The New Geopolitics of Energy
On March 31, Ukrainians went to the polls to elect a new president. Front-runner Volodymyr Zelenskiy, an inexperienced 41-year-old comic television actor, came out on top, with even higher numbers than predicted. The results give the comedian 30 percent of the vote. Incumbent President Petro Poroshenko came in second with just under 16 percent. Because no candidate crossed the 50 percent threshold, Zelenskiy and Poroshenko will face off in a second-round runoff on April 21.
All of this was to be expected. Zelenskiy had been leading in the polls for two months, and Ukrainian presidential incumbents don’t enjoy an advantage as they do in other systems. Since gaining independence in 1991, Ukrainians have reelected only one president.
The vote was a referendum on Poroshenko, who was elected on an anti-graft platform following the 2013–14 Euromaidan protests that resulted in the ouster of President Viktor Yanukovych. Ukrainians have told pollsters they are frustrated with the country’s lack of progress over the last five years. People’s everyday lives haven’t gotten better, none of the prominent crooked officials from the pre-Euromaidan era were imprisoned, and the war with Russian-led separatists in the country’s east remains at a stalemate. The war, corruption, and the economy were the top issues for voters.
Poroshenko gets solid marks as a wartime president, but the economy is barely growing. At the beginning of his presidency, the government moved against graft, mainly in the gas sector, but the fight stalled. Efforts to reform the judiciary by rebooting the Supreme Court failed. Investors weren’t fooled by Poroshenko’s claims of progress, and foreign direct investment has remained flat. According to the International Monetary Fund (IMF), Ukraine has become the poorest country in Europe as measured by GDP per capita, even poorer than Moldova. At least two million Ukrainians have moved to Europe to look for work. The finance minister has estimated that at its current rate of growth, Ukraine’s economy will take 50 years to catch up to Poland’s.
Zelenskiy read the public mood better than any other candidate. Ukrainians have the lowest rates of trust in their government in the world. They have consistently told pollsters that they want new faces in power and a real fight against corruption. They want a clean president who promises easy solutions and quick progress. By that standard, a more perfect candidate would be hard to devise: on television, Zelenskiy plays a president who lives with his parents in an ordinary apartment building, rides a bicycle, and slays the oligarchs. In real life, Zelenskiy has pledged to hold everyone equal before the law, to remove parliamentary immunity from prosecution, and to support Ukraine’s anticorruption institutions. He’s also got two serious reformers advising him—former Finance Minister Oleksandr Danylyuk and former Minister of Economic Development Aivaras Abromavicius.
Ukrainians have the lowest rates of trust in their government in the world.
“Ukrainians believe that Zelenskiy as a political outsider will defeat the corrupt system because he does not owe it anything,” Danylyuk told me on April 1. The former minister said Zelenskiy is working on a 100-day plan. “The first priority in fixing the economy is fixing the problem of corruption. He will start with cleaning up the judiciary and restoring the independence of anticorruption institutions.” Danylyuk said that cooperation with the IMF will continue, which is crucial because the massive debt Yanukovych accumulated will begin to come due this year.
But winning the presidency alone won’t be enough to effect real change, Danylyuk cautioned: Servant of the People, Zelenskiy’s party, must also win the October 2019 parliamentary elections in order to put a reformist government into place. Then, according to Danylyuk, Zelenskiy would be able to execute his economic agenda, which includes breaking up monopolies, privatizing Ukraine’s approximately 3,350 state-owned enterprises, deregulating industry, and reforming the land market, labor law, and tax code.
Poroshenko, to his credit, knows that he’s vulnerable on the economy. After coming in second, he spoke at his campaign headquarters in Kiev, denounced Zelenskiy as a “puppet of [oligarch Ihor] Kolomoisky,” and vowed to get the economy going. “Priority: economy, economy, and once again economy,” he said.
Longtime political operator and TV anchor Taras Berezovets described Poroshenko’s mood as “confident as hell” in spite of the results. As the numbers came in, Poroshenko started swinging immediately, calling Zelenskiy a gift to Russian President Vladimir Putin. “He [Putin] dreams of a soft, submissive, gentle, giggling, inexperienced, weak, ideologically amorphous, and politically uncertain president. Will we give him this?”
Despite Zelenskiy’s strong performance in the first round, his victory is far from assured. For one thing, the two candidates have agreed to a live debate, and Poroshenko is an experienced debater, while Zelenskiy has made basic arithmetic mistakes when talking about policy ideas in the past. Poroshenko is also strong on the campaign trail—“like a rocket,” according to Berezovets. At times during this cycle, however, the president has come across as condescending and haughty, lecturing ordinary Ukrainians who ask basic, sensible questions. He told a man who asked him how he would fight corruption, “Go to church, light a candle, for you are a non-believer. And the Lord will soothe you.”
Zelenskiy waged an untraditional campaign, performing in comedy troupes around the country and using social media. But he also held numerous roundtables with experts from civil society and seemed to genuinely listen. In a conversation with business leaders, he emphasized that he, too, was a business owner and could understand the community’s concerns.
But Zelenskiy has vulnerabilities. He doesn’t have any serious military or national security advisers, while Poroshenko’s performance as a wartime president is perhaps his greatest strength. Poroshenko has made Ukraine’s aspiration to membership in the European Union and NATO central to his campaign, while Zelenskiy tends to stress domestic issues. Although Zelenskiy supports the idea of joining the EU and NATO, he has promised to hold a referendum on the latter, likely in order to entice voters with pro-Russian sympathies from southern and eastern Ukraine to back him. But those voters are unlikely to be satisfied. Once the president is in office, his foreign policy choices will be constrained by public opinion, and public opinion is clear: a majority of Ukrainians support NATO and EU membership, and the parliament has enshrined the country’s Western course and commitment to seeking membership in these organizations in its constitution. After losing 13,000 people in a war that Russia started in the Donbas, Ukrainians will not budge on the issue.
Zelenskiy may be a self-made millionaire, but he will have to better explain his relationship with the notorious oligarch Ihor Kolomoisky, who owns 1+1, the TV channel that airs Zelenskiy’s shows. Kolomoisky and Poroshenko became bitter rivals after the president nationalized Kolomoisky’s PrivatBank in late 2016; an independent audit by the corporate investigations consultancy Kroll showed that oligarchs had looted the bank to the tune of $5.5 billion. Some experts claim that Kolomoisky is the mastermind behind the rise of Zelenskiy and that the comedian is nothing more than malleable clay in the hands of an oligarch who wants revenge. (Of course, Poroshenko is himself an oligarch with links to a number of unsavory people who have stolen from the state budget.)
Although it’s easy to fixate on the presidential election, the fall parliamentary elections are even more important for Ukraine’s future. Parliament, after all, is the body that determines the country’s economic policies. Most experts predict a more fragmented and less reform-minded legislature than the current one. Such an outcome would be unfortunate, because parliament and the president will need to work together to make any real progress against corruption and to get the economy really growing. Finally setting up an independent anticorruption court, as the IMF has insisted on, would send a strong signal that Ukraine is moving in the right direction. Other signs to watch for include the treatment of Ukraine’s outspoken civil society activists and the ability of the country’s new anticorruption institutions to investigate and prosecute officials. The outcome of the parliamentary elections, together with the presidential one, will show just how serious Ukraine really is about leaving behind a system that enriches elites and impoverishes everyone else.