Yulya Reloaded

Economic News

22 Jul 2010
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While the latest results from Sunday’s parliamentary elections show a nominal victory for Viktor Yanukovych’s Party of the Regions, all eyes instead have focused on Yulya Tymoshenko, who is expected to emerge as the real winner in Ukraine’s latest democratic contest.

The former prime minister and heroine of the 2004 Orange revolution may force Yanukovych into opposition, despite the fact that results showed the largest share of the vote – around 30% – going to his blue and white-coloured party of the Donbass, with its roots in the industrialised, pro-Russian East of the country.

Yet the combined vote of the two parties claiming the mantle of the Orange revolution – the Tymoshenko Bloc and the ruling Our Ukraine – was around 37%. With only two other parties expected to cross the 3% national threshold, the odds are stacked strongly in favour of an Orange reunion.

Nonetheless, the real loser in what international observers have called a free and fair election, is widely considered to be the embattled father of the Orange revolution and former ally of Tymoshenko, President Viktor Yushchenko.

He is now faced with a humiliating prospect of having to make up to his rejected partner. The two fell out last year in a dispute that led Yushchenko to fire Tymoshenko and her entire government.

According to early estimates on Tuesday afternoon, Yushchenko’s party, Our Ukraine, will likely come in third place with just around 15% of the total vote. This is significantly less than the 22% attributed to the surprisingly successful Tymoshenko Bloc. Most pre-election opinion polls had predicted her party would trail behind Yushchenko’s, fetching no more than 15% of the total vote.

The populist revolutionary heroine seems to have been vindicated by the Ukrainian electorate, and now wants to claim back her old job as prime minister.

If Tymoshenko uses her newly acquired political capital wisely, one Kiev-based analyst told OBG, she has every chance of reuniting the divided Orange team and forming the majority coalition, with the help of socialist allies.

Both the Socialist Party – which is expected to obtain around 6% of the vote – and Our Ukraine have signalled their willingness to bury the hatchet and enter coalition talks, with Tymoshenko as the prime minister apparent.

This, however, analysts argue, would be a bitter pill to swallow for President Yushchenko, who continues to draw criticism from his former ally for having betrayed the principles of the Orange revolution.

Speaking to Italy’s La Republica shortly after the election, Tymoshenko refused to strike a conciliatory note, accusing Yushchenko of giving the impression of being an opportunist who was even prepared to enter an unholy alliance with his arch rival for the presidency back in 2004-5, Yanukovych.

Commenting on the scenario of Our Ukraine entering a rainbow coalition with the Party of the Regions, Tymoshenko said, Such an alliance is not possible. The President has to decide who will be the next prime minister – myself or Yanukovych. Choosing Yanukovych would be equal to political suicide.

Most analysts agree that such an unholy alliance with the Party of the Regions – which used to be the most widely touted election forecast – would indeed deprive the President of his authority and could spark a popular revolt against him.

The probability of going down that road also looks less likely as the two Orange opponents are showing signs of mending bridges. After a meeting with President Yushchenko on March 28, Tymoshenko told local media that she expected to sign a memorandum of coalition with Our Ukraine and the Socialist Party in the next few days.

Tymoshenko made it clear, however, that the negotiations would be carried out on her terms, in line with the popular support each party received in the parliamentary elections.

While the fiery Orange heroine is known for her uncompromising character, which, many analysts say, could still bring the coalition talks into a gridlock, the new government team that is going shaped in the next few weeks is likely to be the result of a political compromise.

With no parliamentary elections planned for another five years, Tymoshenko is expected to lean more toward real politik rather than the more populist instincts that underpinned her remarkable political comeback. Yulya-I, as many analysts put it, is likely to be very different from Yulya-II – the fiery revolutionary icon may become more conciliatory in the days ahead.

That would be a major relief for both the local and foreign business community, which often criticised Tymoshenko’s erratic policies when she was in government.

She has already promised to renegotiate the gas deal with Russia, and is expected to readopt her traditionally tough stance towards the Kuchma-era oligarchs.

The main question for the business community, however, is whether Tymoshenko is going to press on with the controversial reprivatisation campaign that is held partly responsible for slowing economic growth last year and for pitting various political factions against each other.

Reprivatisation was the issue over which the Orange camp fell apart back in September last year, and it is also the one single issue that is likely to continue to be the main source of political strife, with the unresolved question of the reprivatisation of the Nikopol Ferroalloy plant still looming in the horizon.

As political parties enter the coalition talks, Ukraine-observers hope that the former Orange allies will find a way to build a workable government team, putting the country – that has just passed an important democratic acid test – on a path of steady
economic growth and political stability.

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