Ukraine's President And Prime Minister Feud As Their Country's Economy Sinks

KIEV, Ukraine -- In Ukraine, it’s truly noteworthy only when the president and prime minister stop fighting.

Ukraine's President Viktor Yushchenko (left) shakes hands with Prime Minister Yulia Tymoshenko during a session of the National Security and Defence Council in Kiev Feb. 10, 2009.

President Viktor Yushchenko and Prime Minister Yulia Tymoshenko — who stood shoulder-to-shoulder just four years ago as Orange Revolution allies — have spent the better part of the last year at each others' throats, in a vituperative, take-no-prisoners struggle that has split the government down the middle and paralyzed the country’s political process.

The situation would be humorous if it were not so critical: Hardly a week seems to go by without some sort of outburst from the president (or his minions) against the prime minister (and her backers). The two camps regularly hurl back and forth phrases like “criminal,” “traitor,” “con artist” and “idiot."

Meanwhile, Ukraine is facing its biggest economic challenge since the economic drought that immediately followed the Soviet Union’s breakup.

Industrial output declined by 30 percent year on year this January. The national currency, the hryvnia, has lost half of its value since highs last year. Banks have stopped lending, and many are permitting only miniscule withdrawals, to head off a run on banks. Factories, shops and businesses throughout this eastern European country of 46 million are closing their doors, while unemployment and public dissatisfaction are spiking.

“Re-arranging the deck chairs on the Titanic,” “Fiddling while Rome burns,” — so the local and international press describe the Ukrainian morass.

The Ukraine-Russia gas dispute was interpreted by many partially as a product of the two leaders’ struggle. In February, the second tranche of a critical $16.5 billion International Monetary Fund bailout program fell through because of infighting in the government. Finance Minister Viktor Pynzenyk, a Yushchenko ally, resigned in protest. Tymoshenko accused the president of spreading “falsehood, panic and hysteria.”

Earlier this month, agents from the Ukrainian Security Service (SBU), some wearing baklavas and brandishing automatics, stormed the offices of state energy company Naftogaz.

At issue was the ownership of a large amount of natural gas — between 6.3 and 11 billion cubic meters, depending on which report you read — valued at about $1 billion. The SBU said the gas belonged to RosUkrEnergo, a shadowy Swiss-based company with reputed ties to Yushchenko and other top politicians, while Naftogaz said it was the rightful owner.

But since the SBU answers to the president — and just a few weeks earlier Yushchenko named a close ally, media magnate Valery Khoroshkovsky, as the SBU’s deputy head — and Naftogaz comes under the prime minister’s aegis, this was viewed as just another clash in the two leaders’ battle royale, albeit with the new, extremely disturbing development of involving the country’s law enforcement bodies.

“This is not new,” said Yuri Yakymenko, director of political and legal programs at the Razumkov think tank, adding that the struggle originally reached fever pitch and stayed there when the president tried to dissolve parliament last autumn and called for new elections. “Unfortunately the fight among the political groups has witnessed a drop in legitimacy for the whole political system.”

The current sparring is believed to be a preview of the presidential elections, scheduled for January next year. Tymoshenko is the front-runner, though her position takes a beating with every new piece of jaw-droppingly horrible economic news. Yushchenko for his part incredibly appears still to be considering re-election — or at least he has not said that he will not run – although his approval ratings are at 2.5 percent. (That could mean zero or lower, when you factor in the margin of error.)

For this reason — and maybe because they at times actually are concerned for the future of their country (though this is not a given) — the two leaders have occasionally set aside their differences. Most recently this happened in the wake of the IMF bailout delay. Yushchenko and Tymoshenko issued a joint statement laying out a unified economic reform program. Both leaders now say they are confident that the country will receive the second $1.8 billion payment.

The damage to both leaders’ reputations — in fact to the whole ruling class — has been irrevocable. Ukrainians will say in one breath that they want to be part of Europe and the West, but at the same time that they are disillusioned with the Orange Revolution, capitalism, as it is now practiced in their country, and even democracy.

On Kiev’s central Independence Square, where hundreds of thousands gathered in 2004 to protest a stolen election and sweep Yushchenko and Tymoshenko to power, a few tents have stood since January. They are part of a movement called “All of them — Out!,” which seems mostly to be made up of groups from the nationalist fringe.

“All of our leaders must go and be replaced by new forces,” said Nadezhda Batolkina, a movement member. As the weather warms, and with demonstrations expected throughout the country, we will soon know to what extent others agree with her.

Source: GlobalPost