Rivalry deepens Ukraine economic woe
Rivalry deepens Ukraine economic woe
12:42, 06.02.2009
2 min.
Ukraine`s prime minister survived a no-confidence vote in parliament, but a deepening economic slump and political bickering spell trouble for the country`s Western-leaning leaders...
Ukraine`s prime minister survived a no-confidence vote in parliament, but a deepening economic slump and political bickering spell trouble for the country`s Western-leaning leaders.
The move by pro-Russian factions to undermine Prime Minister Yulia Tymoshenko came as she and her onetime ally, President Viktor Yushchenko, have seen their images dented by personal rivalry.
With the approach of presidential elections in the next year, each has turned to blaming the other for a botched response to the economic crisis. Millions of layoffs are expected in Ukraine`s heavy industries in the coming months, and unemployment is expected to hit levels unseen since the fall of the Soviet Union.
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The disarray threatens Western hopes that this nation -- geographically slightly smaller than the state of Texas -- on Russia`s border could become a beachhead for democratic values in the former Soviet Union.
Diplomats say Mr. Yushchenko and Ms. Tymoshenko have all but given up governing, and their rivalry is jeopardizing Ukraine`s ability to meet criteria of the International Monetary Fund, which extended to Ukraine a $16.5 billion rescue package last year.
In parliament, Ms. Tymoshenko stuck by her budget`s forecast for growth in the economy, despite analyst projections that it could shrink by as much as 10% this year. "It is simply too easy to become reconciled to a fall," she said. "I believe Ukraine is strong, with resources and reserves, and if the proper actions are taken at this difficult time, we can achieve this indicator as planned."
Ukraine has been hit hard by the economic crisis and the collapse in prices of metals and fertilizers, its main exports. Ukraine`s industrial production fell by 26% in December from a year earlier and its currency has lost a third of its value since the summer.
Moscow has been using the economic crisis to strengthen its hand in the region, and last month forced Ukraine to agree to sharply higher prices for natural gas after a standoff in which it cut off shipments. The increased cost to Ukraine`s gas-hungry industries is expected to pummel the economy further.
Mr. Yushchenko and Ms. Tymoshenko have often feuded since the so-called Orange Revolution that swept them to power in 2004, and the approach of presidential elections has worsened matters.
Mr. Yuschenko`s administration has labeled Ms. Tymoshenko a populist and spendthrift who is misleading the country with budgets and promises she can`t fulfill.
Ms. Tymoshenko in turn accused the president of spreading "a mix of untruths, panic and hysteria." She has been trying to fire the head of Ukraine`s central bank, an appointee of Mr. Yushchenko, accusing him of favoritism and corruption.
The leaders managed to cobble together enough legislation to secure the help of the IMF, but Ukrainian debt trades at default levels amid fears government spending is out of control.
An IMF mission has been in Kiev for the past two weeks to determine whether to release the second tranche of its loan. IMF officials have made no statements on the government`s plans.
Mr. Yushchenko`s approval ratings have crept to the low single digits in recent months. Ms. Tymoshenko`s ratings, though higher, are also softening amid signs voters want new faces.
Former parliament speaker Arseny Yatsenyuk, 34 years old, saw his ratings rise after he was sacked by parliament in November, and has been taking support from both Mr. Yushchenko and Ms. Tymoshenko.
The fracture of the government has also benefited a figure who has been mostly locked out of power in recent years -- Viktor Yanukovych, the pro-Russian candidate in the 2004 vote that sparked the Orange Revolution.
Mr. Yanukovych, who pushed for the no-confidence vote, has predicted that this year marks Ukraine`s "last Orange winter."
