Ukraine: End of Orange Revolution, start of Stabilisation

“We can say goodbye to our democracy, our independence and our sovereignty” (outgoing President Yushchenko predicts a future with either Ms Tymoshenko or Mr Yanukovych as President)

“I’m quite happy because whoever is chosen today will be hated tomorrow by the majority of the country.” (Andrey Kurkov)

Ukraine’s Russian-leaning opposition leader, Viktor Yanukovych is on course to become the country’s president, with early results indicating he had a lead of several points over his bitter rival, Yulia Tymoshenko, the prime minister. Describing yesterday’s vote as a “turning point in our country’s history”, he added that he would pursue policies that helped all Ukrainians – and would not favour one geographical area. “We don’t need to find enemies in our country. We need to unite together,” he declared. In contrast to 2004, international observers said there was no major evidence of fraud. Despite fair elections PM Tymoshenko insists that she will challenge the results of the presidential election.

With more than 97% of votes counted, Mr Yanukovych had a 2.6% lead over his rival, PM Yulia Tymoshenko. According to the results, “against all” received 4.4 percent. Preliminary estimates showed about a 69 percent turnout. Sunday’s elections had been given a “positive assessment” by the election observation mission led by the Office for Democratic Institutions and Human Rights ODIHR) of the Organisation for Security Co-operation in Europe (OSCE). The OSCE hailed the process as “professional, transparent and honest,” saying it should “serve as a solid foundation for a peaceful transition of power. There looks to have been less interference from the US this time than happened in 2004, when a number of Washington-backed NGOs took an active part in events in Kiev.

The outcome

Before 1st round I wrote and article “Ukraine – choosing a new Way”

I described Ukraine’s challenges – created mainly the disastrous regime of outgoing President Yushchenko – and prognosticated that Ukraine is now selecting more pragmatic and balanced approach with its foreign policy. I also predicted right the 1^st round outcome but bet wrong the final 2^nd round. One reason can be that after 1^st round President Yushchenko went really mad – changing voting regulations, naming Stepan Bandera (nazi-collaborator and chief of the Organization of Ukrainian Nationalists, OUN) as Hero of Ukraine and proposing to vote “against all”. These actions were maybe enough to increase the support for Mr. Yanukovich and decrease the popularity of Ms. Tymoshenko.

Tensions ran high ahead of the vote, with both candidates accusing each other of planning large-scale ballot fraud and vowing to send their supporters into the streets to sway the outcome of any legal disputes over the count. The positive assessment of international monitors however gives limited background to contest the result.

Stabilisation

Mr. Yanukovych and his team may be an old-style party team, however this past can be seen also as an experience needed to bring order and stability to country. In contrast to 2004, Yanukovych’s potential presidency is no longer viewed among Western Ukrainian voters as an existential threat to Ukraine. Earlier Party of Regions even managed to came third in the local election to the city council of Ternopil in March 2009 gaining about 10% and surpassing Tymoshenko’s bloc (which called for a boycott of the election) and Yushchenko’s “Our Ukraine.” Yanukovych’s personal support in the West of Ukraine rose to the same level. At the same time, the less intense animosity to Yanukovych now and disillusionment with his main alternatives means that the West of Ukraine will grudgingly accept him as a new president just the way it accepted Kuchma in 1994. One may claim that the ongoing political confrontation between the Orange leaders has become a far greater threat to Ukraine’s statehood than any of Yanukovych’s election promises could ever be.

According to the 2001 census, 67.5 percent of the population declared Ukrainian as their native language and 29.6 percent declared Russian. Ethnic Ukrainians make up 77.8% of the population while the share of ethnic Russians is 17.3%. So it is clear that the new President has considerable support also outside predominantly Russian regions. This situation may ease tensions between different ethnic and religious groups, not only between Ukrainians and Russians but e.g. between central government and the (Trans-Carpathian) Rusins as the Crimean Tatars.

One of his first tasks is to unblock frozen IMF aid for its ailing economy. Yanukovich supports the idea of starting talks with Russia and the EU on the possible creation of a gas transportation consortium in order to increase the reliability of Russian gas transit to Europe. Improving Ukraine’s investment climate could attract foreign companies who could help Ukraine to develop its vast oil and gas reserves and strengthen its energy security.

In foreign policy the outlines of the new Yanukovych era are clear. He will improve Ukraine’s strained relations with the Kremlin tilting country back towards Russia’s sphere of influence, after the relentlessly pro-European course set under President Yushchenko. He will rule out Nato membership and extend the lease on Russia’s Crimea-based Black Sea fleet. It expires in 2017. He also believes in European integration – economically if not politically.

Energy aspect

The election may also be the final nail in the coffin of GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) Group which was founded 1999 with help of US to foster favourable conditions conducive to economic growth through development of an Europe-Caucasus-Asia transport corridor. GUUAM was dominated by Anglo-American oil interests, ultimately purports to exclude Russia from oil and gas deposits in the Caspian area, as well as isolating Moscow politically. First Uzbekistan withdraws from it leaving behind a stump GUAM. Then Georgia started its aggressions with false idea of western support leading today’s situation. Moldova was aiming towards Nato and EU but after conflict in Georgia it started to look other alternatives. Political attitudes of Azerbaijan and Russia have approached each other. Now Ukraine as last fortress of GUAM is taking distance from its earlier Nato ambitions. More e.g. in article “Is GUUAM dead?”

Constructing the White Stream pipeline underneath the Black Sea was supposed to be the main energy project of GUAM bloc; it was also designed as an alternative to EU’s Nabucco. The idea of White Stream is to pump natural gas from the Caspian region to Ukraine and further to Romania, from where it can be marketed to Europe. On May 28, 2008, the European Commission identified the project as a “Project of Common Interest” and furthermore accepted it as a “Priority Project.” However the last Georgian energy summit on January 14-15 2010 in Batumi to discuss the construction of pipelines bypassing Russia failed and got downgraded as no high-ranking officials who said they would attend the meeting ended up coming. White Stream has some similarities with Nabucco – both are more political project and both are missing the gas supply. With new President in Ukraine also political backing is dispelled.

Ukraine’s role of a major European gas hub is also at risk because South Stream could almost halve its transit earnings. Russian newspaper Kommersant reported on Tuesday that Viktor Yanukovich had invited Gazprom to participate in upgrading the Ukrainian gas pipeline system. Gazprom has made early comment that the pipelines needed upgrading and the company would be interested in participating, however any investment would not replace the need for Gazprom to develop the South Stream pipeline. I agree – politicians are coming and going and chancing their minds in between but pipe will stay a halve century if not more.

My Conclusions

• The most positive result were fair and free elections. I expect that in domestic politics attitudes between regions/groups identifying more with Ukrainian nationalism and the Greek Orthodox religion, and predominantly Russian and favourable to the Soviet era will ease.

• It appears obvious that in foreign policy one of the top priority in the political agenda of new President will become the restoring of cordial relations with Russia.

• I hope that the EU and Ukraine will rapidly reach agreement on a new Association Agreement (including comprehensive free-trade agreement) that added to better investment climate will help modernise the Ukrainian economy and enable it to return to pre-recession growth rates.

Summa summarum

• Free and fair elections will revise the policy both with internal and foreign affairs of Ukraine. Nato membership will be ruled out, European integration will continue economically if not politically, relationship to Russia will improve. Ethnic tensions may be reduced and more united country with new President has better possibilities match economical challenges.

balkan