Books on Ukraine
Update No: 324 - (19/12/07)
A crisis at the top
The chaos of Yulia Tymoshenko's premiership two years ago is hampering her
attempt to win back her job and has made the foreign business community, vital
to the running of the economy, wary of her possible return. Like the strong
woman she is, she has enemies galore.
She narrowly lost the chance to be re-elected premier on December 10, when she
obtained 225 votes in the 450-seat assembly. She needed an outright majority.
President Viktor Yushchenko, who is actually one of those enemies, if
semi-detached, nevertheless immediately instated a bid to elect her again,
doomed to be successful. But the squeakiness of it all is very telling.
Her passionate speeches during the 2004 "Orange" revolution fuelled
protests for weeks and helped to sweep Yushchenko to power after the re-run of a
fraudulent election. But the same fiery rhetoric caused mayhem among her allies,
made relations with Russia difficult and spooked investors with calls for a
review of state sell-offs and interference in markets. There is little doubt
that just like in Russia, State assets were sold off at a fraction of their true
In the process many great fortunes were made and her proclaimed intention of
revisiting those deals brought out the very beneficiaries of those deals, many
of whom are sitting members of the very parliament whose votes she needed to
gain her appointment. This is how it is with Ukrainian politics – money, big
money past, present, or future is never far away from the daily grind of
political ‘give and take’.
Yushchenko sacked her after just seven months the first time around. A possible
second stab at the job worries investors, unsure whether she and her allies, who
hold a tiny majority in parliament, could push through urgent reforms to
underpin an economy powered by high global steel prices. "There is
trepidation within the business community," a senior business source said.
"Will she interfere in markets as she had a tendency to do in the past or
will she be able to get people to coalesce around her and get something
The former Soviet state's economy has absorbed big yearly gas price rises from
Russia and grown by about 7 percent in recent years. Some service sectors, such
as banking, have developed and Ukrainians are spending their rising wages.
But the heavy industry on which the economy depends needs modernisation and
corruption persists at all levels.
And it is still difficult to separate business and politics. All major parties
have oligarch backers and any businessman worth his salt sits in parliament,
including Ukraine's richest man Rinat Akhmetov, or has interests represented in
A crisis at the bottom
November and December last year saw several tragic accidents in Ukraine. An oil
tanker going down in the already heavily- polluted Black Sea, along with several
other ships in an early November storm, was followed later in the month by a
mine blast in the Donetz, trapping and killing a hundred miners, the worst
mining accident in its history.
In early December with the country reeling from their impact came another
disaster - and in the same mine in Donetz, killing five and maiming dozens.
Yushchenko called on December 3 for the closure of a colliery in eastern
Ukraine, while a special investigation is carried out into the three explosions
which killed 106 men in two weeks.
Acting Prime Minister Viktor Yanukovich, the president's long-standing rival,
acknowledged that the Zasyadko mine, a major producer of coking coal, could be
closed, but said in a characteristic reaction that doing so would have severe
economic consequences for Ukrainian industry.
The first of the three methane explosions at the mine in mid-November killed 101
miners in Ukraine's worst ever mining accident. "In connection with the
latest accident at the Zasyadko mine, which has caused casualties, I insist the
mine be completely closed until all circumstances and reasons for the tragedies
... are determined,"
Yushchenko said in a statement. The president's reaction was humane.
Yanukovich's was rather different. He said the blasts had taken place in
circumstances never before observed.” He said Ukraine's steel industry, a
major consumer of coking coal, could be badly hit by any closure. Given that
Ukraine has a shortfall of six million tons of coking coal (annually), we are
encountering huge economic consequences," he told reporters.
The roots of disaster
These remarks are typical of the former Soviet apparatchik Yakunovich
irremediably is. Such types of distressing event are more common in FSU
countries, notably Ukraine, than in the West.
The Soviet Union had no independent unions to monitor working conditions. The
workers were in charge theoretically, but not in reality. Incompetent and
ignorant bureaucrats and technicians prevailed. Chernobyl after all occurred in
Ukraine in 1985, just as Gorbachev came to power. He at least ensured it being
promptly disclosed and tackled.
Disasters now get major media attention in Ukraine. That is a reflection of a
revolution of a sort.