Alexander Moroz, the chairman of the Ukrainian Rada and the leader of Ukraine's Socialist Party, in Kiev in 2006.
Photo: Anastasia Ivanova
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Expensive Enemies
// Political Opponents Divvy Up Ukrainian Wealth
The Socialist Party of Ukraine, which belongs to the prime minister's ruling coalition, stated its opinion yesterday that the current crisis in the Ukrainian parliament was provoked by a confrontation between factions of oligarchs who support different political parties. The socialists called opposition deputies "gas profiteers" and "political provocateurs and hired guns" and openly accused supporters of the idea of dissolving the Ukrainian parliament of working on behalf of a business elite that is eagerly seeking the redistribution of property in the country in various privatization deals.
The targets of the denunciation from Socialist Party leader Alexander Moroz were the pro-president parties Our Ukraine and the Bloc of Yulia Tymoshenko, whose leaders have been actively pushing President Viktor Yushchenko to dissolve the Supreme Rada, the Ukrainian parliament. "A bunch of petty political schemers and provocateurs has laid siege to the government institution of the president and is pushing him towards a senseless and irresponsible step for which there is no constitutional grounds," said the statement issued by the Socialist Party's press office. The authors of the statement called their opponents "buffoons," "sneaks of all colors," "conniving Pharisees from the petty Byzantine party of war," and, last but not least, "gas profiteers." According to the socialists, the "political provocateurs" in the opposition intend to bring the country to a "critical point" that could turn into a "catastrophe for Ukrainian nationhood."
The statement was the first official recognition that the current crisis in the Ukrainian parliament arose not only from political discord between the sides but also from a conflict of interest between factions in the Ukrainian business elite who provide the warring parties with financial sponsorship. In Kiev it has even been estimated how the ruling and opposition parties are managing the current standoff: the Kiev publication Korrespondent calculated an approximate budget for the street protests organized last weekend by Our Ukraine and the Bloc of Yulia Tymoshenko, on the one hand, and the Party of the Regions, the Socialist Party, and the Communist Party on the other. It turned out that bringing tens of thousands of party supporters to the capital from far-flung regions of Ukraine and paying for them to stay briefly in Kiev cost the organizers of the street protests $1.5-3 million.
Even these expenses pale, however, in comparison with the real cost of the ongoing struggle for power. Viktor Yanukovych's return to power last year was not only his personal triumph and that of his Party of the Regions – it was also a victory for the many business interests associated with the prime minister, particularly the company System Capital Management (SCM), which belongs to Rinat Akhmetov, the richest man in Ukraine; the corporation Interpipe, headed by Leonid Kuchma's son-in-law Viktor Pinchuk; and the group UkrSib, which belongs to Alexander Yaroslavsky and Ernest Goliev.
Consequently, businessmen sympathetic to the prime minister's opponents, the Our Ukraine and Bloc of Yulia Tymoshenko parties, have been cut out of the loop. Incidentally, the last few months have seen privatization actively moving forward in Ukraine under the supervision of the government Property Fund (FGI), whose leader Valentina Semenyuk is a member of the Socialist Party, which is a partner in Viktor Yanukovych's "national unity coalition." Coincidentally or not, the decisions that the FGI has been making lately have been unfavorable for businessmen associated with Yulia Tymoshenko. The noisiest scandal involved the recent privatization of the holding company Luganskteplovoz: although Privat Group, which is owned by long-term Tymoshenko associate Igor Kolomoisky, wanted to bid on shares in the company, the FGI ruled that only two Russian companies, Demikhovsky Mashinostroitelny Zavod (Moscow Oblast) and the managing company of Bryansk Mashinostroitelny Zavod (both companies are controlled by the group Transmashkholding), would be allowed to participate in the auction. When Luganskteplovoz eventually went to Bryansk Mashinostroitelny Zavod for $58.5 million, the Bloc of Yulia Tymoshenko (BYuT) charged that the deal was illegal and initiated a parliamentary investigation lead by BYuT deputy Andrey Kozhemyakin, the head of the Committee for Privatization Issues.
The fiercest battles over privatization still lie ahead, however. This year the FGI is preparing to auction off shares in Ukrtelekom, and Mr. Akhmetov's SCM has already expressed interest. The Ukrainian government has also given its consent to a broad privatization campaign in the electrical energy sector. Shares will be offered for sale in numerous government-owned regional energy companies, including Prikarpatenergo, Lvovenergo, Sumyenergo, Chernigovenergo, and Poltavaoblenergo, and experts are already predicting that SCM, Interpipe, and Privat will fight tooth and nail over the spoils.
Such a state of affairs does not sit well with the rest of the heavyweights in the Ukrainian market, who are now determined to see a change in the current political landscape. In large measure, the actions of Yulia Tymoshenko and Our Ukraine are driven by the expectations of businessmen claiming offense at the hands of the government. "Yanukovych is lobbying not only for the interests of Akhmetov but also for those of Russian business, which the Luganskteplovoz affair shows," believes Vadim Karasev, the head of the Kiev Global Strategy Institute. "If BYuT and Our Ukraine succeed in getting early elections called and form a coalition that ends up holding the reins of power, the oligarchs standing behind them, i.e., Privat, will also win. That is the cost of dissolving the Rada – Ukraine as a business asset."
Vladimir Solovyov
All the Article in Russian as of Apr. 03, 2007
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