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After the Revolution
Anders Åslund
01/01/2006
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As new prime minister, Yushchenko proposed Yuriy Yekhanurov, who
appears able to put Ukraine’s economic policies in order. He is an experienced
economic politician. As minister of privatization from 1994 to 1997, he carried
out Ukraine’s mass privatization. He served as then–Prime Minister Yushchenko’s
first deputy from 1999 to 2001, administering the government.
Yekhanurov
seems the opposite of Tymoshenko. He has few enemies, keeps a low public profile
and is known as an effective administrator. Yushchenko appears to have kept this
loyal man in reserve until the revolutionary hotheads burned out. Similarly, he
has named his closest collaborator, Oleh Rybachuk, as his chief of staff. The
new government is dominated by untainted technocratic politicians rather than
extravagant revolutionaries and businessmen. The new government is also
supported by nine of the parliament’s 14 party factions, a sound
majority.
Although the Yekhanurov government will serve for only a few months
before the parliamentary elections in March, it can turn the economic policy
around. First, the destabilizing reprivatization campaign will be stopped. It
will likely lead to only one or two reprivatizations, while a general amnesty
will be declared for other privatizations. Second, a long-promised deregulation
scheme, eliminating thousands of laws, will finally be promulgated. Third, the
last laws needed for Ukraine’s accession to the World Trade Organization will be
swiftly adopted. Fourth, the budget for 2006, which contains some tax cuts, will
be enacted. Finally, some overdue financial legislation might be adopted. As
investment has been held back by extreme political uncertainty, Ukraine’s
investment and growth rate could swiftly recover next year.
Moving forward,
the prime antagonists in Ukrainian politics are likely to be Yushchenko and
Tymoshenko. Their individual popularity remains roughly equal; it has fallen in
parallel. Power will likely consolidate around these two figures, but the
current political fragmentation may well persist. Each side has its Orange
Revolutionaries as well as its oligarchs. Has Tymoshenko’s revolutionary fire
burned out, or was Yushchenko’s bold attempt at post-revolutionary stabilization
premature?
Regardless of the outcome of the next elections, many reasons to
be optimistic about Ukraine’s future remain. The country has become a democracy,
and macroeconomic trends appear secure. The unexploited potential for economic
integration with the West is huge, and textile and electronic corporations are
now moving from Central Europe to Ukraine in their hunt for cheap labor in
Europe. Ukraine’s economy has much more going for it than many people
recognize.
Anders Åslund is director of the Russian and Eurasian program at the Carnegie
Endowment for Inter national Peace, Washington, D.C., and co-editor of Revolution
in Orange, due out in February.
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