Ukraine: after the party

When the spotlight of the Western media was last on Ukraine, optimism was in the air. ‘Our man’ was in, the oligarchs were out and a new era in Eastern European politics was being predicted by journalists and politicians alike.

The so-called Orange revolution – in which the opposition leader Viktor Yushchenko fought his way to the presidency despite electoral fraud, the state-controlled media and an attempted poisoning – was hailed as a shining example of the New Europe in action. It made for a good Hollywood narrative: the dioxin-scarred Yushchenko finding the strength through ‘people power’ to take on the dark forces of the post-Soviet world. With the colourful occasion of his inauguration ceremony and the party afterwards on Kyiv’s central square, the story was given a neat climax, and the attention of the world turned elsewhere.

Since then, however, cracks have appeared in the new democracy, the origins of which lay long before the revolution was first considered a possibility. Yushchenko’s Nasha Ukraina party (‘Our Ukraine’), a loosely bound coalition of liberals, socialists, communists and environmentalists that he had been gathering since he was dismissed as prime minister in 2001, has shown a lack of unity in pushing through the new government’s reforms, with recent parliamentary debates on key issues ending in punch-ups.

Struggles at the top have also marred progress. Yulia Tymoshenko, the prime minister whose high personal popularity rating gave the revolution much of its vigour, has been jealously guarding her job from the rest of the cabinet, and may consider challenging Yushchenko for the presidency if the opportunity arises. Known as the ‘Gas princess’ for her multibillion dollar personal fortune from natural resources and wanted for embezzlement in Russia, Tymoshenko has been accused of bringing a new oligarchy into power at the same time as condemning the actions of the previous establishment.

The prime minister’s daughter’s expensive lifestyle in London has also been criticised in Ukraine, where the average monthly salary is less than $90. These difficulties are becoming increasingly embarrassing for the new government, which will face its first electoral challenge in March 2006 with the parliamentary elections.

Ukraine’s economy is also showing difficulties. For the first six months of 2005, growth has been at four per cent, compared to 13 per cent for the same period in 2004. A large budget deficit has been forecast, and Ukraine’s rate of inflation for the first quarter of the year was the highest of all the Commonwealth of Independent States (CIS) countries. The World Bank, which had been allocating loans to Ukraine with great enthusiasm, has expressed its reluctance to continue unless stricter controls are introduced.

Foreign investment, which was expected to flood in after the positive coverage of the revolution by the Western media, has only gone up by three per cent since the start of the year. With a highly educated population and low labour costs, Ukraine does represent an attractive market, but investors are wary of bureaucracy and corruption stifling their business. The government’s controversial renationalisation policies, where state assets thought to have been sold off under dubious circumstances by the old government were renationalised and then resold, have also been warding off potential foreign capital.

Foreign policy reform, which was one of the most popular aspects of Yushchenko’s promises during his election campaign, has proved problematic. The plans of ‘Our Ukraine’ to develop a closer relationship with America and further European Union (EU) integration have met with particular resistance. The majority of Western leaders, although enthusiastic in general terms about Ukraine’s achievements, have given little in the way of economic concessions and support for the country’s membership ambitions to Western organisations. In diplomatic terms Ukraine is on much better terms with the USA, but few changes have been made to US foreign policy.

Ukraine is still subject to the Jackson-Vanik amendment, a hostile measure implemented against the USSR during the Cold War, which prevents Ukraine from achieving Normal Trade Relations with the USA. The possibility of Ukraine’s joining the World Trade Organisation (WTO) this year is currently under discussion, but agricultural subsidies and the enforcement of copyright law may prove significant barriers to progress. As far as European integration is concerned, after France and Holland rejected the European Constitution in their referenda, Ukrainian entry into the EU has become unlikely for the foreseeable future. This is a considerable problem for Yushchenko, who has made the opening of formal entry negotiations by 2007 a priority for his first term.

So the difficult realities faced by Ukraine’s new government are odds with the heady coverage given at the time of the Orange revolution. The story was portrayed as an uprising of the people against government corruption. Could it be that the West’s enthusiasm had more to do with its own agenda – with its desire to be seen taking the side of right, of the New Europe against old, Soviet-linked elites – than with the reality of Yushchenko’s regime?

Jack Jordan is studying Russian and Arabic at Leeds University, and previously worked as an intern at spiked.