early parliamentary elections, which is currently dominated by a loose coalition led by his arch-rival Tymoshenko (Ukrainska Pravda, May 16). Nonetheless, the chief judge of the constitutional court Andry Stryzhak, said that Yushchenko has no legal grounds to disband parliament and call new elections (ICTV, May 17).

--Pavel Korduban

 

 

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