Ahead of next year's presidential elections, Ukraine is being handed a false choice
Sergii Leshchenko 28 November 2018
The seizure of Ukrainian ships in the Kerch strait on 25 November is not only yet another act of Russian aggression, as we understand it in Ukraine. It is reminder to the world that the annexation of Crimea is gradually becoming the new status quo in global politics; and western leaders have basically accepted this injustice. In turn, this is feeding the hawks in the Ukrainian authorities, who are trying to conserve power for the current kleptocratic elite by raising the stakes. This week, Ukraine's parliament stopped the potential scenario of Ukraine sliding into authoritarianism, after the Security Council proposed introducing martial law across the country. This would, in effect, have cancelled the upcoming presidential elections on 31 March 2019. This situation has shown once again that Ukraine is like a swinging pendulum, where the prospect of reforms and strengthening democracy are constantly subject to risk of revanche and corrupt affairs.
The fate of democracy is being decided in Ukraine, a country that has undergone two revolutions in ten years, the reality of Russian occupation, and where the high-profile case against US political fixer Paul Manafort began.
Next spring will see Ukraine hold presidential elections, followed by parliamentary elections in autumn. They will give an answer to the question: can the overthrow of an authoritarian leader, mired in corruption and who cooperates with Russia, build a democratic society that professes western values? Or are all "colour revolutions" doomed to revanche, and is the west's support for values of the free world in transition states destined to fail?
The Ukrainian authorities are trying to force the whole country into facing a binary choice: either President Petro Poroshenko, who declares his support for the EU and NATO, remains in power, or he will be ousted by pro-Russian politicians who are less open to negotiation.
But as always, the real situation is more complex. A victory for Poroshenko, just like his defeat, has little in common with Ukrainian citizens' decision to build a European democracy. Ukraine is at a crossroads. But my country isn't simply choosing between different surnames, but between a politics that could put an end to Ukraine's chances or a politics which could give Ukraine a chance to be reborn.
In 2014, Petro Poroshenko began his current presidential term with a clear idea. After disgraced ex-president Viktor Yanukovych fled the country, Poroshenko proclaimed his allegiance to European and liberal values. But now his term in power is coming to an end and he needs to report back on his promises, the incumbent president is changing his views on the fly. Today, his rhetoric makes no mention of the fight against corruption, about the rule of law and the need to attract foreign investment, which Ukraine badly needs.
Poroshenko is currently ignoring the wave of violence which has swamped civic activists in Ukraine. When activist Kateryna Handzyuk, based in the southern city of Kherson, was doused in acid in July 2018 in retaliation for her corruption investigations, Poroshenko waited until her death on 4 November before making any comments. And when journalists at Nashi Hroshi (Our Money) revealed the astronomical sums of hidden wealth belonging to Serhiy Semochko, the first deputy head of Ukraine's foreign intelligence service, the president chose not to dismiss him from his post. In fact, he didn't comment on this development at all.
Thus, Poroshenko strongly adheres to the public relations strategy laid down for him by his political technologists to help him win a second term. It contains just three messages: "Language, Faith, Army." Poroshenko doesn't talk about other issues at all, while promoting a law on the obligatory use of the Ukrainian language in media and conducting a campaign in favour of autocephaly for the Ukrainian Orthodox Church.
Today, Poroshenko, together with half a dozen other candidates with roughly the same approval rating, is lagging far behind challenger Yulia Tymoshenko, a former prime minister. But Poroshenko's goal is not to convince the whole country to elect him. Instead, the president wants to position himself before a certain part of society in order to make it into the second round. Given that Tymoshenko's negative approval rating is significantly higher than her positive one, Poroshenko believes that if he goes head-to-head with her in a second round, he will win. Meanwhile, Tymoshenko also sees Poroshenko, who is surrounded by a series of corruption scandals, as her ideal candidate, whom she can beat with her fiery social rhetoric.
The war on anti-corruption
Alongside the struggle for power, the pre-election period is accompanied by attempts to destroy the fragile anti-corruption bodies established in recent years with the participation of the US government.
The National Anti-Corruption Bureau (NABU) has proven itself to be independent and principled in exposing the misdeeds of Ukraine's ruling class. As a result, NABU's head Artem Sytnik, deputy director Gizo Uglava, and the entire bureau have been subject to constant attacks, which are only increasing in intensity. One possible scenario for what happens next involves removing Sytnik from office on the ridiculous pretext that he was excessively talkative with journalists, to whom he allegedly made public secret information from an investigation.
This pressure on Ukraine's anti-corruption agency has its own rationale: the stakes in the struggle for power are simply too high. If Petro Poroshenko loses the presidential election and his portfolio next April, then from that moment on he will be open to investigation by NABU. Under current Ukrainian law, NABU only has the authority to investigate the actions of an incumbent president, not a serving one.
Therefore, while Poroshenko remains president, he is preparing a plan of action in case of defeat. First of all, he needs to discredit NABU and split the supporters of Ukraine's fight against corruption, in order to ensure that the Romanian scenario of mass anti-corruption protests is not repeated in Ukraine. And in order to do that, he has to ensure that nobody comes out in defence of NABU.
Is Poroshenko right to be wary of NABU? Ukrainian and international media have reported on the alleged abuse of funds for the Ukrainian military, whose overseas arms deals are negotiated with dubious shell companies. In one investigation by Ukrainian media Novoye Vremya, the Bogdan company, which was owned by Poroshenko before being transferred to a longtime companion, was revealed to have become a major producer of military equipment for the army. The investigation showed that this company then began producing an array of military equipment on secret government contracts, which were closed to the normal tender process. NABU has also actively investigated political corruption, including accusations of bribing parliamentary deputies, and has recently questioned Serhiy Berezenko and Ihor Kononenko, two of the president's closest advisors, on the matter.
Another high-profile case concerns possible abuses in Ukraine's thermal energy market. State officials under Poroshenko's control raised tariffs for electricity on the basis that power plants now use coal which is allegedly imported to Ukraine from the North Sea port of Rotterdam. NABU head Artem Sytnik declared that unconfirmed costs included in the sales price have already led to the embezzlement of half a billion dollars.
An investigation by Novoye Vremya alleges that Ukraine's richest oligarch Rinat Akhmetov is the main beneficiary of the scheme. After his fellow party member Viktor Yanukovych fled the country, it seems that Akhmetov was able to find a common language with the new president. Opponents of the government allege that Poroshenko personally receives a share of what Akhmetov pays for the scheme to run smoothly, and that the president is using the ICU investment company as a means of concealing the money.
The Poroshenko administration's attempts to sabotage the completion of anti-corruption reforms have led to a situation where even completed investigations do not end in court sentences. For example, courts have been waiting 18 months to examine the case against the former head of the state fiscal service (and associate of Poroshenko) Roman Nasirov, who is in jail on corruption charges brought by NABU.
Furthermore, Nazar Kholodnitsky, the special prosecutor who supervises NABU investigations, is now embroiled in allegations of corruption: he was revealed to have been transmitting information to the suspect of an investigation to help them evade punishment. Even though all these facts were recorded on a secret device hidden in an aquarium in Kholodnitsky's office, the justice system released him and allowed him to remain in his post. Vitaly Shabunin, chairman of the board of the Anti-Corruption Action Centre, a Kyiv-based NGO, alleges that in return for this lenience, Kholodnitsky closed cases against Oleksandr Avakov, the son of the Minister of Internal Affairs Arsen Avakov, and several parliamentary deputies from the country's ruling parties. Shabunin claims that Kholodnitsky also refused to investigate one of the most odious officers of the Ukrainian security services, and another member of the president's inner circle.
A time of disappointments
This gloomy picture may dismay both residents of Ukraine and international partners who have rallied behind our country in recent years in the face of Russian aggression in eastern Ukraine and Crimea. According to a recent survey, nearly 80% of Ukrainian citizens now believe that the country is moving in the wrong direction.
What's happening now actually has a simple explanation: after the overthrow of Viktor Yanukovych, state power was seized by politicians with exactly the same values as the fugitive – but with a better command of English. The answer to the question of how Ukraine can avoid revanche does not lie in the victory of a given candidate. In fact, the revanche is happening on a daily basis, with every million dollars stolen from the state budget. A budget, no less, for which Ukraine asks the US and international organisations to replenish.
This situation could be changed by adopting systemic reforms across the board. First of all, Ukrainian politics needs a new rulebook. This presupposes a new electoral law that would forbid candidates from simply buying a deputy's mandate for three million dollars. Ukrainian politics is saturated with money, and that could be changed by banning paid television advertising for politicians and investigating all potential conflicts of interests when parties funded by oligarchs become lobbyists in support of laws which favour their benefactors.
Ukraine must launch a large-scale fight against corruption in order to free business from shadow rentiers. Ukraine needs privatisation and a market for land, the sale of which could provide the impetus for economic recovery. A true judicial reform is also needed; previous attempts were implemented only on paper, meaning that over the past four and a half years of Poroshenko's rule, the courts have failed to become independent.
The Ukrainian secret services should be deprived of the right to harass businesses or spy on journalists and civic activists. During Poroshenko's years in power, all attempts to reform the secret services have ended in fiasco. A way must also be found to limit the flow of money into offshore companies through "transfer pricing", which facilitates the loss of more than half a billion dollars in budget revenue in the agrarian and metallurgical sectors of the Ukrainian economy alone. The customs system must also be reformed, as the shadow economy turns over billions of dollars every year.
Ukraine must be made attractive for foreign direct investment. Today's situation is paradoxical in the sense the investment rates mostly do not reflect investment by European companies, but Russian capitalisation of banks in Ukraine. The IMF's painful requirements for a balanced budget and market prices for gas must be met.
Unless it takes these measures, Ukraine will not just fail to catch up with the living standards of neighbouring countries, but rather chase after those of its recent past under Yanukovych's rule. The result of postponing these reforms is all too clear: Ukraine ranks 134 out of 162 countries in a rating of economic freedom by Canadian thinktank Fraser Institute. This puts Ukraine alongside such countries as Iraq, Iran, Pakistan and Zimbabwe. According to recently updated IMF data, Ukraine turns out to be the poorest country in Europe, lagging behind even Moldova.
Optimistic and pessimistic scenarios for Ukraine
A victory for Yulia Tymoshenko or Petro Poroshenko would be risky for Ukraine in different ways. If Yulia Tymoshenko is elected president, the country could spiral into populism; fulfilling her election promises would mean a reduction in gas prices. Tymoshenko speaks about a "special path for Ukraine," which entails refusing to comply with the demands of the IMF and a rupture in ties with various financial organisations. This could culminate in a financial default.
Furthermore, the election of Tymoshenko would also provoke further speculation about her secret agreements with Russia, rumours of which have circulated ever since she was investigated for business schemes of the 1990s.
Yet there are grounds for optimism in the case of Tymoshenko's victory: her tendency to follow the political fashion of the day will require a generational change in Ukrainian politics. She will be forced to attract a new cadre of young people into government positions. In addition, Tymoshenko will certainly want to satisfy popular demands for the punishment of thieving members of today's ruling authorities, creating a further precedent for their comeuppance.
The re-election of Petro Poroshenko for another presidential term will serve to deepen the internal crisis in Ukraine. By exploiting divisive topics in the course of the election, Poroshenko could further provoke the distaste towards him felt across many regions of the country.
Poroshenko's remaining in office will spell a more overt struggle with Ukraine's anti-corruption bodies and the preservation of the status quo when it comes to the plundering of money from state coffers. Instead of real reforms, the country will see their pale imitation, and social benefits will be distributed to the benefit of oligarchic clans. These clans will be strengthened, and develop political structures which in turn will invest in election campaigns. Moreover, Poroshenko's opposition to a new law on parliamentary elections means a death sentence for any changes to Ukraine's political culture and its renewal with the coming of a new generation to political life.
In other words, a Tymoshenko presidency would bring unpredictability, while Poroshenko is predictable in his desire to preserve the current corrupt status quo.
An optimistic scenario for Ukraine would mean the victory of representatives of the liberal reformist camp. Today there are several candidates who embody these values, chief among them Minister of Defence Anatoly Hrytsenko came third place in opinion polls this summer. The lack of real competitors have made Hrytsenko the only alternative for those in society who want change. However, his position may be rocked by the nomination of another reform candidate, mayor of the western Ukrainian city of Lviv, Andriy Sadovyi.
Famous Ukrainian rock singer Svyatoslav Vakarchuk has also kept up the intrigue surrounding his possible participation in the elections. On the one hand, Vakarchuk is not a politician – he is not implicated in any corruption scandals. And on the other, Vakarchuk has unparalleled visibility in Ukrainian society, packing stadiums with hundreds of thousands of fans, and spent the last year studying at Stanford University. He turned his back on an earlier foray into politics; having been elected to parliament in 2007, he soon renounced his deputy's mandate due to disillusionment with politics.
But the main surprise might be the popularity of Volodymyr Zelenskiy, a comedian who plays the president of Ukraine in the popular TV series, Servant of the People. Many are fond of his rhetoric, so much so that they are prepared to believe in Zelenskiy's ability to act the same way in real life as he does on screen. One problem is Zelensky's ties to the runaway oligarch Ihor Kolomoyskyi, who is currently hiding in Israel following an FBI request, but still owns TV channels in Ukraine.
It still seems unlikely that the former supporters of runaway president Viktor Yanukovych will get their revenge. These days, Russia relies on Viktor Medvedchuk, who has personal ties to Vladimir Putin and is striving to unite all pro-Russian forces in order to take a leading position in the new parliament.
Ukrainian society, which has survived many shocks over the past few years, deserves an honest government. Ukraine's international partners, who have invested financial aid in our country and put their reputations on the line in doing so, also deserve an honest partner – one which is not engaged in corruption and which will do more than just imitate reforms.
Sergii Leshchenko is a Ukrainian journalist and a member of the Verkhovna Rada. All views expressed are made in a personal capacity.
This article is published under a Creative Commons Attribution 4.0 International licence.
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