YUSHCHENKO, TIMOSHENKO: TWO RIVALS, TWO WAYS OF DEVELOPMENT

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MOSCOW (Tatyana Stanovaya for RIA Novosti) - The petroleum crisis in Ukraine has nearly split President Viktor Yushchenko and Prime Minister Yulia Timoshenko.

It also aggravated the problems of Ukraine, which is standing at the crossroads of a pro-Western and nationalist development. The two alternatives cannot be married, and Viktor Yushchenko will have to choose one of them.

The "orange revolution" in Ukraine was associated with the victory of the pro-Western political elite. Upon election, President Yushchenko pledged a democratic political development, favorable conditions for foreign investors, and deregulation of the economy.

"Freedom and Democracy" are the slogans of Viktor Yushchenko. The establishment of the "orange forces" in power with Western assistance was a kind of a trap because the "revolution" had a price.

Liberalization is a highly risky policy that can weaken power, reduce its popularity and provoke negative social consequences. A relevant example is the situation in Russia in the 1990s, when it had sky-high debts, U.S. consultants in the government, economic liberalization, and extremely painful social and economic consequences amidst the plummeting popularity of the regime.

Another proof is the situation in Georgia, where the U.S. president is welcomed as a national hero and cabinet members get payment from the American budget.

The electoral base of the "orange regime" has a different interpretation of the pro-Western policy. Ukraine does not want to partially lose sovereignty and to become a geopolitical appendage of the West. Ukrainians think European integration will ensure them the European quality of life and turn their country into a civilized and economically and geopolitically developed state and a member of the club of industrialized countries determining global politics.

To be more precise, Ukraine wants to become not a satellite but an effective part of the West. This aspiration rests on nationalist sentiments, predominantly in western Ukraine and, to a lesser degree, in the central part of the country. Unlike Timoshenko, President Yushchenko views this part of the electorate as "peripheral." But it was Timoshenko who orchestrated the "orange revolution"; the promises she made to the people earned her the post of premier. Yulia Timoshenko said in 2001: "Yes, I am a nationalist politician in the best meaning of the word: I am ready to die for the Ukrainian political nation."

As of now, 71% of Ukrainians support re-privatization and only 4% identify themselves with the liberal forces. This disappoints the West, on which Ukraine's admission to the EU and NATO depends.

The Washington Post wrote that, regrettably, the new Ukrainian government led by Yulia Timoshenko, another heroine of the revolution, unexpectedly opted for an essentially socialist and populist economic policy.

But a review of governmental decisions is welcomed. U.S. Minister of Energy Samuel Bodman conditioned the growth of foreign investment in Ukrainian power engineering on governmental support for the free market in the industry, where the main element is free market price formation.

The Western victory of "freedom and democracy" in Ukraine has been compounded by national ambitions and the predominantly etatist sentiments of the public. Yushchenko may get rid of this "luggage" if he accepts a fall in his popularity. He appointed Yulia Timoshenko prime minister in recognition of her role in the victory of the "orange revolution." But the premier has said more than once that she had come to stay and her actions are proof of the seriousness of new intentions and ambitions.

During a meeting with the leaders of Russian companies, Yushchenko called on Timoshenko to resign in order to "sing and chant together with the Social Democratic Party and the Party of Regions." The president added that "the Ukrainian government is the worst in Europe" and he is sorry that he had "appointed Timoshenko to the post" of premier.

It was the most open expression of Yushchenko's emotions about the Timoshenko-led cabinet. But several hours later the two leaders pledged mutual confidence and spoke about their "closely-knit" team.

Timoshenko's resignation would slash Yushchenko's electoral base, while the premier would become a strong opponent with the image of a martyr who was "prevented from reviving the country." The next parliamentary election is set for 2006 and Yushchenko needs to form a coalition with Timoshenko and parliament speaker Vladimir Litvin to fight the opposition led by the defeated presidential candidate Viktor Yanukovich, which is waking up.

The president will try to maintain relations with Timoshenko at least until the parliamentary election, but to make his regime effective he needs to coordinate at least the guidelines of his economic policy with her.

The influence of the premier will decline now that Yushchenko has accused her of creating price problems and hindering Ukraine's accession to the World Trade Organization. However, her behavior shows that remaining on Yushchenko's team is more important for her than her current policy. She is not ready to uphold her policy if this is fraught with resignation. This is positive news for the "orange regime." It means that Timoshenko can be tamed, though this calls round-the-clock control. But this will also push Ukraine's economic policy closer to the market and open it to Western influence.

So far, the economic interests of Russia and the West in Ukraine coincide. Russian business is working there energetically, while the West is preparing to follow suit and hence badly needs a market economy there. But the trouble is that pro-Western actions are Yushchenko's strategy, while flirting with Russia is a short-term policy that will be abandoned at the first clash between Russian and Western investment interests.

Tatyana Stanovaya is a leading expert at the Center for Political Technologies

The opinions expressed in this article are those of the author and may not necessarily represent the opinions of the editorial board.

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