Ukraine - Change of faces at the top under pressure from the street

From Lutte de Classe ##86 - February 2005 (published in Class Struggle #54 - Britain)
February 2005

The election campaign which took place in Ukraine last December triggered a wave of demonstrations which involved a whole section of the population. This "orange revolution", as it was described by the parliamentary opposition which had chosen to use this colour for its banner, resulted in the opposition leader Viktor Yushchenko being elected. Having been beaten in the second round, due to massive fraud, he won a third round for which the electoral code had no provisions and the ruling clique no plans.

As he could not stand for re-election himself, the outgoing president Leonid Kuchma had given his backing to prime minister, Viktor Yanukovych, in the presidential race. With the support of the state authorities and most of the media, it seemed that Yanukovych was heading towards certain victory.

However, in the first round of the election, at the end of October, the official candidate came second behind Yushchenko. In the next round the authorities interfered so much with the voting and counting of the ballots, confident as it was that it would get away with it, that the opposition chose to mobilise public opinion. On the evening of the second round, its supporters flooded the streets of the capital, Kiev. They were to occupy the town centre continuously for the next two weeks. There were demonstrations in other towns as well. University students joined the ranks of the opposition supporters together with other layers of the population, including in the official candidate's eastern stronghold.

The opposition wins

Under pressure from the streets, the Election Commission, which had been appointed by the authorities, refused to endorse fraudulent results which would have resulted in Yanukovych's election. This first success boosted the resolve of the opposition and the numbers of its supporters grew even more in the streets. Eventually the Supreme Court annulled the election. While Yushchenko's supporters held the centre of Kiev, the governors of some eastern regions threatened to secede, should Yushchenko be elected. Negotiations began between the government and the opposition, under the auspices of Russian, EU and US representatives. In the end, an agreement was reached whereby a new election would be held on 26th December.

Considering that the result of this election as a forgone conclusion, part of the state's personnel changed sides. Kuchma himself turned his back on his prime minister, who had just been censured by the National Assembly. In the eastern part of the country, officials and politicians chose either to adopt a low profile or rallied Yushchenko's camp. Predictably, on election day, Yushchenko won with 52% of the votes against 44% for his rival - 4% of the electorate spoiled their ballots as a means of voting against both candidates. This result did not alter the electoral geography of the country, however. Yushchenko had won his best results in the western part of the country, with is more rural and where more people speak Ukrainian, in the central part and in the capital. In some towns, such as Lvov, Yushchenko had even made scores similar to the scores which had led Yanukovych to be accused of fraud in the previous round. Nevertheless, the new Election Commission as well as the 15,000 or so "observers" appointed by the US and the EU declared that the ballot had been "fair". The Ukrainian opposition joined western capitals to proclaim that "democracy has been victorious in the Ukraine."

A "corrupted and criminal" regime

Of course, what convinced a majority of voters to support Yushchenko was the fact that he was attacking Kuchma's "corrupted and criminal" regime, by exposing some of its most notorious dirty tricks, its murder attempts, the way in which it had been stifling the media. Yushchenko also claimed that he planned to bring the "oligarch thieves" to account - i.e. businessmen with close ties with the ruling circles who had made a fortune out of the privatisations of the 1990s. In short, Yushchenko played the role of the "good guy" who was saying aloud what the overwhelming majority of the population thought about the regime but never dared to say. On the basis of his tirades against corruption and his advocacy of a rapprochement with the West, the western media portrayed Yushchenko as a "pro-market democrat", thereby sweeping under the carpet the fact that Yushchenko himself belonged to the very same corrupted machinery.

This is a well-known recipe among politicians and an old one at that. Its main purpose is always to revamp the image of former officials of discredited regimes, by deluding those who hope for political change.

In the late 1980s, at the time when the USSR was collapsing onto itself as a result of the in-fighting between rival top bureaucrats trying to carve their own fiefdoms out of the Soviet Union, the same western media used to portray people like Yeltsin in Russia and Kravchuk and Kuchma in Ukraine, as "democrats". At the time, Yushchenko held a senior post in the Soviet state bank, at the very heart of one of the machineries which allowed the top spheres of the soviet bureaucracy to transfer many billions of dollars into secret accounts they held in the West. Judging from his career, Yushchenko earned the esteem of his superiors. After the collapse of the USSR, he moved on to Ukraine's state bank. In 1993, he became the bank's president, following the murder of his predecessor - in these days, this was a common way of redistributing top positions together with the sources of income they entailed. According to commentators, Yushchenko did a great job in his position, by launching the hryvnya, the new Ukrainian currency, among other things. In reality, his monetary reform deprived the population of what little savings it still had, after the 1992-93 hyper-inflation caused by the collapse of the soviet state and economy, had already forced the majority into poverty. Above all, Yushchenko showed his real abilities by organising a whole financial machinery whose main purpose was to help the Ukrainian bureaucrats and Mafia to export the product of their theft towards tax havens.

In those days, just as in Yeltsin's Russia, the money from IMF loans (which were supposed to help with the transition to the market) and US aid (Ukraine was the third largest beneficiary of US aid after Israel and Egypt) melted away in the hands of top officials of the regime. The state and the economy did not see a penny of it, let alone the population. The only visible consequence of this inflow of money was the devastating growth of the public debt and the resulting price and tax increases. For western banks, this looting was doubly profitable. Not only had Ukraine to pay back its debt with interest, but the money lent to Ukraine came back to their vaults through indirect channels as investment. In fact, this phenomenon became so massive that the IMF and US authorities decided to suspend their aid at the end of the 1990s.

Forced into poverty

His "successes" at the head of the central bank allowed Yushchenko to be appointed prime minister by president Kuchma in 1999. As to the country, it was on its knees. Its economy had been disorganised by the end of central planning, the severance of its ties with the rest of the formet Soviet economy and the looting of the regime's various cliques. Overall it had experienced a terrible decline. Since the collapse of the USSR, production had dropped by half. The giant industrial complexes built in the past to meet the huge needs of the Soviet economy, were operating far below capacity and the remaining workers were only paid poverty wages long after they were due. In the western part of the country, which was less industrialised, the economic decline was even worse. Almost three quarters of the population lived below the official poverty line. In the Trans-Carpathian region, where production dropped by 70% in just one decade, nearly 20% of the active population found no means to make a living except by crossing over into Hungary, Slovakia or Romania, to work illegally on farms and building sites. Around the city of Lvov, an estimated 600,000 people, out of a 4m population, had to emigrate illegally to Western Europe.

In Central Europe, the mixing of populations - Ukrainian, Belorussian, Polish, Hungarian, Slovak, etc... - goes back a long way. But, in addition, due to the collapse of the Peoples' Democracies in 1989, and then of the USSR in 1991, border controls virtually disappeared across the region. A very large section of the Ukrainian population turned into "chelnoki" - commuting "ants" who buy a few cheap items in Ukraine and sell them at a higher price in neighbouring countries. According to recent surveys carried out in Ukraine's border areas, this micro-trade is the only source of income for one third of the population. However, this section of the population will be deprived of its source of income as the borders of Poland, Hungary and Slovakia close down, following these countries' admission into the European Union.

The regime turns toward Russia

During his first term in office president Kuchma had gambled on western aid to help put the economy back on its feet. But western investors proved even less attracted by Ukraine than they were by Russia. Between 1992 and 2003, foreign direct investment into Ukraine reached a grand total of £3bn - 50 times less per inhabitant than in western European countries. What is more, the extension of the European Union towards the east will deprive the Ukrainian industry of some of its traditional markets in Central Europe.

Against such a backdrop, Russia could appear to some as offering a possible way forward. Of course Russia had also suffered from the collapse of the USSR and the looting of state property by bureaucrats turned businessmen. But seen from Kiev, Russia seemed in better shape than Ukraine. In order to kick start the Ukrainian economy, Kuchma's regime opened the door to Russian enterprises. Initially they offered a part-ownership agreement to their former Russian partners from the Soviet era, in return for the writing off of Ukraine's energy debt to Russia. This debt was all the larger as Ukraine has neither gas nor oil, but an industry that cannot do without either, so that the Ukrainian government had stopped paying its energy bills for years.

One of the artisans of this opening towards Russia was deputy prime minister Yulia Tymoshenko. Tymoshenko, who was described by the western media as a "democratic madonna" during the "orange revolution", was a high-flying businesswoman who controlled Ukraine's energy supply during the whole period when Yushchenko was prime minister. Her career was typical of the top oligarchs who emerged in what remained of the former USSR. In the last years of the Soviet Union, she had joined the Dniepropetrovsk bureaucratic clique, which based itself on the country's largest industrial centre, by marrying the son of the Communist Party's head in the area. In the late 1980s, like all the young bureaucrats of her generation, she turned to doing business under the guidance of the region's new strong man, Piotr Lazarenko. When Lazarenko was appointed prime minister by Kuchma, Tymoshenko was allowed to join his administration to oversee oil and gas, a post she retained later under Yushchenko.

War between the bureaucracy's cliques

Lazarenko belonged to the same bureaucratic clique as Kuchma. Did it come to the point where Kuchma found him too greedy or too much of a dangerous rival? In any case Lazarenko felt threatened enough to take refuge in the USA where he has already transferred some of his wealth. This proved to be the wrong move. As the US justice system had accounts to settle with those who had diverted US aid to Ukraine, Lazarenko found himself behind bars.

It was after Lazarenko's departure that Kuchma, who was looking for new allies, appointed the head of the central bank, Yushchenko, as prime minister. Within 2 years however, Kuchma found that Yushchenko was getting too big for his boots and sacked him. Even Yushchenko's ally, Tymoshenko, spent some time in jail, not because she had diverted large quantities of Russian gas and oil for her own benefit, which she had, but because by doing so she had taken business away from other bureaucratic high-flyers.

Having been thrown out of office, Yushchenko and Tymoshenko began a rest-cure in opposition. And judging from the results of the last election, they have benefited from this cure, which accorded enough time for a section of the electorate to forget that both are direct products of the ruling bureaucratic cliques.

In Ukraine there are four main rival cliques, each based on one specific regional fiefdom. The Donetsk clique, based around the country's main mining area, is represented by Yanukovych, the former prime minister who lost the recent election. This clique includes people such as Ahrmetov, who is considered as Ukraine's richest individual. Another clique is based around the factory town of Dniepropetrovsk, which used to be the Ukrainian stronghold of the Soviet militaro-industrial complex. It was this clique which, in the 1960s, had propelled Brezhnev to power, long before it became a spring-board for people like Kuchma, Lazarenko and Tymoshenko.

Between them, these two cliques control three quarters of the wealth produced in Ukraine and their regional fiefdoms provide the state with more than half its income. Although these two cliques are in competition with one another, the duet of Kuchma-Yanukovych was a symbol of their alliance, at least until the last election.

But then this alliance was one dictated by necessity, as there are other contenders. One is the Kiev clique, led by Medvedchuk, the head of the presidential administration, which controls part of the financial flows going through the capital. The other one is based in western Ukraine and includes Pachenko, the magnate of industrial confectionary. Unlike the Kiev clique which has been more or less aliied to Kuchma, the western Ukraine clique has remained away from central government and its sources of income. And while the Kiev clique came close to Yushchenko when it became clear that Kuchma's days were coming to an end, the western Ukraine clique was bound to support Yushchenko as the only way for it to get any access to central government.

Divide to rule

This on-going war between bureaucratic cliques was the driving force behind the confrontation between Yushchenko and Yanukovych.

This confrontation has often been portrayed as one between the western and eastern part of the country, on the basis of the geographical location of the fiefdoms of the cliques which supported the two sides. In fact, this east-west divide coincides more or less with a historical and linguistic division.

East of the river Dniepr are located the country's most industrialised regions. There, the Russian language is predominant due to an early integration into the Czarist empire dating back to the 17th century. The western part of the country, on the other side of the Dniepr, was under Polish and Austro-Hungarian domination for a long time. It was only integrated into Russia much later, and part of it was only integrated into the USSR after Germany's defeat, in 1945. Some of the inhabitants of this largely rural and Ukrainian-speaking western Ukraine changed "nationality" five times during the 20th century! The methods used by the dominating powers to maintain their control over the area and its population have left deep scars. The horrendous methods used by the Stalinist bureaucracy were no better than those of the Czarist regime in this respect and they succeeded in alienating a large part of the population against Moscow. For instance, in the early 1930s, Stalin retaliated against the resistance of Ukrainian farmers to collectivisation by engineering a famine which claimed millions of victims.

Of course, the days of the Soviet Union saw developments which would have been unthinkable under the Czar - universities, theatres and newspapers which used the Ukrainian language. They were what remained of the powerful cultural development of the populations oppressed by Czarism that the October 1917 revolution and its Bolshevik leadership had allowed and hoped for. In an article entitled "The Ukrainian question", written in 1939, Trotsky remarked that statues of Chevchenko (a peasant-poet and national Ukrainian hero) were being erected "but only with the aim of crushing the Ukrainian population under the weight of such monuments and forcing it to sing the Kremlin's looters praises in the language of Kobzar (a poem written by Chevchenko)."

Trotsky had been one of the leaders of this October revolution which opened the doors of the Czarist "prison of the peoples", to use Lenin's phrase. One of the first acts of the fledgling proletarian power had been to declare the right of people to choose their own destiny, including to withdraw from Soviet Russia. In the years following the October revolution Ukraine went through the experience of German and Polish occupation as well as a period of independence from Russia under various national bourgeois governments. If it finally chose to join what was to become the Soviet Union, it was due to the fact that the Bolshevik party had proved, not just in words but in deeds, that the policy it proposed was the best guarantee for the Ukrainian people to enjoy a free national and cultural development.

But the Stalinist degeneration of the workers' state replaced the relationship between equals which existed among the Soviet nationalities with the bureaucracy's brutal methods in managing the republics, oppressing their populations and repressing their national feelings.

On the eve of World War II, the hatred fuelled by this oppression among the Ukrainian population had reached such a point that Trotsky saw it as a potentially lethal threat for the workers' state. He saw no policy against the way the bureaucracy was thus undermining the workers' state at a time when the USSR had to prepare for a predictable military offensive by Hitler's regime, than to call for an "independent, free and united workers' and peasants' soviet Ukraine." History did not allow this to happen but it tragically vindicated Trotsky's prognosis. During the initial period of the German invasion of the USSR, part of the population in the occupied areas, especially in Ukraine, adopted an attitude which was at best neutral towards - and sometimes supportive of - the invaders, out of hatred for the Stalinist authorities. Of course, the vast majority of these populations soon realised that Hitler's occupation was the worst of two evils. But for the whole duration of the war, the Nazis and the most reactionary Ukrainian nationalist groups were able to channel this hatred to their advantage, towards racism and anti-communism. At the end of the war, in some parts of Ukraine, it took years before the Soviet political police, the NKVD, finally succeeded in disbanding the last Ukrainian nationalist armed gangs. These years have left deep traces in western Ukraine, where the collapse of the Soviet Union sparked off the re-emergence of a strong anti-Russian current with far-right undertones.

During the presidential election, neither of the two main candidates could resist fanning the flames of nationalist prejudices by warning against the nationalism of the voters supporting the opposite side. The Ukrainian nationalists supported Yushchenko, sometimes using anti-semitic slogans. And Yushchenko made a point of always using Ukrainian in his public speeches. Yanukovych, on the other hand, was supported by, among others, the Russian-language far-right and always spoke in Russian. Of course, both of them can speak both languages, even though in Ukraine, even more so than in most of the former Soviet republics, the Russian language remains the most commonly used among the urban population. And this is even more true among the bureaucracy. But this did not prevent the Russian-speaking Kuchma to woo the Ukrainian nationalists after he came to power by making Ukrainian the only official language. It was for the same reason that, just before the 2002 general election, he issued a book under his name entitled "Ukraine is not Russia". It is a tradition for the bureaucracy to flatter nationalism when it finds it convenient.

Both protagonists in the recent presidential election found it advantageous to resort to such demagogy as it allowed them to appear to defend different sides and concealed what they had in common, in particular in the eyes of their own potential supporters. Yanukovych and Yushchenko both aimed at distinct electorates, both in social and geographical terms. But many of their more modest potential supporters could have seen a point in opposing men who belonged to the bureaucracy and were or had been in power.

Workers, rurals and tradesmen

In front of the electorate, Yanukovych and Kuchma boasted of their own balance sheets. They claimed to have brought the economy back into shape and restarted industrial production. Wages, they said, are paid on time, at last. And hadn't they just increased pensions? They boasted of having established "social peace" and had the nerve to talk about a "Ukrainian miracle".

For the workers of eastern Ukraine, this miracle meant that they had returned to a job, even though on a derisory wage. It is thanks to these very low wages and to the fact that the world demand in metal products is high that Ukraine's industrial complexes have resumed a certain level of activity, following a first period of reactivation due to the resumption of Ukraine's industrial trade with Russia. On the ground, voters probably saw these developments as an improvement, assuming it lasted. In the ballot boxes this certainly benefited Yanukovych, although it seems that a section of workers did not fall for the lies of the two candidates and voted "against both" (i.e. spoiled their vote).

But in the rural areas of western Ukraine, the small improvements hailed by Kuchma and Yanukovych sounded like provocations. The opposition responded to the anger of the countryside by pointing a finger at the "urban privileged" - from the Russian-speaking industrial east, of course - accusing them of being "helped by Moscow" at the expense of the Ukrainian-speaking countryside. Predictably, the opposition won its highest scores in these deprived rural areas.

But the opposition also won the support of the urban petty-bourgeoisie, both in the east and the west. Yushchenko's speeches against the "thieves", the "bureaucracy", etc.. hit home among all those who had anything to do with trade, whether shopkeepers or street peddlers. Indeed, for years, all those involved in such activities have had no option but to pay "insurance" and "protection fees" to both criminal gangs, the police and various administrations - and these "fees" far outweigh taxes. As no-one is in any doubt that the criminal gangs are the by-products of a general system and that those really pulling the strings and reaping the profits belong to the ruling circles, the opposition had no difficulties in convincing the "torgashi" (tradesmen) to take to the streets.

As to the third social layer which backed the opposition - the main town's student demonstrators - it was the most conspicuous. These students were certainly receptive to Yushchenko's exposure of the regime's censorship, repression and gangsterism. Besides, by presenting himself as the man who would propel Ukraine into a western world which he portrayed with idyllic colours, Yushchenko could only appeal to this milieu. But there were also social reasons for this. Whether they believe or not in these fairy tales about the west, students in the former USSR are very conscious of belonging to the privileged layers. In Ukraine, official figures show that 65% of all students pay for their studies - meaning that they belong to the very small social layer which is rich enough to be able to afford it. And this social layer has good reason to believe that it would be among the few beneficiaries of an opening to the West.

The West pushes its pawns

During the election campaign, Russian president Putin made a point of endorsing Yanukovych in a spectacular way. He came twice to the Ukraine to support the man who appeared as Moscow's candidate. But, as it happened, the congratulations he offered to Yanukovych for his election on the second round proved premature.

On the opposite side, Yushchenko promoted the integration of the Ukraine into various imperialist institutions (NATO and the European Union, among others). This allowed him to win the backing of the US and, to a lesser extent, the EU. This backing materialised in all sorts of ways, before and during the election campaign: practical, financial and political help provided by US foundations and European NGOs which claimed to promote "democracy" and "citizens' education"; funds which enabled Yushchenko to travel across the country, publish propaganda, pay salaries to an army of election agents, rent coaches in order to bring demonstrators to Kiev and even pay "compensation" to some of them for the time they spent occupying the streets of the capital.

Russian and Western commentators draw a parallel between Ukraine's "orange revolution" and last year's "roses' revolution" in Georgia. In Moscow, both were denounced as mere manoeuvring and in the West both hailed as "progress for democracy". And indeed in both cases, a politician who enjoyed the support of the West came into office after street demonstrations forced out a president considered close to Moscow.

The fact is that the fall of Georgia's Shevardnadze and Ukraine's Kuchma and Yanukovych represent a weakening of Russia's sphere of influence in a region that Moscow still considers as its backyard. The "strategic partnership" with Russia hailed by Bush never meant that US imperialism gave up its attempts at gaining political, economic and strategic positions wherever it could, by taking advantage of the collapse of the USSR and weakening of Russia.

This was illustrated by the developments which took place after 9/11, when the build-up to the war in Afghanistan gave the US a pretext to gain a military foothold in the former soviet republics of central Asia. After the Taliban were overthrown, the US military bases remained there. They keep a watchful eye on the US imperialist interests in the region, particularly in terms of oil, and could, if necessary, protect the regimes of the region's dictators against their own populations. Indeed, now that US troops are in control on the ground, the western media and leaders do not find much to say about these dictatorships, no matter how vicious.

Bu then, of course, Ukraine has a much larger population and is far more developed that the central Asian republics. And, despite the chaos generated by the collapse of the USSR, it retains much closer ties with Russia.

Ever since it became independent, 13 years ago, Ukraine's governments made repeated approaches to the West. Kuchma had requested entry into NATO and the EU long before Yushchenko advocated it. Eventually Kuchma had no choice but to turn to Moscow and the same may well happen to Yushchenko. But even if it was not the case this time and Yushchenko met with more success with the West, this would not mean the end of the present catastrophic economic and social situation. At best, it would mean a situation comparable to that in the Russia, where there are islands of parasitic wealth tainted with gangsterism, in the middle of an ocean of poverty, under the auspices of Putin's "democratic" police state. In fact, this is more or less what has already happened in Ukraine since the beginning of its limited economic revival under Kuchma.

Of course, one cannot risk any prognosis in this respect. But it is worth noting that, as soon as Yushchenko's election victory became certain, some EU officials made it known that they had no plans to consider the possibility of Ukraine joining the Union. As to Russia, although Putin claims to be "willing to work with the elected president", Yushchenko has announced that he planned to review an agreement signed recently by Kuchma, aimed at creating an integrated economic zone including Russsia, Ukraine, Belarus and Kazakstan.

Yushchenko's election may result, therefore, in this economic zone being stillborn, just as previous similar attempts which collapsed as a result of Ukraine's reluctance. There would be a difference this time, however, because this failure would reflect, in addition, the pressure of the imperialist leaders who are willing to allow Russia to help them in enforcing their world order, but will not allow it to rebuild itself as a real power.

It is not even certain that imperialism will have much to offer Ukraine in return for playing the role which is expected from it. The trickle of western aid which reached Ukraine in the 1990s has dried up long ago, ending mostly in offshore bank accounts. In the short-term however, Yushchenko's new administration is already using the pretext of Ukraine's future integration into western institutions to demand more sacrifices from the working class. This is probably the beginning of the disillusion for those who believed in the vague promises of an improved standard of living made by Yushchenko during his campaign.

In Georgia, one year after the "roses' revolution", the population has still to see any improvement: poverty has remained at the same level, corruption is just as rife as before and imprisonments for political reasons are still taking place. Once the demonstrators had left the streets, the new Georgian president, Saakashvili was able to have a free ride.

In Ukraine the street protests were more massive and lasted longer than in Georgia. For two weeks, it brought together hundreds of thousands of demonstrators across the country on the basis of the objectives set by the opposition's leaders - primarily the replacement of Kuchma and his clique with Yushchenko and his own people - and with the backing of various forces, from within the state bureaucracy and from the West, which were pursuing their own agendas. But the positive side of this was the mobilisation itself - the fact that hundreds of thousands of people ceased to be passive spectators and took to the streets in a bid to have a say in the country's political future.

Now that this mobilisation is over, the best development that one can hope for is that, when Yushchenko's plans against the working class become clearer, the workers of Ukraine will remember the lesson of last year's mass protest - that it was the mass demonstrations and these alone which forced the previous administration into retreat.