Saturday, September 04, 2004

A colleague in Europe emailed me this question:

What is your gut feeling about the presidential election in the Ukraine this October?

My gut feeling? Man, it depends on the day. Right now it is more toward the pessimistic so the thing will play out at least in my mind like this: There will be intimidation and widespread fraud. The West (EU and the US) will have their election watchers and won't certify it because of the fraud. There will be some demonstrations which will be put down by the government maybe even brutally. Then it all will die down and people will get on with the business of living.

The problem is that the oligarchs have too much to lose. Yanukovich Kuchma's guy has said he will crack down on the oligarchs but no one thinks he is serious. On the contrary, Yuschenko says he will and everyone takes him seriously. Yuschenko also is looking to the West which means that he is looking to make the EU and the US happier the payoff of which would be eventual membership in the EU and the WTO. All of that means that monopolists power will be broken up; the EU and the US will require it. That is a double shot to the gut for the olis: investigation on the one hand and the loss of their privileged place in the economy on the other. I think that is just too much for them to think about losing so they will pull out all the plugs to make sure the Kuchma surrogate gets in.

There is also still the other problem that has not been resolved either. The constitutional amendments that would take away the power of the president are still out there and could still be pushed through the Duma. So even if Yuschenko wins, he might be powerless anyway; the Duma will elect the Prime Minister which might well be Kuchma. That would place him in power again.

Some think that there might be a "rose revolution" here in Ukraine. I don't think it will happen. First of all, the people are not in as dire an economic situation as they were in Georgia. There is money here and people are spending it. You can hear the sawing and drilling in these old buildings as you pass by. People are renovating their Soviet era apartments. And new buildings are going up all over the place and supermarkets and malls, though the malls are not that many yet. And there are more women either pregnant or carting around babies than I have seen since I started coming here two years ago. There is a mini or maxi baby boom going on that I think is the result of a feeling that things are not as bad here as they were. There are poor people here obviously and the people don't make all that much money, but their lives are better than they were. That is one reason why I think they won't take to the streets en masse if fraud is reported.

The second reason I don't think that is that Ukrainians are just too passive. Too long under the Soviet system I am afraid. They take issue with no one who abuses them, not clerks, not bus drivers, not the old ladies elbowing their way to the front of the line for whatever reason, no one. It happens but it is rare. So I think that they will note that their lives are not so bad and think that they will hunker down like they always do and survive the system again as they always have.

If the Kuchma surrogate wins business will be able to function here on the same terms it does now and has for the past few years. There will be development like there is now on about the same level as now. But if the opposition wins and they do just some of the things they say they will, there will be a business revolution here. The US will showcase it and back things up better for foreign investors. Would be good for the country, the people and for consultants.

But I might think a different way tomorrow. And I could be all wrong and the Ukrainians surprise me. I wish they would. But when you go to a Christmas party offered to the children of Kiev, sponsored by major brands (chocolate, soda, etc.) and before the festivities get under way, a big picture of Kuchma is flashed onto the screen without any complaints, a democrat (small "d") can get a bit down about it. (Shows business in bed with the government.) I don't think it would have been any different under the Soviets except they would have skipped the sponsors.

My wife said that the mayor of the city was giving money out to the city residents just last week. Apparently it was something they were owed. Of course it would have nothing to do with the elections coming up, nothing at all. But people took the money and there was no complaining about it. I guess, "I got mine" was the ruling sentiment.