Yushchenko hits back
GlobalMarkets, is part of the Delinian Group, DELINIAN (GLOBALCAPITAL) LIMITED, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 15236213
Copyright © DELINIAN (GLOBALCAPITAL) LIMITED and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Emerging Markets

Yushchenko hits back

Ukraine president remains defiant as crisis mounts

Ukraine’s president is fighting back against a rising tide of criticism of his policies, as the crisis that has brought his government to a standstill showed no signs of abating.


In an exclusive interview with Emerging Markets the embattled leader launched a vigorous defense of his decision to dissolve parliament and call early elections. He also vowed widespread reforms for an economy which has so far weathered the political storm without ill effect. “I am convinced it is the only way to achieve political stability. My decree to disband parliament is neither a victory nor a defeat for any political force,” Yushchenko said. “It only reasserts Ukraine’s democratic course.”

In a wry aside, he noted that “the Ukrainian economy is perhaps one of the world’s most unusual economies. It functions best during extreme perturbations because politicians are busy with other things and have no time to interfere in the economy.”

Yushchenko nevertheless stressed the urgency of taking active steps towards resolving the crisis that has stalled Ukraine’s ambitious economic reform programme. “We must continue to restore the confidence and trust of our people and introduce economic reforms. Foreign investors need to understand where the country is going.”

The pro-western president and his rival during the so-called Orange Revolution, prime minister Viktor Yanukovich, have locked horns for months over a division of powers. The prime minister reluctantly agreed to an early poll, but talks to set a date and work out legislative details remain in gridlock. Though a date of June 24 has been tabled, Yanukovich maintains it is unreasonable to stage an election before the autumn.

Taking a swipe at his Moscow-friendly rival, Yushchenko said: “I was forced to disband parliament and call early elections. I could not stand aside and watch power being usurped in an unconstitutional and undemocratic manner.”

Asked whether he would consider reviving the old “orange” alliance between his party and ex-prime minister Yulia Tymoshenko’s bloc, he said: “I am convinced the alliance between [our two parties] helped develop our European institutions. We are ready to cooperate with any premier that upholds the nation’s priorities. However, I assure you that my cooperation with [Yanukovich] is possible and necessary for the country’s steady development.”

Yushchenko admitted though that public confidence in Ukraine’s political system has been badly damaged, but said the causes run far deeper than today’s crisis. “As far as public confidence is concerned, I would say we have lost it a long time ago and those who now represent the government and parliament have contributed to the devaluation of law and morality.”

Nevertheless, he said that the economy’s defiance of political upheaval means that “reforms can be introduced before it is settled.” Specifically, he said reforms in the housing sector were imminent and that an overhaul of the budget salary system would begin on June 1. He said that parliament will adopt a new tax code that will cut rate and also ease the bureaucracy for foreign firms.

The president pledged to push ahead with “public, fair and transparent” privatizations, adding that Ukrtelecom and the Odessa Port Plant will both be sold this year. “Their privatization will have a decisive impact on the development of these industries.”

He also said WTO accession is inevitable this year.

Yushchenko’s comments come amid mixed feelings among foreign investors. “Ukraine is a total crap shoot right now,” said Eric Kraus, managing director of Anyatta Capital in Moscow, which runs the long/short Nikitsky Fund. He added that political upheaval in the country is a positive disincentive to portfolio investment in the Ukrainian equity markets and that consequently the Nikitsky Fund does not own any stocks from the country.

Gift this article