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NEWS ANALYSIS


and those who use gas (like big metallurgy plants, mines, chemical industry, mayors of big Eastern cities). They hate each other with a vengeance. The real ‘Donetsk guys’ hate Firtash more than they hate the opposition or Yushchenko. Because the mayor of, say, Donetsk needs to go to Firtash cap in hand to get some gas discount. This kind of division inside the party of power didn’t exist before. Those who bring in gas from Russia and those who consume this gas are all inside this party of power. It is a powerful conflict.”


Yanukovych finished the summer with a


visit to Germany, where airport detentions were mentioned but gas and pipelines were discussed in more detail. The President told Chancellor Merkel that Ukraine wants Germany to be its strategic partner in the EU. His first visit was to Brussels, he keeps inviting Western investors, and his power team, analysts say, want to do their private business with London, Frankfurt and New York. Yanukovych’s programme for economic reform talks repeatedly about EU standards in many areas of the


“The biggest divide in The Party of Regions is between


those who own gas and those who use gas





economy. Ukraine may stay oriented to the West, not the East, notwithstanding re-establishing close ties with Russia and more recently, China.


The influential economist, adviser to


the two previous presidents, Oleksandr Paskhaver says: “Successful reforms are not made in a hurry. Successful reforms are achieved through continuous effort. And I have a feeling that such an effort will be applied by this government. (…however) Managing a country is not an administrative process but a social one, with strong communication between government and the society. I think this team still has not learned this. And they should, if they are planning to stay for a long time and if they want to avoid social unrest.”


After six months, the path down which


President Yanukovych wants to lead Ukraine is still unclear in many ways. Opinion is divided, largely reflecting voting at the last election, but neither total surrender of the national interests to Russia nor complete destruction of the opposition have happened as some had forecast. Decisive measures are being taken – ‘strong’ or ‘harsh’ depending on perspective, and ‘Order’ appears a higher priority than ‘transparency.’ We shall see what the future holds. UBi


In Russia forest fires, smog and deaths


were some of the top news stories of the summer. In contrast, drought-related news from Ukraine mainly concerned wheat exports. “Russians have been asking: why is Russia burning, but why isn’t Ukraine?” says Viktor Nebozhenko. He gives his own answer: because in a more democratic Ukraine there is more public scrutiny over local authorities and the central government, and as a consequence better infrastructure. “Democracy and freedom of speech have quite obvious material value,” he says.


8 UkraineBusiness insight October/November 2010


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