Ukraine's Revolution Is Mired Over Markets

YALTA, Ukraine -- Eight months after hundreds of thousands of demonstrators removed a corrupt government in Ukraine, its peaceful Orange Revolution is being undermined by rivalries, conflicting reform programs and lack of coordination between the two people who did most to lead the revolt, advisers and supporters in both camps say.

President Viktor A. Yushchenko (L) and Prime Minister Yulia Tymoshenko during Orange Revolution

They say the struggle between President Viktor A. Yushchenko, a former chief of Ukraine's central bank, and Prime Minister Yulia Tymoshenko, a former business tycoon, is delaying much-needed reforms. It could even erode the popular support that put both leaders, who are very different, into power.

"Tymoshenko is very left-wing, hugely populist, paternalistic and also very charismatic," said Boris Nemtsov, a former deputy prime minister of Russia, leading member of Russia's pro-market Union of Right Forces political party and now an adviser to Mr. Yushchenko.

"Yushchenko is a liberal, democrat, European-oriented politician," he said, using the term liberal in its economic, free-market sense. "Such ideological differences are very hard to overcome. There is jealousy and rivalry while reforms keep being delayed."

Yet, say their advisers and analysts, they depend on each other. Mr. Yushchenko needs Ms. Tymoshenko's power, popularity and political guile to keep a fragile coalition of free-market advocates, Socialists and Communists together before parliamentary elections in March. Ms. Tymoshenko needs Mr. Yushchenko's support to retain the office of prime minister.

Neither politician will admit publicly to a conflict. But the openness with which their advisers discussed the problem at a conference in Yalta in late July illustrated that the rivalry and clash of agendas were hampering change. This means that changes proposed by the International Monetary Fund and the European Bank for Reconstruction and Development - like the introduction of clear property rights, the rule of law and privatization - have not gotten very far.

"There is a lack of coordination and coherence inside the government," said Grigoriy Nemyrya, an adviser to the prime minister and director of the Center for European and International Studies in Kiev. "If last December's revolution was a managed revolution, then a managed counterrevolution is possible over the next eight months. It would be damaging for Europe and Ukraine. It would be catastrophic for the region."

Mr. Nemtsov and Mr. Nemyrya were among several top government advisers and businesspeople at the conference in the Livadia Palace, a favorite summer residence of the Russian czars perched above the southernmost tip of the Crimean coast in Ukraine. It was here, in February 1945, that the United States, Britain and the Soviet Union decided the fate of Germany and Eastern Europe after World War II. After Nazi Germany capitulated three months later, Eastern Europe soon came under Soviet domination.

Sixty years later, with the Soviet Union gone, Germany reunited and former Communist countries becoming members of the European Union and the North Atlantic Treaty Organization, there is another agenda. "This is about bringing Ukraine back to Europe," said Marek Siwiec, a Polish legislator in the European Parliament and a board member of Yalta European Strategy, a private group that organized the conference.

The aim of Yalta European Strategy is to muster international support for Ukraine's wish to become a member of the European Union. The driving force behind it is the oligarch Viktor Pinchuk, the son-in-law of the former Ukrainian president, Leonid Kuchma.

Mr. Kuchma stepped down last December after Mr. Yushchenko was elected in a vote that was rerun after huge protests by people accusing the government of electoral fraud.

At the conference, the staunchest supporters of the Orange Revolution from inside and outside the country could not hide their disappointment over the slow pace of change, seen as an essential step toward Ukraine's gaining entry in the World Trade Organization. "There is mounting anger in Western business circles over the lack of radical liberal reforms and the failure to establish a functioning legal system," said Alexander Rahr, an expert on the region and program director at the German Council for Foreign Relations in Berlin.

With the election scheduled for next spring, Mr. Rahr and other analysts said Ukraine's legislators would balk at any unpopular changes that could damage their election chances. Widespread privatization could lead to restructuring and job losses, which could dent support for the reformist parties.

The political challenge for these changes was clear earlier last month, when the government tried to get parliamentary approval for reducing import tariffs, a measure required for joining the W.T.O.

Socialist Party legislators backed by the Ministry of Agriculture fought hard against Mr. Yushchenko's supporters to prevent any relaxation of the high tariffs on sugar imports in order to protect domestic farmers. The debate ended in fistfights.

Source: International Herald Tribune