by Anders Aslund, Peterson Institute for International Economics
Op-ed in the Moscow Times
August 7, 2006
© Moscow Times
On Friday, Viktor Yanukovych was confirmed as prime minister by the Ukrainian parliament, more than four months after elections to the body had been held. The process could have moved faster but, given the election outcome, the government is about as good as anybody could have hoped for.
This coalition represents a strategic realignment in four ways. First, it signifies that the Orange Revolution is really over, and its ultimate success has been the democratization of the Party of the Regions, which honestly attracted the most support in the elections. Second, it marks a departure from regionally divisive politics. Third, the new coalition is based on a common economic policy. And finally, the new government has adopted a unified foreign policy.
Yushchenko and Yanukovych have opted for a strategy of national unity. One of Yushchenko's advisers explained to me recently that Ukraine needed to satisfy western Ukrainians on questions of the state, culture and language, because that was what they cared about, while the easterners should be catered to on the economy, which was the most important issue for them. Otherwise, Ukraine would be divided by a western national vision leaning toward Europe in opposition to a Russian-oriented vision.
After the elections, three alternative coalitions were possible: one Orange, one eastern, and the third an ideological coalition between the Party of the Regions and Our Ukraine. The Orange coalition was tried, but it alienated the east and fell apart. An eastern coalition was attempted, which naturally alienated the east. The natural way out was a government based on a liberal/conservative economic policy hybrid uniting Our Ukraine and the Party of the Regions. The Socialist Party has also gone along, while the Communists are likely to remain outside the coalition.
The new government is to be based on the principle of checks and balances. The Party of the Regions will get most of the economic posts, while Yushchenko will get to appoint the heads of the so-called "power ministries," consisting of defense, foreign affairs and interior, the chairman of the State Security Service and the Prosecutor General, as well as the first deputy prime minister and a number of minor ministers. Each ministerial appointment is supposed to be balanced by a committee chairman in the Parliament from another party.
Yulia Tymoshenko, meanwhile, has announced that she will move into opposition and will welcome anyone who wants to cross to join her faction. She will undoubtedly provide an effective critique of the government, which should prove good for democracy and the ultimate quality of governmental decisions. The concern that she could force new elections on flimsy constitutional grounds has, fortunately, subsided. These elections would have increased divisions between Ukraine's east and west and could have undermined Ukraine's newborn democracy.
Yushchenko has put great effort into elaborating the program for the new coalition, called the "Declaration of National Unity." This relatively brief document, consisting of six pages and containing 27 basic points, sets out the results of negotiations on four particularly difficult points: federalism, the status of the Russian language, private ownership of agricultural land, and Ukraine's foreign policy orientation. Compromises were made on all points, but Yushchenko appears to have emerged with the upper hand.
The first paragraph establishes that Ukraine is a unitary state, while another advocates decentralization, but without any mention of federalism.
The paragraph concerning language appears to have been put together carefully. Ukrainian remains the official state language, but "every Ukrainian citizen is guaranteed the right to use Russian or any other native language in all walks of life." The private sale of agricultural land will be introduced no later than January 1, 2008, a move that the Socialists have opposed.
Four paragraphs are devoted directly to foreign policy issues. Ukraine is to “take all necessary legislative steps to join the WTO before the end of 2006,” which is a clear victory of Our Ukraine over both the Party of the Regions and the Socialists. Ukraine is to maintain its course toward European integration with the eventual aim of joining the European Union, including the beginning negotiations on a free trade zone between Ukraine and the European Union. Again, this looks like a victory for Our Ukraine.
The Party of the Regions insisted on adding a paragraph on the Common Economic Space, a proposed common market between Russia, Belarus, Kazakhstan, and Ukraine that has been pushed by Moscow. But the coalition addresses the Common Economic Space only as a free trade area and with certain reservations from Yushchenko that may make the deal much less attractive for the Russian side.
Our Ukraine was able to get a paragraph dealing with NATO in the declaration, calling for "mutually beneficial cooperation with NATO." The Party of the Regions made sure that a paragraph calling for a referendum on Ukraine's accession to NATO must be held, but Our Ukraine has attached the phrase that the referendum should be carried out only "after Ukraine has carried out all the necessary procedures," which seems somewhat diffusely to refer to NATO accession.
What it all comes down to is that Our Ukraine appears to have formed the foreign policy and security bloc in the government, while the Party of the Regions gets the economic bloc. Both parties appear to agree on the basic principles of economic policy. At the same time, significant progress has been made on resolving national tensions. The Party of the Regions appears to have accepted a Western-oriented foreign policy. Whether or not Ukraine gets a membership action plan for NATO at the organization's November summit in Riga is no longer a big issue.
That this was the outcome of the negotiations is impressive. Because of the complementary nature of the compromise, there is strong hope this alliance will hold. Therefore, we should not be too upset that it took four months to reach.
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