Monday, July 18, 2005

Ukraine: "Not a Clean Break" 

I think The First Ring has misanalyzed the situation in Ukraine. He think the problem with Yulia Tymoshenko is simply antipathy with ethnic Russians. It's far more, far worse than that. First Ringer says:
Tymoshenko�s dedication to reform and democracy aren�t in question, but Ukraine�s hot version of Margaret Thatcher has isolated a number of eastern Ukrainian voters who are culturally Russian. With concerns of secession in the region preceding and following the second vote, a Tymoshenko presidency would have been a gallon of gas to the smoldering embers of the 2004 vote. Tymoshenko has made efforts to reach out to the east, even traveling there immediately following Yushchenko�s victory, but the wounds are simply too fresh.
I've written earlier this year that the Tymoshenko cabinet has not moved forward on economic reforms. Anders Aslund sounded the alarm this May. He notes that Tymoshenko has engaged in pure populism, increasing taxes and giving public sector workers and pensioners 60% raises. Inflation is on the rise. Ariel Cohen last week amplifies the point that property rights are routinely violated in Ukraine. It has a socialist privatization minister (take a moment to get your mind around that concept) who thinks we've had enough privatization. James Sherr argues persuasively that Tymoshenko is not a good friend of Yushchenko's and is not averse to arbitrary use of power.
Between his inauguration and the recent oil crisis, President Yushchenko tended to act more as the spiritual than the political leader of the country. He also made twelve trips abroad. When the oil crisis reached the point of peril, he intervened with wisdom and firmness, but it is not clear whether he will now exercise direct and active authority. His Prime Minister, Yulia Tymoshenko, an electoral ally but a personal rival, is not averse to confrontation and seems determined to exercise authority without limit. If Yushchenko has confused leadership with inspiration, she has confused it with control and, to the astonishment of many in Ukraine's business sector, these controls are taking the form of Soviet style 'administrative measures' which extend to the micro economy.
Sherr also makes a good point that these actors come from an authoritarian regime and are used to working within it, both having held positions in the previous government of Leonid Kuchma. "It represents a principled break from the past, but not a clean break."

One has to wonder, contrary to First Ringer, whether Yushchenko's health really is fine. His hands-off approach is certainly fitting the style I remember he had at the National Bank, but broad guidelines were often followed with concrete steps. And laissez-faire was not his style in running his government when he was prime minister. Given that the power of the presidency is to be reduced next year under the constitutional reforms agreed at the conclusion of the Orange Revolution, the time is now for Yushchenko to take charge. (Tammy Lynch offers the same sentiment; as noted by Robert Mayer.)

UPDATE: The economic slowdown is making one Orange Revolution promise harder to keep, according to a new report.

Ukraine's economy grew just 4 percent in the first six months of 2005, the government announced Thursday, a sharp downturn from the white-hot growth registered by the former government over the same period a year earlier.

The slowdown poses another hurdle for the new pro-Western government which took power after last year's Orange Revolution amid promises to boost living standards and create 5 million new jobs.

Yushchenko believes last year's nubers were doctored to improve the government's chances. I believe that's probably true, but it makes the 5 million new jobs even harder to make, if the old jobs number was fudged.

First Ringer has updated his post and says the results are consistent with consensus-building. I suppose this is true; the Orange Revolution needed the consensus to succeed. But it may take the next parliamentary elections in 2006 to solidify the gains and move forward. As to Yulia, unquestionably she is angling to succeed Viktor some day, but winning that parliamentary election appears to be the nearer-term goal.