Behind
The collapse Of Ukraine’s “Orange Revolution”
By Niall Green
06 April 2006
World
Socialist Web
Ukraine’s
March 25 parliamentary elections and the subsequent back-room deals
between the main political actors have exposed the fraudulent nature
of the so-called “Orange Revolution” of November and December
2004.
The Our Ukraine party of
President Viktor Yushchenko, proclaimed the “hero” of the
Orange Revolution by the Western media, suffered an electoral debacle,
ending in third place with 15 percent of the vote. The man whom Yushchenko
displaced and the target of the supposed revolution, Victor Yanukovich,
a protégé of retiring President Leonid Kuchma, easily
won a plurality of votes, gaining some 30 percent.
This humiliating result came
only 15 months after Yushchenko assumed power, ushering in a period
of economic decline, political crisis and intrigue, replete with allegations
of government corruption and Yushchenko’s firing last September
of his former Orange Revolution ally, then prime minister, Yulia Tymoshenko.
Tymoshenko finished in second
place in last month’s elections, with 22 percent of the vote.
Since the election, Yushchenko
has held separate coalition talks with Tymoshenko and Yanukovich. The
president may try to reunite with his former ally, whose Bloc Yulia
Tymoshenko garnered almost all its electoral support in the Ukrainian-speaking
west and centre of the country.
Tymoshenko has called for
a coalition government of her party, Yushchenko’s and the small
Socialist party, which participated in the Orange movement and won 6
percent in the March 25 vote. She has also demanded that she be named
prime minister and her party be given one of the internal security ministries.
Since his defeat in the third
round of the 2004 presidential election, Yanukovich has made efforts
to rehabilitate his image in the eyes of the Western powers, first and
foremost the US, which financed and largely organised the pro-market
and pro-American Orange movement and selected Yushchenko, formerly a
Kuchma loyalist and for a time his prime minister, to serve as the leader
of the “democratic” forces.
In his parliamentary election
campaign, Yanukovich, considered by Washington to be unacceptably close
to Moscow, made use of the tactics that helped the Orange Revolution
triumph, including the employment of American consultants. Yanukovich
has said that a government headed by his Party of the Regions would
support ties with the European Union, while mending Ukraine’s
relationship with Russia.
Popular support for the Party
of the Regions is based largely in the Russian-speaking industrial southeast
of Ukraine, where many are hostile to the anti-Russian chauvinism and
“free market” economic policies of the Orange politicians.
Yanukovich also wants more powers devolved to the regions, and to the
oligarchs who control them.
Yanukovich has profited from
the economic crisis caused by falling prices for the country’s
industrial products, compounded by rising energy costs and fuel shortages.
The president’s office
quoted Yushchenko as saying that the post-election bargaining would
help “solve all the issues that divide Ukraine.” This has
been interpreted as an olive branch held out to Yanukovich’s party.
“We will calmly wait
through the first round, when an Orange coalition between three political
forces will be signed,” said Taras Chornovil, a Party of the Regions
spokesperson. “And when one of the parties—I believe it
will be the Socialists—withdraws...we will enter the normal negotiating
process.”
Political fiefdoms of the oligarchs
As a result of constitutional
changes enacted since 2004, the Ukrainian parliament has substantial
new powers to name and dismiss the prime minister and much of the cabinet,
with no presidential veto. Thus, whoever becomes prime minister will
largely overshadow President Yushchenko on domestic policy questions.
Another crucial benefit of
membership in parliament is immunity from criminal prosecution—a
distinct threat for most of Ukraine’s business-political elite,
including those associated with the Orange Revolution.
The ultimate composition
of the ruling coalition is of great importance to Ukraine’s oligarchs,
who, like their counterparts across the former Soviet Union, conduct
their affairs in the manner of Mafioso and consider the official levers
of governmental power little more than mechanisms for self-enrichment
and settling old scores.
The two largest factions
in parliament represent two regionally distinct oligarchic groups. The
Bloc Yulia Tymoshenko represents, in the first place, the interests
of its founder and her husband, who are among the richest people in
the country.
Tymoshenko has gathered around
her other business interests that orient towards the US and the European
Union (EU) and resent the dominance of the industrial oligarchs in the
east of the country, who are closely tied to Russian big business. Though
herself originally from the southeastern city of Dnipropetrovsk, Tymoshenko
has positioned herself as the leader of the most anti-Russian forces
from the west of Ukraine.
She is a representative of
an ambitious and unprincipled layer that prospered under Stalinist rule.
Tymoshenko experienced a significant rise in wealth and power in the
last days of the Soviet Union, founding a successful video rental chain
in 1989. But it was after the full imposition of capitalist restorationist
policies that she made a meteoric rise, directing several energy companies
and acquiring a significant fortune between 1990 and 1998.
In the course of the fire-sale
privatisation of state assets in Ukraine, which mirrored that in Russia
in terms of corruption, Tymoshenko’s husband became one of the
wealthiest oligarchs by exporting metals. From 1995 to 1997, Tymoshenko
was the president of United Energy Systems of Ukraine, a privately owned
company that became the main importer of Russian natural gas in 1996.
During that time she acquired the nickname “gas princess”
and was accused of stealing and selling on the international market
enormous quantities of Russian gas piped through Ukraine.
One of her main business
allies during the 1990s was Pavel Lazarenko. A crony of then-president
Kuchma, Lazarenko was made prime minister in 1998 and Tymoshenko was
appointed the chairperson of the parliamentary Budget Committee.
Lazarenko was dismissed for
exhibiting ambitions to succeed Kuchma to the presidency. Charged with
money laundering and the murders of two political opponents, he fled
Ukraine in 1999 and was subsequently arrested and imprisoned by US authorities
on money-laundering charges.
From 1999 to 2001, Tymoshenko
was the deputy prime minister with responsibility for the energy sector
in the government of Lazarenko’s successor, Yushchenko. This former
ally of Kuchma subsequently shifted his allegiance to Washington and
began denouncing his one-time benefactor as a corrupt autocrat.
Yushchenko had been the head
of the post-independence central bank. A supporter of “free market”
economic reforms, he was chosen by Kuchma, in part, as a sop to America
and the European powers, who demanded that Ukraine’s economy be
fully privatised and opened up to exploitation by the West. Without
close ties to the oligarchs, Yushchenko was seen by Kuchma as a loyal
prime minister who could help mediate between the warring interests
at the top of Ukrainian society.
His deputy, Tymoshenko, was
reportedly chosen for the energy portfolio because of her intimate knowledge
of machinations in the oil and gas sector, which were to be brought
under control so as to attract inward investment by the Western powers.
Kuchma fired Yushchenko and
Tymoshenko in January 2001, after pressure from the eastern oligarchs
forced a halt to further “free market” reforms. Tymoshenko
was then arrested on charges of forging customs documents and smuggling
Russian natural gas in the 1990s, but was cleared several weeks later.
Out of government, she ingratiated
herself into the campaign against President Kuchma for his alleged role
in the murder of the journalist Georgi Gongadze—an issue that
had not troubled Tymoshenko during her period in office.
Tymoshenko’s rivals
for power are the eastern Ukrainian oligarchs who have backed Yanukovich
and his Party of the Regions and see the capitalist market reforms demanded
by Washington and the European Union as a threat to their entrenched
interests.
Yanukovich began his career
as a transport executive in the Soviet coal mining industry in eastern
Ukraine. In the 1990s, less than a year after entering the local administration,
he became governor of the Donetsk region, home to more than 3 million
people and the economic powerhouse of Ukraine.
The figurehead of Donetsk’s
political and business groups, he is regarded as a virtual family retainer
of the Kuchma clan. He served the ex-president as prime minister from
2001 to 2004 and is a close associate of Kuchma’s son-in-law,
Viktor Pinchuk, and his business partner, Rinat Akhmetov.
In June 2004, Yanukovich
awarded the Akhmetov-Pinchuk partnership the right to buy the massive
state-owned steel concern Kryvorizhstal for US$800 million. Known to
be a fraction of its market value—US Steel had offered US$1.5
billion for it—the move was widely condemned in Ukraine as an
example of the rampant corruption of the oligarchs, and by the Western
powers for whom such nepotistic deals represented a barrier to their
exploitation of the Ukrainian economy.
Once the Orange Revolution
had brought to power the pro-Western Yushchenko regime, Kryvorizhstal
was nationalised and run by directors linked to the Privat Bank, an
institution believed to be closely associated to then-Prime Minister
Tymoshenko. Kryvorizhstal was re-privatised in October 2005, realising
a price of US$4.81 billion from the Anglo-Indian giant, Mittal Steel.
The Orange Revolution was
organised and financed by Washington and, to a lesser extent, by the
European powers in order to facilitate just this type of restructuring
of the Ukrainian economy at the behest of the transnational corporations.
Yushchenko was chosen and supported by the US after he had won their
admiration for implementing limited pro-market reforms as Kuchma’s
prime minister from 1999 to 2001.
During this time, he showed
his true “democratic” credentials, co-signing a public statement
by Kuchma describing those protesting against the suspected state murder
of journalist Georgiy Gongadze as “fascists.” Not a few
of these “fascist” opponents of Kuchma would later become
supporters of the Orange Revolution and Yushchenko.
After losing out in the power
struggle with the industrial oligarchs in 2001, Yushchenko, out of high
office for the first time since Ukraine’s independence, suddenly
discovered his opposition to Kuchma and the corruption of Ukrainian
politics.
Forming an opposition bloc
in 2002 called Our Ukraine, he allied himself to the US and adopted
policies in favour of NATO and EU membership and the weakening of relations
with Russia. Yushchenko is married to Kateryna Yushchenko-Chumachenko,
a Ukrainian-American former special advisor to the US State Department’s
assistant secretary of state for human rights and humanitarian affairs.
Capitalising on widespread
hostility to Kuchma and playing to Ukrainian nationalism, he won the
largest number of seats in the 2002 parliamentary election. Backed by
Washington, he formed an alliance with his former deputy Tymoshenko,
other oligarchs and politicians who had fallen foul of Kuchma, and sections
of Ukrainian business in the west of the country that had more to gain
from a closer alliance with Europe than from the country’s pro-Russian
orientation.
This amalgam of pro-imperialist
opportunism, big business interests and national chauvinism formed the
core of the Orange Revolution, so-named after the fashion begun in Georgia
in 2003 when Eduard Shevardnadze’s rule was ended by the US-orchestrated
“Rose Revolution.”
The Orange Revolution implodes
Never a genuine mass movement
and lacking any democratic principles, the Yushchenko-Tymoshenko alliance
was a highly unstable coalition of rival interests whose only commonalities
were their expulsion from power by the Kuchma regime and their willingness
to become pawns in Washington’s power struggle with Moscow.
Their Orange movement was
organised, funded and staffed by the US through such entities as the
National Democratic Institute, the International Republican Institute
and the US State Department.
Those workers and young people
who were genuinely disgusted by the criminal Kuchma regime and who rallied
under the Orange banner were used as camouflage for what amounted to
the seizure of power from one clique of oligarchs allied with Russia
by another clique of oligarchs allied with the US.
Since becoming president,
Yushchenko has lost virtually all credibility with the populace as a
result of his “free market” economic policies. In the face
of falling prices for Ukraine’s industrial products and rising
energy costs, the living standards of many Ukrainians have deteriorated.
Corruption, which Yushchenko insisted he would stamp out, remains endemic.
His son, Andre, has made a fortune from the sale of official Orange
Revolution merchandise, for which he has appropriated sole marketing
rights.
Always a marriage of convenience,
the Yushchenko-Tymoshenko tandem quickly unravelled when the Tymoshenko
faction of the Orange coup began to aggressively push for the prosecution
of their rivals among the eastern oligarchs, seizing their assets for
resale. Tymoshenko demanded the re-privatisation of these formerly state-owned
enterprises, which promised to be an enormous boon for the pro-Orange
elite, who could buy up shares and entire companies on favourable terms
or act as the well-paid local agents for foreign-based transnationals.
Additionally, the threat of seizing assets could be used to strong-arm
rivals—including those within the Orange faction.
As Ukraine’s chief
financial bureaucrat throughout the 1990s, Yushchenko knew that a rash
of anti-corruption prosecutions would not only expose the criminal methods
by which the eastern oligarchs amassed their fortunes, but could also
cast light on the nefarious activities of many of the backers of the
Orange coup.
Not only Ukraine’s
gangster elite, but major western European and American companies and
financial institutions were involved in the smash-and-grab economics
of the 1990s privatisations. Seeking to improve their foothold in the
Ukrainian economy today, these corporations would not welcome any exposure
of their dealings, both past and present.
Another concern about the
re-privatisation frenzy advocated by Tymoshenko—at one point she
suggested that 3,000 enterprises sold off cheaply under Kuchma be renationalised
and then resold—was that it would cause economic instability by
disrupting the web of business relations with Russia, where much of
Ukraine’s exports go.
It was in response to such
investor concerns that Yushchenko sacked Tymoshenko as prime minister
in September 2005.
Following her dismissal,
Tymoshenko sought a rapprochement with Russian President Vladimir Putin,
whose government was concerned that Yushchenko’s turn to the eastern
Ukraine oligarchs would reduce Moscow’s influence over Ukrainian
industry. As a gesture of support, longstanding criminal charges in
Russia against Tymoshenko were dropped, despite the fact that her alleged
accomplices had been imprisoned.
When Russia hiked the cost
of natural gas to the Ukraine in January this year, it served not only
to destabilise Yushchenko, but to pressure Tymoshenko’s opponents
in the east not to form too close an alliance with the Ukrainian president.
A government for hire
The split between Yushchenko
and Tymoshenko expressed the reality of the Orange “revolutionaries”
as a faction of the Ukrainian elite that had offered itself for hire
to Washington and international big business in order to win power and
greater wealth for themselves.
Tymoshenko, the self-styled
“Orange princess,” feels emboldened by her wealth and renewed
power to embark on reckless policies that threaten to destabilise the
entire region. She has vowed if made prime minister to cancel the compromise
gas deal Ukraine recently signed with Russia that temporarily secured
the supply of Russian gas in exchange for an increase in the price paid
by Kiev. Such a move would likely bring about further energy instability
across Eurasia.
She has also promised to
initiate an anti-corruption campaign involving lifting immunity from
prosecution for parliamentarians—a move intended to allow her
to settle old scores with her more pro-Russian business and political
rivals.
It is a measure of the desperation
of US imperialism to advance its geopolitical conflict with Russia that
many in Washington consider such an unstable character in so volatile
a region to be a useful ally. The Washington Post reported an unnamed
State Department official as saying the United States favoured Tymoshenko
and Yushchenko forming a government friendly to the West and prepared
to work for more market reforms.
However, some in Washington
recognise that Yushchenko is already a busted flush and that Tymoshenko
is too erratic to be relied on to carry through “free market”
reforms. The Washington Post editorialised that a new alliance with
Yanukovich—only recently decried by the newspaper as the representative
of a brutal Ukrainian autocracy—may be necessary:
“Some in the Bush administration
are quietly encouraging the Orange Revolution parties to set aside their
differences and form a new coalition so as to prevent the pro-Moscow
candidate, Viktor Yanukovich, from becoming prime minister. But a few
experts outside the government argue that Mr. Yanukovich’s party,
backed by some of Ukraine’s biggest private businessmen, is ready
to embrace western capitalism and that a coalition between it and Mr.
Yushchenko’s party could heal Ukraine’s lingering divisions.”
This was echoed in the Wall
Street Journal on March 28. Despite editorialising that the Orange Revolution
overthrew a corrupt “ancien regime” in 2004, and that Yanukovich
had a “possible role in electoral fraud,” the Journal was
keen to stress that it was amenable to the prospect of a rapprochement:
“Mr. Yanukovich is wooing [the] Our Ukraine party and other centrists
by tempering his past Russophile utterances. Significantly, he supports
Ukrainian membership in the European Union.”
Another Journal article expressed
growing concern amongst international investors over Tymoshenko’s
return to government and her “populist slogans”:
“Such concerns have
prompted many in Mr. Yushchenko’s party to call for an alliance
with Mr. Yanukovich instead, as the lesser of two evils. ‘Businessmen
will do everything to make sure Tymoshenko doesn’t return to government,’
said Katya Malofeyeva, an analyst at Renaissance Capital bank in Kiev.”
Never having any principled
differences with Kuchma, Yanukovich or the eastern oligarchs, the Orange
elite could well form an alliance with its previous enemies. A Yushchenko-Yanukovich
or even a Tymoshenko-Yanukovich “grand coalition” cannot
be ruled out as a result of either the current negotiations or future
ones.
Whatever the make-up of the
government in Kiev, the Ukrainian working class can expect nothing from
the parasitic, corrupt and extremely wealthy elite—and their backers
in Washington, Europe and Moscow—but further economic uncertainty
and hardship and the growing spectre of military conflict in the region.