Inside

October 23, 2014 №34 Content

The Government Policy ...... 1

Risk of sabotage and terrorist attacks on the eve of elections ...... 1

The issue of IDPs has got a legal solution ...... 2

Economic Situation ...... 4

Ukrainian credit-rating outlook is still negative ...... 4

Further outflow of foreign investment recorded in Ukraine ...... 5

Gas talks are ongoing ...... 6

Political competition ...... 8

War for the electorate of Party of the Regions ...... 8

An effort to discredit young democratic parties ...... 9

Batkivshchyna’s fight for opposition status ...... 10

Inside Ukraine 34 The Government Policy Elections in a number of majoritarian districts The has finally adopted the law in Donbas may be disrupted by pro-Russian mili- on protection of the rights and freedoms of IDPs. tants. Such a development will play into the hands They have received the right to unemployment state of the Kremlin, which continues to speculate on benefits, free housing for six months, health care the idea that the Russian-speaking population of and education services at the place of actual resi- the East does not have its representatives in the dence and a simplified procedure of business regis- Parliament. In addition, there can be sabotage and tration. Such problems are burning issues for all the terrorist attacks in the cities of Donbas, which are . They can be resolved through abolition controlled by Ukrainian authorities, as well as in of the institute of state registration, which exists regional centers of the East and South in order to since the Soviet era, binds citizens to one place and intimidate voters and reduce turnout. It should reduces their mobility. However, due to the urgent be noted that turnout of voters in these regions is need to solve the problems of IDPs, the Parliament usually lower than in western and central regions gave preference to creating benefits for this group of the country. of people, but not reforming the whole system. Risk of sabotage and terrorist attacks on the eve of elections

Russia will be trying to disrupt the democratic population of Ukraine. In addition, reduction in parliamentary elections in the Donbas districts the number of MPs will complicate the President’s controlled by the Ukrainian authorities. The task regarding parliamentary majority, as majori- Kremlin is interested in reducing the number of tarian MPs will play a leading role in creation of majoritarian districts in which elections are held. the pro-presidential faction. This will allow Russia to further speculate about Pro-Russian forces will have a minimum repre- ignoring the Russian- The Kremlin sentation in the new Parliament that does not sat- speaking population of is interested isfy Moscow. For the first time in years, commu- Donbas and the fact that in disrupting nists risk not to be in the Verkhovna Rada. Former authorities in Kyiv do elections in Donbas “regionals”, which have been a “fifth column” of the not represent the entire Kremlin for a long time, have also little chances to

Inside Ukraine 34 1 The Government Policy get a mandate. The only Russia’s lever of influence ern Ukraine. No doubt that their activities are aimed in the Parliament can be some majoritarians, rep- at destabilizing the situation in Ukraine. The Security resentatives of “Strong Ukraine” and “Opposition Service of Ukraine (SBU) has intensified efforts to bloc”, although the chances to overcome the elec- neutralize such groups over the past few weeks. toral threshold are miserable for the latter. Last week extremist groups were neutralized in Parliamentary elections certainly will not be Odesa, Dnipropetrovsk, Zaporizhia and Kharkiv. held in nine districts of Donetsk region and six dis- Their task was to organize terrorist and sabotage tricts of Luhansk region. Taking into account that acts on the day of elections. The SBU also proved Crimea and Sevastopol delegate 12 representatives the involvement of Russian citizens in organization to the Verkhovna Rada according to majoritarian of the protest held by National Guard soldiers on districts, even under the Elections will not October 13 and mass unrest near the Verkhovna most optimistic scenario, take place in 27 Rada on October 14, 2014. the future Parliament will districts for certain Another indication of potential escalation of consist only of 423 MPs. the situation in Donbas on the day of elections is Holding elections in another four districts of Russia’s attempts to coordinate diverse groups of Donetsk region is of serious concern, because militants in Luhansk region. On October 21, 2014, even without escalation of the situation, voting Mykola Kozitsyn, Oleksiy Mozgovyi and leader of process can be organized only at several polling the so-called LNR Ihor Plotnytskyi made a state- stations. It should be noted that there are 32 elec- ment on establishing a single command center. toral districts in Donbas. It should be noted that during the nominal There is a high probability of terrorist attacks truce, militants’ leaders Mykola Kozitsyn and and intimidation of election commissioners on the Pavlo Driomov announced the creation of the so- day of elections in the Donbas districts controlled called Cossack and Stakhanov People’s Republics, by Ukrainian authorities. There are a great number which were not subordinated to LNR. Clashes of pro-Russian citizens in Kramatorsk, Sloviansk between LNR militants and Oleksiy Mozhovyi’s and Artemivsk. They actively supported the sepa- units based in Alchevsk became more frequent. ratists and may be used by Russian security services Ukrainian authorities are interested in such fight- to disrupt the electoral process. ing between militants, as Militants In addition, sabotage SBU has intensified it allows Kyiv to neutral- intestine wars groups have been repeat- struggle against ize weakened and poorly are advantageous edly detected in the largest Russian subversive coordinated groups of to Ukrainian cities of southern and east- groups separatists one by one. authorities The issue of IDPs has got a legal solution The upcoming elections sped up the adoption unit of local administration on social protection is- of the law “On ensuring rights and freedoms of sues at the place of actual residence. A relevant cer- internally displaced persons”. Its consideration in tificate is issued free of charge on the submission the Verkhovna Rada has been delayed for a long day and is valid for six months. Registration of IDPs time. The law provides for additional mechanisms is carried out through the Unified State Register of of IDPs’ social security from the government. internally displaced persons. Record on registration These mechanisms will The Parliament of IDP’s residence place is put in the certificate of help these individuals to created legislative registration, and not in the passport. This is due to adapt to the new place of framework for IDPs the fact that many IDPs visit territories controlled residence. by pro-Russian separatists from time to time, and In order to obtain an IDP status, residents of such a record in the passport may become a reason Donbas and Crimea need to apply for a structural to be prosecuted by terrorists.

2 Inside Ukraine 34 The Government Policy

Internally displaced persons get the right to re- not exercise the right to vote, enjoy administrative ceive social payments (pensions, unemployment and health care services, primary and secondary and disability benefits) in accordance with the laws education at the place of Problems of IDPs of Ukraine at the place of actual residence registra- residence. In addition, represent tion. They may change the place of voting with- the citizens can register the problems out changing the voting address and register legal companies at the place of all Ukrainians entities under the simplified procedure. Internal of registration, and not at migrants are provided with the possibility of free the place of actual residence. It greatly complicates temporary residence within six months from the business activity. date of registration, purpose loan for house con- Thus, problems of IDPs are a matter of na- struction (with the interest rate which cannot be tional reforms. Instead, the Parliament created higher than the NBU discount rate), transportation a number of exceptions The Parliament of movable property and facilitation of returning to only for internally dis- chose making their previous residence place. These opportunities placed persons. Such exceptions and are mainly provided by local state administrations exceptions and privileg- not implementing and local authorities. Measures on ensuring the re- es increase corruption reforms ception, travel, accommodation and resettlement risks. At the same time, of internally displaced persons are financed by the an opportune moment for the abolition of reg- state budget of Ukraine and the local budgets. With istration institute and geographic restrictions for reference to international law, the law also envis- doing business has been lost. ages that sooner or later the aggressor country will On the other hand, the issue of IDPs required compensate these costs and direct expenses of in- its urgent solution due to the upcoming winter and ternal migrants. crisis in the Ukrainian economy. The economic cri- The problems faced by internal resettlers are a sis will result in increased unemployment rate and concentrated essence of the problems faced by av- more complicated adaptation process at the new erage Ukrainians. They have clearly demonstrated place of residence. 15 thousand people out of 420 how outdated the institution of registration is. thousand IDPs have applied to the state employ- It exists since the Soviet era, though in a slightly ment centers. And only 3 thousand were assisted in modified form. Without state registration, one can- finding employment.

Inside Ukraine 34 3 Economic Situation International rating agencies continue to esti- national currency require an increase in foreign mate Ukraine’s credit risks as high and Ukrainian investment. However, due to the ongoing war in economy as being in a pre-default state. According Eastern Ukraine and the absence of reforms, for- to Standard&Poor’s Ratings Services, slight im- eign investors are wary of investing in Ukrainian provement in national sovereign rating is technical. economy. Unfavourable current credit rating negatively af- Russia softened its conditions for gas supply to fects the value of credit resources and complicates Ukraine by decreasing the first tranche of debt pay- investment into Ukraine in general and Ukrainian ment and gas supply volume for winter time. How- companies in particular. ever, agreements on gas prices and sales volume The restoration of Donbas infrastructure, in- have not been reached. crease in budget revenues and stabilization of Ukrainian credit-rating outlook is still negative

According to Standard&Poor’s, last week positively evaluated a sovereign credit rating of Ukraine unexpectedly improved its sovereign Ukraine by raising it from uaBB+ to uaBBB-. Ac- credit rating. However, the reason behind the rat- cording to S&P level of measurement, BBB rating ing review was not positive economic dynamics means that solvency of an issuer is satisfactory. It or progress on economic Reason for should be noted that S&P rating does not influ- reforms implementation, S&P rating ence other ratings of the country. According to but technical features of improvement is the agency, Ukraine’s long-term FX rating is still at rating compiling. As a technical features CCC level (high credit risks). It should be stressed result, Standard&Poor’s of rating compiling that in July S&P improved its forecast for this rating,

4 Inside Ukraine 34 Economic Situation raising it from negative to stable. The agency ex- from “AA+ (ukr)” to “AA- (ukr )”, “stable”, for “Metin- plained that the forecast was improved due to suf- vest BV” — from “AA+ (ukr)” to “BBB (ukr)”, “stable”. ficient IMF bailout loans and positive assessment of Sovereign credit ratings as well as the evaluation some government measures. of Ukrainian credit risks and the likelihood of in- In April, 2014 international rating agency solvency are very topical nowadays. Investors and Moody’s lowered long-term T-bill rating from creditors use credit rating to make a decision on Саа2 level to Саа3. At the moment of publication, investment and provision of loans respectively. The the rating already took In April 2014 higher the rating is, the more confidence they have into consideration high Moody’s lowered in borrowers and the lower rate is set for loans. internal political risks in long-term T-bill It is worth noting that major criteria for credit Ukraine, the likelihood rating for Ukraine rating of a country are political and economic risks. of early parliamentary As for Ukraine, political factor, namely the military elections and high probability of destabilization in conflict with Russia, is predominant and continues Eastern Ukraine. At the same time, the rating fore- to put great pressure on Major criteria cast is still negative. It indicates that the rating is political and economic for credit rating likely to deteriorate. stability of the country. of a country are In late August 2014, Fitch international rating The current credit ratings political and agency lowered national currency credit rating for of Ukraine already con- economic risks Ukraine from В- to ССС and confirmed long-term sider negative influence FX credit rating at ССС level. Major Fitch assump- of these main factors. It is likely that Russia will tions were the following: Ukraine will receive more resume active military actions that will lead to the IMF loans and keep enjoying the EU support, and escalation of the conflict, which can subsequently there will be no large-scale incursion of Russian change credit rating. The absence of negative chang- troops into Ukraine. es as regards military actions will not cause the At the same time the agency experts noted that review of a sovereign credit rating of Ukraine. Its key factors which, jointly or severally, could improve improvement may occur only on condition that the ratings included improvement of political stability, economic situation is stabilized, public debt service implementation of economic measures agreed on is improved and structural reforms are effectively with the IMF, and improved external liquidity. implemented in close cooperation with the IMF. Changes in a country’s credit rating cause the re- The current situation does not give one much op- view of corporate ratings of individual companies. timism. In early October, Moody’s published a re- At the beginning of September, 2014 Fitch Ratings port in which it projected a higher risk of default for changed ratings for a number of Ukrainian issuers af- Ukraine. Next year Russia may demand an immedi- ter the decrease of the country’s sovereign rating. For ate repayment of USD 3 billion borrowed by Yan- example, Fitch lowered national long-term credit rat- ukovych-Azarov’s government. However, analysts ing for Kernel Holding from “AA+ (ukr)” to “A (ukr)”, call this agreement questionable and do not take it “stable”, for OJSC “Myronivskyi khliboprodukt” — as a reason to review the credit rating of Ukraine. Further outflow of foreign investment recorded in Ukraine Foreign investment should become one of the According to balance of payment statistics, in Jan- main sources for the restoration of infrastructure uary-August 2014, the FDI deficit amounted to USD in Ukraine’s East, stabilization of national currency 594 million, which means that in Ukraine outward and increased economic growth. However, despite direct investment exceeded inward direct investment. high Ukrainian demand for FDI, the volume of for- In comparison to the same period in the previous eign investment decreas- year, there was surplus investment in January-August FDI volume es every month. 2013, as inward direct investment exceeded outward decreases

Inside Ukraine 34 5 Economic Situation direct investment by USD 3 billion. Foreign portfolio ginning of Polish economic transformation, foreign investment is also characterized by negative dynam- investors preferred investing into Hungary, Czech ics. In January-August 2014, the FDI deficit amount- Republic, and Slovenia, where investment climate ed to USD 365 million, whereas USD 1.9 bln of FDI was more attractive. However, after certain im- surplus was reported in the same period of 2013. provements in Polish legislation regarding invest- Such negative dynamics may cause the first ments and business as well as implementation of deficit in balance of payment in Ukrainian history, economic reforms, the existing situation changed which means that the aggregate investment outflow dramatically, with foreign investment into Poland will exceed inflow by the end of the year. As a re- increasing every year. sult, there will be less budget revenues and currency Decisive actions in the area of economic reforms reserves, with the subsequent economic stagnation are needed in Ukraine, particularly as regards the driven by the lack of investment. Another problem protection of rights of entrepreneurs and creation will be a significant limitation on resources, which of favourable investment climate. Reforms should will be redirected towards the restoration of Donbas. be aimed at: There are many causes of foreign investment 1) The reduction of corruption level — the efforts outflow, with the main ones being the war in East- should be put to create legislative field for a ern Ukraine and lack of reforms. Also, Dmytro set of special corruption prevention measures Shymkiv, Deputy Head of Presidential Adminis- as well as for more severe punishment for tration, claims that it is not the armed conflict in corruption. Ukraine’s East but the pervasive corruption that is 2) The enhancement of market regulation and the main cause of dete- implementation of anti-corruption reform Major reasons for riorating investment cli- — instead of existing system of economic the decrease are mate. For this reason, the regulation, inherited from the , war in the East and fight against corruption market regulation system with new principles lack of reforms should intensify. Ukrai- and structure should be introduced. nian leadership declares that it makes every effort 3) Tax reform should be aimed at implementation to address the problem of decreasing foreign in- of the following priorities: 1) equal taxation vestment in Ukraine. In particular, according to the conditions for all economic agents; 2) lower Presidential Administration, a new “Strategy-2020” tax burden; 3) effective tax administration and will ensure FDI inflow in the amount of USD 40 bln public finances stability. in 2015-2020. However, in view of the current eco- 4) Justice and law enforcement reform are to nomic situation, such plans look over-optimistic. ensure justice and implementation of decisions Most western neighbours of Ukraine used to of courts of law, protection of property rights, face the problem of FDI. In particular, at the be- fight against raids. Gas talks are ongoing Recently Aleksander Novak, Russian minister The Kremlin’s statements do not correspond to of energy, stated that Moscow agreed to decrease actual situation. Due to reverse flows and supplies the first tranche of so called Ukraine’s gas expo- of Norwegian gas Ukraine will be able to cover gas sure repayment from USD 2 bln. to USD 1.45 bln. deficit in the amount of 1.5-2 bln. cubic m of gas Besides, the minister offered to decrease volume in the winter time, which will decrease gas deficit of gas supply to Ukraine in winter from 5 to 4 bln. from 5 to 3 bln. cubic m. Besides, for many times cubic m. According to Aleksander Novak, Russian official Kyiv underlined that it would repay the gas offers were sent to the EU Commission on October debt towards Russia only after the respective ruling 3, 2014. Moreover, Russian minister of energy ex- of Stockholm arbitration court. pressed criticism that Kyiv was not ready to accept The most debatable issue — approval of the new Russian conditions, while even the EU Com- gas price for transitory period — is still unsolved. mission approved the Kremlin’s initiatives. Ukraine believes that the price of USD 385 per 1000

6 Inside Ukraine 34 Economic Situation cubic m should be stated in the contract, while Russia’s concessions in the gas sphere are a mere Russia insists on 100-dollar discount to the cur- imitation of readiness to continue gas talks. Dis- rent price. There are also counts Russia has offered are a result of Ukraine’s disputes over the way The issue of diversification of gas supplies, whereas Russia the gas should be paid approval of the gas wants that basic provisions of the contract remain for — Moscow requires price for transitory unchanged. Official Moscow agreed to minor con- advance payments, while period is still cessions in order to freeze energy problems of Kyiv is ready to pay after unsolved Ukraine and have leverage over the EU. Since the the delivery. Besides, Russia is against the principle very beginning gas talks with Russians in trilateral that the protocol on restoration of gas supplies to format were doomed to Russian discounts Ukraine is signed between two companies — “Naf- fail. In the times of war it are a result togaz” and “Gazprom”. According to the Russian is impossible to sign mu- of Ukraine’s negotiators, the protocol should be signed by ener- tually beneficial commer- diversification of gy ministers of both countries and European com- cial agreement with the gas supplies missioner. aggressor.

Inside Ukraine 34 7 Political competition A brief parliamentary campaign illustrated the mately, this may lead to the lower turnout in elec- growing gap between civil society development and tions, which is a negative trend in conditions of ag- the political elite in Ukraine. Civic activists carefully gressive Russian policy towards Ukraine. According analyzed election promises, while most parties were to a recent poll, only 55% of voters are determined negligent about their programs and wrote them ex- to vote. Even smaller percentage of voters has al- tremely formally: soaked with a lot of populism and ready decided who to vote for. lack of specifics, but without a clear vision of neces- The obvious favourite is “Bloc of Petro Poroshen- sary changes in the country. ko”, with support from 25% to 35%. The runners-up Compared to the previous elections, the quality are “People’s Front” of and Radi- of party lists improved, since most parties tried to cal party of (10-12%). “Samopomich” include civic activists and ATO participants. In ad- of Andrii Sadovyi, which explosive rating growth dition, due to the rapidity of campaign, there was caused a vigorous media campaign against the poli- no time to sell seats at the top of the election lists. At tician, is expected to compete, as well as “Batkivsh- the same time, the key oligarch groups of Ihor Kolo- chyna”, which, despite ’s claims moiskyi and Serhiy Lyovochkin managed to del- about affiliation with the democratic forces in the egate their representatives to various party projects, new parliament, is the most plausible candidate for as well as to majoritarian districts. Although both the role of opposition. A few parties are on the verge oligarchs compete with each other, currently they of passing the threshold: “Civic position” of Ana- support ’s policy, and their depu- toliy Hrytsenko, “Strong Ukraine” of Serhiy Tihipko ties will help to form the pro-presidential majority. and “Opposition bloc”, which comprises former re- Powerful information campaigns between the gionals. In recent weeks the confrontation between two oligarchs through their own media turned into “Strong Ukraine” and “Opposition bloc” over legacy mutual smearing and brought discredit on most of Party of the Regions and a niche of the South- political parties and TV channels themselves. Ulti- East electorate representative has intensified. War for the electorate of Party of the Regions

There is still a considerable number of voters in “Strong Ukraine”, “Opposition bloc” and Commu- the South and East who are not ready to vote for nist party are competing. The latter, after the an- democratic parties. Disappointed in Party of the nexation of Crimea, where the bulk of its voters Regions betrayal, most Most of former concentrated, missed a chance of getting to the par- of them will simply ig- Party of the liament. Vice versa, “Strong Ukraine” and “Opposi- nore the elections, while Regions voters will tion bloc” pre-electoral race has gained momentum for the votes of the rest ignore the elections in recent weeks.

8 Inside Ukraine 34 Political Competition

Former members of Party of the Regions still hope position bloc”. The rhetoric of this political force to get to the Rada as part of “Opposition bloc”. Politi- focuses on economy issues and peace regulation cians from the party list criticize the government, try in the East. The party consists of representatives of to portray themselves as victims of persecution and big capital that did not retain close links with Ya- raise sensitive topics to the public. For example, they nukovych’s entourage, but actively cooperated with condemn the demolition of monuments to Soviet Party of the Regions to protect their assets. The leaders, pretend to be victims of public “lustration”, party is trying to gain support of former Party of etc. What is more, even Russian President Vladimir the Regions voters’, who, on the one hand, cannot Putin highlighted in his speech the importance of back the democratic forces of “Maidan”, and, on the parties representing South-East in the parliament, other hand, do not approve of Russian aggression clearly alluding to the “Opposition bloc”. and opponents of Ukrainian independence. However, just a week before the elections, the in- Competitors for South-Eastern electorate slam ternet media started to circulate information about Serhiy Tihipko for opportunism and his ability to possible Victor Yanukovych’s public speech on tele- cooperate with any government. Since mid-Octo- vision and his calls to support “Opposition bloc” ber, campaign materials as the only representative of the Russian-speaking against Tihipko and his Efforts to discredit Ukrainians today. This can be interpreted as part party have been widely “Strong Ukraine” in the East of information campaign Negative rating distributed in the regions against “Opposition bloc”, of Yanukovych of the South and East. since a reference to the is used against Meanwhile, in order to improve the ability of name of the former Pres- “Opposition bloc” Ukraine to confront Russia, it is essential that the ident of Ukraine reduces new parliament had at least one political force fo- already minimal chances of the party to get to the cused exclusively on the Russian-speaking East. It parliament. As a matter of fact, Yanukovych re- will allow channelling political moods of the pop- ceives immensely strong disapproval from all the ulation which does not support democratic par- Ukrainians. Most consider him a dictator and a ties and will deprive Russia of grounds to posture pro-Russian minority sees him as a traitor. that interests of the Russian-speaking Ukrainians “Strong Ukraine” has a higher rating than “Op- are not represented in the parliament. An effort to discredit young democratic parties New political forces which have minimum of for- “Civic position” used to have higher rating than mer MPs on their lists stand a chance of getting to the “Samopomich” till the last phase of the electoral Verkhovna Rada at these process. According to various opinion polls, it went Main parties do parliamentary elections. up to 8-9%, but now it reduced to the threshold. not benefit from These are “Samopomich” One of the reasons for this phenomenon is a fierce the emergence of and “Civic position”. The campaign against its leader . new players in the former does not have any On May 21, 2014 the General Prosecutor’s office parliament previously elected candi- charged him with embezzlement of military prop- dates, and the latter has no more than five. Despite erty. And only in September-October 2014 this the fact that they share a target voter, there is no ri- topic started to be widely publicized in highly rated valry between them. However, the other participants media. Such an attack on primary channels result- of electoral campaign oppose to emergence of new ed in the drop of Anatoliy Dependence of players in the parliament. “Samopomich” and “Civic Hrytsenko’s party rating. party rating on position” interact with the electoral field of “Bloc of Due to a strong link with leader’s name will Petro Poroshenko”, “People’s front” and “Batkivshchy- the leader, the party is di- play against “Civic na”, particularly concentrating on state reforms issues. rectly dependent on his position”

Inside Ukraine 34 9 Political Competition

rating. This is a mistake which may make it lose the image for his own political ambitions. Nevertheless, elections to the Verkhovna Rada. in contrast to “Civic position”, “Samopomich” is not A similar method was also employed against the associated with pervasive influence of Andriy Sa- party “Samopomich”. Today its rating goes up to dovyi. The party comprises a large number of self- 7-9%, and it is constantly growing. The technique for sufficient community leaders, and the mayor of undermining confidence in this political force was placed himself 50th on the list of candidates. Such also enabled through discrediting its leader, Andriy a situation and actions quite efficiently negate the Sadovyi. His remarks about loyalty to Victor Yanu- attempts to discriminate A large number kovych in 2009 were mentioned, and the video of the party through Andriy of new leaders the president-runaway’s birthday, where the mayor Sadovyi’s discredit, al- in “Samopomich” of Lviv was present, was posted in the network. Os- lowing the party to gain protects it from tap Drozdov, a well-known journalist in Lviv, began popularity in the electoral criticism to accuse Andriy Sadovyi of exploitation of Lviv process. Batkivshchyna’s fight for opposition status Personal antagonism “Petro Poroshenko-Yulia sion on the Ilovaisk tragedy, Andriy Senchenko. An Tymoshenko” will not allow “Batkivshchyna” to old ally of Yulia Tymoshenko and people’s deputy join the pro-presidential majority, although the from “Batkivshchyna” claimed that inadequate ac- party leader talks about cooperation with other tions of the Defense Minister Valeriy Heletey and democratic parties in the new parliament. Taking the Chief of the General Staff Victor Muzhenko led into consideration the background of the party, it to rout of Ukrainian military forces at Ilovaisk. The may become the main opposition in the new parlia- politician went on to state that the President’s in- ment. Although “Strong Ukraine” and “Opposition action, namely no martial law introduced and no bloc” present themselves as constructive opposi- General Headquarters created, is the root cause for tion, they consist of big “Batkivshchyna” the tragedy. Surprisingly, these points coincide with business representatives as the main “Batkivshchina” pre-election theses. Could the par- and discredited officials, opposition in the liamentary commission come to such generalized and therefore, they will new parliament conclusions looking for those responsible for par- feel uncomfortable in ticular tragedy in Ilovaisk? Moreover, the time of opposition to the government. Although officially results publication and the fact that first they were they are unlikely to join the pro-presidential forces, published on the site of “Batkivshchyna” bring up a Petro Poroshenko will influence the parties’ actions lot of questions. in cases of crucial voting. Abuse of position in favour of the party one rep- In the niche of democratic opposition, “Civic resents is political cor- Abuse of position position” of Anatoliy Hrytsenko may accompany ruption, even though this in favour of the “Batkivshchina”. Even though Hrytsenko did not position is held in the party is political criticize the President before, the fight against “Civ- parliament, not in the ex- corruption ic position” both by Ihor Kolomojskyi’s media and ecutive branch. law enforcement agencies will push Hrytsenko into Another attack on Petro Poroshenko was made opposition. Besides, he has a track record of coop- by Yulia Tymoshenko herself. Leader of “Batkivsh- eration with “Batkivshchyna”. chyna” publicly criticized the President for his con- Last week of the electoral campaign was marked fectionary factory still working in Russia despite by several bold statements of “Batkivshchyna” external aggression of the Kremlin against Ukraine. against the incumbent government. On the background of these two statements the The stinging attack was unleashed by the head war of ratings broke out, and some of them state of temporary parliamentary investigation commis- that “Batkivshchyna” will not get to the parliament.

10 Inside Ukraine 34 Political Competition

However, most sociological companies agree that of the party radical renewal thesis, compensated the “Batkivshchyna” can count on 6-8 percent of voters. loss to some extent. Nevertheless, the fact that Yulia Despite Yulia Tymoshenko’s active presence in Tymoshenko had a significant negative rating in the the media and her frequent visits to regions, the society and was not ready Yulia Tymoshenko party rating did not increase in last two months. to delegate campaigning was not ready Arseniy Yatseniuk, and Arsen to young members of the to delegate Avakov’s withdrawal from “Batkivshchyna” under- team did not allow her campaigning to mined the party positions. Only active involvement to take advantage of this young team of young politicians, who became a vivid illustration powerful resource.

Inside Ukraine 34 11 The aim of the publication is to provide objective information on current political events in Ukraine and thorough analysis of major tendencies in domestic politics. Such analysis will assist in setting priorities in the process of implementing reforms in Ukraine and in evaluating quality of state decisions from the viewpoint of their impact and sustainability. Special attention is paid to evaluation of political competition in Ukraine and ability of key political players to address challenges.

@2014 International Center for Policy Studies (ICPS) If citing please give reference on the ICPS

Idea of the project: Vira Nanivska

Responsible for the project: Iaroslav Kovalchuk

Responsible for the chapters:

The Government Policy — Iaroslav Kovalchuk Economic Situation — Vasyl Povoroznyk Political Competition — Iaroslav Kovalchuk

Team of ICPS experts: Vira Nanivska, Iaroslav Kovalchuk, Vasyl Povoroznyk, Angela Bochi, Anatoliy Oktysyuk, Olena Zakha- rova, Volodymyr Prytula, Vasyl Filipchuk, Valentin Krasnopyorov.

Inside Ukraine 34