Yushchenko promises new government focused on economic stability, pragmatism (09/18/05)

Yushchenko promises new government focused on economic stability, pragmatism

by Zenon Zawada
Kyiv Press Bureau

KYIV - As he forms his new Cabinet of Ministers, Ukrainian President Viktor Yushchenko has announced that economic stability and government pragmatism are his new priorities.

In the two press conferences he held since firing his Cabinet on September 8, reform was a word seldom mentioned.

"I told a colleague in Parliament, 'Let's not place political cadres in government,'" Mr. Yushchenko told reporters on September 11. "Let's get pragmatists. Let's have revisions where we need them, where real, good things can take place."

It was a clear effort by Mr. Yushchenko to put the struggling Ukrainian economy back on track and encourage both Ukrainian and foreign investors, many of whom have been scared off by potential reforms, to keep their money in Ukraine.

Demonstrating his new faces, Mr. Yushchenko announced at a September 13 press conference with Western journalists that most reprivatizations would cease, with the exception of Kryvorizhstal.

He said reprivatization had caused fear in the business community, and lay the blame on his former prime minister, Yulia Tymoshenko, who suggested earlier in the year that the government target several thousand businesses.

"I want to initiate formulation of new principles which would witness that from today we give up these practices of reprivatization from the last two or three months," Mr. Yushchenko said.

Businessmen feel frightened, Mr. Yushchenko said, and they don't feel stability, thinking that "with every prime minister that arrives, there's new revision and redistribution of interests," he said.

He even urged wealthy businessmen, such as Rynat Akhmetov and Ihor Kolomoyskyi, who are currently abroad to return to Ukraine. "Don't hide behind mountains," Mr. Yushchenko said September 13. "No one is coming after them as long as they don't have a conflict with the law. I personally back this statement."

Aside from the establishing an atmosphere of economic stability, Mr. Yushchenko's other main preoccupation was launching a campaign to attack and discredit Ms. Tymoshenko. He said she engaged in backstage antics and corruption ever since she became prime minister.

The straw that broke the camel's back came when Ms. Tymoshenko tried to pressure government officials into selling the Nikopol Ferroalloy plant to Dnipropetrovsk businessmen, Mr. Yushchenko said.

Two days later, Mr. Yushchenko lobbed an even greater accusation.

In an interview with the Associated Press, he alleged that Ms. Tymoshenko used her position to try to eliminate $1.5 billion in debt owed to the government by her defunct gas-trading company, Unified Energy Systems.

"The behavior that Yulia Volodymyrivna demonstrated in government, and the circle of her allies, were formed on a basis contrary to state interests," he said. "Many activities which the prime minister participated in were carried out behind the scenes with the aim of solving her problems."

In his statements to the press he also painted Ms. Tymoshenko as an emotional woman and referred to her as an "artist."

"Ukraine needs wise, thought-out, patient decisions without emotion, without artistry, without public relations, so that everything works honestly," Mr. Yushchenko said.

In response, Ms. Tymoshenko echoed the concerns expressed last week by former Vice Prime Minister of Humanitarian Affairs Mykola Tomenko that "Kuchmism" was returning to Bankova Street, where the president's offices are situated.

Mr. Yushchenko "is using the same methods that Mr. Kuchma used to get rid of me," Mrs. Tymoshenko told the Associated Press on September 14.

To demonstrate his emphasis on stability, Mr. Yushchenko recalled the time when he was removed as prime minister from former President Leonid Kuchma's government.

"I said, 'Mr. President, we can spend the next year and a half in oblivion or in mutual respect,' " Mr. Yushchenko told reporters at a September 11 press conference. "To live in mutual respect, we should do what Germans did in 1948 when political leaders said we've lived three years in misunderstanding and lost faith. They decided on stability. Three years. After that, reforms began."

Two days later, Mr. Yushchenko did what Mr. Kuchma declined to do several years earlier. He called all the major political party leaders to a conference, including his nemesis, the Party of the Regions, in which they signed a Declaration of Unity and Cooperation for the Sake of Ukraine's Future.

The broad coalition of signers included Raisa Bohatyriova of the Party of the Regions, Yurii Kostenko of the right-wing Ukrainian People's Party and Valerii Pustovoitenko of Trudova Ukraina (Labor Ukraine).

Mr. Yushchenko made a point of noting that only three major political parties had not signed: the Communist Party, the Social Democratic Party United (SDPU) and the Yulia Tymoshenko Bloc.

"There's terrible fear on behalf of the Yushchenko entourage of Tymoshenko," said Ivan Lozowy, president of the Kyiv-based Institute of Statehood and Democracy, which is exclusively financed by Ukrainian business donations.

"They knew they had to cut her adrift because they're afraid of her. Now that she's cut adrift, they have to destroy her. Isolate her, and at any cost create a de-facto anti-Tymoshenko coalition," he noted

The president neglected to mention that former Finance Minister Viktor Pynzenyk, leader of the Reforms and Order Party, also did not sign. Political experts widely speculate that Mr. Pynzenyk will align his political forces with Ms. Tymoshenko, though he has made no official announcement.

The composition of the new Cabinet remains uncertain, although speculation and rumors abound in the Ukrainian capital.

A few positions have been clarified. Mr. Yushchenko named Ihor Drizhchanyi as the new chief of the Security Service of Ukraine, replacing Oleksander Turchynov, among former Ms. Tymoshenko's closest allies in the former government.

Yurii Lutsenko said Mr. Yushchenko had asked him to remain as Internal Affairs Minister immediately after announcing his sacking of the Cabinet.

Mr. Lutsenko has been among the most visible and active Cabinet Ministers during the Yushchenko presidency so far. He led the campaign in arresting government officials suspected in corruption, including former Donetsk Oblast Administration Chairman Borys Kolesnykov and former Zakarpattia Oblast Administration Chairman Ivan Rizak.

Acting Prime Minister Yurii Yekhanurov spent September 14 talking to leaders of various political factions in assembling his Cabinet of Ministers.

His role and agenda are unclear thus far, but many political experts said he is a strong selection to introduce stability and calm to a Cabinet ripped apart by conflict.

Mr. Yekhanurov served as Mr. Yushchenko's first vice prime minister in 2001 and was Mr. Yushchenko's assistant chief of staff during the Orange Revolution.

However, he was also head of the State Property Fund, responsible for the handling of state properties, under former President Leonid Kuchma between 1994 and 1997. The State Property Fund was a feeding trough for corrupt oligarchs during the Kuchma years, Mr. Lozowy said.

"Tymoshenko made plenty of mistakes, but the one thing I give her credit for is not being afraid to go after the big fish," Mr. Lozowy said. "What we're seeing now is a seal of approval by the Kuchmites like Yekhanurov on the entire period of rampant corruption under the Kuchma regime."

In one of his first public appearances as prime minister, photographers snapped pictures of Mr. Yekhanurov warmly greeting and embracing Mr. Kuchma in Dnipropetrovsk on September 12.

In response to concerns about Mr. Yekhanurov's record and commitment to reform, Mr. Yushchenko said September 13 that service under Mr. Kuchma does not entail a corrupt character. Mr. Yushchenko pointed out that he himself chaired the National Bank of Ukraine under Mr. Kuchma and served as his prime minister.

"Of course, anyone I nominate, they held a position in 1992, or in 1995 or in 1999," Mr. Yushchenko said during a September 14 Kyiv press conference for foreign journalists. "They didn't live in the clouds. They had some place in the system's hierarchy. If you remember there was no opposition then."

Mr. Yushchenko said, that certainly, Mr. Kuchma frequently called upon Mr. Yekhanurov and gave him orders. However, as his first vice prime minister, Mr. Yekhanurov's "performance was beyond reproach," Mr. Yushchenko said.

They were trying to implement reforms, despite working for Mr. Kuchma, Mr. Yushchenko said. "We were on another course, through which we were fired," Mr. Yushchenko said. However, immediately after his dismissal, Mr. Yekhanurov served as chief of staff Oleksander Zinchenko's first assistant in 2001.

Eventually, Mr. Yekhanurov joined the opposition.

Ms. Tymoshenko described a meeting with Mr. Yushchenko, days before her firing, in which he attacked her for attempting to overshadow him in the media.

He was frustrated that she managed to create an image in which he was "weak and incapable of running things," while she appeared "strong and efficient," Ms. Tymoshenko said. "He said, 'Look at Putin or Lukashenka. They have brilliant prime ministers. No one ever sees them on television.' "

In selecting Mr. Yekhanurov, Mr. Yushchenko wanted more of a technocrat who was going to work behind the scenes to ensure the president's initiatives moved forward, experts said.

In the one week he has been acting prime minister, Mr. Yekhanurov has yet to call a press conference.

"Yurii Yekhanurov is an absolutely different type of person than Yulia Tymoshenko," said Vasyl Stoyakin, director of the Center for Political Marketing in Kyiv.

"It's well-known to everyone that Yekhanurov, as first vice prime minister, was the work horse that carried the main activities of Yushchenko's Cabinet. Therefore, this person, without flattering him, is a dependable, hopeful servant in the best sense of the word; a very qualified manager who was very popular in the previous regime."

Anders Aslund, director of the Russian and Eurasian Program at the Carnegie Endowment for International Peace in Washington, hailed Mr. Yushchenko's decision to fire Ms. Tymoshenko.

"If Yurii Yekhanurov completely changes the political government, and this is what I expect, he will be able to bring order to the economy," said Dr. Aslund, who had long argued for an end to reprivatizations.

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