Internal Impediment: The Oligarchization of Power in Ukraine

In truth, Ukraine has numerous domestic obstacles to achieving a functioning liberal democracy. Ukraine’s economy, which was significantly hit during the 2008 global financial crisis, has more recently taken a further turn for the worse with the ongoing Ukraine crisis and destruction of the Donbass region, its industrial heartland (Wilson 2015). Thus, not only is Ukraine’s economic outlook dire (a 12% drop is forecast for 2015), inequality is also on the rise (inflation is expected to hit 23.6% in 2016), both ofwhich do not bode well for democratisation prospects (RT 2015). Additionally, although Ukraine’s civil society is rated as having decent functionality (see Figs. 9.1 and 9.2), it clearly has a lacking substantive critical mass needed for organic democratisation to develop (Kuzio 2010).

Unsurprisingly, after numerous failed democratic movements, political apathy amongst average Ukrainians is growing and few seem genuinely convinced of an achievable democratic future for Ukraine (Yanevskyy 2015). However, while the aforementioned issues are problematic and certainly need addressing, if successful democratisation is to be achieved the biggest internal hurdle is undoubtedly rectifying the role of elites in Ukrainian politics.

Elites, as a variable for understanding democratisation, were a key component of the transitional theory of democratisation first introduced by Rustow (1970) in the 1970s and later added to by O’Donnell and Schmitter (1986), and Higley and Burton (1989) in the 1980s. The main argument of this school of thought was that democracy comes about through elite-managed transitions, generally occurring in stages and ending in a ‘habituation stage’ where democracy is consciously adoption (Potter 1997). As Grugel and Bishop (2002, p. 56) note, for transitolo- gists, democracy is not ‘a question of waiting for economic conditions to mature or the political struggles unleashed by economic change to be one’, but rather democracy is the outcome of intentional actions pursued by elites. While the step-by-step transition argument holds little weight in more recent scholarship (Carothers 2002; Lynch and Crawford 2011) the importance of elites as to whether concrete democratisation occurs or not is undeniable (Hale 2005; Tolstrup 2012).

in the context of the transitions that have occurred in the independent states that emerged from the Soviet Union’s collapse, all of which have ostensibly attempted some level of democratisation, the role of elites has been important as to whether democracy has occurred or not. Although, popular mobilisations demanding democracy, like what occurred at the fall of the Soviet Union or more recently in the Colour Revolutions, have often grabbed the headlines. Hale (2005, p. 161) argues that in the majority of post-Soviet states, ‘political contestation is at root an elite affair where powerful groups compete to manipulate mass opinion through biased media and machine politics’. Thus, it is elites which represent the crucial variable when assessing the democratisation prospects ofpost-Soviet countries, such as Ukraine, which have entrenched illiberal (what Hale calls, patronal) regimes (Hale 2005).

The influence of elites on Ukraine’s politics and governance in its two and a half decades of independence has been significant. Initially, in the early years of independence under Kravchuk, the Ukrainian political elite was made up mostly of former high-ranking figures from the Communist apparatus (Puglisi 2003). However, due to wide-ranging economic reforms, especially privatisation, implemented when Kuchma came to power in 1994, a new breed of elite emerged in Ukraine: oligarchs. The term oligarch, in this context, refers to business magnates who acquired huge amounts of wealth, often through criminal connections or activities, during the privatisation process. Along with the acquisition of immense wealth naturally came significant political influence and power, making the management of the oligarchs a key priority of the president (Kuzio 2007).

The literature on whether the emergence of powerful oligarchs is good or bad for democracy is contested, with examples of emerging groups of oligarchs’ unwittingly aiding liberalisation in Japan and Malaysia (Puglisi 2003). In the Ukrainian context, however, the rise of oligarchs, occurring at time when economic and political transitions were failing, has been a largely negative development for democracy (Burlyuk 2015; Kuzio 2007). Beyond the obvious problems with triggering rising corruption (Transparency International documented worsening perceptions of corruption in Ukraine between 1996 and 2004), Kubicek (2009, p. 620) argues that the rise of oligarchs undermined the potentially positive impact of trade unions which could have reverted the ‘overcentralisation of authority and lack of checks on both political and economic power’. Furthermore, this negative impact was exacerbated with the emergence politically of key oligarchs in Kuchma’s second term in 1999 which went hand-in-hand with the democratic backsliding that eventually reached a crescendo with the electoral violations preceding the Orange Revolution (Kuzio 2007).

Unsurprisingly, one of the key pledges of the Orange Revolution was to address the high levels of corruption (read: oligarchs) in Ukraine’s politics in order to foster greater democratisation. Yushchenko (2005), in his inauguration speech, stated that:

We will eliminate corruption and bring economy out of shadow. Taxes will be reduced but everybody will pay them. Business to be separated from power. Only those people who declared their incomes will assume state offices.

However, instead of addressing the problem of oligarchs and corruption, the Orange Revolution led, ironically, to what Hovshovsurka (2006) termed the ‘oligarchisation of power’ in Ukraine. Importantly, because a number of key Orange revolutionaries were themselves, for all intents and purposes, oligarchs (or linked to oligarchic factions) - most notably Yulia Tymoshenko and Petro Poroshenko - the Orange Revolution actually represented the further encroachment of oligarchs into politics (Kuzio 2007). Furthermore, soon after the 2005 ‘Orange divorce’ between Yushchenko and Tymoshenko and abetted by Tymoshenko’s agenda- driven corruption crusade against perceived oligarchic rivals, Ukraine became a political battleground between different oligarchic factions vying for power (Kubicek 2009).

The end of Orange rule at the hands of Yanukovych in the 2010 presidential election had very little effect on the role of oligarchs in Ukrainian politics. Yanukovych himself was an oligarch of sorts, albeit a relative newcomer to his wealth and was, more importantly, heavily backed by a group of oligarchs from the Donbass region of Ukraine, most notably billionaires Rinat Akhmetov and Dmitry Firtash (Kudelia 2014). Contrary to the Orange revolutionaries, Yanukovych did not make bold democratic reform aims for his presidency, rather promising, first and foremost, stability after 5 years of chaotic Orange rule (Motyl 2013). Indeed, rhetorical commitments to fighting corruption and pursuing democratic reforms followed, but this was little more than placation of the EU’s prescribed democratic reform demands for Ukraine (Smith 2014).

Unlike long periods ofKuchma’s presidency, or Vladimir Putin’s rule in Russia, it became apparent near the end of Yanukovych’s reign that the oligarchisation of power has reached a point where the power of the President was impotent in the face of oligarchic interests. Although Yanukovych spent much of his reign attempting to acquire enough financial and political capital in order to insulate himself from the power of his Donbass backers, when Ukraine became unstable at the end of 2013, Yanukovych’s grip on power proved to be weak (Kudelia 2014). Notwithstanding mounting popular pressure on his position as president orchestrated by the Euromaidan movement, it was the removal of support from key oligarchs, especially Akhmetov and Firtash, which led to Yanukovych fleeing in late February 2014 (Neef 2014).

Despite the flight of Yanukovych and the election of a new president, Petro Poroshenko, in 2014 who openly stated his desire for Ukraine to pursue a European pathway, signing an economic and political deal with the EU which requires concrete democratisation, few are optimistic as to Ukraine’s immediate democratic prospects. Not only is Poroshenko an oligarch - a billionaire chocolate magnate - but also his rule to date has been blighted by the same problems that have affected Ukrainian politics since the emergence of oligarchs in the late 1990s, namely allegations of infighting, corruption and nepotism (Pond 2015). Indeed, the momentum generated by the Euromaidan movement seems to have been coopted by Poroshenko and his oligarchic supporters as zero of the key grassroots figures in that movement were represented in the positions of real power in the new regime (Andreyev and Wilson 2014). Thus, despite promises to de-oligarchise Ukrainian politics, Poroshenko’s first year in power illustrates that history is once again repeating itself in Ukraine (Kononczuk 2015).

Ultimately, as Hale (2005) observed during the Orange Revolution, the current political system in Ukraine, which has not been significantly altered in design by the ongoing Ukraine crisis to date, means that rather than moving towards democracy or autocracy, power will merely perpetually vacillate between competing elite groups, creating cycles of ‘regime behaviour’. Thus, breaking this embedded system which serves oligarchic interests appears to be the key challenge impeding Ukraine’s prospects for achieving greater democratisation from within, because without significant alteration, not matter what happens economically or in other areas of democratisation (i.e. civil society growth, elections, rule of law), a liberal democracy is largely impossible.

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