Oleksandr Klymenko Official website
Digest | 1575 | 03.04.2015

Ukraine’s Poroshenko Risking Stability?

In what can be seen as a public relations tactic, on March 25th the Ukrainian police charged into a live televised cabinet meeting to arrest two senior officials; the head of the state emergency service, Serhiy Bochkovsky and his deputy, Vasyl Stoyetsky, on charges of corruption. As a warning to those watching, Prime Minister Arseniy Yatsenyuk, menacingly tweeted “this will happen to everyone who breaks the law and sneers at the Ukrainian state”.  As dust in the east of Ukraine begins to settle with the Minsk II agreement largely intact, it seems President Petro Poroshenko has turned his attention away from the front and embarked on a path to deal with the country’s systemic problems: corruption and oligarchy.

Just hours earlier, Poroshenko dismissed Ihor Kolomoyskyi, billionaire governor of the key industrial region of Dnipropetrovsk and one of Ukraine’s most anti-Russian politicians. His ousting came about following a clash with the government over a new law that would limit Kolomoyskyi’s power to control two of Ukraine’s state-owned energy companies, in which he holds minority stakes. After the signing of the law on March 19th, armed security guards allegedly loyal to the oligarch occupied the building of one of the companies, Urktransnafta, in protest of a decision to forcefully remove the CEO. While Kolomoyskyi insisted he was assisting his friend from the seemingly illegal removal from his post, the situation was presented in the media as “a disgruntled oligarch with armed guards entering a building of a company he did not control to protect a crony”. For his part, Kolomoyskyi claims that the government had tried to replace the longstanding manager through a “raider attack”, claiming that the newly appointed CEO, a former security services official, has strong ties to the current parliament and Kolomoyskyi’s business competitors.

Before this dramatic falling-out, Kolomoyskyi was a vital ally of the government in Kyiv and organized a powerful volunteer group that played an important role in fighting the Russian-backed separatists and ensuring the region’s stability. At its peak, an estimated 20,000 men were at the oligarch’s beck and call. Indeed, Dnipropetrovsk is “a bulwark against advances of pro-Russian separatists”.

While Poroshenko can be seen to be appeasing his Western allies by tackling problems of corruption and oligarchy in the country, he has also been accused of appointing “business partners and friends” to governmental posts. What is more, Poroshenko is himself a former oligarch and so far has reneged on his pre-election promises of giving up his business interests. He is clearly faced with a painful conundrum: how to clean up the Ukrainian society without alienating the people on which the country’s security and economy depends upon.

Although fighting in the east has ceased for the meantime, the crisis is far from over. Kyiv has been cooperative in fulfilling its military obligations under the Minsk II agreement, but progress to embark on its political commitments has ground to a halt. The government has yet to recognize the rebel region’s autonomy, open dialogue concerning elections, and restore the much needed finances and assistance to the separatist republics. However, time for a permanent solution is running out as rebels have insisted that should there be “no reconciliation within a redesigned Ukraine”; they would continue to seize chunks of the Donbas, a devastating setback for a crisis that could finally be seeing the light at the end of the tunnel.

According to political strategist Aron Shaviv, “for there to be reconciliation [in Ukraine] there needs to be a process for the government to allow political opposition […] to operate freely in domestic politics”. Holding elections in rebel held areas and granting them autonomy could go a long way to achieving these means and kick start the reconciliation process and keep Ukraine united. Furthermore, Ukraine’s former Tax and Revenue’s Minister, Oleksandr Klymenko, had advocated for granting the Donbas a Special Economic Zone Status, claiming that such a framework would provide the region with strategic and economic significance for Ukraine and allow it to become a prime investment hub.

With the conflict frozen but not yet over, difficult times lie ahead for Kyiv. For his part, Poroshenko needs to engage with the rebels to find a long lasting solution and fulfil all the conditions of the Minsk II agreement, which would effectively guarantee the return of Ukraine’s sovereignty. However, by alienating the very individuals who support the government in Kyiv and a Western orientated Ukraine and replacing them with his own partners, Poroshenko risks destabilizing a process already fragile to its core and creating a newly loyal class of oligarch cronies.

Matthew Turner is a Bratislava-based geopolitical consultant specializing in Russia and Eastern Europe’s role on the international platform. He has previously published in EU Observer and has a blog on Digital Journal.

Link to source: Neweasterneurope

Photo: Neweasterneurope