Guest column: ‘Overcome rivalries and draw clear lines of authority’

Quote: There is an old saying: “Where there are two Ukrainians, there will be three hetmans.” Hetmans were the leaders of Ukraine’s traditional Cossack hosts and the proverb reflects the divisive politics of Ukraine’s past.
Modern-day Ukraine’s politics are no less fractious or confusing to the outside world. In the past 29 months, Kiev has seen five different governments, including two under pro-Russian prime minister Viktor Yanukovich and two under pro-western prime minister Yulia Tymoshenko, who is now in office. Such volatility is hardly surprising. At the height of the 2004 Orange Revolution, Ukraine seemed to have three presidents: lame-duck authoritarian Leonid Kuchma; his anointed successor Viktor Yanukovich, who claimed victory amid evidence of vote fraud; and Viktor Yushchenko, the reformer who swore himself in as president and eventually won a re-run election. At times, political tensions have been accompanied by signs of rampant corruption.
But, amid the turmoil, Ukraine has seen steady economic growth with gross domestic product rising at an average of 7.4 per cent a year since 2000. Personal incomes have risen and property prices have soared.
Increasingly, domestic and international business people have learned to discount the political tensions. Observers have come to understand that sharp struggles have contributed to democratic development, political pluralism, free media, and the absence of political persecution.
Business naturally would prefer predictability, stability, and the opportunity to work issues and legislation through a consistent team of decision-makers. Yet Ukraine has seen more continuity in its economic policies than lurches to the left and right.
As Alexander Motyl, a professor at Rutgers University in New Jersey, sees it: “Ukraine’s fragmented politics amounts to a weak state. If it’s too weak that can be bad for business. But if the state is preoccupied with its own affairs, that can be quite good for business.”
Big business is well represented in all three leading political forces – the Yanukovich-led Regions party, the pro-Yushchenko Our Ukraine bloc, and the Yulia Tymoshenko bloc – which cumulatively account for nearly 90 per cent of the seats in the legislature. A study indicated that about 40 per cent of deputies in the last parliament came from business backgrounds. With minor differences, Ukraine’s three major political leaders all respect the market system and are sensitive to business interests.
In one sense, the growing influence of business on Ukraine’s parties is a by-product of the intense political struggle. Since 2000 there have been two presidential and three parliamentary elections, as well as numerous local contests. The frequent elections generate a need to finance increasingly expensive campaigns. In turn, business leaders leverage financial support into a direct presence on party lists and influence over party programmes. As a result, the big parties all espouse business-friendly centrist economic policies when in office.
Some business people use their clout to lobby for narrow interests and at times exploit political influence for special advantage, and a disproportionate business presence in politics may damage pluralism over time. Some are not shy to bribe politicians and bureaucrats alike.
But in recent years, the business community’s role in politics has largely been salutary. Most of the business community quietly threw its support behind the Orange Revolution, seeing in Mr Yushchenko a leader who could help the country escape from the corrupt ruling elite. When, last year, a showdown between President Yushchenko and Mr Yanukovich, who was then prime minister, threatened to spiral out of control, business intervened.
Ukraine’s richest man Rinat Akhmetov, a patron of the Regions party, pressed for a ballot-box solution. When the verdict came in, he helped ensure his party accepted defeat.
But business is becoming increasingly worried about rising inflation, which, as well as being economically damaging can be socially disruptive. Instead of tackling the problem co-operatively, the president and prime minister are quarrelling as they prepare for the January 2010 presidential election.
In practical terms this means too little is being done to tame inflation, meaningful privatisation is stymied, and populist promises proliferate.
For a country that has shed its authoritarian past, dispersed power and checks and balances make sense. Yet the new system is not working properly, despite several attempts at constitutional reform. Political leaders still view politics as a matter of constant struggle.

http://www.ft.com/cms/s/0/93db761e-1fc1-11dd-9216-000077b07658.html

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