Publication: Eurasia Daily Monitor Volume: 3 Issue: 157

The Donetsk interest group is clearly the hegemonic factor in Ukraine’s newly installed coalition government under Prime Minister Viktor Yanukovych. It seems quite possible that Washington and Brussels can “do business” politically and perhaps to some extent even strategically with this group. Certainly, the government’s installation marks an advance from chaos to relative stability and predictability, as well as a shift from pro-Western but ineffectual Orange power to a “two-vector” (East-West balance) stable and somewhat more competent power.

In testing the Donetsk group’s capacity for strategic partnership with the West, four assumptions now being proposed could prove irrelevant at best and counterproductive at worst. These assumptions hold that the new government marks a departure from regionally divisive politics; that the “Party of Regions has been democratized”; that the coalition is based on a common economic policy; and that it has adopted a unified foreign policy.

However, the governing coalition’s composition in parliament and government shows that the political forces that speak for the western and central regions (Yulia Tymoshenko Bloc and the national-democratic wing of the Our Ukraine bloc) opposed the formation of this government. By the same token, the Donetsk team’s economic and political power in the government is wholly disproportionate to its actual influence in the country and may be misused to expand that influence and cement that team’s power. Rather than departing from regionally divisive politics, the new Donetsk hegemony can exacerbate such politics by triggering reactions from regionally based forces that feel unrepresented or short-changed.

The “democratization” of the Party of Regions may seem to be an almost obligatory case to make, but it is difficult to sustain. The present leaders’ Kuchma-era record is a non- and anti-democratic one, which helped trigger the democratic Orange Revolution. The party is strongest in electoral terms in those areas where the Soviet/Russian mentality of paternalism, collectivism, and subservience to authority is strongest; and its oligarchic leaders control the populous industrial centers in the Donetsk and Luhansk oblasts in company-town fashion, though on a far larger scale than the classical model. Furthermore, the party’s oligarchs have brought the unreconstructed Communist Party into the government.

Under these circumstances, and in view of the Party of Regions’ monopolization of economic power in the government, one can hardly speak of a “common economic policy” of this coalition. By the same token, a “unified foreign policy” does not seem likely; rather, a tug-of-war between the Eastern and Western vectors — and correspondingly uneasy relations between the pro-Western ministers of foreign affairs and defense and other ministers — can be expected.

Meanwhile, the ruling Donetsk team in the Party of Regions is widening its sweep of the key economic posts in the Ukrainian government. Heavily dominant in the new cabinet of ministers (see EDM, August 8, 9), this team seems to have embarked on monopolizing control over the state’s economic levers.

On August 11, First Deputy Prime Minister and Finance Minister Mykola Azarov designated Anatoliy Brezvin, Serhiy Kharchenko, and Petro Andriyev as heads of the State Tax Administration, State Treasury, and State Auditing Directorate, respectively. All these officials had worked with Azarov during his earlier tenures as state tax administration chief and finance minister in the Kuchma era. Thus, the Donetsk team is concentrating the state’s financial oversight mechanisms into its own hands.

On the same date, Fuel and Energy Minister Yuriy Boyko — a Party of Regions nominee in that post — selected Vadym Chuprun as the first deputy minister in charge of the oil and gas sector. Chuprun is a veteran member of the Donetsk team, formerly head of the regional council and head of the state administration in the Donetsk oblast. Also on August 11, the government appointed Volodymyr Kozak as general director of Ukraine’s Railways. Kozak has until now headed the Lemtransport company in the Donetsk oblast.

Implicitly challenging Donetsk hegemony, the reappointed Internal Affairs Minister Yuriy Lutsenko has been quick to warn that he intends to target the Donetsk team with new anti-crime investigations. Lutsenko had previously refused to serve in a government with Yanukovych and other leaders of the Party of Regions, citing their past involvement in alleged crime and electoral fraud. Also for that reason, Lutsenko resigned from the Socialist Party in July to protest the coalition deal that party leader Oleksandr Moroz cut with the Party of Regions. President Viktor Yushchenko persuaded Lutsenko at the last moment to stay on as interior minister, this time as a presidential appointee in the new cabinet. According to Lutsenko, he has accepted the post in order to resist a “possible surge in the activity of anti-democratic forces, a renewal of corrupt schemes.”

In an April 11 news conference, Lutsenko fired two shots across the Donetsk team’s bow. He announced that the Ukrainian Railroads’ new management (which was being officially installed on that same date) is suspected of involvement in past “illegal activities” and allegedly fraudulent tenders and that his ministry is currently collecting documentary evidence to that effect.

Lutsenko then focused on the events surrounding Roman Yerokhin, a senior officer of the Internal Affairs Ministry’s department to combat organized crime, who was investigating criminal activities in the Donetsk oblast. Yerokhin was shot at, wounded and abducted in late July by as yet unidentified perpetrators. According to Lutsenko, the officer had uncovered a money-laundering operation, linked to [unnamed] members of the Verkhovna Rada and “the mechanism of drawing up election lists” — that is, sale and purchase of places on the lists. “This crime might have earthquake-like repercussions,” Lutsenko warned.

(Interfax-Ukraine, UNIAN, Channel Five TV [Kyiv], August 11)