lifestyle leader

Ukraine is awaiting a run-off in its presidential election to be held on February 7th between leader of the opposition Viktor Yanukovych and current Prime Minister Yulia Tymoshenko. The winner will succeed President Viktor Yuschenko, who is leaving office with an approval rating in the low single digits, a dramatic fall from grace for the leader of the Orange Revolution. His successor will inherit a country in crisis: economically, financially and existentially. This election could not be more important for Ukraine's future.

Yuschenko's presidency was an utter failure. Granted, he had little domestic support, as his current prime minister (Tymoshenko) is also his fiercest political rival. But his economic record has been dismal in response to the Ukraine's crisis, sacrificing his early achievements in attracting FDI and cutting unemployment. While he has succeeded in turning Ukraine away from Russia and set the country on a path towards European integration (WTO accession, a promise of future NATO membership and negotiations over an FTA with Brussels), he has also presided over near-annual gas wars with Russia that threaten Europe's supplies, a total economic deterioration (GDP contracted about 15% in 2009) and non-observance of key conditions to Ukraine's $16.4 billion IMF program. This led the IMF to suspend its fourth disbursement or $3.8 billion, leaving Ukraine on the brink of default. Yuschenko also managed to swing public opinion decisively against NATO and EU accession, undermining his key foreign policy successes.

Conventional wisdom therefore interprets the current election as a repudiation of Yuschenko's pro-Western agenda, with the two leading candidates representing a more Russia-oriented foreign policy in the years ahead. But according to Samuel Charap's recent article in Foreign Policy, this assumption overstates the degree to which either Yanukovych or Tymoshenko will turn to Russia. Neither candidate is a 'pro-Russian stooge,' even Yanukovych, who according to Charap did little to endear himself to the Kremlin during his stint as prime minister, even if he was the Kremlin's 'preferred' candidate the last time around. Further, the interests that back Yanukovych are heavily invested in EU trade, so one can expect a lot of pressure on the potential president to deepen Ukraine's economic integration into Europe. This is far more critical to Ukraine's future than the immediate prospects for NATO accession.

Tymoshenko's presidency would hold the most promise, as she is likely to fashion a commanding political majority that would leave her free to enact key economic policy reforms, most importantly the 2010 budget and energy sector reform, that would unlock the remaining IMF funds and set Ukraine on a path to recovery. She would also prioritize Ukraine's relationship with Russia, but in the interest of rapprochement, which is as important to Europe (see: gas) as it is to Russia. Thus, both candidates are likely to conduct a more balanced foreign policy, which would be in the interest of all parties. But economics will determine Ukraine's future, and neither candidate can afford to ignore the pressing challenges at home. Both the EU and Russia have a role to play in stabilizing Ukraine's economy.

One of the fundamental insights of IPE is that domestic politics matter as much in the international arena as they do internally. They either enable or constrain foreign policy decisions, and Ukraine's current situation highlights this perfectly. The EU/Russia dichotomy that Yuschenko spent so much time constructing has clouded our perspective on the current candidates and their impact on Ukraine's future, as Charap's article illustrates. Their presidencies will be dominated by jobs, energy and trade. Rapprochement with Russia is likely and welcome, but there are powerful interest groups in favor of further economic integration with the EU. This will check any drift eastward.