The celebration

Looks like the rumor was wrong. There was lots of orange down on the square last night.

Some of the speakers who were passionate during the revolution up there on the stage last night seemed to have lost a lot of the fire they had back then. Were they reacting to what they think the people think? Or have they just lost it? Don't know which it is.

Tymoshenko hasn't lost it. She made her case last night though I didn't listen much to it. When Yuschenko spoke, she stood behind him with what looked like tears in her eyes.

Yuschenko gave a laundry list speech at first. It was a "this is what we have done" kind of beginning. A bit boring and didn't really speak to the mood in the country right now. After that was over, he went on to an explanation about his motivations for picking the people he did and what happened when he dismissed them. I thought it was heartfelt and should have been where he started. By the time he got there, I think he lost a lot of people who compared the positive gains he says the country has made to their own lives and found the difference to be telling.

I know that they have listened to the Clinton spin people recently. I think a lot of what was done in that administration to make the president's case was a wreckless slashing and burning on all sides without much regard to the effect it had on the institutions of government and on the people.

But to have someone here talking to Yuschenko that could help shape his message and approach is a good idea no matter where it comes from. Yuschenko needs that and he needs some discipline too to get him to control his outbursts. Last night for example, when he got on the stage, some in the crowd chanted, "Yulia! Yulia! Yulia!" He responded with, "You can continue and I'll listen. When you finish, I'll begin." It is what he felt but it won't help to make him any new friends.

That is the same thing he did in that affair about his son. Talking that way to a news organization that supported him during the revolution didn't serve him well. That that news organization now says it is in opposition to the Ysuchenko government should be laid entirely at the feet of Yuschenko. It didn't need to happen.

He said something else that was on a par. He may feel it, but he's gotta control saying something about it. That may be impossible because to suppress it might seem dishonest. He needs friends and that is hard to do when you are in their faces for what are petty things.

I do though think he set the right tone later in the speech. He was forthright and candid I think about the government and what happened. And he ended up the speech with a reemphasis on the direction the country needed to take. It was much of what was stated in the revolution last year.

Those who listened to it I think would have to come away from it thinking that Yuschenko is still sincerely engaged in trying to correct the problems of the country. That he doesn't have more to show for the time he has been involved is a very real and a very bad problem. And it is all to be laid up to his mistakes. But I think the mistakes came from trying to do the right thing. He vacillated between government unity and making the right decisions. His hand was forced and unity was the casualty. It should have been but much, much earlier.

My wife thought he was the only speaker who sounded like he did last year on the square. I think he did too. We'll see what effect it has.

We listened to the speech with people who are disenchanted with Yuschenko. That might be the majority of Ukrainians, I don't know. Their lives haven't changed much and things have gotten more expensive. For this they blame not primarily Tymoshenko, though she is getting it too, but Yuschenko. These particular people, the ones we had over, still support Tymoshenko because they saw her as getting something done.

I think I may not have been the best host last night. (They were at our place.) In a bit of heat, I kept saying to them, "Ask Tymoshenko where the investment went." That she was doing something is true but it amounted to nothing better than rearranging the deck chairs on that big sinking ship. Investment is needed for the pie to grow here and for people's lives to get better. But she with her careless populism scared a lot of it away. And her statist managing of the economy got them all shortages and inflation as a bonus. A pure disaster.

There is irony there too. She blamed the Russians for a number of the problems of the Ukrainian economy. But it is the Russians who are the only ones who can stomach the perceived risks in the Ukrainian economy. (Like I have said before, a lot of the risks are only perception. We think they have been vastly overstated.) So she blamed the Russians for it all and then instituted polices that made it inevitable that the Russians would take a significant role in the economy. But now Russia isn't the problem anymore for her I guess. She went there and saw how wonderful it all was there for herself.

A lot of people say that corruption hasn't changed at all and that that was the major pledge of Yuschenko on Maidan last year. And that is the truth on both counts. The problem is that corruption was never as much a problem of systems and structure as it was one of culture. What this means is that there was only so much that could be done by Yuschenko in the first place. And some of it has been done, to his credit. The rest of it has to come from a change in the culture.

Corruption was not simply a problem of Kuchma or of Yanukovych or of the militsya who stopped the car looking for a bribe to let it go. It has always been a problem of the people of Ukraine. For every official who wants a bribe for something, there is someone willing to pay it. And these would include even those who stood out in the cold cheering on Yuschenko. They would be the first to condemn Yanukovych for paying officials to get votes. But when it comes to getting their children into the right school or to getting their child a degree or to selling their apartment at the time they need to or to getting that piece of paper that allows them to do something they want to do, everyone, everyone, is willing to pay what it takes to whomever it takes to get it done. But corruption something the other guy does, the bad guy, not me. My motives are pure. But it is all corruption and it is all a problem, all of it. It distorts policy and creates a drag on the economy. And it creates costs that all people are paying for now, costs that are keeping the lot of them in poverty and subjecting them to rule by the whims of stupid bureacrats who can't do anything other than manage paper but who have power and know how to use it for their own benefit. (OK, so they aren't stupid in that either.) And that means, in the end, government by the rich and for the rich.

But it's the other guys, not me.

There is more to say on this but I don't have more time. We are expecting a baby in the next couple of weeks and that means making the rounds to doctors and other places to get ready for it. Not much time left after all that.

Things at the Kremlin

Here's something interesting about the thinking of Kremlin officials. Another Massive Dose of Kremlin Diagnoses.

Maybe it is the natural tendency of any court to focus inward so that the reality for them becomes the reality of court life. It happened with Louis XIII and XIV. They are the great examples of it. Louis the XIV's court, for instance, had it in spades. Marie Antoinette is supposed to have said when informed the people were starving, "Let them eat cake!" But what she really said was something like they should try brioche which is a delicate type of bread or cake that she and the court ate. In other words, they should try eating what I eat when I am hungry. She lived in a complete fantasy world unrelated to any reality. And when things got bad and they tried to escape, the whole thing was treated as some sort of game they might play in the parlor rooms of the palace. They were recognized and their way blocked by revolutionaries. In the end, that fantasy world came butt up against the reality of the guillotine.

The same thing could be said for Nicholas' court. And this is not for tzars and tzarinas and sun kings only. The same thing happens in the administration of democratically elected presidents. The extreme example is Nixon, but then you have Kennedy's Bay of Pigs which was a response to the dynamics in the administration more than it was to the reality on the ground. And there are other examples.

But the same thing is true of big corporations. How much time is spent fighting the fires of office politics as opposed to doing the work of the company? Glen Reynolds makes this point:

...In a small organization, people deal mostly with customers and suppliers. They get ahead mostly by making both (but especially the customers) happy. In big organizations, people mostly deal with other people within the organization, and they get ahead mostly by making those people happy. Pleasing customers is a way to get ahead only to the extent that it also pleases the bosses, and if you have to choose whom to please, you're better off pleasing your boss than your customer.

So it happens everywhere. Does that fact let the Kremlin off the hook? No because the extent of the unreality suggests a certain willfulness about it. And the potential for real mischief is a lot greater than it is with others. To have the Soviet era paranoia like they do in an age when the evils of that system are clear, seems to have more to do with the fact that they prefer it rather than that they are forced to it by circumstances or that it reflects some sort of reality. It hearkens back to the good old days of empire. How satisfying that is.

Anyway, these things tend to come up against reality eventually. The question is what form will that eventually take?

Orange Revolution celebration

There's going to be a celebration of the Orange Revolution this next Monday and Tuesday down on the Maidan. There will be some of the same artists who performed during the revolution. There won't be any color orange though from what we hear. Maybe it's that it's too identified with Yuschenko and they don't want to identify it with him. Or maybe it's that they want to be all inclusive and reach out to the east, a West and East together kind of thing. Either way it will be funny--an Orange Revolution celebration without the color orange.

Maybe we'll see the return of those American made boots and drug filled oranges that filled the imaginations of people in the east, courtesy of Mrs. Yanukovych. Something like this:

I saw last night upon the Square
Some boots, spiked citrus that was not there.
They were not there again today,
Oh how I wish they'd go away!

(Apologies to whoever wrote the original. "I saw last night upon the stair/A little man who was not there..." I think it was a physicist.)

Some of the people in the tent near the Presidential Admin building had a sense of humor. They had oranges and boots hanging around. One guy walked around with a boot on a stick. A real poke in Yanukovych's eye.

Those were the good old days.

Piracy

A Ukrainian ship is being held for ransom right now. This article--SOS as pirate motherships take to the high seas seeking cargo and hostages - [Sunday Herald]--suggests piracy is bad right now and set to get worse.

Global piracy is now one of the biggest threats to world shipping, far eclipsing the risk from terrorism, and Somalia "a war-torn realm in almost complete anarchy" has fast become one of the world's pirate hot spots. Since March 15 this year, there have been 32 attacks off Somalia. In 2004, there were just two attacks, in 2003, three, and in 2002, six. In the first nine months of 2005, there were 205 pirate attacks worldwide. Murders by pirates are also rising. In 2004, 30 crew members were killed. In 2003, the figure was 21.

The favoured tactic of the Somali pirates is to capture the vessel and crew, take it to one of their safe havens around Mogadishu and hold the hostages for ransoms of hundreds of thousands of pounds. Today, some seven vessels and more than 100 sailors, from countries including Burma, Indonesia, the Philippines and the Ukraine, are held captive by the pirates pending the ransom payment. When the ransom is received the ship, cargo and crew are all freed.

And there was a recent attack on a cruise ship. It was repelled when they used a sonic gun capable of damaging hearing at 300 yards. I guess they were a bit concerned they might not be able to use their iPods ever again so they beat it out of there.

I guess the sound was unpleasant enough for them but what if they had had ear plugs or were listening to some theme music while they rampaged? Sounds a bit too neutral a weapon to me. Maybe they'll develop something that fires asbestos into the air as the pirates approach. Concerned about cancer they will break off.

Andrew Linnington of the UK maritime union Numast said the waters off Somalia should be declared a war zone. "It's got to the stage where it's anarchy," he said.

The International Maritime Bureau has made a direct request to the Royal Navy to intervene in east African waters. The Ministry of Defence promised that if there were navy vessels in the area and intelligence of piracy then the Royal Navy "would undertake action in pursuit of pirates and help to deal with the problem."

UK shipping minister Stephen Ladyman is supporting a move by the International Maritime Organisation for the UN Security Council to pass a resolution to deal with Somali piracy. UK ships are now under advice to keep a minimum of 150 nautical miles from the Somali coast.

If they Security Council votes a resolution and the Somali warlords violate it what then? I hear that violating a UN resolution is not a sufficient casus belli. But maybe I heard wrong.

I once used an example of pirates seizing a ship in my international business law class. I think the students thought it to be an anachronism. Looks like it wasn't.

Bird flu

This doesn’t sound very good—Bird Flu Triggers Immune System “Storm.” (Hat tip: Glen Reynolds.)

As concern mounts over the potential spread of avian flu to humans, researchers believe they've discovered one reason why the infection can prove so deadly.

Experiments with human cells have found the H5N1 virus can trigger levels of inflammatory proteins called cytokines and chemokines that are more than 10 times higher than those that occur during a bout of the common flu.

This massive increase in cytokine and chemokine activity can inflame airways, making it hard to breathe. It also contributes to the unusual severity of the avian flu, which can result in life-threatening pneumonia and acute respiratory distress….

"This is basically a cytokine storm induced by this specific virus, which then leads to respiratory distress syndrome," Osterholm said. "This also makes sense of why you tend to see a preponderance of severe illness in those who tend to be the healthiest, because the ability to increase the production of cytokines is actually higher in those who are not immune-compromised. It's more likely in those who are otherwise healthy."

Basically, the healthier you are the sicker you become because of increased cytokine production. That turns things on its head. For other illnesses, being in good health lessens the effects. Not with bird flu it looks like.

This is not good.

Bird flu has been found within ten miles of Ukraine’s southern border in Romania. I kid with people in the US that we are eyeing the birds that land on our balcony suspiciously. Not any more, the kidding that is. This looks serious and we could be part of the initial surge of it, if it crosses the human threshold. But this doesn’t look good on that score.

Market economy status--EU

This is very, very good news. Commission Clears Ukraine for Improved Trade Relations.

The European Union is set to lower its defences against imports from Ukraine in a sign that Brussels is finally providing concrete help for Kiev after the Orange Revolution.

The European Commission has decided that Ukraine deserves the title of "market economy status" - a move that reduces Brussels' scope to levy hefty anti-dumping duties on Ukrainian imports. Such a classification has been one of Kiev's main objectives this year. The EU is Ukraine's biggest trading partner; annual bilateral trade stands at $22bn (€18.6bn, £12.6bn), ahead of the $20bn trade between Ukraine and Russia.

"Ukraine now fulfils all the criteria to be granted market economy status," says an internal Commission paper seen by the Financial Times. "This means that Ukraine will be treated as a full-fledged market economy in all trade defence investigations," once the measure has come into force. The Commission expects the process will be completed by the end of this year or early next year.

Viktor Yushchenko, Ukraine's president, has sought greater help from the EU to consolidate the country's democratic swing, but Brussels has been dismayed by disarray within the Ukrainian administration and has been reluctant to encourage
Ukrainian hopes for EU membership.

I am busy now so I don't have time to talk about this. I'll get back to it later. Score one for Yuschenko though.

Looting history

Looks like state owned assets aren't the only thing that has been looted in Ukraine. Historical sites and artifacts have been too--Black Earth, Black archeology, Black Times.

We have been to Chersones and it is impressive. A Greek city along the shores of the Black Sea in the Crimea. But pots and pieces of pottery sit out in the weather, in a chicken wire enclosure to prevent theft, I am sure. But they sit there with the paint or tint fading on them. There are other artifacts in the museum but it looked to me as if there is a lot of neglect.

And a lot of apathy. Make sure the museum is opened and closed on time and that the fee is paid, but that's about it. We saw no digs there and no one suggested anything like that was in the offing.

We wandered all over the ruins and could have dug a hole without anyone seeing us in the middle of the day (midwinter.) And you can get in along the beach from either side so, if a surreptitious dig is at night, it will be easy to get in, dig and get out without anyone seeing.

It is hard to know what can be done about it. Even if they hired guards, those guards could be coerced into letting them loot. Money or threats, the standard. No one's going to want to risk life or limb for any artifact, especially if he can be paid instead. So it's hard to see that as any solution.

So what is to be done?

The anniversary of the revolution

Today is the anniversary of the revolution of 1917, the most famous revolution around these parts prior to this past year.

There are some communists gathering on Maidan downtown right now to celebrate it. They say there are about 30,000 of them there. They apparently started out in Arsenalna, the place where the revolution started in Ukraine (or at least in Kiev.) They fired a few shots off in celebration—not from guns but with some large bore fireworks like they use at all times of the year. The problem is that they had no permission to gather there and do that so the police ran them off.

And I don’t think they have permission to gather in Maidan either so it might be fun to see what comes of that. Of course, for more than 70 years, they didn’t have to have permission to gather anywhere, the communists didn’t. Getting permission now just must seem to them to be a mite disrespectful of the movement. That’s dissing them.

But thirty thousand are a lot of people to just clear off with police, even riot police. So they’ll probably stay and have their rally and talk about the good old days when it all meant something. Then they can dream of their renaissance much like American southerners did. But, I am afraid, that kind of dream is going to end like the dream of those southerners. It ain’t gonna happen, no how, no way.

That is not to say that Ukraine has become immune to authoritarian systems of government. It hasn’t. If Yuschenko and the reformers don’t reform, there is a very real risk of a thug showing up and taking charge, especially if there is an economic downturn.  It’s just to say that it won’t be done in the name of communism. Communism is dead; thuggery as a governing principle is not.

No noise

Pssst! Do you hear that? That's the sound of no cabinet arguments in public about government policy. There haven't been any since the cabinet shuffle and that is a good thing for Yuschenko. I guess you might say, paraphrasing what was said about a migration of a whole people, "Yuschenko dismissed his government of his own free will, because he had to." And it has at least worked to make the sounds issuing from government more unified. That is good.

Now he just needs to make his case. He has the time and the calm now to do it.

An upbeat analysis

Here's an optimistic analysis I would pretty much agree with--Viktor Gets His Groove Back. (Subscription req'd.--the pdf is available here. )

Automated comment idiocies

We have been hit pretty hard by automated comments around here. Some of them are pretty idiotic.

"Nice post! I address the same thing at my blog!" There follows a link to a site called Business Lawyer. I guess they got the lawyer right but missed pretty much everything else.

Or the one from an adult site asking for tips on blogging--finger to mouth and demure look, no doubt--that then says, "I have bookmarked you!" It just sends chills up my spine thinking about it.

Give me a break.

Busy, busy, busy

I have been very busy over the past week and have not had time to post much here. The good news though is that there has not been much to post about. But there is some.

The government finally seems to be talking with a single voice for one. There has been none of the old back and forth in the press between ministers and the president that I have heard like there used to be. That is a good thing.

And the Kryvorizstahl mill sale went off without a hitch. Some analysts seem to be saying that the sale is a victory for Yuschenko that should help him in the elections this spring. I don't know how a sale of the steel mill will increase his attractiveness to the people in the face of what has gone on, but it can be one piece to be added to other pieces--like economic and political stability, two others-- that might all add up to victory then. Steady, consistent effort to get things done might just pay off. And it would be new.

So I don't know how much of a victory the sale represents. But what it does do is to begin to demonstrate seriousness on the part of the government in making the climate here more investment friendly. This sale goes a long way towards making that case. And that is a good thing.

I will say it again: It is much better to have the power to make things happen than to sit around waiting for something to go wrong in order to make political hay out of it.

In other news, Yuschenko's Our Ukraine is forming a youth organization. Tymoshenko is following suit. "I'll see your youth organization and raise you, what?" Nothing. Yuschenko signs an agreement with Yanukovych which he says recognizes the east as having legitimate interests in the government, an east that is pro Russia, and Tymoshenko responds by visiting Putin in Russia and bringing back a glowing report on Putin as president. She seems to be on the back end of the wave.

More of the same, but different--Russia

This doesn't look good--UNIAN-News from Ukraine.

Russia's Foreign Minister Sergei Lavrov said on Wednesday, Oct. 12, that the main diplomatic resources of Russia are natural gas, oil and electric power and promised to use “all of the means of economic pressure” on disloyal CIS neighbors. According to Nezavisimaya Gazeta (Independent Gazette) daily, Lavrov made these statements at a closed meeting of Federation Council, upper house of the Russian parliament, according to MosNews.

There was some talk a few months back about what the appropriate Russian response should be to the recent government dismissals in Ukraine. There were three possibilities. The first one was that Russia should go for the jugular while Ukraine is weak by upping the price of natural gas to world levels. That would create economic chaos and lead the fall of the government and disenchantment with the revolution. Russia would then sweep in and pick up the pieces.

Otheeh other end was the idea that Ukrainshoulddl be dealt with diplomatically just as other states deal with other states diplomatically. That requires thinking of Ukraine as an equal. For some Russians. especially those in the Kremlin, that seems impossible to do.

The tird apporach was somewhere in between these two.

The first would be devastating to the economy. The price paid by Ukraine right now for natural gas is less than a third the world price. It is partly due to the low cost of energy that Ukraine's export success has depended. Raising the price of natural gas would make a lot of export commodities like steel uncompetitive.

And it would raise the cost of living for Ukrainians as well. Right now the cost to heat an apartment is pretty low by American standards but the people here are living on a lot smaller incomes. They might be able to pay the price right now but if it were tripled or quadrupled, what would they do? It gets pretty cold here in the winter. And a lot of people use gas for cooking. Could they afford to if the price hit world levels? I doubt it. Heating a home and cooking might become unaffordable.

But does this statement by Lavrov mean the Russians intend to do it? They have been threatening this for a number of months, so the threat of it is nothing new. But that threat has always been in the context of price negotiations on the natural gas. Now that threat is coming from the Foreign Office. That might mean the Kremlin has settled on the policy. Looks like it's door number one.

Decline in the hinterlands

We spent a part of the previous weekend in the village at my in-law’s place. While there, my father-in-law informed me that they had had an investor interested in leasing land there and putting in a chicken farm. He would have used the cooperative buildings and equipment and depended on the cooperativistas land for his business needs. It all would have been leased and it would have been state of the art. What is perhaps more significant is that it would have employed close to 200 persons. That is an awful lot of people for a village that numbers not much more than that.

But I say “would have” because it isn’t going to happen. The cooperative that would have been “co-opted” for the purpose polled its members and a number of them came back with a “no.” They thought life was fine as it is, that they get about a metric ton of grain from the coop as it is and that having a chicken farm was not something that would add anything to their lives. And that was it as far as the investor goes. He is now off looking for some other place. And this little village languishes.

I was stunned when I heard it. It’s not a case of their entering the twentieth century; progress is good and all that. That is not why I was stunned. They do have a life. It’s not something we would consider to be a life, but it is a life to them and enjoyable to them. If it were simply a matter of progress, I wouldn’t have been so struck by it.

The problem is not progress, the problem is keeping the young people there in the village. I have written about this before but more and more of the young are leaving the villages to make their way in the larger cities. Some would see that as a good thing. But we are talking about their getting jobs that pay at the most $200 for what skills they bring and a lot will make less than that. And they are coming to the large cities to live where? With relatives? If they have them which is not certain. They end up having to find a room because renting an apartment is just out of the question. For two room apartments, and that means just two rooms--kitchen and bathroom excepted--the rent is over $250 a month in Kiev, last we looked. And it keeps going up in price. (Some think the price will be $300 by year’s end.) So goodbye to all their hard earned pay for the whole month to make their rental payment.

And don’t even think about buying a home, which here is an apartment. Mortgages can be found but they are not all that widespread and the interest rates are 17% with an inflation index to make sure the bank gets its money, all of its money, back with interest no matter the economic conditions of the country. There aren’t many who can afford that kind of thing, not coming from the village anyway. It is cheaper in some of the other cities and in some of the outlying areas of Kiev, but not enough to make a go of it at $200 a month or less.

That company was offering the same pay for people to work on the chicken farm in that village. $200 a month in that village and in any village in the Ukraine is a very good salary. (In Western Ukraine, it would be a very, very good salary.) They could afford a house there after not too many months of saving, though maybe not a new white brick home that the more affluent have built. And they would have their plot of land nearby for their vegetables and maybe some animals. Their electricity costs and gas costs would be only a few dollars a month. With all of those advantages, they would be putting quite a bit of money away, relatively speaking. So the young people who might be lured away to life in the city could stay there in the village.

That is my problem with the whole thing. It isn’t the older people that’s the issue at all. It is the younger ones. And the fact that they voted what was simply their own very narrow interests, not thinking about the fate of their own village, is beyond me. They will live to an old age, though some of them not so old because of the harshness of the life, and then die off. One by one the houses will be vacant and then there will be no village. Their children might, might, come back at times to visit the old homestead. But that is extremely doubtful-- they will be too busy trying to scratch out a life for themselves in the city to have much time for that.

Kyiv scams

Here's something to keep in mind for anyone visiting--Kyiv scams

I have been hit by numbers 3 and 4. I didn't know how some people in St. Petersburg could have gotten both my card number and PIN number. This article explained it.

Something to think about.

Yushchenko will not fight loss of own authority

This is probably the right thing to do--:: Yushchenko will not fight loss of own authority and deputy immunity :: Ukrayinska Pravda--especially for this reason:

"I gave my word that no destructive steps will be taken towards the constitutional initiatives in question. I do not want to challenge these amendments, because I do not want 47 million Ukrainians to think that Yushchenko is thinking about preserving his authority," assured the president.

I had thought earlier that it would be a good thing for him to repudiate the reforms because he was going to need all the power he could get. (I know, I know, that had the potential for making him a Ukrainian Putin and me a bit inconsistent. But if someone tells you one day to take an umbrella and on another not too, is it that his judgment is bad or does it have something to do with the weather?)

He might have been able to do it before, but clearly he can't do it now. And it might not be a bad idea anyway. Some reform is necessary and now might be as good a time as any. And to allow a president to take power to himself would not be moving in the right direction, even though it might be for good reasons and the person trustworthy.

Is there such a person really? Doesn't absolute power corrupt absolutely? Maybe not and yes it does but not in every single case. There are a few notable exceptions, George Washington for one. (Wasn't it Napoleon who said, "They expected me to be another Washington"?) But my argument was that the risk of ending up with the kind of system they had here was outweighed by the potential benefits that could come from effective and quick reforms. In other words, to risk that Yuschenko became another Kuchma was not much of a risk in the face of what could be gained if he did what he said he would do.

So I think he is right and I think he is doing the right thing. The "probably" is a nod to what I thought might be the good thing to do. Not realistic now even if it were the thing to have done.

It's the economy stupid

At least it should be here. Yuschenko is saying the right things about it--Yushchenko Makes Plea for Growth

Ukrainian President Viktor Yushchenko urged his new government on Wednesday to create favorable conditions for business to kick-start slumping growth and bring
back reluctant foreign investors.

Chairing a meeting of the team assembled after last month's dismissal of former Orange Revolution ally Yulia Tymoshenko, he told ministers to concentrate on the economy and steer clear of politics ahead of March's parliamentary election.

"If we want to provide proper European wages and pensions we have to ensure economic growth," Yushchenko told the session.

"To ensure economic growth we must mobilize financial resources in the form of investment. And to mobilize them we need to have clear procedures for Ukrainian business."

Yushchenko said the ousted government, riven by months of infighting, had done little to improve the business climate. "Two-thirds of the measures which impeded business were in fact government orders," he said.

Some themes II

2. The dismissal of the government was a crisis. This was the tack of some articles. Others framed it in terms of ultimate doom and catastrophe. In none of the articles I read, until I got to the analyses for investors, was anything good said about it.

But the government dismissal was not a crisis; it resolved a crisis. The crisis was actually the previous 8 months or so of the government. Lots of ministers saying lots of things and all seemed to be pulling in different directions.

There were any number of problems but the one that seemed to hang around the most was the re-privatization issue. I had thought after the election that it was not politically possible for Yuschenko to avoid re-privatizing some of the enterprises sold off during the Kuchma era. It had been a centerpiece of his campaign and it also represented a reassertion of some justice after what had gone on in the previous administration and for many years in the past. But the figure out of the gate was 3,000. There was no way that was going to fly with investors and business. No one wants to put money into something where the title is suspect right off the bat. And, in the context of this area of the world, showing that the government had both the power and the will—the means, motive and opportunity--to re-privatize is not going to reassure anyone that title to anything will ever be more than suspect. If they do it once, they can do it again if the will is there. And with the kind of populism that was a part of Tymoshenko’s government, the will to do so would always hang around in the background ready to hand if needed or wanted. At least that would be the feeling.

No, the crisis was the previous government. The new government has created the sense of much more stability. They all seem to be talking with a single voice right now. And that has made financial analysts less wary.

3. Tymoshenko is the winner in all of this. The polls seem to say that. Her party seems to have 20% of the electorate while Yuschenko is currently at about 14%. This is significant and if the election were held today, she would be forming the new government.

But the election is not being held today. It will be held in March, 6 months away. Those 6 months are an eternity in democracies. Lots of things can happen in the meantime that can change those poll numbers. And the point is, a point lost on a number of people, that Yuschenko is in power and has the power to make the kinds of changes that can affect those poll numbers. Tymoshenko, on the other hand, has no power to affect anything. She can call a press conference and talk about it all, but the power is with Yuschenko and his government and that can make all the difference. Of course he actually has to do something positive but to be able to do something is better than waiting around for something to bad to happen to capitalize on it.

Isn’t it possible that Tymoshenko realized this and that is the reason for the offer to Yuschenko on the new government?

The funny thing is that some of her appeal came from the fact that she was seen as sticking it to the Russians. But now that she has made her way north and found some kind of an accomdation with Putin and with Russia, what will that do to her appeal? After this, will the activists still see her in the same light? Yuschenko may have become more pragmatic but she seems to have followed suit. What will the OR purists have to say about that?

To be continued…

Some themes

Some of the themes I have seen in articles and my response to them:

1. Yuschenko resurrected Yanukovych. This was mentioned in some articles and was a question asked by an anonymous poster to the website. As a question, it is a good one. As a statement of fact, it is not incontrovertible.

Does it give Yanukovych more status than he had? It may in the minds of people but Yanukovych had no status prior to that agreement. He was a no show as the opposition. You would hear some sniping from the trees by people like Chernovil (his last campaign manager) but it was petty stuff, not the campaign on a broad front that it should be by a serious candidate representing the opposition. (“This government isn’t professional!” said Chernovil. Not a very original statement and not much of an opposition campaign. As an opening salvo, fine. But if that constitutes the whole broadside, pitiful. And that was it.) The agreement showed everyone that Yanukovych was still alive. That may be something to know but it doesn’t go very far in making him formidable opposition. At least, not considering where he has been.

And that agreement is really not much of anything anyway. I said that it can be repudiated and it can. The charge would be opportunism but that is the charge right now. Does that charge help Yanukovych?

The funny thing is that Yanukovych was called in to the prosecutor’s office to answer questions a day or two ago. His supporters said it violated the memorandum. It may have but it just goes to show that Yuschenko has the power so he has he advantage.

The real argument is that it somehow rehabilitates Yanukovych in the minds of the people or that it grants some sort of legitimacy to him. I think it does neither. For rehabilitation, that would mean that an agreement signed by Yuschenko served to change the minds of the people regarding Yanukovych. “He is a bandit but since Yuschenko dealt with him maybe not.” Those ardently for the Orange Revolution were ardently against Yanukovych. The tone of the responses to the memo by those supporters is one of betrayal by Yuschenko not of reconciliation with Yanukovych.

Legitimacy would be a weaker benefit for Yanukovych but it suffers from the same problems: He is a bandit to the supporters. Could it affect any swing voters? I don’t know that there are any. People already have their opinions formed on Yanukovych. In the West, see the first sentence. In the East, he has a lot of support; some of it may be a little soft. But he represents the interests of the eastern part of the country and they just put up with anything else. Who else represents the interests of the East especially after the Orange Revolution? It does a government and a people no good to write off half a country.

Then there’s the idea that Yanukovych could remain a protest vote option, a kind of “devil-we-know.” That is something that is hard to gauge but he would have been that anyway. The memo doesn’t make that any more likely than it was before. There isn’t anyone in Ukraine now who doesn’t know who he is. If his name were on the ballot they would know it--he has name recognition galore. The question would be: Would they vote for him if they were disillusioned by all other parties? I doubt it, but I guess it’s possible. The disillusionment would have to be complete and I don’t see that as being all that likely.

I do have to issue a caveat here. This is based on what Yanukovych has done since the Revolution. It might be that an effective opposition could be mounted by him—the targets of opportunity are all over the place. (Military types would call it a “target-rich environment.”) We heard today that some of the Russian “political technologists”—spin doctors—are making there way back here again. They have learned their lesson according to the report and won’t make the same mistakes again (they said in all lack of humility.) That remains to be seen. It's hard to be effective when you see your adversary as a backwoods hick who stares out in wide-eyed astonishment at the high sophistication of the tailored suits from Moscow. That they see Ukraine as beneath them is the lesson they should have learned. Did they learn it? It’s possible but I doubt it.

But if some kind of effective campaign can be launched for Yanukovych, his stock could go up with some voters. “We had 12% growth when I was PM. Gasoline was cheaper and so was chicken, pork and everything else. Was there corruption? Yes, there was. And the man responsible for it, the man who also worked to take the vote away from the people, is no longer in government. He is out and well he should be. But he is running around loose when he should have been arrested and prosecuted. Why hasn’t he been arrested and prosecuted? He worked to steal the election from the people for his own purposes unknown to me at the time. But he runs now at large, scoffing at the people he sought to defraud, untouched by the law. Why is that? Ask Yuschenko why. I suppose the answer is that if he got something from Yuschenko, Yuschenko must have gotten something from him….” Or something like that.

Anyway, if he comes up with an effective campaign, he could end up with some more legitimacy—it remains to be seen how much more. But that depends on him and his organization, not on the memorandum. And to date, there has been not much of anything coming from his camp.

To be continued…

I talk to my brother-in-law

I was talking to my brother-in-law last night. He was one who was down on the square most every day during the Orange Revolution. In fact, I was with him at Maidan on the night of the first election, November 21st, I think it was, when the protests started. That was a Sunday night, described here.

It was kind of funny because when we met at the subway that night, he seemed to be filled out a bit more than I had remembered. He had on a winter coat but that coat was not thick enough to account for the extra bulk he seemed to have. I didn’t mention it at the time—I thought I might not have judged it right-- and just let it go.

Later, my wife was talking to my sister-in-law and she said that that Saturday before we went, the day before, she thought she heard her husband sawing wood in another part of their apartment. She went to look for him and when she found him, he was sawing wood. When she asked him what he was doing, he hemmed and hawed a bit before he told her that he was putting together some protection—some wood on the front like a breastplate and wood on the back-- in case he went down to Maidan the next day. Wood was the only thing he had to do it with, and the only thing it would stop would have been a knife or blows from a truncheon. It wouldn’t have stopped any bullets from any caliber carried by the police or the military. He knew this but thought that most of the problem would come from crowd dispersion measures rather than from a wholesale gunning-down by the military. He did though accept that as a possibility and something he risked because later that week, when he had been down on the square for a couple of days, he asked me to take care of his wife in case he was killed or imprisoned. The way he put was, “If I don’t come back.”

That’s just some background.

Talking to him last night, he was of the opinion that Tymoshenko hadn’t had enough time to do what she needed to do; she was fired before she could make things better. I think that is the opinion of a lot of Ukrainian supporters of the OR. They think that Tymoshenko was working to reform the system and was sacked before she could finish.

One of the things he mentioned was pensions and government wages. He said that now she was out there would be no increases in pensions and government wages. Though he isn’t affected by either of these—he works in the private sector—increasing both of these is seen by a lot of people as a measure of government effectiveness and even justice. The fact is that pensions have been rather low for a long time, since the economic collapse in the later 90s. The hryvna was devalued and wages and pensions were caught in that devaluation. To make that up is a kind of test of government effectiveness for some people. Tymoshenko resonates with that.

He also told me that a couple of guys at his work had said that Yuschenko was now in with that “bandit” Yanukovych. He proved it by signing that memorandum. My brother-in-law didn’t say if he agreed with that assessment. I think he isn’t settled about that right now. Out of respect for Yuschenko, his mind isn’t made up on that point, at least not yet. This I think is good news for Yuschenko if it is widespread and I think it is. (Others we know say things like, “I don’t know who to believe!” Shows their minds are not made up.) I don’t think people have made up their minds yet about it because they have a lot invested in Yuschenko. But he does have to communicate with them more. I think people are looking for Yuschenko to come and tell them what he has done and why he had to do it. He hasn’t done that yet. He needs to do it.

A new poll out says that Yuschenko has about 20% approval. That doesn’t contradict what I have said. People are upset with him but that doesn’t necessarily mean this is their final position about him. I think they are registering their dissatisfaction. And they ought to.

The interesting thing is that although Tymoshenko polled better than Yuschenko, she was only a couple of points better. Her approval rating is at around 22%. Not good news.

It might be that disapproval of Yuschenko will translate into bad poll numbers for anyone involved with him in the OR. Show Tymoshenko suffers. If Yuschenko builds his case separate from Tymoshenko, she will be left with the worst of both worlds. And there is some argument that she has made a number of mistakes on her own that leave her in a weakened position. That is the argument here. (Need to read it carefully, the translation is a little rough.)