The Coup in the Kremlin
How Putin and the Security Services Captured the Russian State
In February 2010, Viktor Yanukovych made a remarkable political comeback. In the 2004 Ukrainian presidential election, Yanukovych, who was then Ukraine's prime minister and the handpicked successor to President Leonid Kuchma, was accused of fraud and ousted by the Orange Revolution, which was led by Viktor Yushchenko and Yulia Tymoshenko. Just over five years later, surrounded by his party's blue-and-white banners, Yanukovych became president.
When it first came to power, Ukraine's Orange government seemed like it would fulfill popular demands for radical political reform and rapid integration into Europe. But those expectations were quickly dashed. Yushchenko, as president, and Tymoshenko, as prime minister, proved incapable of working together, continually clashing and publicly criticizing each other. Soon, Ukraine's dysfunctional political system became known to Ukrainians as a durdom, or "madhouse."
Then, the global economic crisis sent Ukraine's economy into a tailspin. In 2009, the country's GDP fell by about 15 percent, exports by 25 percent, and imports by just under 40 percent. The consumer price index rose by more than 12 percent. Popular anger and frustration set in. Yearning for stability, Ukrainians were willing to support anyone in this year's election who could fix the mess. Tymoshenko, Yanukovych's main challenger, was seen to share fault for Ukraine's problems and could not easily claim to be that person.
Wisely, Yanukovych presented himself as a moderate, democratic professional who could unify a country increasingly divided over whether it should align with Russia or the West. He claimed that he would be able to strike the right balance between the two and could transform Ukraine into an economic tiger, making it one of the world's 20 richest nations. Yanukovych's campaign slogan -- "Ukraine is for people" -- captured the right tone to counter his previously negative image. It suggested that he was a man of the people who would place the interests of citizens above his own, in contrast to the supposedly power-hungry Tymoshenko. Yanukovych also claimed to have learned from his mistakes in 2004. In December 2009, he wrote in Dzerkalo Tyzhnya, one of Ukraine's most widely read newspapers, that although he still believed that the real goal of the Orange Revolution had been "to weaken Russia," he accepted that it represented a popular call for democracy. He further noted that a government "cannot promote serious socioeconomic plans without the active participation of the entire society."
Whatever the reasons for Yanukovych's victory, it was a surprisingly narrow one. In the first round, Yanukovych received just over 35 percent of the vote and made it into the runoff round with Tymoshenko. He received just under 49 percent of the vote in that round, compared with Tymoshenko's 45 percent. But really he had won over only about one-third of Ukraine's electorate since turnout was around 69 percent. Moreover, had Yushchenko not encouraged his supporters to select the "against all" option on the ballot, Tymoshenko would probably have won.
With such a slim mandate, most expected Yanukovych to pursue a moderate course after the election, reaching out to the opposition and working toward economic stability and political reform. Instead, he immediately took actions that undermined democracy, neglected the country's badly broken economy, and aligned Ukraine too closely with Russia for the comfort of much of the electorate.
After the Yushchenko government was dismissed, on March 3, Yanukovych had 30 days to form his own. Because his Party of Regions lacked a clear majority of seats in the Verkhovna Rada, Ukraine's parliament, it needed a coalition partner and so began negotiations with the Our Ukraine-People's Self-Defense (NU-NS) Bloc, led by Yushchenko. The NU-NS knew that no majority coalition could be formed without it, and so it demanded control over a range of portfolios, including the prime ministership.
The Party of Regions responded by changing the Rada's rules so that it could form a coalition without the NU-NS by joining with willing individual deputies. In mid-March, Yanukovych's party formed a governing coalition called Stability and Reform with the Communists, the Lytvyn Bloc (the bloc allied with the Rada's Speaker, Volodymyr Lytvyn), and 16 individuals who crossed party lines to join the coalition. Those who crossed over have come to be known as tushki, a pejorative Russian term roughly meaning "roadkill." Although the tushki gave Stability and Reform just enough votes to form a government, Yanukovych's willingness to use unconstitutional measures to do so -- in 2008, Ukraine's Constitutional Court explicitly outlawed the use of individual deputies to form coalitions, althougph it has now refused to challenge Yanukovych -- set a disturbingly antidemocratic precedent. As the German political scientist Andreas Umland noted in late March in the Kyiv Post, "Ukraine is now less democratic than it was. . . . With their change of allegiance the tushki have grossly misrepresented the preferences of the Ukrainian voters."
After the coalition was formed, Ukrainians expected Yanukovych to live up to his campaign promises and appoint professionals, reformers, and moderates to government posts, but he did the opposite. Most of Yanukovych's political appointees hail from his home region, Ukraine's highly Sovietized rust belt, the Donbass, and have little experience with democratic politics or the technical know-how required to run a clean government and a functioning market economy. Like the old Donbass Communist Party bosses did, with whom many of these appointees cut their political teeth, Yanukovych acts as a patron. He doles out favors, provides access to power, and makes most decisions.
The position of prime minister, for example, went to Yanukovych's longtime ally Mykola Azarov. As head of the Rada's budgetary committee and the State Tax Administration in the 1990s, Azarov turned a blind eye to government graft and imposed ruinously high tax rates on small businesses. His relationship with Yanukovych was cemented when he served as the first deputy prime minister and finance minister to notoriously unscrupulous cabinets headed by Yanukovych in 2004 and 2006-7. Together, Yanukovych and Azarov have doled out 29 cabinet seats to their cronies. Such a large cabinet, with two more members than even the ineffective Council of the European Union, is almost certain to become a talking shop that, like the Council of the European Union, is incapable of reaching consensus or making tough decisions. Meanwhile, the positions of economic minister and finance minister have gone to politicians who lack experience in either field but are dependent on Yanukovych for power and are thus unlikely to cross him. Contrary to his campaign slogans, reform and democracy are clearly not Yanukovych's priority.
To be sure, Yanukovych and his chief of staff, the economist Iryna Akimova, have created -- and will be heading up -- the new Committee on Economic Reform. Although there are some economists among the committee's 26 members, there are also many political appointees beholden to Yanukovych. The inclusion of political appointees and the committee's impractically large size suggest that it will be as ineffective as Yanukovych's cabinet. And even if it does develop some real economic reforms, they are likely to fall victim to turf battles between the Economy and Finance Ministries and the committee itself. Parallel organizations with overlapping jurisdictions are doomed to tussle over control, even with wise, professional management -- something Yanukovych is unlikely to provide.
Yanukovych's hub-and-spokes political system -- with Yanukovych at the center and key political roles filled by yes men -- has put the president "on top of [the] Ukrainian power pyramid," as analysts at Kiev's Penta Center, a political think tank, have put it. Yanukovych even went so far as to redefine democracy as "order" in a press conference in Strasbourg on April 27. But political order is not democracy. Such hypercentralized political systems are rarely efficient and almost always corrupt. There is no reason to think that the Donbass-based dons who man the Yanukovych system will be able or willing to pursue the economic reform Ukraine so badly needs.
Just as Yanukovych has failed to live up to his democratic and economic promises, he has acted against his campaign promise to unify the country. As president, Yushchenko actively favored his ethnic Ukrainian base by promoting the Ukrainian language, culture, and identity in schools, government, and the media. In the process, he alienated many of the ethnic Russians and Russian-speaking Ukrainians in the country's east and south. Most observers expected Yanukovych to calm the tense situation by neither advocating nor disparaging Ukrainian heritage. Instead, he surprised everyone by attacking it.
Dmytro Tabachnyk, Yanukovych's appointment for minister of education and science, has spearheaded this assault. Tabachnyk is an odious choice because, besides having a weak academic pedigree, he openly espouses anti-Ukrainian views. He claims that the ethnic Ukrainians in the west of the country are too westernized to be true Ukrainians. He believes that Ukrainian culture flourished in Soviet times, when it was in fact suppressed in favor of the colonial power's culture. He also insists that today the Russian language is discriminated against, even as Russian-language publications and broadcasts make up the overwhelming majority of media available in Ukraine. Since assuming his new position, Tabachnyk has reduced the role of Ukrainian in schools, urged the cessation of Ukrainian-language dubbing of foreign films, and expressed indifference to the construction of a statue of Stalin in the southern city of Zaporizhzhya. Unsurprisingly, his assault on Ukrainian identity has provoked demonstrations, student protests, and petitions -- directed as much at Yanukovych as at Tabachnyk.
Yanukovych's overly centralized, anti-Ukrainian regime has been unable to forge a genuine national consensus on the country's political and economic direction, either. A case in point is the April 2010 Russian-Ukrainian pact, in which Yanukovych agreed to extend until 2047 the basing rights of Russia's Black Sea Fleet in Sevastopol, a port city on the southern part of the Crimean Peninsula, which juts off Ukraine and into the Black Sea, and Russian President Dmitry Medvedev agreed in return to lower the price Ukraine pays for Russian natural gas by 30 percent through 2019.
The agreement's critics charge that Yanukovych has sold out to Russia. This may be true, but the more damning criticism is that the agreement was pushed through the Rada without regard for transparency or democratic procedure. As one senior Ukrainian diplomat told me, "The haste with which the agreement was signed is daunting. There was no expert evaluation of the draft and no proper consideration of the issue in parliamentary committees. . . . The decision was taken by a small group of individuals, if not by one person."
There are four separate issues concerning the Sevastopol deal that the Rada should have had the opportunity to debate: the geopolitical implications for Ukraine of basing the Black Sea Fleet in Sevastopol, the fair rate that Russia should pay in rent for using the base, the price Ukraine should pay for Russian gas, and the cost to Russia of transporting gas through Ukraine's pipelines. But instead of airing these issues individually in the Rada, Yanukovych bundled them and thus bartered away Ukraine's security by ceding informal control of the Crimea, its potentially vital sea-lanes, and the natural gas deposits that surround it to Russia for the foreseeable future. In return, Yanukovych secured gas prices that will likely save Ukraine some $1-$3 billion annually for only the next nine years. Worse, Russia merely agreed to cut its gas prices to current average world rates, pay below-market gas transit fees, and pay a long-term rent on the base that, at $100 million per annum, is about one-fifth of what experts calculate it should be, based on rents for comparable bases around the world. With open consideration of the agreement's terms in the Rada and a team of professional negotiators, Ukraine could have gotten much more out of the deal: it should at least have demanded European-level transit fees and a higher basing rent.
The deal's passage unleashed a riot in the Rada, complete with egg throwing and smoke bombs. Yanukovych's subsequent negotiations with Russia over closer cooperation on aviation, nuclear energy, transportation, and gas transit have led to protests across Ukraine. Intellectuals and opposition leaders have accused Yanukovych of treason, declared unconditional opposition to his regime, and predicted that civil war was in the offing. Even if this response is exaggerated, it shows that a significant portion of the population -- at least the one-third or more who are opposed to closer ties with Russia -- now detests Yanukovych.
CAN'T HOLD US DOWN
The rise of such discontent matters. Ukraine is home to a politically conscious civil society that, thanks to the Orange Revolution, is more vigorous than at any time in Ukraine's almost 20-year independent existence. Professionals, intellectuals, students, and businesspeople will increasingly resist Yanukovych's efforts to establish strongman rule and will continue to protest if he kowtows to Russia or the economy grows worse. They have already started to organize: in mid-March, over 300 representatives of the so-called New Citizen movement met in Kiev to begin monitoring the activities of the Yanukovych government; in May, branches of the similar Save Ukraine Committee were operating across the country. Local elections in 2011 and parliamentary elections in 2012 could also mobilize the population against Yanukovych and his regime. If he continues on his current course, radical nationalists may be the big winners.
Faced with growing popular resistance, Yanukovych may contemplate cracking down on dissent. But such a move would likely provoke violence and destabilize Ukraine. Moreover, authoritarianism along the lines of Belarus in the mid-1990s or Russia at the start of this century is almost certainly not a viable option for Yanukovych. When Aleksandr Lukashenko became president of Belarus in 1994, he inherited an intact Soviet security apparatus. And former Russian President Vladimir Putin could rely on thousands of siloviki, political operatives in the secret police and the army, for support. Ukraine's security service and army are a far cry from those in Belarus or Russia. Without a strong coercive apparatus, Yanukovych cannot succeed even as an authoritarian.
Ukraine's first president, in office from 1991 to 1994, the generally cautious Leonid Kravchuk, has joined the chorus of Yanukovych critics. In an open letter published in March, he wrote, "Your team has many people who want to continue along the path of lawlessness, permissiveness and corruption. They're developing a taste for solving complex problems by force. This has nothing in common with democracy." Kravchuk's comments should worry Yanukovych. They demonstrate that even neutrally inclined Ukrainian elites (Kravchuk did not support the Orange Revolution) are turning against him.
If Yanukovych keeps on his current course, he could very well provoke a second Orange Revolution. Lacking the ability, capacity, and will to change the system, Yanukovych will probably try to enhance his regime's legitimacy by continuing to rally the more radical of his constituents at the expense of the Ukrainian language, culture, and identity; do everything possible to appease the gas-hungry oligarchs of eastern Ukraine; and use the Union of European Football Associations (UEFA) championship, which Ukraine will host in partnership with Poland in 2012, to promote his image as a pro-European modernizer.
Viewed through this lens, Yanukovych's choice of the incendiary Tabachnyk as education and science minister makes some sense. As Tabachnyk antagonizes nationally conscious Ukrainians, he enhances Yanukovych's appeal among his pro-Russian constituents in the country's south and east. That said, this course risks encouraging ethnic violence between radical ethnic Russians and ethnic Ukrainians. Additionally, Yanukovych cannot provoke moderate ethnic Ukrainians without limit. They are the ones who took to the streets in 2004 to prevent him from coming to office and could do so again to kick him out.
The lower natural gas price that Yanukovych negotiated with Russia will bring immediate benefits to the oligarchs who run Ukraine's heavily industrialized southeast. Lower gas prices will allow them to keep the costs of their products low and globally competitive without forcing them to modernize or become more efficient. This will certainly endear them to Yanukovych in the short term. In the medium term, however, Ukraine's overarching economic stagnation will eat into their profits. And even if the population welcomes lower gas prices at first, the Yanukovych regime is likely to become more corrupt as it draws closer to Russia's notoriously unscrupulous energy business. Sooner or later, as their living standards stagnate or deteriorate, Yanukovych's working-class constituents may begin to realize that they got the short end of the deal.
Yanukovych's best chance to rally public support (and address some economic problems) might be the 2012 UEFA championship. Ukraine's roads are in terrible shape; its railroads, although efficient, require modernization; and its airports and hotels are in need of significant improvement. A state-led campaign to fix these problems before the influx of tourists in 2012 could generate economic activity, create jobs, and attract more capital. Unsurprisingly, readying Ukraine for the championship has become a priority for Yanukovych, who in April created a special committee to oversee the preparations.
The UEFA preparations will buy Yanukovych time but cannot fix Ukraine's underlying economic and political problems. To do that, Yanukovych would have to democratize his regime, control corruption, cease his anti-Ukrainian campaign, and persuade his compatriots to accept the economic pain that goes with serious reform. He may eventually come to realize that democracy is preferable to ignominy. Or oligarchs worried about their long-term economic interests may persuade him that hypercentralization will destabilize Ukraine. Rather than waiting for these eventualities to happen, however, Russia and the West should help Yanukovych change his course now, before it is too late.
HELPING YANUKOVYCH HELP HIMSELF
At the start of his presidency, Yanukovych laid out his foreign policy priorities: restoring Ukraine's close ties with Russia, European integration, and building relationships with strategic partners such as the United States. By playing to these priorities and, at the same time, pursuing their own interests in the region, Russia, the European Union, and the United States can help stabilize the Yanukovych presidency and Ukraine.
Russia considers Ukraine part of its sphere of influence and would prefer it to be a weak state rather than an independent, strong democracy. But although a weak Ukraine may be to authoritarian Russia's benefit, a deeply dysfunctional Ukraine on the verge of popular revolution is not. For his part, Yanukovych has said that he wants Ukraine to serve as a bridge between Russia and the West. But a bridge must be sturdy. With the gas and fleet deal, Yanukovych has amply demonstrated his fealty to Russia and solidified his pro-Russian credentials with his base. The Kremlin should return the favor by encouraging Yanukovych to fire the controversial Tabachnyk to appease some of his critics in the rest of the country.
The West has an even greater role to play in nudging Yanukovych in the right direction. The International Monetary Fund -- which gave Kiev an emergency loan at the start of the global economic crisis and will likely need to do so again -- should insist on strict conditionality. It should not only demand that Yanukovych balance his budget but also pressure him to undertake significant structural economic reforms, including reducing taxation, simplifying business registration procedures, raising the retirement age, and raising the cost of utilities.
Europe should hold to the European Parliament's February 2010 resolution, which reaffirmed Ukraine's strategic importance to the EU and stated that the country could apply for membership if it "adheres to the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law." As the European Parliament recommended, Europe should assist Ukraine in meeting these standards and should deepen ties between the two by working toward visa-free travel, better energy cooperation, and a free-trade zone. Yanukovych has affirmed that he is interested in further integration with the EU. Europe should take him at his word and offer Yanukovych the prospect of associate member status for Ukraine if he tackles some of the country's political and economic problems.
Washington must remind Yanukovych that Ukraine -- especially a democratic Ukraine -- remains important to the United States, even as the Obama administration works to improve U.S. relations with Russia. Historically, the U.S.-Ukrainian relationship has atrophied when the United States has pursued closer ties with Russia and has grown stronger when U.S.-Russian relations were strained. But President Barack Obama should resist this pattern. Just as a stable Ukraine is in Russia's interests, so, too, is a stable and democratic Ukraine in the United States' interests. If Yanukovych precipitates a government collapse or state failure, Russia may be tempted to step in, disrupting the balance of power in eastern Europe.
If no popular revolution intervenes, Russia and the West will have to deal with Yanukovych and his "blue counterrevolution" for the next five years. Unfortunately, during that time, Yanukovych will probably grow increasingly ineffective and embattled, destabilizing Ukraine. Yet it remains conceivable that Yanukovych could reverse course, democratize Ukraine, and enact genuine economic reform. But this is likely only if Russia and the West act soon to save Yanukovych from himself.