Yanukovych Woos Voters With Promises To Alter Program

KIEV, Ukraine -- Ukrainian presidential candidate Viktor Yanukovych, who won most votes in the first round on Jan. 17, began campaigning for the second ballot by promising to listen to voters who backed rivals and adjust his policies.

“People voted for changes and we will implement them,” Yanukovych, 59, said in Kiev yesterday after eliminating incumbent President Viktor Yushchenko. “It’s important voters whose candidates failed don’t feel their voices went nowhere.”

Yanukovych topped a field of 18 contenders with 35 percent support after 99.5 percent of ballots were counted. He will face Prime Minister Yulia Timoshenko, who took 25 percent, on Feb. 7 for the right to lead the former Soviet republic of 46 million.

The candidates both pledge to strengthen ties with the European Union and repair strained relations with Russia, fight corruption, cut taxes, improve health care and restore economic growth. Timoshenko, 49, says she wants to bring Ukraine into the EU while Yanukovych has campaigned to introduce Russian as the nation’s second official language.

“With seemingly little to choose in the way of policy between the two, the most important factor will be how quickly either can build a political consensus,” said David Oxley, an emerging-market economist at London-based Capital Economics Ltd.

Ukraine was forced to line up a $16.4 billion International Monetary Fund bailout in late 2008 as the global credit crisis cut demand for its exports and dried up investment. Cooperation with the Washington-based lender is stalled because of political infighting and the government’s failure to cut spending.

Combating Crisis

Yanukovych said he will remedy the economic woes. “We will combat the crisis and return to economic growth,” he pledged.

Voters who backed communist Petro Symonenko, who won 3.6 percent, may switch to Yanukovych, while supporters of Yushchenko and former parliamentary speaker Arseniy Yatsenyuk, who won a combined 12.4 percent, are more likely to turn to Timoshenko, who helped lead the Orange Revolution with Yushchenko in 2004, analysts said.

“It is impossible to predict with any certainty how the votes collected by the losing candidates will be distributed,” said Iryna Piontkivska, an analyst at Troika Dialog investment bank in Kiev. “Although Yanukovych has a comfortable lead after the first round, Timoshenko could still improve her result thanks to the so-called Orange electorate, the votes of which were dispersed among most of the candidates.”

Possible Kingmaker

The kingmaker may be Serhiy Tihipko, a former central bank governor who placed third with 13.1 percent, according to researchers at Kiev-based AKIB UkrSibbank. Yanukovych may cut a deal with him to hold early parliamentary elections, giving Tihipko’s party a chance to enter the legislature, the bank said.

Tihipko headed Yanukovych’s presidential campaign in 2004, which triggered the Orange Revolution when the Supreme Court declared his victory fraudulent.

“We don’t expect the Ukrainian election saga to end soon, making Ukrainian sovereign debt vulnerable to political noise,” UkrSibbank said in its research note.

The yield on Ukraine’s dollar-denominated bond due 2013 fell to 10.43 yesterday from 10.473 on Jan. 15, Bloomberg data show. The benchmark PFTS stock index added 1.5 percent to 634.40, the highest since Nov. 19.

Timoshenko may have to overcome voter anger over her bickering with Yushchenko that began after the revolution and helped Yanukovych’s party win parliamentary elections in 2006.

Economic Recession

Yanukovych was prime minister in 2006, though disputes with Yushchenko led to early elections in 2007, allowing the Orange allies to reunite and Timoshenko to become premier again.

The country has slumped into its worst recession in at least 15 years, with gross domestic product plummeting a record 20.3 percent in the first quarter of 2009, 17.8 percent in the second and 15.9 percent in the third.

Yushchenko, who was swept to power when millions poured onto the streets to protest against Yanukovych’s rigged victory five years ago, was punished by voters for failing to fulfill his promises, said analysts including Yuriy Yakymenko, at Kiev- based Razumkov Center for Economic and Political Studies.

Yushchenko failed to combat corruption and win membership of the North Atlantic Treaty Organization, though he managed to gain entry to the World Trade Organization, increase foreign investment and cut unemployment.

Source: BusinessWeek