What is President Yushchenko Doing?
I stood on the Maidan in Kyiv for the 17 days that became known as the Orange Revolution. I am an American, but I listened to the speeches, talked to the “campers,” joined the chanting and waved my orange flags and creased, worn streamers. I watched as a million people soared on the wings of a collective euphoria.
During these 17 days, presidential candidate Viktor Yushchenko railed against corruption, promised to solve politically-motivated murders and vowed to involve “the people” in the process of state building.
And then …. he took office. Five years later, those million-strong euphoric expectations have crashed to the ground. Corruption has not decreased. Political crimes have not been solved. And few in Ukraine believe that “the people” matter.
The blame for this must not solely be laid at President Yushchenko’s door. One thing is clear, however – in five years, Yushchenko has proven unable to work efficiently with any government, any prime minister, or any political bloc to pass his stated reform agenda.
This week, in an apparent attempt to undermine Prime Minister Yulia Tymoshenko, President Yushchenko attacked her government – again. In the process, he also perhaps unwittingly launched an attack on Ukraine itself.
On 17 September, Yushchenko announced that the IMF is being too lenient with Tymoshenko’s government, implying that the Fund should suspend disbursement of the remaining tranches of a $16.4 billion loan. “I am very disappointed,” Yushchenko said, “that the policies in 2009 departed so far from the memorandum [of understanding with the IMF],” as his aide warned that the IMF had said it would not disburse more money this year. So far, the country has received over $10 billion from the Fund. The government quickly disputed these statements.
Yushchenko is correct about one thing – the IMF has been very lenient. A majority of agreed reforms have not occurred. However, President Yushchenko should look in the mirror to see one of the reasons. A number of reforms have been enacted by the Prime Minister’s direct decree. PM Tymoshenko was forced to rely on decree power after Yushchenko’s parliamentary allies refused to vote for IMF-supported changes to the pension fund and Naftohaz gas company funding. Yushchenko made no attempt to rally his troops on behalf of these policy alterations.
Yushchenko also has avoided campaigning personally for the implementation of the IMF’s toughest reform requirement – higher gas prices for consumers. With an election four months away, it is unlikely any politician will board that reform train.
The biggest problem with Yushchenko’s critique of the IMF’s leniency is not whether it is true. Rather, his comments undercut his own government’s work with an international lending organization, while signaling to other investors that they should stay away. He has spotlighted a potential problem but done nothing to fix it – a common event during his presidency. In the process, a president who is supposed to represent his country has undermined it.
So, what if the IMF listened? Would the situation in Ukraine improve? Hardly. In fact, a suspended IMF loan could have a fatal effect on Ukraine’s bond yields, further destabilize the currency, squash Naftohaz’s attempts to restructure its Eurobonds and freeze Foreign Direct Investment indefinitely. Is President Yushchenko too concerned with undermining his prime minister – and presidential campaign opponent – to understand this?