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Newsletter for the international community providing views and analysis from the Bloc of Yulia Tymoshenko – Batkivshchyna





Page 1 Opposition Resorts to Hunger Strike

Page 2 Kryvorizhstal Gives Foreign Investors the Jitters

Page 3 Dress Code Makes Ukraine a Laughing Stock

Page 4 Turning back the Clock to 1996

Page 4 Parliament Votes for Change

Page 5 Cause for Alarm in Kharkiv Schools





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Opposition Resorts to Hunger Strike

So far, 28 members from the Bloc of Yulia Tymoshenko (BYuT)-Batkivshchyna have gone on hunger strike to draw attention to the widespread fraud taking place in the run up to local elections on 31 October 2010. Seven members of the party in the Kyiv region embarked upon this extreme course of action after petitioning the regional election commission to suspend fake party lists submitted by a bogus branch. The Kyiv hunger strikers have been joined by 10 colleagues in the Lviv region and 11 from the Kirovohrad region.

The opposition has revealed that the authorities are engaged in a systematic campaign that involves setting up fake branches of several oppositional parties across Ukraine and registering their candidates for local elections. It said that its members are being prevented from running for local elections in Kyiv, Lviv, Ternopil and Luhansk.

Today, Leader of the Opposition, Yulia Tymoshenko visited the hunger strikers outside the Central Election Commission and appealed to them to call off their protest. “I came here to ask you to stop your hunger strike. I know that you are struggling for democracy, for fair elections but I am concerned for your health, for your life,” she said. The protesters refused.

In the Lviv region, 10 deputies decided to go on hunger strike. They signed an open letter posted on the party website claiming President Viktor Yanukovych is using his administrative machine to sway the results of the elections in this region in his favour. About 90 percent of voters in the Lviv region voted for Yulia Tymoshenko in last February’s presidential elections.

“Our enemy is a dangerous one,” says the statement, “as it dragged into this war those who we considered to be our political allies. With the aid of judges and the regional department of the Justice Ministry, the authorities are sneaking into the local government the supporters of the Party of Regions in the guise of Batkivshchyna party members.” The statement says that the move is being facilitated by Vasyl Horbal, a governor of the Lviv region and a loyal Party of the Regions member.

Another BYuT-Batkivshchyna party deputy going on hunger strike is Valeriy Kalchenko from the Kirovohrad region in the south of Ukraine. He has been joined in the protest by 10 colleagues. He said that he decided to take this step when the regional election commission refused to register candidates from his party into the city council of the town of Olexandria.

Earlier, the opposition notified foreign diplomats and NGOs stating that the Ukrainian authorities have set about “large-scale vote rigging” by exercising control over the majority of the Central Election Commission and over the make up of the local election commissions, with the ruling party taking the lion’s share.

The note went in unison with a letter to President Yanukovych from four members of the Central Election Commission (CEC), warning him that a number of changes in the new election law will make it impossible to conduct fair, transparent and democratic elections.



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Kryvorizhstal Gives Foreign Investors the Jitters

The Kryvorizhstal steel mill is under threat of being taken away from its owners ArcelorMittal and returned to the state. ArcelorMittal, the world’s premier steelmaker and one of Ukraine’s largest foreign investors is accused by the authorities of violating its purchase agreement. The sale of the mill five years ago was celebrated as Ukraine’s largest and most transparent privatisation.

The steelmaker is charged with delaying a $200 million investment programme at the plant. Amendments to the investment programme were signed off by the State Property Fund in 2009 due to force majeure: in the form of the global economic slowdown and decrease in the global demand for steel. The State Property Fund also stands accused of exceeding its mandate in signing off the amendments.

"We are concerned that there is an attempt to take back our asset and return it to the state," said Nicola Davidson, a spokeswoman for ArcelorMittal. "Somewhere, someone is creating a false reason that we have broken our sales purchase agreement."

“The contents of this agreement were coordinated with all relevant ministries and the plant’s trade unions. The additional agreement was made public as much as it was thought to be sensible,” said the former Deputy Head of the State Property Fund, Olexandr Potimkov.

ArcelorMittal bought Kryvorizhstal for $4.8 billion in a televised auction in October 2005. The driving force behind the transparent auction was Yulia Tymoshenko, Leader of the Opposition. As prime minister she oversaw the reprivatisation of Kryvorizhstal which was originally sold to Ukrainian tycoons for the knock-down price of $800 million.

“ArcelorMittal is viewed as one of the pillars of the global economy and has a presence in many countries, just like Coca-Cola or McDonald’s,” said Olexandr Potimkov. “So, the investors’ thinking is that if these companies can work here, we can do it as well. If ArcelorMittal leaves, the image of the country will be dealt a huge blow. Investors will understand that in this country anything can happen.”

The dispute will be heard in a Kyiv court on 12 October, despite the privatisation agreement stipulating that any dispute is to be handled by an international court of arbitration. The company said that if the court rules to seize its assets it will appeal against the decision.

Hryhoriy Nemyria, foreign policy advisor to Ms Tymoshenko, said, “Taking Kryvorizhstal back into state hands would send the wrong signal to the international investment community. It would be the equivalent of saying that the government can misappropriate your assets whenever it likes. Already foreign investors are being put off by the refusal of the government to include stability clauses in contracts. The authorities need to get serious about winning back the confidence of investors, not frighten them off.”

President Yanukovych during his state visit to France said that no reprivatisation of ArcelorMittal is envisaged. “The conflict arose,” he said, “because the procedure was not followed and the investment programme was extended without the go-ahead from the government.” The president implied that ArcelorMittal was at fault when it took the liberty of believing that it could change the investment programme all by itself.

“I think the case won’t move any further,” said Mr Yanukovych. Commentators meanwhile have noticed how the case was fast-tracked through legal channels, with it being accepted and scheduled for a hearing within a few days.



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Dress Code Makes Ukraine a Laughing Stock

Ukraine was once again made a laughing stock internationally when Prime Minister Mykola Azarov issued a strict dress code to government employees, reminiscent of state instructions from the Soviet era.

The 62-year old premier put aside weighty topics such as reforming Ukraine’s recession battered economy to provide detailed instruction on how men and women should dress when working in the cabinet. Out are “figure-hugging dresses” and garments where “underwear is visible.” Plunging necklines, mini-skirts, skirts with slits and high heels are banned. In are sensible low-heel shoes and below the knee skirts. Ladies are advised to apply light make-up and to go easy on the perfume.

Men are advised to own at least three business suits which must be “somewhat subdued.” Colour wise, Mr Azarov – who is not exactly known to be a natty dresser – recommends “dark blue or any shade of grey.” Men were also advised not to wear the same suit two days in a row and to wear a fresh shirt every day.

Some observers interpreted the move as evidence of Mr Azarov seeking to distance his administration from the elegant outfits worn by his predecessor Yulia Tymoshenko. Stranger things have happened. In March this year Mr Azarov brought in Orthodox priest Father Pavlo to exorcise the spirit of Yulia Tymoshenko from his office.

Ms Tymoshenko, Leader of the Opposition, found the amusing side to Mr Azarov’s dress code. She pointed out that under the code, “neither the Queen of England or [Libyan leader] Colonel Gaddafi would make it into the government building."

She was not alone in ridiculing the new dress code. Even the Deputy Head of the Presidential Administration, Hanna Herman confided, "It looks a bit archaic, to be honest."



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Turning back the Clock to 1996

By nullifying the 2004 constitutional reforms, Ukraine’s Constitutional Court (CC) is recommending lawmakers restore the 1996 constitution and presidential system. But how did this bizarre turn of events come about and what are the legal conundrums thrown up by this unusual decision?

The Constitutional reforms stem from the Orange Revolution. Voted upon in December 2004, the reforms were a compromise, brokered by Poland, Lithuania and the EU at three round-tables attended by then opposition presidential candidate Viktor Yushchenko, President Leonid Kuchma and other political leaders. The ostensible aim was to extricate Ukraine from the political crisis following the massive fraud committed by the authorities during the second round of the presidential elections. The fraud came on the back of a decade of corruption and high level abuse of office that provoked millions of Ukrainians to hold a 17 day protest known worldwide as the Orange Revolution.

Yulia Tymoshenko was excluded from the talks as she was seen as the leader of the radical wing of the opposition which had always sought to lay criminal charges against President Kuchma, not negotiate with him. Not surprisingly, as she points out in her appeal following the 1 October 2010 CC ruling, her eponymous bloc ended up as the only political force in December 2004 to vote against the package of reforms. The reforms came into force in March 2006.

Over the next five years many Ukrainians looked negatively upon the new semi-parliamentary constitution because they associated it with chaos and political instability. There was little doubt that the December 2004 reforms had been rushed through and the constitution needed improvement in key areas.

The main factor which turned sentiment against the 2006 constitution was the manner in which President Viktor Yushchenko refused to reconcile himself to a parliamentary system and sought to intervene in the prerogatives of the prime minister. As a consequence, President Yushchenko was in conflict with three of the four prime ministers that served during his term in office.

Closing the Door on the European System

The 2006 constitution was a step in the direction for European integration. Central-Eastern Europe and the Baltic states have adopted parliamentary systems that consolidated their democracies and put them on successful paths to NATO and EU membership. CIS countries, on the other hand, have adopted presidential systems and all of them are autocracies. The CIS exceptions were Ukraine and Moldova which had parliamentary systems.

The act of annulling the constitutional reforms is consistent with other steps Mr Yanukovych has taken to move Ukraine away from Europe and realign it with Russia and Eurasia. Reverting to a presidential system re-affirms his single vector pro-Russian foreign policy. Even before the CC ruling, senior EU representatives publicly admitted that Ukraine no longer wishes to join the EU.

President Yanukovych knew he would never obtain the 300 parliamentary votes needed to change the constitution. It was far easier to bribe and coerce the CC judges. Also, a vote to change the constitution could have turned into a vote of confidence in his leadership. Given Mr Yanukovych’s poor showing in recent opinion polls, this was a gamble he was not prepared to take. Cajoling and inducing the CC to do the president’s bidding proved a more convenient way of dealing with a hastily drawn up constitution, which should have been improved by bringing together a broad consensus of political forces.

Majority Oppose 1996 Constitution

A September poll by the Ukrainian Democratic Circle found 56 percent of Ukrainians are against changing the constitution with only 13 percent supporting a return to the 1996 constitution. A September poll by the Ratings Group found a similar 50 percent of Ukrainians opposed to returning Ukraine to presidentialism with 31 percent in favour.

The Ratings Group found that a return to a presidential system is only supported by the residents of Donetsk, the home turf of President Yanukovych’s Party of Regions. They, along with Deputy Prime Minister Sergei Tigipko’s Strong Ukraine Party, support a strengthening of presidentialism. Those supporting the Bloc of Yulia Tymoshenko-Batkivshchyna and Front for Change, led by Arseniy Yatseniuk, are opposed.

Mr Yanukovych argues that he needs a presidential constitution to promote “reforms.” But, Mr Yanukovych is no Mikheil Saakashvili, Georgia’s President, who, although moving his country to a presidential system after the 2003 Rose Revolution, adopted sweeping reforms and eliminated corruption. In contrast, Mr Yanukovych has controlled the presidency and parliament but has undertaken few reforms during his first 200 days in office. The CC ruling is therefore nothing more than a grab of power for power’s sake, a “coup d’état.”

Last week Mr Yanukovych told Britain’s Prime Minister David Cameron, in a phone call, that he supports the rule of law and democracy. But his record in office shows otherwise. There have been countless constitutional and legal infringements. Nine members of the ruling Stability and Reforms coalition have infringed the constitution since the spring by serving in the government or as governors while not relinquishing their parliamentary seats. Further contempt for democracy is shown by violating media freedoms, harassing NGOs, electoral violations, the persecution of opposition leaders, the list goes on and on.

Legal Chaos

The CC ruling throws Ukraine into legal chaos, admitted Party of Regions legal expert Serhiy Holovatiy. Two legal experts from Kyiv’s Centre for Political and Legal Reforms (CPLR) told Ukrayinska Pravda that the annulment means that we cannot talk of “stability of the legal system.”

Worst still the CC ruling destroys what little public trust was left in Ukraine’s state institutions. It illustrates to the outside world that Mr Yanukovych is willing to play around with the fundamental law of the land for political reasons and to extract revenge for his humiliation in the 2004 elections.

The two CPLR legal experts pointed out that the CC had ruled on many occasions (2006-2010) on the new constitution which it now declares “unconstitutional.” According to Ukrayinska Pravda, the only conclusion one can make is that the CC ensured “not the supremacy of the constitution but the supremacy of illegality.”

The CC ruling causes a legal conundrum. Followed to its logical conclusion, the laws adopted during the last five years need to be changed, treaties that were ratified are no longer operational (including the April Black Sea Fleet base lease extension) and three elections that were held were unconstitutional. This would necessitate the calling of pre-term presidential elections, as Mr Yanukovych was elected under the “unconstitutional” 2006 constitution, and pre-term parliamentary elections as parliament was elected under the same constitution. Furthermore, Viktor Yushchenko should resume the position as President for another four years as he only served one year of his term in 2005 under the 1996 constitution.

Put simply, the CC ruling places Ukraine on the path to dictatorship and national discord. This is far removed from the “political stability” that Mr Yanukovych claims he is bringing to Ukraine.



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Parliament Votes for Change

Last Thursday a total of 252 deputies, in the 450-seat Verkhovna Rada, voted in changes to the Cabinet of Ministers in line with the move to revert Ukraine back to its 1996 Constitution.

The new law makes the Cabinet of Ministers responsible to the president instead of parliament, with a prime minister who can be appointed by the president with the agreement of parliament. The move reverts Ukraine to a presidential-parliamentary system where parliament is subservient to the president. Now, a government may be dismissed by a vote of no confidence in parliament, or by a prime minister’s resignation or death, or by presidential decree. Previously, the president only had limited rights to dissolve parliament.



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Cause for Alarm in Kharkiv Schools

According to Radio Free Europe/Liberty Radio, teachers in the eastern city of Kharkiv are complaining of pressure being exerted on them by the ruling Party of Regions. The situation is so bad that some teachers are resigning their posts. Parents are complaining that the Party of Regions is actively politicising the schools ahead of the local elections scheduled for 31 October. In one school large pictures of the acting mayor Hennadiy Kernes are displayed. A secondary-school director from the region, who wished to remain anonymous, complained that it was not possible for anyone who is not a member of the party to “be a school director or deputy director in the region.” BYuT-Batkivshchyna condemns the politicisation of education which it says is reminiscent of life in the Soviet era.





Questions or comments? Email us at nlysova{ät}beauty.net.ua

Wenn du mich kennen würdest, wüßtest du, dass genau das Gegenteil der Fall ist. Ich kenne aber die Verhältnisse und die Entwicklung in der Ukraine ziemlich gut und habe keine rosarote Brille auf. Es ehrt dich, dass du an das Gute im ukrainischen Politiker glaubst, aber es geht an der Realität vorbei.
Du scheinst noch nicht allzu lange in der Ukraine zu sein. Also hüte dich vor vorschnellen Unterstellungen. Ich stehe zu dem, was ich gesagt habe. Aber was du in meine Worte hinein interpretierst - dafür kann ich nichts.

Das Meiste, was du sagst, ist theoretisch richtig. Aber auch nur einen Teil davon in die Praxis umzusetzen, scheint in der Ukraine fast unmöglich. Das Grundübel dieses Staates ist die Korruption, die die gesamte Gesellschaft zersetzt hat. Und das Schlimmste ist, es gibt kein Unrechtbewußtsein. Als Antwort erhält man: "Was solls, man muß doch leben". Und solange DAS gesellschaftlich akzeptiert wird, sehe ich keine Chance für die grundlegende Verbesserung der Lebensbedingungen der breiten Masse.

und weiter gehts:

Zum katastrophalen Zustand der Opposition lässt sich in diesem Interview mit Nikolaj Tomenko, stellvertretender Parlamentssprecher für die Fraktion Block Julia Timoschenko. URL is visible only for registered users. Register here Achtung - russisch
Im Prinzip gibt er zu, dass sie auch ohne Druck von Regierungsseite alt aussehen würden. Kein Plan, keine Strategie und vor allem keine Unterstützung von der Bevölkerung ....

Newsletter for the international community providing views and analysis from the Bloc of Yulia Tymoshenko – Batkivshchyna





Page 1 Party Congress Says No to Election Boycott

Page 2 Government Fraud Investigation Denounced

Page 4 Authoritarian “Stability” is No Substitute for European Stability

Page 5 Gaffe Watch: The International Prison Guards Are Coming





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Party Congress Says No to Election Boycott

At the Batkivshchyna Party Congress held on Sunday, party leader Yulia Tymoshenko appealed to Ukraine’s opposition forces not to boycott the 31 October elections despite evidence of election irregularities already taking place. She called for the democratic parties “to fight for every vote, for each mandate, at every level.”

Ms Tymoshenko also urged the democratic forces to work together and form a majority after the next parliamentary election. “The democratic parties need to secure maximum support from the electorate to change this country’s leadership as soon as possible,” she said. "We need more than 300 votes to terminate this president’s authority."

Also announced was a project entitled ‘Ukraine in the Third Millennium’ which will use the power of the Internet to allow people to share opinions and submit proposals to create new draft legislation. Working groups will be established to work on the laws and draft a new Constitution.

Wilfried Martens, the President of the European People’s Party expressed his party’s support for Ms Tymoshenko in a televised address to delegates. He said the “EPP is convinced that through the leadership of Yulia Tymoshenko Ukraine can defend its freedom and democracy and bring your country to Europe. I applaud your efforts, I applaud your courage and perseverance.”

Mr Martens also approved of steps taken to reform Batkivshchyna, “I would like to take this opportunity to express my admiration to you for taking the power to reform your party at a time when democratic freedoms are at risk in your country.” Reforms include a commitment to hold primaries to elect its leader and selection of parliamentary candidates by party groups after the primaries.

Chris Patten, the Chancellor of Oxford University and former European Commissioner for External Relations applauded the holding of the party congress. He talked about the struggle for democracy and freedom in Ukraine and said, “Yulia, and all of you continue to pursue a European path, which means the rule of law and national independence are paramount. I would like to express my admiration and support your quest for a better, European Ukraine.”



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Government Fraud Investigation Denounced

The Bloc of Yulia Tymoshenko (BYuT)-Batkivshchyna denounced the government investigation into the activities of the former premier’s administration as “politically motivated” and an attempt to discredit the opposition ahead of local elections on 31 October. The international anti-corruption watchdog Transparency International slammed the investigation report released on Thursday saying that it was not independent.

The 176-page-long report, commissioned by the Ministry of Finance accused Yulia Tymoshenko’s administration of misappropriating state money. It alleged that money had be channelled into her presidential campaign and into the state pension fund. In particular the probe accused former government officials of misappropriating taxpayers’ money when buying sugar, vaccines and foreign cars, and when selling carbon credits to other countries under the Kyoto agreement.

Hryhoriy Nemyria, Foreign Policy Advisor to Ms Tymoshenko was critical of the investigation. “From the outset this shameful exercise has been designed to discredit the opposition and was timed to come out before local elections on 31 October,” he said.

The investigation was led by the US-law firm Trout Cacheris, assisted by the detective company Kroll Associates and law firm Akin Gump Strauss Hauer and Feld.

“The investigation focuses exclusively on the period the previous government was in office and fails completely to examine well publicised allegations of corruption when Viktor Yanukovych was prime minister,” said Mr Nemyria. The former deputy prime minister responsible for European integration pointed out that both Kroll and Akin Gump have known associations with Mr Yanukovych’s Party of Regions. Kroll Associates undertook an investigation which cleared former President Leonid Kuchma from involvement in plotting to murder journalist Georgy Gongadze, whereas Akin Gump has represented Dmytro Firtash the main Ukrainian owner of discredited energy intermediary RosUkrEnergo, and oligarch Rinat Akhmetov who is a Party of Regions deputy. Both Mr Firtash and Mr Akhmetov are believed to have financially backed Mr Yanukovych’s election campaign.

Trout Cacheris brushed away any suggestions of a conflict of interest and deflected answering direct questions about the cost of the investigation.

“The principle of being innocent until proven guilty doesn’t appear to apply here,” said a BYuT spokesperson, who told Inform that the cost of the investigation was believed to be $2 million so far. The Ukrainian taxpayer is footing the bill.

Nicholaus Marshall, Regional Director of Transparency International, an anti-corruption watchdog, told the German state broadcaster Deutsche Welle that the so-called Washington investigation of former Prime Minister Yulia Tymoshenko's government discredits the war against corruption in Ukraine.

"We welcome the war against the embezzlement of taxpayer money [in Ukraine]. Any government official in a democratic country should be held accountable. But judging by the information coming from Ukraine, the recently released audit has at least one serious flaw: It is not independent," said Mr Marshall.

This view was echoed by Susan Stewart from the German Institute for International and Security Affairs. "I still think it's an open question as to whether this neutrality is really present,” she said.

There is no doubt that if fraud has been committed it warrants investigation. However, as the European People’s Party said in its resolution on 13 September, “The fight against corruption in which only members of the former government are picked out can hardly be seen as genuine and politically unbiased.”

In countries where the rule of law is paramount, fraud committed by former governments should be investigated by law-enforcement agencies, and not by the current government itself, commented Mr Marshall.

Mr Nemyria put things into context. “We are witnessing the systematic rolling back of democracy in Ukraine with intimidation of political opponents and censorship of the media taking place on a daily basis. This politically motivated investigation is merely another piece in the authoritarian jig-saw.”

Systematic Persecution

The government report should be viewed against a systematic programme of persecution targeting opposition figures.

· 7 April: Ms Tymoshenko is summoned to the Prosecutor General’s Office to answer questions regarding her pronouncements that pressure had been exerted on the judges of the Constitutional Court to rule on the legitimacy of the new parliamentary coalition.

· 10 May: Ms Tymoshenko is summoned to the Prosecutor General’s Office to give evidence on a previously closed 2004 case, re-opened against her.

· 26 June: former Head of State Customs, Anatoly Makarenko, is arrested in relation to charges of negligence, for a customs clearance in 2009 of 11 billion cubic metres of gas allegedly belonging to RosUkrEnergo.

· 12 July: former Deputy Chairman of Naftohaz, Ihor Didenko, arrested in relation to the same case.

· 22 July: First Deputy Head of the State Treasury, Tetiana Hrytsun, arrested in line with charges over alleged irregularities relating to the Odessa Portside Plant privatisation.

· 11 August: the Prosecutor General’s Office opens criminal proceedings against former Minister for the Economy, Bohdan Danylyshyn. He is placed on an Interpol watch list as he is abroad.

· 21 August: Military prosecutors detain Valeriy Ivaschenko the former First Deputy Defence Minister who is charged with illegally making a decision to sell the property of the Feodosiya Shipbuilding and Mechanical Plant.

· 3 September: Former Labour Minister, Lyudmyla Denysova, said that she is being targeted by the authorities. She said that a special group arrived in Crimea to dig up dirt about her.

· 16 September: Ms Tymoshenko receives a menacing phone call from an unnamed man who warns her over her visit to Brussels on 14 September and the resolution of the European People’s Party, which was critical of the anti-democratic actions of President Yanukovych’s administration. The caller tells her that she will soon “spit blood.”

· 17, 20, 21 September: Former First Deputy Prime Minister, Oleksandr Turchynov, is summoned to the Prosecutor General’s Office for questioning over the Naftohaz-RosUkrEnergo gas affair and the sale of discounted gas to large enterprises. Mr Turchynov again explains that on entering office his team closed down the scheme which, ironically, was set up under the government of Viktor Yanukovych.

· 23 September: Mikhail Livinksy, Yulia Tymoshenko’s Chief of Staff was called in for questioning by the SBU.



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Authoritarian “Stability” is No Substitute for European Stability

The ostensible reason given for President Viktor Yanukovych to return to the 1996 presidential constitution is to use his new and enhanced powers to undertake “reforms.” On scrutiny this argument seems rather odd given that Mr Yanukovych already occupies the presidency and controls parliament. It is in reality more a question of seeking power for power’s sake and, coupled with an onslaught against the opposition Bloc of Yulia Tymoshenko (BYuT)-Batkivshchyna, a means to marginalise the opposition from political life.

Not content with controlling the presidency and government, Mr Yanukovych has cemented control over regional governors and the country’s courts. Evidence of the latter is the 1 October, 2010 decision by the Constitutional Court to declare the constitutional reforms, approved by parliament in December 2004, as having been undertaken “unconstitutionally.” The decision went against the same court’s 2008 refusal to rule on a similar request from President Viktor Yushchenko. So with a monopoly on power even before 1 October, why hasn’t Mr Yanukovych implemented a reform agenda?

Few reforms have been undertaken – the most notable being a poorly drafted tax law that squeezes the middle class and small and medium-sized businesses. Instead, Mr Yanukovych has squandered opportunities and spent the majority of the last nine months consolidating his political power.

This is reflected in recent opinion polls. An October survey of Ukrainian attitudes by the International Foundation for Electoral Systems (IFES) revealed that 91 percent of those surveyed disapprove of the government’s hike in utility prices, whereas a huge 94 percent disapprove of the government’s fiscal and monetary policies. On tackling unemployment, Mr Yanukovych was also given the thumbs down with 90 percent disapproving of his inaction. All this is in stark contrast to his populist election campaign to not increase utility prices and to create jobs.

IFES found that a whopping 77 percent of respondents are dissatisfied with the administration’s efforts to reduce corruption. Meanwhile, 63 percent are unhappy at its inability to limit the influence of the rapacious oligarchs who funded Mr Yanukovych’s election campaign.

Stability… What Stability?

The second canard touted by Mr Yanukovych for returning the country to a presidential system is to bring the country back to “stability.” This argument has been accepted by some Western governments and has unfortunately led to a Western reluctance to criticise overtly Mr Yanukovych’s authoritarian policies (although this is changing).

What though does “stability” mean? And, is the stability offered by Mr Yanukovych based upon a Western understanding of this term or that found in Eurasia? Clearly there is a difference. The European variety is linked to democratic political systems while the latter is based upon authoritarianism of the type found in Russia and Belarus.

Interestingly, the Yushchenko era, during which Yulia Tymoshenko led two governments, was not in any way more unstable than the period of Ukrainian history which preceded it. During 1996-2005, when Ukraine had the presidential constitution to which Mr Yanukovych has now returned it, the country had seven governments.

In the five years during which Ukraine had a parliamentary constitution, from 2006-2010, the country had only three governments. Clearly the ratio of seven governments over ten years would appear a far worse case of instability, approximating Italy’s post-war record for changing its government.

The October IFES survey backs these findings. After nine months of Mr Yanukovych as president, 44 percent of Ukrainians believe their country is on the path to instability. Only 21 percent believe that Ukraine is on a path to stability – a figure which is less than half of the 48 percent garnered by Mr Yanukovych in the second round of last February’s presidential election.

There is therefore a remarkably salient disjuncture between Ukrainian and Western perceptions of Ukraine. A majority of Ukrainians tend to see Mr Yanukovych’s authoritarian blitzkrieg and Ukrainophobe nationality and educational policies as bringing instability and deepening regional divisions.

Honeymoon with International Community Over

Yet some European and American governments still seem to believe that Mr Yanukovych is a source of stability. However, the number of Western governments that continue to believe this is shrinking rapidly. This makes it all the more unusual why President Nicolas Sarkozy awarded Mr Yanukovych the Légion d'honneur. France’s highest honour was awarded even though, prior to the state visit, the media watchdog Reporters Without Borders sent an open letter to Mr Sarkozy, foreign minister Bernard Kouchner, and National Assembly speaker Bernard Accoyer, complaining about “serious violations of media freedom” in Ukraine since Mr Yanukovych became president.

The Italian Job

But, in a comparative context is Ukraine unique in changing its government often and how does this adversely affect economic growth and foreign direct investment?

Italy, a founding member of the EU, has had on average a different government each year since World War II. That is, a total of 57 governments.

Italy’s so-called political instability has not prevented the country from doing well economically, becoming the eighteenth most developed country, and ranked eighth in the world measured on quality of life, surpassing Germany and the UK. Italy’s per capita GDP at purchasing power parity reflects the EU average.

Political instability after the 2004 Orange Revolution and Viktor Yushchenko’s election as president did not negatively impact foreign investment or Ukraine’s economic growth. Until the 2008 global financial crisis, Ukraine was ranked 18 out of 20 in the top destinations for FDI, according to the United Nations Conference on Trade and Development. Indeed, Ukraine experienced record growth for much of the period between 2000-2007.

The promise of stability is a myth. It is a well-worn term that has been used by just about every dictator in history to justify authoritarianism.

It is feared that Mr Yanukovych’s current authoritarian policies will lead Ukraine to a period of greater political and social instability. This is what a large majority of Ukrainians already believe. How long will it take for Europe and the USA to finally reach this same conclusion?



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Gaffe Watch: The International Prison Guards Are Coming

Last Thursday during an interview on Channel 5 television, President Viktor Yanukovych made another of his celebrated gaffes. The subject was the presence of international observers at Ukraine’s forthcoming local elections on 31 October. Much to the bemusement of viewers the tongue-tied head of state referred to the international observers as “prison guards.”

“But this time I gave such an order to the ministry of foreign affairs to invite international prison guards…” said Mr Yanukovych. He made the mistake not once but three times. We wonder what was on his mind? Perhaps he was recalling his two previous criminal convictions?

The following letter was sent on 8 December, 2010, by Yulia Tymoshenko, opposition leader and former Prime Minister of Ukraine, to the IMF Managing Director and Executive Directors:


TO: Mr. Dominique Strauss-Kahn, Managing Director of the IMF

CC: IMF Executive Directors

Meg Lundsager (USA)
Mitsuhiro Furusawa (Japan)
Klaus D. Stein (Germany)
Ambroise Fayolle (France)
Alex Gibbs (United Kingdom)
Willy Kiekens (Belgium)
Age F.P. Bakker (Netherlands)
Carlos Pérez-Verdía (Mexico)
Arrigo Sadun (Italy)
HE Jianxiong (China)
Thomas Hockin (Canada)
Christopher Legg (Australia)
Duangmanee Vongpradhip (Thailand)
Per Callesen (Denmark)
Shakour Shaalan (Egypt)
Moeketsi Majoro (Lesotho)
Ahmed Abdulkarim Alkholifey (Saudi Arabia)
René Weber (Switzerland)
Aleksei V. Mozhin (Russian Federation)
Mohammad Jafar Mojarrad (Islamic Republic of Iran)
Paulo Nogueira Batista (Brazil)
Arvind Virmani (India)
Alfredo Mac Laughlin (Argentina)
Kossi Assimaidou (Togo)


First of all, I would like to express my gratitude to the IMF for its long-standing cooperation with Ukraine that was especially important during the global financial crisis in 2008-2009. I am sure that the cooperation between Ukraine and the IMF will continue for the sake of real reforms and the recovery of our public finances.

In the joint IMF-Ukraine programmes, considerable attention has been paid to balancing the budget and ensuring an optimal deficit – a significant part of which involves curtailing unreasonable public expenditure. The most important conditions for realizing a successful cooperative programme are transparency and accountability of public finances.

An integral part of Ukraine’s state budget is balancing the state-owned joint stock company Naftogaz. Unfortunately, I must state that today the company is entangled in a web of international corruption and fraud.

The basis of the corruption scandal is the illegal transfer of public funds in the amount of USD 5.4 billion to the shadowy company RosUkrEnergo. The amount – which constitutes 10% of Ukraine’s national debt – will completely unbalance the public finances and lead to the bankruptcy of Ukraine’s gas-transportation system. As a result, this will pose a threat to the energy stability of Europe.

The order governing this shadowy international transaction has already been approved by Government Resolution No 1061, dated 15 November, 2010 – a date which will go down for the largest-scale financial crime in Ukraine’s history.

As you understand, the financial resources that are being provided to Ukraine by the IMF will in general balance, subsidize, and finance this crime. Instead of the desired curtailment of Naftogaz’s deficit and relieving its dependence on state financial support, both will be increased significantly.

Ukrainian authorities will justify their actions by the decision of the Arbitration Institute of the Stockholm Chamber of Commerce. Without questioning the Court’s international authority, one must understand that it was not a legal proceeding in which Ukraine conscientiously defended its position. There was a corrupt conspiracy between the new Ukrainian government and the shadowy company RosUkrEnergo against Ukraine, framed behind the back of Ukraine’s people.

I would like to recommend to you a proposition to send a monitoring group to Ukraine to examine the situation before the disbursement of the next tranche payment to Ukraine. Furthermore, we wish to see in the Memorandum of cooperation with Ukraine the voluntary abandonment by the Ukrainian authorities of financing corrupt transactions connected with RosUkrEnergo.

During the difficult post-crisis period, it is very hard for Ukraine’s people to live, work and repay credits to the IMF, which will later be transferred to mafia structures. I know that other IMF donor-countries have also experienced difficult times after the crisis. It would be unfair for taxpayers of the IMF donor-countries to finance corrupt schemes in the post-Soviet space.

The fraud using public funds, occurring simultaneously with the disbursal of the IMF’s credit to Ukraine, directly contradicts the values and essence of the Fund’s mission in the world.

The Ukrainian and international communities are well-informed about the activity of RosUkrEnergo and its founders, among which are some odious figures sought by the FBI. A special investigation of its activity was undertaken by the international NGO Global Witness. Detailed information about its founders was also published both by the Ukrainian and international media.

Ukraine’s society counts on your objective response, as well as fair and professional actions by the IMF Board of Directors.

Sincerely yours,

Yulia Tymoshenko

Former Prime Minister of Ukraine

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