Victors of last December’s inter-elite struggle in spectacular fall out

The recent fall of the Ukraine government, amid accusations and counter-accusations of corruption between supporters of President Victor Yuschenko, and former Prime Minister Yulia Timoshenko, and the cynical and opportunist blocs and deals underway between these forces and their former political ‘enemies’, shows that the CWI’s previous analysis of the so-called ‘Orange revolution’ holds true.

In our articles last year and at the beginning of this year (see articles under ‘Ukraine’ on this site), we explained the reactionary, pro-capitalist character of the leaders of the Orange revolution, who played on the genuine desire of working people in west Ukraine for democratic rights and better living standards.

The Orange revolution, backed by the Western media, the US and the EU powers, led to a change of power from the former pro-Russian regime of Leonid Kuchma, who had tried to have his supporters fraudulently hold onto power after parliamentary elections, to the more pro-Western Yuschenko. Amongst workers in the west of Ukraine, great hopes were raised by the new regime. But months later, all that workers have experienced is lower living standards and the continuing domination of society by the oligarchs.

The following article is based on a report by Vitalii Gorenko, from Kiev, in the current edition of ‘Socialist Resistance’, newspaper of the CWI in the CIS. It is updated by Rob Jones, in Moscow. Both authors were in Kiev during last year’s ‘Orange Revolution’, along with other CWI members.

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Bitter fruit of the ‘Orange Revolution’

The various elements of the so-called Orange Revolution that came to power last December on a wave of populist slogans and promises have spectacularly fallen apart. President Victor Yushenko sacked his government, led by Yulia Timoshenko. She has gone into public opposition, while Yushenko’s new candidate for premier, Yuri Ekhanurov, was only approved by the Supreme Rada (a parliament chamber) on the second vote, after Yushenko made an open deal with Victor Yanukovich, his bitter opponent and rival for the presidency, just 8 months ago.

The catalyst that caused the recent split was the struggle for control of the Nikopolskii Steelworks, one of the plants that the leaders of the Orange Revolution promised to “de-privatise”, to take them out of the hands of the pro-Russian oligarchs. But, once in power, the new government, in the person of the “Orange princess”, Premier Yulia Timoshenko, had made quite clear that her intention to deprivatise the factory was not to return it to state ownership but so that it could then be privatised again to a new owner.

The current “owner” of the plant is Victor Pinchuk, one of the Ukraine’s richest men and not coincidentally son-in-law of the former president, Leonid Kuchma. One of the main candidates to take over the ‘reprivatised’ factory is the financial group ‘Privat’, in whose interests Timoshenko is accused of lobbying. Pinchuk was openly supported by the Secretary of the Security and Defense Council, Petr Poroshenko.

In dividing up the wealth and power of the Ukraine in their own interests, the Ukrainian capitalists have exposed, for all to see, their brutal greed. In live TV broadcasts of demonstrations by workers from the Nikopolskii Steelworks, Victor Penchuk, a dollar billionaire, was shown standing amongst the workers. All three of the TV stations that Penchuk owns aired pictures of this fallen oligarch, standing side by side with his hired workers in, what the broadcasts described as, a “show of solidarity between labour and capital” in the struggle against the corrupt state!

In the months after the Orange revolution, the new government, headed by Timoshenko, and including Poroshenko, used their power to undermine the position of their opponents. But once they had managed to undermine the economic position of their opponents they then started to squabble between themselves. And there is no sign that this conflict will end soon. New figures are coming to the fore, trying to get more power and influence for themselves.

The conflict came into the open when head of the President’s Administration, Alexander Zimchenko, announced his resignation at a press conference, accusing Yushenko’s allies of corruption. The Ukrainian press is full of stories of how Yushenko’s son, who likes to drive expensive cars, flaunted his wealth and position and on how government ministers have suddenly acquired expensive yachts.

Zimchenko noticeably excluded Timoshenko from his blacklist of corrupt leaders, even though she was formerly known as the “gas pump princess” after she and her husband took over the petrol distribution network in the Ukraine. Her husband is now in hiding and her uncle is on fraud charges in the US. Timoshenko was on the Interpol wanted list at the request of the Russian authorities, who accused her of bribery. But these charges were renounced last week, as the Russian capitalist class apparently decided they might need to ally themselves with Timoshenko.

Blow to Yushenko’s authority

These scandals have dealt a severe blow to President Yushenko’s authority. Having won 52% of the vote in January’s rerun election some opinion polls now show his support falling rapidly to below 30%. Darling of the West, Timoshenko (the BBC World Service newsreaders routinely preface her name with the phrase “highly popular”) has fallen to below 20%, in the same polls.

Although the Timoshenko government is dismissed, this has only opened up a further period of conflict within the Ukrainian ruling elite. The roots of this conflict lie in the squabble over who controls industry but also in the political deal that Yushenko made with former president, Leonid Kuchma, last winter.

Kuchma conceded a rerun of the disputed presidential election after Yushenko agreed to reduce the powers of the president and to increase those of the Verkhovnaya Rada (the Ukrainian parliament, which literally translates as ‘Supreme Soviet’). These reforms are to come into effect next year. In effect, January’s Presidential election was the Ukraine’s last, as from next year, the president will be elected by the parliament.

Timoshenko has now made clear she is moving into open opposition. She is dangerously opportunist. As the most ‘radical’ leader of the Orange revolution, last December, she played a major role in whipping up Ukrainian nationalist moods against the Russian-speaking, working class population of the East and South Ukraine, who mainly supported Yanokovich’s candidacy against Yushenko.

But in a recent interview on Donetsk television (Donetsk is the mining capital of the east), shortly after she was removed from office, Timoshenko held up an orange and blue ribbon (blue was the colour of the pro-Russian Yanukovich campaign last year), put them side by side, and exclaimed, “Oh look! The Ukrainian flag! [The Ukraine flag, incidentally, is blue and yellow]. We need to unite together against the government”.

Timoshenko’s stunt shows the possibility of a block between her and pro-Russian oligarchs in the East and possibly also the Communist Party. Clearly such a block is a million miles away from representing the interests of working people in any part of Ukraine.

Failure of Orange government

The crises currently wracking Ukraine are fuelled by the failure of Yushenko’s neo-liberal project. In the early days of his office, Yushenko, through Timoshenko’s government, carried out some populist measures intended to gain support form the poorer sections of society. He announced a huge increase in pensions. But this policy backfired when prices in the shops rose. This left pensioners no better off and the rest of the population poorer. It also helped to alienate a large section of middle classes and even capitalist backers of Yushenko, who rather than getting tax reductions ended up paying more tax.

Over the last couple of months, an economic crisis has also been developing, as the formerly high growth rates in the Ukraine have dropped sharply. In 2004, the Ukrainian economy grew by more than 12%, this year growth is already down to 3.5%, and there are predictions it will halve again by year end. Industrial production is actually falling and last year’s budget surplus has disappeared.

Unlike Russia and Kazakhstan, the Ukraine has no oil and gas to sell. When Timoshenko was still premier she attempted to limit the price rises on petrol, but this just led to a national fuel crisis, as pumps ran dry. The paradox of the past eight months is that the leaders of the Orange revolution, who came to power as pro-western neo-liberal politicians, ended up carrying out measures that included ‘deprivatisation’, attempts by the state to regulate the prices of meat, petrol and grain, and the strengthening of the state monopolies. However, the measures have not improved the lot of working people. So much so, that in the week that Timoshenko was sacked, the miners’ union declared a “pre-strike situation”.

As far as democratic reforms are concerned, these too have proved to have been ephemeral under the Yushenko government. One of the biggest ironies is the fate of the ‘Pora’ movement, a mainly youth organisation, financed by Western funds, which was the backbone of last year’s Orange movement. When Pora leaders tried to register as a political party they were refused. Pora complained that they struggled against the Kuchma government due to its reliance on the greedy oligarchs, and now Yushenko has made deals with other oligarchs. Indeed, one of Yushenko’s right hand men has a “personal” wealth of nearly half a billion dollars.

Human rights groups complain that state torture is still used in Ukraine. Relatives of the journalist Gondzazde, murdered under the Kuchma regime, are again organising pickets but this time they are bitterly denouncing Yushenko for assisting the cover up of those guilty for the young journalist’s death.

The success of the Orange revolution, and the coming to power of Yuschenko and Timoschenko, was seen as a big blow to Russian interests in the region. The Western powers and media - the US, in particular - backed the Orange revolution. Its victory was meant to lead to the US getting a stronger position in the East, to counter Russia’s regional power. But the collapse of the Orange government and Yushenko’s tilt towards Moscow means that the US has lost ground in recent events.

The Yushenko-Timoshenko government made it clear they were intent on entering the European Union. But this “dream” also got nowhere. Ukrainians now understand that EU membership is not a likely perspective, partly because the EU has made clear this is not on the cards.

But even the pro-Western government has discovered it is not so easy to break from Russian influence, when Russia controls Ukraine’s oil and gas supplies, and, incidentally, still only charges half the market price.

If Timoshenko’s “Oh! Look we have the Ukrainian flag” was blatant opportunism, the way in which Yushenko gained a majority in parliament for his choice of new prime minister was even more cynical. His candidate, Yuri Yekhanurova, is a ‘technocrat’, who, in the past, headed the Privatisation Committee. As one Ukrainian commentator explained, “The important question is not who is Yuri Yekhanorov. He’s a competent builder with the kind smile of a baby Siberian bear [he was born in Siberia]. The question is how was the election done? Everyone knows about a ‘shotgun wedding’. You know when you have to push things through quickly in case the bride has to leave the wedding to rush to hospital. The vote in the Supreme Rada was like such a wedding. Yekhanorov didn’t even speak. The Maestro Litvin [Speaker] didn’t even read out the list of absent members he was in such a rush. It’s just like it used to be under Kuchma.”

In other reports, it is claimed that Yushenko offered MPs up to 300,000 US dollars to vote for Yekhanorova, whilst Timoshenko, it is claimed, promised a quarter of a million to vote against!

Even the serious political analysts in the Ukraine are at a loss to explain the real differences between Yusenko and Timoshenko, because this is such a blatant struggle for power and wealth that ‘political positions’ are forced into the background.

It is clear that in the run-up to next March’s parliamentary elections we can expect all manner of maneuvers and position changes. It is beginning to look quite possible that Timoshenko, who models herself on a cross between a Ukrainian Joan d’Arc and Margaret Thatcher, could move in a very opportunist, populist direction. It may even be the case that Yushenko and Timoshenko will try to ‘out-populist’ each other!

Left weak

It remains the case, however, that the forces of the left are extremely weak. Both the Communist Party (which is considered to have worked behind the scenes with Timoshenko), and the Socialist Party (which had links with Yushenko), reneged on their ‘aims’ of lobbying their friends in government for even basic reforms for the working class. This has left a vacuum on the left that is being filled by organisations like the United Social Democratic Party of the Ukraine, which is financed and run by one of the oligarchs. Nationalist groups, including extreme Russian or extreme Ukrainian nationalists, are also attempting to fill the political gap. Workers and youth are bitter at the experience of the Yushenko and Timoshenko government and blocs. In western Ukraine, the working masses feel they made a revolution last year, only to have to stolen by more oligarchs.

Consciousness is very confused, after decades of Stalinist rule, after more than a decade of brutal capitalist restoration, and now following the latest clash between sections of the ruling elite and the oligarchs. Yet there is big potential for a clear, socialist banner. Both the general ideological confusion, and also the potential for a principled, socialist left were shown last week by a large “anti-capitalist” march in Kiev. Up to 5,000 youth, who were mainly brought to the streets by the USDP and the various nationalists, marched with red flags and Che banners.

If one thing is crystal clear in the Ukraine, it is that the current struggle is only part of a long, drawn-out and ever-deepening crisis of the capitalist system. To resolve this crisis calls out for the emergence of a new force - a new genuine workers’ party. Such a party could unite the working masses of all nationalities in the fight to overthrow the current Ukrainian ruling elite that cynically struggles for the spoils of office, power and wealth in one of the largest and one of the poorest countries in Europe.

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