October 8, 2007

The Ukrainian Elections and Estonia’s Interests

Merle Maigre, Researcher, ICDS, September 2007 The snap parliamentary elections in Ukraine will indicate whether the country will advance in

Merle Maigre, Researcher, ICDS, September 2007
The snap parliamentary elections in Ukraine will indicate whether the country will advance in the direction of reform and whether such reforms will be successful. The cabinet which will be formed after the elections will have an influence on Ukraine’s future foreign policy course – the more unanimity in the coalition, the more certain it will be that the country will stay on a selected course. Ukraine’s foreign policy trends will have an impact on the balance of power in the whole Baltic and Black Sea regions, including in the new democracies at the borders of NATO and the European Union.
The further Ukraine’s political and economic reforms proceed and the closer it cooperates with NATO, the more certain it will be that countries such as Georgia and Moldova will also follow a Western orientation. Westerly winds from Ukraine could also stimulate and sustain the Belarusian opposition. But if the current domestic squabbling and inconsistency in foreign policy continue and if reforms remain incomplete, if the relationship with NATO becomes hollow and if Ukraine continues to sulk with the EU, it will also be harder for Georgia and Moldova to follow a pro-Western policy and Lukashenka’s autocratic regime in Belarus will flourish. And in the bigger picture, developments in Ukraine can create a supportive climate for systemic changes in Russia too.
All of this is important for Estonia. It is in Estonia’s interests that Ukraine should make its security and economic policy decisions freely, without influence from Russia. One of Estonia’s foreign policy priorities is to strengthen the transitional democracies in the EU and NATO’s neighbourhood. Sustaining new democracies offers the prospect that Russia too might be inflicted with the democracy bug one day. It is in Estonia’s interests that Ukraine should develop into a state governed by the rule of law and with respect for democratic values. It is in Estonia’s interests that Ukraine should follow stable domestic and foreign policy courses. That it should become a country with transparent politics and economics. Estonia is interested in having close business ties and a meaningful foreign policy dialogue with Ukraine.
To what degree do Estonian interests depend on the result of the Ukrainian elections? Are there any joint projects that should be delayed until the exact identity of the new Ukrainian government is clear? What parties are likely to form the new coalition? How will it affect Ukrainian policy? This analysis offers some answers to these questions.
Firstly, the paper gives an overview of the current state of play of Ukrainian politics and parties. Secondly, it suggests some possible combinations for Ukraine’s new coalition. Thirdly, it assesses the effect of the election results on future Ukrainian policies. Fourthly, the analysis offers some conclusions and suggestions for Estonia.
1. Background to the elections – domestic politics
The early parliamentary elections on September 30 represent an interim settlement – a time-out solution to a political crisis that has been smouldering for over a year in Ukraine. The roots of the crisis are in the Ukrainian constitutional reforms launched during the Orange Revolution. In December 2004, the Ukrainian parliament adopted a decision to amend the constitution. The amendments were supposed to enter into force in January 2006 and their objective was to move away from the Soviet-style super-presidential power system towards a more balanced parliamentary-presidential system.  According to the new agreement, the executive power (the prime minister) would gain more control over economic and finance policy, while foreign policy and defence matters would remain in the president’s competence. Unfortunately, the constitutional amendments were adopted as a single package of theoretical principles without consideration of how they would be applied in practice, leaving the precise balance of powers between the president, government and parliament unclear.
During this April and May’s domestic political crisis, a dispute over power sharing between the president, parliament and government that had been brewing since August 2006, when Prime Minister Yanukovych was appointed, reached its height. In early April, President Yushchenko suddenly dissolved the Verhovna Rada (parliament) to prevent power concentrating in the hands of the governing coalition led by Prime Minister Yanukovych’s Party of Regions. On 21 March, the former parliamentary defence committee chairman, Anatoliy Kinakh, together with fellow MPs from his Party of Industrialists and Entrepreneurs of Ukraine, had moved from the Our Ukraine-led opposition to the Regions-led coalition. This served as a catalyst for the crisis, creating a new balance in the 450-member parliament: the Regions coalition gained additional votes taking it within only a couple of dozens of the 300 which would be necessary to override the presidential veto. This was too much for President Yushchenko.
The political crisis lasted two months. At the end of May, the president, prime minister and speaker of the parliament reached a joint declaration[1] where they agreed on a date for early parliamentary elections – 30 September 2007. They also declared that the decision of the constitutional court would not affect the holding of the extraordinary elections. In order to avoid a precedent, the president agreed that the basis for dissolving the parliament would not be his April directives, but that the parliament itself should initiate the dissolution.[2]
The spring crisis in Ukraine demonstrated the fragility of its democracy. All sides showed disrespect for democratic institutions such as the constitution and the constitutional court. In the course of the power struggle, the principles of a state governed by the rule of law became a secondary consideration. In my opinion, the 30 September elections will not bring closure to this political crisis. While there could be a solution if the various political forces in Ukraine reached consensus on a constitutional compromise, in reality this is unlikely to happen because personal power remains close to the hearts of top Ukrainian politicians. A lack of transparency, suspicion and a continual game of musical chairs in Ukraine’s domestic politics are likely to continue, at least for the near future.
2. Overview of principal political forces
Before the elections, the Party of Regions had the highest popularity – between 29 and 34%. However, Regions is divided into two inner circles or cliques which engage in cloak-and-dagger intrigue. The first group is led by the richest and most influential man in Ukraine, Rinat Akhmetov. It also includes Regions’ campaign manager, Boris Kolesnikov, and their base in the business community. They support the modernisation of the Party’s image, a business and foreign policy balanced between the West and Russia, and peaceful relations and cooperation with President Yushchenko. In order to soften the anti-Western image of the party, Akhmetov hired Paul Manafort’s American PR firm which has, since December 2006, been responsible for constructing Regions’ interaction with other Ukrainian political forces, as well as its relations with the West.
The other circle consists of the Minister of Energy, Yuri Boyko, deputy Prime Minister, Nikolai Azarov, and their supporters. This group represents Russian business interests and a pro-Russia policy. Some of them are “brown-suit” politicians from the Kuchma era who still put stock in the good old Soviet political culture and are suspicious with regard to NATO. They talk of the Great Patriotic War, engage in counter-propaganda against the idea of Ukrainian nationhood and deny the 1930s famine. It cannot be ruled out that part of this conservative Regions group would be ready to ignore state interests for personal business gain and profit. If they do not like the election results, they may protest against them and call the people onto the streets to demonstrate. In part, such acts would be aimed at preventing the Akhmetov camp from achieving a coalition agreement with the president.
Yanukovych is a uniting force between the two Regions groups and a popular leader with the common people. The Orange revolution made him a political idol in Ukraine’s mining areas. Regions’ campaign in the run-up to the elections focused on the messages that Yanukovych is an effective economist and that the party will raise the standard of living. Only towards the end of the election campaign, in September, was anti-NATO and pro-Russian propaganda launched to win over miners in the east and Crimean citizens in the south. Regions also initiated a nationwide referendum based on these issues in an attempt to gain votes at the elections.
Support for the Yulia Tymoshenko Bloc (BYUT) electoral alliance was 22 to 25% before the elections. In a sense, Yulia Tymoshenko emerged victorious from the spring crisis as she was able to leave an impression that she was above the domestic political mudslinging. BYUT’s advantages are Tymoshenko’s charisma and an enormous working capacity, combined with the keen intelligence of the party’s foreign policy “brain”, Grigory Nemirya. On the downside are Tymoshenko’s uncompromising nature and self-centeredness, which will make it complicated for BYUT to enter a coalition with other political forces. Tymoshenko wants to become prime minister and will make only reluctant compromises in this regard. She would gladly see herself as president in 2009.
The pre-election popularity of the Our Ukraine – People’s Self-Defence bloc was between 11 and 15%. This alliance consists of the Our Ukraine Party itself, the civic movement People’s Self-Defence, led by Yuri Lutsenko who is particularly popular with the youth, and the right-wing bloc of former Minister of Foreign Affairs Borys Tarasyuk, National Rukh-Ukraine.
Our Ukraine’s campaign focused on abolishing immunity and preferential rights for MPs. They strongly vowed to stand up to and fight against corruption. The public’s favourite was the former Minister of the Interior, Yuri Lutsenko, who lived in a tent camp in Independence Square during the Orange Revolution and has been popular ever since. Should he win in the elections, Lutsenko has said that he would be content with the position of mayor of Kyiv. He would prefer that the Interior Minister’s post, which is close to his heart, be given to his brother-in-arms Hennadiy Moskal, the deputy head of the Security Service and former President’s special representative to Crimea.
Above all, Our Ukraine remains the president’s party and President Yushchenko himself has a decisive voice in party matters. Naturally, Yushchenko used the opportunity of the election campaign to raise his personal rating, thus consolidating his position ahead of the presidential elections planned for 2009. Yushchenko is determined to continue as head of state beyond 2009 as well and it certainly is worth keeping this in mind when assessing his actions.
Litvyn Bloc has become the dark horse of the September elections. This is the eponymous electoral alliance of Volodymyr Litvyn, who was a speaker of the parliament prior to 2006. His bloc’s pre-election support ran between 3 and 5%. Litvyn’s platform called for a moderate balance in domestic matters and foreign policy and supported a conservative economic policy, placing it between the Orange camp and Regions. Such perfect centrism appealed to Ukrainians. If Litvyn’s Bloc gained enough votes to pass the 3% threshold, he would be ready to team up with any political force that made him a lucrative offer.
3. Power games and coalition combinations
No major changes should be expected in the parliament that emerged from the elections of March 2006.  Then, the election threshold was crossed by Regions, BYUT, Our Ukraine, the socialists and the communists. The average Ukrainian is tired of the domestic political one-upmanship of the September election campaign and will only go to the polls if he is in the mood.
It is unlikely that any party will win a landslide. Public opinion polls predict that Regions, BYUT and Our Ukraine will each gain more or less the same number of votes, with Litvyn achieving 4 to 5%. Undecided voters are leaning towards casting their ballots for the Orange parties. Second tier political forces such as the communists, socialists or Natalia Vitrenko’s ultra-left-wing electoral alliance could be surprise finishers above the 3% threshold. Support for each of these is between 1.5 and 5%. Ukrainian parties should therefore be ready for coalition negotiations. And politicians should be ready for the compromises and cooperation required to work in a coalition.
If the Orange forces – BYUT and Our Ukraine – together win a majority at these elections, they will probably form a coalition and, in all likelihood, Yulia Tymoshenko will become prime minister. This is, of course, provided that President Yushchenko can overcome his personal antipathy towards her. With an Orange coalition, Ukrainian economic and political reforms would hopefully continue, cooperation with NATO would again become energetic and substantial and the Western oriented foreign policy course would become stronger.
An alliance between Regions and Our Ukraine would be possible if neither Regions nor the Orange Union could achieve a majority. In this case, Akhmetov could prevail in Regions. He is interested in a more Western-minded policy and in cooperation with the president, rather than unlimited power for Yanukovych’s Party of Regions, as a balance of forces is more in his own business interests. From the foreign policy perspective, the emphasis would then be on relations with the EU, with NATO relegated to the background. The governing coalition would, in any case, remain haunted by indecision and suspicion of its own relationship, as both Yushchenko and Yanukovych would personally find it hard to forget the strife of the spring crisis.
If Regions gets a clear majority of the votes, they will form a one-party government and Yanukovych will probably continue as prime minister. If Regions are ready to offer Litvyn the parliamentary speaker’s chair, they could form a cabinet together. In either case, Regions’ hardliners would set the tone in this union. In such a case, economic reforms would face stagnation and integration with NATO would slow down. Support for Western interests would dry up in favour of Russian political and economic interests. In the energy sector, corruption and a lack of transparency would continue, as would nepotism in privatisation policy.
4. Effect of the election results on Ukrainian policy
How would the election results affect Ukraine’s security policy, its relations with Russia, its energy policy, NATO integration and its role in the region?
Security sector reform would enjoy a more favourable climate under an Orange coalition, assuming that this coalition would be the most stable of the alternatives: security sector reform needs stability to thrive. With Regions and Our Ukraine, there would be a danger of infighting breaking out between the prime minister and president. In this case, energy would be wasted on picking fights and political one-upmanship rather than trying to achieve consensus on national security priorities. In February 2007, the president signed Ukraine’s new National Security Concept and a truce between the agencies will be necessary to implement it. The animated and determined inclusion of the security forces in the political battle would not help administrative reform as the civil service should, as a matter of principle, be apolitical and non-military.
The closer the Party of Regions’ Moscow-minded splinter faction gets to the helm of the state, the more fraternal relations with Russia will be. The litmus tests of relations with Russia will be: whether the lease agreement with Russia for the Black Sea fleet is ended or extended past 2017; the status of Russian as the second official language; cooperation with NATO; and the new gas supply contracts. Ukraine currently imports 80% of its natural gas from Russia and Moscow uses this state of dependence to apply both foreign policy and economic (price) pressure.
The dispute over the price of natural gas between the Russian state enterprise Gazprom and the Ukrainian government will set the tone of Ukrainian energy policy. The dispute stared in March 2005, when Russia decided to suddenly raise the price of the natural gas it sold to Ukraine. On 1 January 2006, gas supply to Ukraine was cut off. The dispute was resolved on 4 January 2006 when the price of gas to Ukraine rose from 50 to 90 dollars per 1000 cubic metres. In 2007, the price for 1000 cubic metres was already up to 130 dollars, and another price rise is planned for 2008.
In early February 2007, Putin announced that he was considering a possible merger of Russia’s and Ukraine’s gas pipelines. Indeed, Prime Minister Yanukovych, his deputy Azarov and Minister of Energy Boyko had already given Moscow a green light to sign an agreement between UkrNaftohaz and Gazprom, in exchange for an opportunity to take part in the exploration of Russia’s oil and gas reserves and for receiving a lower price for gas deliveries. The Ukrainian media, public and opposition in parliament took decisive action. A week later, the Verhovna Rada, spearheaded by BYUT and Our Ukraine, approved a draft law which prohibited any restructuring of the Ukrainian gas infrastructure[3]
Considering the lack of transparency in the Party of Regions’ energy policy, it can be assumed that if they came to power, Ukraine’s energy dependence on Russia would increase.
Ukraine’s activeness in regional policy will depend on the Western-mindedness of the cabinet. The primary fora for regional policy are: GUAM – the association uniting Georgia, Ukraine, Azerbaijan and Moldova; the initiative led by Ukrainian and Georgian presidents Yushchenko and Saakashvili called Community of Democratic Choice; and Transnistria. Kyiv revived GUAM after the Orange Revolution in 2005 in order to offer an alternative in regional policy and a balance to the Russian dominated Collective Security Organisation. But the initial enthusiasm has recently faded. In 2007, Azerbaijan took the presidency of GUAM.
The purpose of the Community of Democratic Choice was to create a united front among the region’s democracies. Unfortunately, the Yanukovych government, not wishing to unbury the hatchet with Russia, was not particularly enthusiastic in this direction. In addition, the Community of Democratic Choice lacks a concrete activity plan.
Ukraine could play an important role in resolving the Transnistria conflict as an independent arbiter and a party with good knowledge of the region. Ukrainian policy will be instrumental in determining how effectively EUBAM (the Ukrainian-Moldovan European Union Border Assistance Mission) will be in exercising control over trade in Transnistria – its headquarters are in Ukraine and it operates with an imprimatur from the Ukrainian authorities. EUBAM is considered to be the EU’s greatest accomplishment so far in resolving the Transnistria conflict. During the period that law and order have been restored on the Ukrainian-Moldovan border, the Transnistria puppet government has lost at least one-third of its income. Nevertheless, apart from making EUBAM operations possible, Ukraine has not offered any ideas on how to resolve the Transnistrian situation.
In the last year, Ukraine has lacked the requisite domestic political stability and the necessary foreign policy consensus between its president and prime minister to assume a leading role in regional policy. The Yanukovych government has not wanted to provoke Russia, which considers itself the leader of the entire territory of the former Soviet Union and condemns any sort of autonomous activity in its “region of control”.
5. Conclusions and recommendations for Estonia
It is in Estonia’s interests to reiterate that NATO’s door should continue to remain open for Ukraine. The Ukrainian government should be reminded that informing the public about NATO is useful and necessary. Regardless of which parties enter the government, Ukraine should take a serious approach towards continuing security sector reform. Reforms in the democratic management of the security sector – which will require the Ukrainian security forces to be demilitarised and apolitical – is above all in the interests of the Ukrainian state itself. Estonia can potentially provide assistance here, for example by increasing the administrative capacity of Ukrainian civil servants through various training and assistance programmes. The aim of such assistance would be to increase the number of competent and Western-minded officials, who in turn would be able to carry out the necessary defence and security sector reforms effectively. Within the EU, Estonia could also support and promote a more active energy security dialogue with Ukraine.
It is important for the consolidation of Ukrainian democracy that multiple layers of civic movements that attach importance to Western values should exist. A strong civic society is a guarantee of a strong democratic rule of law. Civic society which supports integration with the West will contribute to reducing Russian influences in Ukraine. Estonia could intensify ties with Ukrainian non-governmental organisations, as these can sometimes be more stable cooperation partners than governmental bodies. NGOs and think tanks are also less constrained in their initiatives than state institutions or those linked to political parties.
In short, whatever the election result, Estonia’s continuing support to Ukraine would be beneficial. It is in Estonia’s interests to positively influence Ukraine’s integration with NATO, its political and economic reforms, and the development of its civic society. To support these interests, it will be necessary for Estonia to continue to intensify contacts with Ukraine. It would be a mistake to halt or postpone Ukraine-oriented projects. Political developments in Ukraine will have an effect on events in the entire region. In spite of the weaknesses and shortcomings that accompany any electoral alliance, Ukraine has a better attitude toward Estonia than Russia does, because Ukraine remains to be a more multifaceted, open and democratic country than Russia today.
____________________________________________________________________________________[1] Full English text of the agreement at http://www.pravda.com.ua/en/news/2007/5/28/7901.htm (as of 11 February 2007)
2 Pursuant to the constitution the president can dissolve the parliament if at least 150 deputies resign.
3 Excerpt from the new law: “The reorganization (merger, incorporation, separation, spin-off, transformation), concession, renting, leasing, mortgaging, privatization, or other actions to change the ownership of state trunk pipeline enterprises as well as the transfer of shares of such enterprises to the authorized capital of other companies shall be prohibited.” In addition, “State trunk pipeline enterprises may not be declared bankrupt and liquidated under bankruptcy legislation.” (06.02.07.)

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