TCS Daily

Ukraine's 100 Days

By Marcus Stober - June 6, 2005 12:00 AM

It has now been a little bit more than 100 days since the Orange Revolution swept through Ukraine and installed Victor Yushchenko as president. Expectations are high that the new government will move the country towards democracy and free market economy. The head of the government and leader of the coalition party, Prime Minister Yulia Tymoshenko, has recently come under intense fire and media are reporting a split between her and the president. True or not, these reports show how difficult it will be to produce results in a country that for too long has been ruled by a corrupt elite.

Still, the first 100 days of the Yushchenko presidency has not been short on promises. The new administration has made it a strategic priority to align itself with the Atlantic Community and sees the prospect of EU membership as a driving force for change. As a country with a population that is often portrayed as split between allegiance to Russia and Western Europe (represented by the EU), Ukraine will find this a delicate balance to strike.

Many things have changed in this short period of time. First, the new administration has reversed some of the unpopular policies of former President Leonid Kuchma's regime. There has been a re-visiting of privatization schemes and a push to abandoning the free economic zones designed to support special economic interests. The new government has also taken on what it sees as the monopolization of the Ukrainian petrol market by Russian oil companies. By forcing a reduction of the petrol price the prime minister has made herself unpopular with the oil industry and its backers. The decision - popular with consumers - is seen by many as the prime minister's personal attack on Russian oil interests. But it was recently reversed by Yushchenko, who ruled the intervention incompatible with free and liberal markets. That his decision came after a meeting with industry leaders has only fueled the speculation on the stability of the coalition and the influence of Russian interests. Another source of tension has been the fluctuating rates of the Hrynva to the dollar. This has hit hard on people's savings, commonly held in dollars.

Despite these problems, the government still enjoys considerable support. Yushchenko and Tymoshenko have been able to raise pensions and state salaries. In a country where the real cost for a minimum standard of living is roughly assumed to be $200 per month and state pensions are hardly above $60, such decisions are indeed important and very popular. Salaries for state civil servants have been raised in order to fight corruption, and Ukrainian families have seen their allowances increase. The decision to re-visit previous privatizations sits well with the ordinary Ukrainian but has raised concern among foreign investors. The list of potential privatization schemes that will be investigated has become a headache for the governments as conflicting reports emerge on the exact number to be re-visited.

One hundred days is not a long time to change the direction of a country. Especially one that for years has been run by an elite protected from public scrutiny and accountability. This is probably one of the major changes in Ukrainian politics. Previous presidents rarely appeared in public. Former President Kuchma used only to "appear on New Year's Eve to wish everyone the best" - as one Ukrainian democracy activist told me during a recent visit in Kiev. Only state-controlled television used to be available for the great majority of Ukrainians and journalists were told what to say and feared repression or even death as the Gongadze case so dramatically showed. This has changed with the Orange Revolution.

Nowadays a day doesn't by without the president being on television or making a public appearance. These are not orchestrated manifestations of propaganda. The president and his government have been forced to explain their decisions to people. On a recent live TV program celebrating the first 100 days of his presidency Yushchenko defended his decisions and took questions from ordinary people from all over the country. This was unthinkable during the previous regime. Even the Prime Minister Janukovitj, who was ousted from power by the revolution and currently heads the opposition, has adapted to the new circumstances and has found new "interest" in communicating with citizens.

The profound changes in the Ukraine have less to do with the new president or his government than they do the long-term shifts affecting the lives of ordinary Ukrainians. The country has been one of the richest states in the former Soviet Union but has been overtaken by its neighbors. Ordinary Ukrainians have not yet reaped the benefits of the fall of communism. Wealth has been stolen by a few. The Orange Revolution was the consequence of this. When millions Ukrainians took to the streets in the cold winter of 2004 they were manifesting a change of mentality that has been growing among the people.

The new administration faces daunting tasks. On one hand it must make sure that its policies does not deepen the historic split between the Russian-dominated east and the European west. But it must also keep up the pace of reforms. Whether Yushchenko's rise to power via the Orange Revolution has taken root with the Ukrainian electorate will not fully be known until the parliamentary elections in 2006.

The author is Director of Policy at the European Enterprise Institute.


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