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Volume 4, issue 08 August 2010 Kharkiv was not originally included among Ukraine`s four first choice Euro 2012 host cities, but the East Ukrainian capital forced itself into contention by pushing ahead impressively with a variety of infrastructure projects. This determination was finally rewarded when Kharkiv replaced Dnipropetrovsk as a UEFA host city in 2009.
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Metalist maracles win UEFA respect
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Kharkiv airport: ready for take off
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23:24 Saturday, September 4, 2010 |
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Politics Not exactly what business expected
Just months into Viktor Yanukovych’s presidency initial optimism is already being tested
Tammy Lynch Volume 4, issue 6 June 2010
During his election campaign Viktor Yanukovych promised change and economic reform. However, in reality, since taking office the new administration has taken little substantive action on the issues that resonated most fully with the electorate – namely economic reform, the frayed social safety net, and the country’s vast network of business and institutional corruption. This inaction has delayed a resumption of IMF aid, which is sorely needed in a country that saw its GDP drop 15% last year (largely on the back of the loss of metallurgic customers in recessed Western economies). The Fund agreed a USD 16.1 billion loan package with the previous government of Yulia Tymoshenko and dispersed all but the final USD 3.8 billion – which was frozen in the run-up to the presidential election. President Yanukovych’s administration is now seeking a roughly USD 20 billion agreement. Budget concerns place loan lifeline in jeopardy The loan package is the cornerstone of Yanukoych’s economic program, and for months representatives from his administration have claimed a new agreement was either done, almost done, or would be done “soon.” In early June, however, the President changed his tack, suggesting that only a “decision” will be announced “by the end of the month” on whether or not the IMF will resume lending. No mention was made of any agreement. Additionally, Deputy Prime Minister Sergiy Tigipko simultaneously admitted that negotiations were moving slowly and that the IMF: “has doubts, first of all, about our arguments.” IMF representative Max Alier confirmed Tigipko’s statement when he criticized President Yanukovych’s budget as “not ambitious” and suggested it will “result in growing public debt for several years before it stabilizes.” Of particular concern is the country’s budget deficit, which most experts put at 10-16% against the 5.3% declared by the government. The 2010 budget also appears to indicate that the cost of maintaining the ministerial apparatus has grown under the new administration and that the bulk of loans under sovereign guarantees will increase by 20%. It also would appear that there has been no progress on eliminating the much vaunted Ukrainian business red tape; no simplified taxation; no streamlined procedure for the acquisition of land or customs clearance, for construction permits, or for compensation on interest rates paid by SMEs on their loans. Russia posed to seize initiative amid IMF doubts This does not mean that no IMF agreement will be forthcoming. The government’s economic reform package has been praised by some and there is clearly an attempt to move forward on a myriad of issues. However, the signals are not good, and the government has begun touting its backup plan – a loan from Russia – which is far from a surprise. Since President Yanukovych came into office the only major changes instituted have related to ties with Ukraine’s Eastern neighbour. An agreement to extend the Russian Black Sea Fleet lease in exchange for a claimed 30% decrease in gas prices for Ukraine is said to have reduced Ukraine’s gas debt burden. It also angered those in and around Ukraine concerned about Russia’s military foothold in the country and economic leverage in the form of prolonged energy dependence. Even more concerning was the secrecy surrounding the deal – which has still not been fully explained or published – providing the first suggestions that transparency may not be the Yanukovych administration’s top priority. Parliamentary approval of the lease extension included an amateurish assault on majority coalition deputies by opposition members throwing eggs and flour. Although in many ways laughable, this ugly scene was actually far more frightening than farcical. It clearly demonstrated the remarginalization of the parliamentary opposition, which has claimed an increase in the use of administration power structures against it. One of those power structures – the Prosecutor General’s office – has now twice called former Prime Minister Yulia Tymoshenko in for questioning, something which rarely engenders faith in transparency and respect for political pluralism. Free speech protests offer new challenge to Ukraine’s civil society Perhaps even more concerning is the decision of prominent journalists to band together against censorship, much as they had done years earlier during the administration of President Leonid Kuchma. In a letter released to the general public, journalists claimed to be protesting against increasing pressure being exerted on the media by politicians and state authorities. In particular, the journalists, who represent many of the most respected news outlets in the country, complained of “barefaced interference by the authorities in the news making policy of TV channels,” and “police inactivity regarding violent behaviour toward journalists.” Representatives from one of Ukraine’s biggest stations 1+1 were particularly blunt: “Our reports which criticize the current leadership are being pulled off the air. We are at risk of losing our profession, the trust of our citizens and the country in which all of us wants to live,” they wrote. At the same time, Ukrainian Catholic University Rector Borys Gudziak has claimed he was told by the Security Service of Ukraine (SBU) to order his students to stay away from anti-government protests or risk prosecution for “illegal activities.” Since the release of these public statements, journalists and educators have said that the government has backed away from what they interpreted as its earlier pressure tactics. This is a positive indication of the strength of civil society in Ukraine. Nevertheless, simply depending on the government’s willingness to pressure or leave activists alone – with no institutional checks or balances in place – places the country in a strange limbo between democracy and something else entirely. It is unclear exactly what this “something else” may be, but Ukraine is clearly once again a country in flux. Dr. Tammy Lynch is a Senior Research Fellow at Boston University’s Institute for the Study of Conflict, Ideology and Policy. Her study “Ukraine’s Post-Orange Evolution” appears in ‘Ukraine on its meandering path between East and West’ (Peter Lang, 2009)
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