Bookmark and Share

Tuesday, September 20, 2005

Ukraine: A lesson in corruption, fraud and reform

You don’t rebuild a failed Soviet Fascist state in one year.

by StFerdIII

The EU and US would do well to help out the struggling Ukrainian Orange revolution with money, investment, legal and political advice and helping Ukraine end its obsession with corruption, which is the main obstacle to becoming a real nation. Corruption is so endemic that it appears that many of the elite surrounding current President Yushchenko are just as bad as the previous mafia, which fed off of the former Kuchma government. The Orange Revolution, which dramatically captured world attention and support, is neither the color of angels, nor a revolution for the good of the common man or women, but more likely a vicious power grab by opportunists who are fighting real reformers for power.

Yushchenko just fired his government maintaining that the divisions between true reformers and corrupt mafia parasites made governing impossible. There is a faint hope that by firing the government and bringing in new faces Yushchenko can keep the Orange revolution on course and focus it to fight government corruption and eliminate the mafia elements that dominate Ukrainian society and its political-economy. However, it is unclear whether Yushechenko’s team is as corrupt as the people they fired, or if Yushchenko himself – a quiet, weak leader – is the right man for the top job.

Yushchenko maintains that Ms. Tymoshenko – the babe of the Orange Revolution who made a few billion during the 1990s by controlling eastern Ukrainian energy and gas imports and distribution - was favoring certain business allies as Prime Minister. Appointed by Yushchenko as PM she was responsible for policy and implementation – but she failed on both counts. Her reforms were tepid, or non-existent and she seemed content to become a populist by spending money, increasing taxes on the wealthy and on business and increasing spending on programs to buy votes. There was little concrete reform of the economy, and little in the way of more plurality and transparency in politics. She would have been at home as a modern socialist populist in Europe or Canada.

Yet it was her old business style and mafia corruption that ended her power. In particular she created a scandal when she tried to force through a quick privatization of one of Europe’s largest ferro-alloy plants and give the equity to her supporters. The plant is currently owned by the son of former President Kuchma and was being ‘re-privatized’. As well Tymoshenko tried to have the Ukraine budget wipe out the debts owed by her former company to both the Ukraine and Russia. These and other mafia-like tricks made her an inescapable purge target. Needless to say the great opportunist Tymoschenko will be back with her own party and band of supporters fighting Yushchenko in next year’s elections. The former friends look set to be firm enemies.

It is a gutsy but necessary move and Yushchenko has now an opportunity to make his name as a real reformer and strong leader. The West needs to back this man. Allowing the Ukraine, which is a Western facing nation with a keen desire to become a part of the modern world economy, to fall back into the corrupt, greedy, corroding hands of the fascist Putin state of Russia, would be a grave mistake. Russia is a social, political, military and economic failure and no amount of high oil prices or lesbian sung pop songs about Putin, can change that base fact. The Ukraine needs to become as unlike Russia as quickly as possible, and this means becoming as Western as possible in the shortest amount of time. But the Ukrainians must want this and do most of the work themselves. It remains to be seen if the Ukrainian elite and political establishment is worthy of the job. Western help in ending the crippling disease of corruption is fundamentally necessary to keep the Ukraine in the European camp.