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Friday, October 03, 2008

Tymoshenko Backtracks As Voters Flee in Panic

After her September fling with the Party of Regions shook her electoral base, the sweetness turned sour. The prodigal PM appears to have scurried back to the salt mines of Orange coalition-rebuilding, even if nothing gets rebuilt in the end.

Before flying off to Moscow yesterday to discuss gas supplies, she abandoned support for legislation that shook Yushchenko’s throne and made Russian a second official language for civil servants.

PM Yulia Tymoshenko: I just saw and I see…uh…here it says ‘spiraling into crisis,’ right? Here it is, with the portrait at the background, with the Premier’s interview at the background. I want to tell you, first of all, it’s an outright manipulation of your mind when the screen now says ‘spiraling into crisis.’ I’m just reading, there’s a display before my eyes. So I want to say that when the President…

Channel 5 host Svyatoslav Tseholko: That the crisis is spiraling into Ukraine, isn’t it true?
Yulia Tymoshenko: Not at all! Don’t push it. It’s absolutely not true.

Svyatoslav Tseholko: I can ask them to pull this subtitle.
Yulia Tymoshenko: Now you see how easy it is to put away the manipulation of people’s minds and scaremongering and certain psycho phenomena.

Svyatoslav Tseholko: The producers are telling me that they’ve changed the subtitle and put it this way:
Yulia Tymoshenko: ‘Ukrainian Renaissance,’ can you see that?
Svyatoslav Tseholko: With a question mark. Could this really be possible?

Yulia Tymoshenko: Well [giggles], it’s not every day that I can be in your studio changing subtitles. Only the chaos in politics is preventing the country from being remarkably successful.

Amen to that, my fair lady. Chaos is stabilnist without makeup.

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elmer said...

I really don't see how the country can be successful when the oligarchs who control the government are busy lining their pockets, while the defense budget of Ukraine is less than 1% of GDP, and 20-year old artillery missiles test-fired simply explode.

A few years back, during the Kuchma era, an errant missile killed all people on board a civilian airliner.

What does it take to start a business in Ukraine? Well, if you pass through all the hurdles, you then pay "protection money" to thugs from the government - unless you're an oligarch.

How can that be a model for a successful country?

When poorly built bridges collapse during floods because someone pocketed money otherwise meant to build strong bridges - how is that a model for a successful country?

When the centrally supplied hot water gets turned off for long periods - how is that a model for a successful country?

When there is absolute wide public distrust of the entire government - and everyone knows it and acknowledges it - how is that a model for a successful country?

When they can't even get their act together for UEFA-2012 - how is that a model for a successful country?

Vitaliy said...

Ha,ha, "Ukrainian renaissance?" - whoever was in charge of the sub-titling in the studio has a quick wit.

Taras said...

Yeah, don’t worry, be happy...oops, there’s been another mine blast!

elmer said...

This is an incredible interview, and I give credit to the interviewer for doing an excellent job, because Yulia is a non-stop, extremely talented, bright campaigner.

But I don't know whether to laugh or cry at some of the things she said.

1) It is very clear that she is ready for pre-term, snap elections, and she mentioned that BYuT intends to get 51% of the vote, so that things can finally get done in the country. I hope that BYuT achieves that goal, since Yushchenko has blown it, and the Party of Regions isn't interested in real democracy. I hope the miners, the ones who haven't died yet in mine explosions, in silly Donbass, finally realize that the Party of Regions collects money, but does nothing for people except watch them explode in mines.

2) The interviewer asked her about eliminating the "party list" system, in which individual candidates do not stand for elections, as in Europe. Instead, people vote for a party list, but only 4 or 5 "headliners" appear on the party list, and the remaining people are unknown.

Yulia is against switching to open elections. First, she claims there is not sufficient time for switching to voting for individual candidates. Second, she claims that what will happen is that the oligarchs will simply buy up all the votes - as was done by Chernovetsky in the mayoral elections in Kyiv - twice. And she believes that when prosecutors finally get around to it, Chernovetsky will have much to answer for.

There it is, folks - Ukrainian votes for sale, and everyone knows it.

3) Ukraine is fortunate, she says, in that nothing works in Ukraine, so that the current semi-global economic crisis will have no impact in Ukraine. She refers to the fact that Ukrainian companies are not traded on any non-Ukrainian stock exchanges, that Ukrainian stock markets don't work, and that Ukraine is not integrated into the global economy.

Bad is good.

Hmmmm - how about Fitch's dropping its ratings on Ukrainian government debt, due to the fact that Yushchenko has a seriously huge bug up his butt about Tymoshenko?

4) She mentions that she is going to maskva to negotiate gas prices, at a time when oil and gas prices are falling, and that for the first time Ukraine is going as an equal to Russia, and as a good neighbor. She also claims that noone should believe the attacks on her in the media about her disregarding the national interest of Ukraine to get Kremlin support in the next Ukrainian presidential elections.

5) She complained about the lack of any positive news, and the portrayal of Ukraine in the Ukrainian media only as a country of disasters and crisis. Instead, she asked for positive news, like increased grain output, etc. I noticed the trailers at the bottom of the screen giving information as to sunflower production, etc.

6) To be fair, both Yushchenko's camp and Tymoshenko's camp are using the courts as a dodge. Yushchenko and his camp are negotiating like Hitler - if you meet one demand, they add another. If you meet all demands, they add more.

But both sides claim that they can't undo certain actions that the other side wants undone, because - it's up to the courts.

And they showed Baloha's s ugly thug face to quote him as saying that "no paper acceding to 2 or 3 points can serve as the basis for a coalition." In other words, President Baloha, er, Yushchenko, ain't going to accept any coalition, no way, no how, nowhere.

Thank you, President Baloha, er, Yushchenko!

elmer said...

Oh, yeah - she also said that Ukrainians aren't ready for majority-type elections for individual candidates, including primaries, instead of the party-list system.

And she asked people to remember what happened when there were "open" elections - that's when the oligarchs began their 17-year campaign of thievery through government.

The only problem with that, is that "open" elections were not really "open" - people were leaned on in various ways to vote the way that thugs wanted them to vote, whether by brute force, by loss of jobs, by monitoring, or other means.

Soooo - are Ukrainians ready for European-style open elections?

Or is this another case of "thank goodness that nothing in Ukraine works."

Taras said...

Since her approval ratings took a nosedive in western Ukraine, she's been gasping for airtime, seeking positive publicity.

As for the voting system, I have a few things to add.

The present system of proportional representation abuses the people's right to know by concealing the party lists from public scrutiny. It also allows for the distortion of the people's choice via party-shopping, the MPs’ practice of changing party loyalties after elections.

While virtually all parties have benefited from the former, there always will be winners and losers stemming from the latter.

And we the people will always lose on both counts.

Serhiy said...

hi Taras! how is it going in Rivne?

Oh la la! you are still there...
So, if I got it right, Ukrainian Renaissance means providing subsidies to Ukrainian metallurgical sector in order to fill the pockets of billioneers and helping of the leading financial-industrial group, ISD, to get under control the whole gas market (through the control of the publicly owned Naftohaz).
As Tymoshenko's friends to confound public interest with their own, our lady seems to confound the Renaissance of Kuchmism with the Renaissance of Ukraine.

Yes, Ukraine is a country of billionaires (or "oligarchs" if you prefer). As well Japan or South Korea, and so what? where's the problem?
Or you think we would be much better off if all the steel production and mineral resources were in the hands of foreign multinationals? I would strongly invite you to make some readings on the comparative political economy of Latin American countries.

Taras said...

Salut Serhiy!

Good to see you again! I haven’t been to Rivne since last December. I have friends and relatives in Rivne oblast, but I was born and live in Kyiv.

Yes, Tymoshenko’s renaissance seems to deal with a renaissance in the use of taxpayers’ money to win favors from Donbas.

The problem with our oligarchs and their chaebols is that they behave in ways that Latin American banana republics did in the 20th century.

While Korea has thrived on innovation, Ukraine has suffered from what I call in-no-way-tion. It’s a synonym for state capture.

The hallmarks of in-no-way-tion: chronic government corruption, cronyism, old economy, cheap labor, energy inefficiency, dependence on volatile commodity markets, grossly unfair income distribution.

Today, Brazil, Argentina, Chile and even Belarus outrank Ukraine in GDP per capita (PPP).

elmer said...

So, serhiy, you believe that "our corrupt oligarchs who use government to rape and pillage their own people" is better than - oh, horror - production in the hands of foreign multinationals?

First, Ukraine is a land of VERY FEW oligarchs, who use government for their own personal gain. That's nothing to be proud of.

Second, foreign multinationals don't have the same opportunity to use Ukrainian government for their own personal benefit, as do the few thug oligarchs who run Ukraine.

Third, if you're afraid of foreign multinationals, I point you to Mittal Steel, which owns Kryvorizhstal, the steel mill that Kuchma and Akhmetov and Pinchuk STOLE in a rigged auction, and which was re-auctioned at a much higher price. And to Microsoft. And to McDonald's. And to the car dealerships that sell BMW's, Mercedes, Bentleys, Porsche's, and other expensive cars around Ukraine. They are the only ones who have any chance of surviving in Ukraine outside of the grip of oligarchs.

Fourth, as Tymoshenko said recently in an interview on Channel 5 - "thank goodness that nothing in Ukraine works - it insulates us from any global economic crisis."

That's not exactly true - but the point is, nothing in Ukraine works. As she pointed out, there are no efficient stock exchanges, and Ukrainian companies are not traded on international stock exchanges.

So while Ukrainian oligarchs continue to blow people up in mines, and rob the country blind, and stick it up the peoples' rear end, you can cheer all you want for Ukrainian oligarchs.

What you get is a country where nothing works - except corruption and mine explosions.

Finally, I'm not sure why you want to justify the ugliness of oligarch government in Ukranie by invoking other ugly examples.

Wouldn't it be better if Ukraine chose a better route? Or, as Tymoshenko said, wouldn't it be better if Ukraine established the best governmental system in the world?

Rather than the worst?

Taras said...

I think, by using South Korea as a model, Serhiy posited the idea of refining our oligarchs into economic nationalists, not crony capitalists who buy politicians and engage in state capture.

The idea has its merits. Over the last few decades, South Korea has advanced by leaps and bounds economically, technologically and democratically. They have their problems, but their GDP per capita of $24,800 (PPP) puts them way ahead of us.

In Ukraine, we have chaebols of our own, but things just don’t seem to work that way. The chaebols get all the favors when it comes to production, and when it comes to wealth distribution, they get all the favors, too. Ordinary Ukrainians eat the crumbs off their tables. Such trickle-down economics can take half a century and half Ukraine’s population to lift Ukraine out of poverty.

Our oligarchs worship Mammon. They've made it into a cargo cult. They buy £80M mansions, they buy Western artists, they pose as philanthropists, but all they really care about is their pockets. They don’t practice noblesse oblige. They practice noblesse négligé.

One of them has openly admitted to having dual citizenship. That’s no way to make an economic nationalist.

Serhiy said...

Hi Taras!
I agree with you when you are comparing certain aspects of Ukraine's political economy with that of Latin America. You may even get farther if you take into account some analysis presenting Latin Amercian capitalism as "hierarchical capitalism", a type of socio-economic system, mainly caracterized by an extreme concentration of private property, a very specific corporate governance with the actual absense of market for corporate titles, and in which hierarchy as a mechanism of coordination plays a much more important role than markets do (you may see some recent publications by , sorry for posting the link in this form).

No one would deny the existence of particularly close relations between private interests and government in Ukraine (both before and after the Orange Revolution, even though the mode of representation of these interests seems to have changed). However, I would not accept the idea of "state capture", as developped in the standard political economy literature. What's especially embarassing for me is the idea that the "state capture" comes from "partial reforms". I would rather agree with some other explanations, as that by Mark Shafer, who is more interested in the caractersitics of the "leading sector", sector which constitues the basis of country's internationali specialization. As he shows, countries in which the mining sector is the leading one, may encounter much more difficulties to develop, since, in this case, the government has inevitable to affront a very concentrated and capitalistic sector, with very few important private players, who have no difficulty to undertake a collective action to obtain from the government what they want to...So, quiet an interesting explanation making part of a vast literature on the "natural ressource curse".

This analysis seems to be a good explanatory tool for many economic and political developments of Ukraine, heavily dependent on the exports of steel and other primary goods. Weak state (both in terms of absolute and relative (vis-a-vis societal actors) capacity), huge mineral resources and dependency on the economic sector engaged in their primary transformation, caracterized by high concentration of important economic resources in few hands, that's what clearly distinguish Ukraine (and also Russia, by the way) from the countries of East Asia (and probably from the Central and Eastern Europe) and make us stand closer to Latin America.
By the way, the type of international specialization and the caracteristics of leading sector may have many consequences on state institutions, type of policies, etc. (for an original analysis, you may look at some papers by Bela Greskovits, writing on the variety of capitalisms in Eastern Europe,

hi Elmer,
I'm not saying that our "oligarchs" are better in some way or that the development path that Ukraine chose was "optimal". What I would like to say, is that the total separation between economics and politics or between public and private interests, may only be envisioned in some utopian representation of human society and polity, as the one of Milton Friedman.

Second, we are not "afraid" of multinationals. Actually today hunting for FDI is the only way to develop. But it also depends on the type of FDI you are able to attract. First, you have of problem of different logics of maximization of wealth: the territorial (for a Nation-State) and the transnational ones which may well run into contradictions. Decisions taken by Mittal, such as for instance to cut some productive capacities during the time of crisis could be perfectly rational and wealth-maximizing for Mittal but could be sub-optimal for Ukraine. That would not be the case of domestic companies, certainly not because they are "patriotic", but because they follow national logic of accumulation (unless they go global).
Second, attracting foreing capital into mineral sector can hardly be a viable development strategy. And to attract FDI into manufacturing sector, intensively using human capital, you should not only be "open and liberal", but also have a strong state, capable of adopting a modern industrial policy (infrastructure development, personnel retraining, special bonuses for FDI,...). That's how it worked in Central Europe.

Anyway, how is it related to Tymoshenko? For me, she seems to be just a populist, and like all populists, both in Latin Amercia and Eastern Europe (there was a good paper in Comparative Politics on this matter), she should be totally afraid of organized interests and be willing to submit them to her personnel will by any means...

elmer said...

Serhiy, look. Democratic governments are strong because government is not concentrated in the hands of a few wealthy people.

The phrase "of the people, by the people, and for the people" actually means something, and is carried out in reality.

In Ukraine, unfortunately, the transformation to a democracy is not complete.

Voting in elections is only part of the equation.

A free press, and free speech, is only part of the equation.

Milton Friedman never advocated a total separation of public and private interests, and that's not the issue.

The issue in Ukraine is the fact that corrupt thug oligarchs have captured the government.

Akhmetov, as a member of government, is also the beneficiary of a contract, as a businessperson, to develop the Black Sea shelf for oil and gas - Vanco Prykerchenska. And he brings in his foreign Russian friends, and friends from lands unknown, to share in the spoils.

In a true democracy, it is unthinkable that such a HUGE conflict of interest is allowed.

Yet, that is what made Ukraine's oligarchs wealthy in the first place (a dairy truck driver named Lazarenko showed them all how to do it on a massive scale) and Kuchma "perfected" the corruption.

Many Ukrainians still don't have any idea of what true democracy is, although they see what it can accomplish in the example of other countries.

Tymoshenko a "populist"? Really? What is a "populist," the way you see it?

That seems to me to be a sovok label, to which people were conditioned to cower and cringe and quake in fear, like trained animals. "Nationalist" and "Bandera" and "fascist" are other such words.

But it was the sovoks who were - and are - the worst fascists.

And there is no need to cower and quake and quiver in fear today based on the sovok handbook of intimidation, insults and threats.

Ukrainians recognize the stench of Ukrainian corruption.

Sadly, some of them are willing to keep holding their nose, or simply to put up with it.

elmer said...

Serhiy, I want to understand what you are advocating.

If you are advocating the idea of "beneficent oligarchs" - that is simply not going to work.

There is not a single thing - not one - that any oligarch has done for the good of the people. Pinchuk's free Paul McCartney concert doesn't count - it does nothing to improve the lives of the people on any sort of sustained basis.

In Kyiv, Kharkiv and other Ukrainian cities, hot water is provided, literally, on a centralized basis - and it goes out for months at a time.

Do the oligarchs, in their gated communities, have the same problem? NO.

Democracy is about people having the chance to rely on themselves, free from government interference, but with the support of government if they need it.

It is about equal rights - and equal opportunities. In Ukraine, the oligarchs have all the rights and all the opportunities.

That is hardly a model for a successful country.

Inflation is raging in Ukraine right now. Who benefits? Wealthy people who can put their money into assets that increase in value in inflationary times - like land.

You're worried about Mittal Steel - tell me just one thing that any oligarch has done for the good of the people. Just one.

Noone ever gets fired from Ukrainian oligarch companies? It's all political, and if someone doesn't toe the line, they get killed.

Give me just one example, Serhiy.