A defining feature of Yanukovych’s early presidency

By Danylo Spolsky, Kyiv-based political analyst, and U of T alumnus

A defining feature of Yanukovych’s early presidency has been its concurrence with Ukraine’s and the world’s recovery from the global economic crisis of 2008-2010. That recovery partly governed the rules of the game for Yanukovych and the Party of Regions (PoR) in 2010.

It can certainly be argued that the crisis itself helped Yanukovych win the February run-off election versus Yulia Tymoshenko – the latter’s strength in the lead-up to the election was undermined by the perception that she had a hand in Ukraine’s economic trip-ups of 2008-09, most notably the hryvnia’s dramatic 40% collapse versus the dollar.

In much the same vein, the blue team’s popular support rating was likely boosted over the past year by Ukraine’s economic recovery this year. Although the country’s impressive recovery (expected 4.5% GDP growth puts it well ahead of most of its central and eastern European peers) in fact had little to do with any policymaking by the new team, the average voting babushka in Donetsk/Kirovohrad/Rivne will attribute last year’s economic improvement, at least in part, to the Party of Regions. It remains to be seen when this honeymoon period fades back to reality.

(Media Credit/EPravda.com.ua)

On the business side, the crisis enabled a swift consolidation within several of Ukraine’s key economic industries, steel and chemicals. A number of other notable mergers and acquisitions aside, the most interesting consolidation was driven by the PoR’s two main financial backers, Rinat Akhmetov and Dmytro Firtash. Akhmetov’s metals and mining arm Metinvest bagged MMK Illicha, Ukraine’s second largest steel mill, by year’s end, while Firtash purchased Stirol, a leading global producer of chemicals.

Will big business and the economy once again take centre stage in 2011? Or – with the economy seemingly back to health – will the focus shift to positioning ahead of the 2012 parliamentary elections?

(Media Credit/Associated Press)

That brings us to one of the more interesting topics on the local political scene in 2010 – the internecine rivalry and posturing between the three principal circles of influence within the blue camp: Akhmetov-Kolesnikov, Firtash-Lyovochkin-Boyko, and Yanukovych’s Family Friends. One of the key themes for 2011 will be how Ukraine’s key parties position themselves for 2012 elections. One would do well to follow the three PoR groups closely in order to gain some insight into the potential post-2012 political landscape in Ukraine. This is especially true of the Akhmetov-Kolesnikov grouping, on the back of reports of a growing rift between Yanukovych and the steel magnate, as well as of the president’s Family Friends, who have quietly picked up a significant amount of political capital this year.

With 2010 having been partly defined by the now-fading economic crisis, it remains to be seen what governs the scene in 2011. Although still early, the emerging theme looks to be the growing rift between the government and the opposition – with political repression on BYuT et al. intensifying, will the nascent Yatseniuk-Hrytsenko-Katerynchuk-Matviyenko grouping be able to provide true opposition to the Party of Regions for the first time since they came to power? On the other side of the fence, how will Akhmetov respond to being pushed to the back burner by Yanukovych in favour of Firtash?

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