Orange Fades to Black

Heralded for its Orange Revolution five years ago, Ukraine is coming apart at the seams

Fred Weir

On Jan. 31, in the industrial city of Donetsk, protesters demanded the impeachment of Ukrainian President Viktor Yushchenko. Industrial production in Ukraine plunged 26.6 percent in the past year.

KIEV, Ukraine – As the glob­al finan­cial cri­sis inten­si­fies, some jour­nal­ists have begun plac­ing bets on which coun­try is like­ly to crack first and dis­solve into anar­chy. If you’re into that sort of thing, the smart mon­ey might be on Ukraine, a nation with a gov­ern­ment that was bor­der­line dys­func­tion­al and an econ­o­my that was unsus­tain­able even before the finan­cial firestorm hit.

Ukraine's economy has tanked, its banks are paralyzed and millions have lost their livelihoods. Everyone has a story of a lost job, overdue loans or inaccessible life savings.

Ukraine’s econ­o­my has gone into a nose­dive, its bank­ing sys­tem is par­a­lyzed and mil­lions of peo­ple have lost their liveli­hoods in recent months. Every­one has a sto­ry of a lost job, over­due loans or life sav­ings frozen in inac­ces­si­ble bank accounts. 

One man, a laid-off Kiev con­struc­tion work­er, says he has sent his fam­i­ly to live with rel­a­tives in the coun­try­side, assum­ing that at least there will be some­thing to eat. That’s a chill­ing echo from the depths of Ukrain­ian history.

But it’s the polit­i­cal dra­ma that keeps grab­bing everyone’s atten­tion. Appar­ent­ly obliv­i­ous to the gal­lop­ing cri­sis, the for­mer heroes of the Orange Rev­o­lu­tion, Prime Min­is­ter Yulia Tymoshenko and Pres­i­dent Vik­tor Yushchenko, are locked in a bureau­crat­ic trench war that only one of them will sur­vive. Any anti-cri­sis mea­sure tak­en by one is imme­di­ate­ly con­tra­dict­ed by the oth­er: Pres­i­den­tial appointees are struck down by the Tymoshenko-led par­lia­ment, while region­al lead­ers across the sprawl­ing and deeply divid­ed for­mer Sovi­et coun­try of 50 mil­lion increas­ing­ly take local eco­nom­ic mat­ters into their own hands. 

It’s a war of all against all,” says Dmytro Vydrin, an inde­pen­dent deputy of the Supreme Rada, Ukraine’s par­lia­ment. Our best hope at this point is that chaos will win out over ill-inten­tions, because the worst thing will be if one group wins and estab­lish­es a monop­oly of power.”

Yushchenko and Tymoshenko are jock­ey­ing for posi­tion in advance of pres­i­den­tial elec­tions, due by the end of 2009. Few doubt that the fiery, ambi­tious Tymoshenko wants to be pres­i­dent, and many believe she has the mak­ings of a Ukrain­ian ver­sion of Russia’s tough leader, Vladimir Putin. 

Tymoshenko is the only Ukrain­ian leader with real charis­ma, and the dri­ve to take and mold pow­er for her own pur­pos­es,” says Vik­tor Nebozhenko, a soci­ol­o­gist and for­mer advis­er to Tymoshenko. She’s very strong, she can make peo­ple do what she wants, and she looks very like­ly to win.”

But the show­down might come much soon­er than any­one expects. Experts warn that default on Ukraine’s $105 bil­lion for­eign debt is immi­nent, despite an emer­gency loan of $16.4 bil­lion obtained from the Inter­na­tion­al Mon­e­tary Fund last autumn. 

The nation­al cur­ren­cy, the Gryv­na, has lost 50 per­cent of its val­ue since last sum­mer, dri­ving up the cost of imports and rapid­ly inflat­ing the U.S. dol­lar-denot­ed debts held by most Ukrain­ian companies. 

As a result of January’s gas accord with Rus­sia, Ukraine’s ener­gy-inten­sive econ­o­my will now have to pay $360 per thou­sand cubic meters of gas, rough­ly dou­ble last year’s price. The vast east­ern Ukrain­ian steel and chem­i­cal mills that account for a third of the country’s GDP are report­ing mas­sive slow­downs, and many of these Sovi­et-era indus­tries may not sur­vive the shock of increased ener­gy costs. 

About 1 mil­lion of Ukraine’s 20 mil­lion work­ers are cur­rent­ly unem­ployed, but mil­lions more have report­ed­ly been forced to take wage cuts, short­er hours or unpaid leave. Many experts are pre­dict­ing mass social protests will erupt in com­ing months as the sit­u­a­tion grows intolerable.

In a 24-page inter­nal memo leaked to the Ukrain­ian media, Finance Min­is­ter Vik­tor Pynzenyk warned in late Jan­u­ary that Ukraine’s econ­o­my is on the verge of col­lapse: We have entered an extreme­ly seri­ous and deep cri­sis. Ukraine’s [eco­nom­ic] sit­u­a­tion is the worst in the world.”

Pub­li­ca­tion of that sober­ing assess­ment served only to inten­si­fy the mutu­al death-grip between the pres­i­dent and prime min­is­ter. Yushchenko took to the air­waves in late Jan­u­ary to blame it all on the pop­ulism” of Tymoshenko, whose 2009 bud­get incurs a huge deficit to pay pub­lic sec­tor wages, pen­sions and oth­er social oblig­a­tions. As a result of her irre­spon­si­bil­i­ty,” Yushchenko charged, salaries, pen­sions and stipends will no longer be paid … all this can bring about a social catastrophe.”

Tymoshenko snapped back the next day: The so-called tele­vised address to the nation of Yushchenko is a mix­ture of false­hood, pan­ic and hys­te­ria. Every­one can see that the pres­i­dent is not the kind of leader they need when Ukraine is reel­ing under the blows of the glob­al eco­nom­ic crisis.”

Cul­tur­al split

It wasn’t always like this. Dur­ing the Orange Rev­o­lu­tion in 2004, Tymoshenko and Yushchenko worked togeth­er to defeat a Russ­ian-backed attempt to rig pres­i­den­tial elec­tions in favor of the east­ern-Ukraine based leader Vik­tor Yanukovych. 

Dur­ing weeks of protests in Kiev’s freez­ing main square, it was usu­al­ly Tymoshenko, a pas­sion­ate ora­tor, who would warm up the crowd before turn­ing the stage over to the more mea­sured and cere­bral Yushchenko. But fol­low­ing Yushchenko’s elec­tion as pres­i­dent, the two quick­ly fell out, and with­in a year Yushchenko dis­missed her from the prime minister’s job. 

In three par­lia­men­tary elec­tions since then, Tymoshenko has clawed her way back to pow­er main­ly by wrest­ing votes away from Yushchenko’s sup­port­ers. She now heads the gov­ern­ment as leader of a frag­ile major­i­ty coalition.

Some observers fear that Ukraine may be fac­ing its 1993 moment,” a ref­er­ence to the extend­ed post-Sovi­et bat­tle between Russia’s left-wing par­lia­ment and West­ern-backed Pres­i­dent Boris Yeltsin, which end­ed with pro-Krem­lin troops and tanks dis­pers­ing the leg­is­la­ture amid a bloody mini-civ­il war in Moscow. Yeltsin used his vic­to­ry to rewrite Russia’s con­sti­tu­tion to vest the lion’s share of pow­er in the Krem­lin, and reduc­ing the new par­lia­ment, the Duma, to lit­tle more than a talking-shop. 

Yeltsin’s suc­ces­sor, Putin, was sub­se­quent­ly able to estab­lish a vir­tu­al dic­ta­tor­ship in Rus­sia with­out – until recent­ly – alter­ing a sin­gle word of that constitution.

By con­trast, Ukraine has mud­dled through its repeat­ed post-Sovi­et crises with a work­ing divi­sion of pow­ers between par­lia­ment and pres­i­dent – both elect­ed in gen­uine­ly con­test­ed polls – and a rel­a­tive­ly inde­pen­dent court sys­tem. This is part­ly due to the country’s pro­found cul­tur­al split between the heav­i­ly Rus­si­fied” indus­tri­al east and the nation­al­is­tic, Ukrain­ian-speak­ing agrar­i­an west. 

The rel­a­tive bal­ance of forces between them has cre­at­ed per­ma­nent polit­i­cal grid­lock, but arguably pre­vent­ed either side from seiz­ing com­plete con­trol. An attempt to rig 2004 pres­i­den­tial elec­tions in favor of Yanukovych led to the Orange Rev­o­lu­tion, which ulti­mate­ly brought the West­ern-lean­ing Yushchenko to pow­er, pledg­ing to put Ukraine on a fast-track to join NATO and inte­grate with Europe.

But pub­lic opin­ion sur­veys show that about two-thirds of Ukraini­ans oppose join­ing NATO, and Moscow has warned that Kiev will cross a red line” if it invites the West­ern mil­i­tary alliance into the heart­land of the for­mer Sovi­et Union. 

Mount­ing unrest

The ongo­ing pop­u­lar­i­ty of Yanukovych’s pro-Moscow Par­ty of Regions illus­trates the hold Rus­sia still has on much of Ukraine’s elec­torate. Accord­ing to a Decem­ber poll by the Kiev-based Demo­c­ra­t­ic Ini­tia­tives Foun­da­tion, Yanukovych is Ukraine’s lead­ing politician,¬†with 22.3 per­cent sup­port. Tymoshenko fol­lows with 14 per­cent, while Yushchenko has fall­en to just 2.2 percent.

In Jan­u­ary, Tymoshenko flew to Moscow and sealed a gas accord with Putin, end­ing a two-week shut­down that had left 18 Euro­pean nations – lit­er­al­ly – out in the cold. But Tymoshenko’s ene­mies claim that, dur­ing sev­er­al hours of pri­vate talks with Putin, she made a sep­a­rate deal for Krem­lin sup­port in her upcom­ing pres­i­den­tial bid, alleged­ly agree­ing to shelve Ukraine’s NATO aspi­ra­tions in return for help in win­ning votes in east­ern Ukraine. 

That’s pre­sum­ably what Yushchenko’s chief of staff, Roman Bezs­mert­ny, was refer­ring to when he told jour­nal­ists: Yulia Tymoshenko’s cur­rent poli­cies show that she is hooked by Russ­ian secret ser­vices, which makes her resort to actions that threat­en Ukraine’s nation­al security.”

Vadim Karasy­ov, direc­tor of the inde­pen­dent Glob­al Strate­gies Insti­tute in Kiev, says, Yulia under­stands that the Unit­ed States is very far away and pre­oc­cu­pied with its own prob­lems, and Rus­sia is very close at hand. She’s just being practical.”

As the cri­sis inten­si­fies, it seems increas­ing­ly like­ly that the final show­down may come as ear­ly as this spring, and it may not take the form of an elec­toral con­test. Social unrest is mount­ing, espe­cial­ly in the east­ern indus­tri­al regions, where the steel mills, chem­i­cal fac­to­ries and coal mines that pro­duce 30 per­cent of Ukraine’s gross domes­tic prod­uct are grind­ing to a halt. 

But dis­con­tent is also pal­pa­ble among the mid­dle class in Kiev – erst­while ardent back­ers of the Orange Rev­o­lu­tion – who are sud­den­ly find­ing that the ATM machines have stopped dis­pens­ing cash, the ser­vice sec­tor jobs are evap­o­rat­ing and the West has lost inter­est in Ukraine’s fate.

Mid­dle class dis­il­lu­sion­ment is extreme­ly dan­ger­ous, because these are the peo­ple most capa­ble of self-orga­ni­za­tion,” says soci­ol­o­gist Nebozhenko. Things are com­ing apart very fast, and I’m afraid this is all head­ed for a set­tle­ment in the streets.”‚ÄÉ

Fred Weir is a Moscow cor­re­spon­dent for In These Times and reg­u­lar con­trib­u­tor to the Chris­t­ian Sci­ence Mon­i­tor, the Lon­don Inde­pen­dent, Cana­di­an Press and the South Chi­na Morn­ing Post. He is the co-author of Rev­o­lu­tion from Above: The Demise of the Sovi­et System.
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