Ukraine-2019: Cautiously Optimistic Україна-2019: В Очікуванні Обережного Оптимізму Contents Зміст Preface
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RAZUMKOV CENTRE Ukraine-2019: Cautiously Optimistic Україна-2019: в очікуванні обережного оптимізму Contents Зміст Preface ...................................................................................... 3 Передмова .........................................................................47 Україна напередодні року виборів: Ukraine on the Eve of Election Year ...................4 в очікуванні обережного оптимізму .......... 48 The Ukrainian Society: Mindset, Demands, Українське суспільство напередодні року Expectations .................................................................................4 виборів: настрої, запити, очікування ................... 48 Political Value Orientations of Політичні цінності та орієнтації Ukrainian Society ......................................................................12 українського суспільства ................................................56 Attitude to Elections .........................................................12 Ставлення суспільства до виборів ...................56 Demands for Future President and Зміст запиту громадян до майбутнього Political Parties .....................................................................19 Президента та політичних партій .....................63 Political Processes in 2019: Presidential Політичні процеси у 2019р.: президентські and Parliamentary Elections, Inter-Election і парламентські вибори, Dynamics ..................................................................................... 20 міжвиборча динаміка .......................................................64 Possible Scenarios between Presidential Можливі сценарії розвитку подій у and Parliamentary Elections .....................................22 період між президентськими та парламентськими виборами .........................66 Parliamentary Elections: Interparty Competition and Possible Results .........................23 Парламентські вибори: чинники міжпартійної конкуренції, Possible Coalitions in the Verkhovna Rada можливі результати ......................................................67 of the 9th Convocation ....................................................25 Контури можливих коаліцій у Conclusions ..................................................................................26 Верховній Раді ІХ скликання .................................69 Ukraine’s Macroeconomic Environment Висновки .....................................................................................70 in 2019 ..................................................................................... 30 Макроекономічне середовище України Domestic and Global Context of Ukraine’s у 2019р. ..................................................................................74 Development ............................................................................. 30 Внутрішній і глобальний контекст розвитку України ..................................................................74 Key Macroeconomic Characteristics ..........................33 Головні макроекономічні Monetary and Fiscal Influences on характеристики ......................................................................77 Economic Dynamics .............................................................35 Монетарний і фіскальний впливи на External Sector of Economy ............................................40 економічну динаміку ........................................................ 80 Debt Positions .......................................................................... 43 Зовнішньоекономічний сектор ............................... 84 Conclusions .................................................................................44 Боргові позиції .......................................................................87 Appendix: Index of Economic Capacity of Заключні зауваження........................................................ 89 Population in 2018 .................................................................. 45 Додаток. Індекс економічної спроможності населення у 2018р. ..............................................................89 This report was prepared by the Razumkov Centre Доповідь Центру Разумкова підготовлена до for the XII Europa-Ukraine Forum XII Форуму “Європа-Україна” Rzeszów, 24-25 January 2019 м.Жешув, 24-25 січня 2019р. Authors: Автори: Yuriy Yakymenko, Vasyl Yurchyshyn, Viktor Zamiatin Ю.Якименко, В.Замятін, В.Юрчишин Editors: Редактори: Valeriya Klymenko, Hanna Pashkova Г.Пашкова, В.Клименко Design and layout: Дизайн і верстка: Tatiana Ovsyanyk, Anna Melnyk Т.Овсяник, A.Мельник Preface 2019 will be the year characterized by peculiar political processes. The presidential and parliamentary elections scheduled for March and October respectively will be the main internal political factors affecting the situation in the country. The 2019 elections will take place in a challenging environment. First of all, this concerns the ongoing war with Russia, which will try to influence the elections results in efforts to bring loyal political leaders and parties to power in Ukraine. Other negative aspects include the society’s disappointment with current government, coupled with low public support of its institutions, individual political leaders and pro-government political forces. The nature and results of the upcoming election will be further affected by the division of supporters of Ukraine’s European path and the political forces declaring the same course into two camps, depending on their attitudes towards the current government. The rise of radicalism in the activities of some opposition parties, as well as significant growth of populism are quite alarming trends in the Ukrainian politics. Holding both elections in one year with brief interval between them is likely to escalate the political struggle, which may result in reduced efficiency of the government with further suspension of the reform processes in anticipation of successive change of the President, the Parliament and the Cabinet of Ministers. The government will have to recognise that people’s wellbeing is declining and will try to avoid risky economic policy steps that can dramatically aggravate the socio-economic situation. This tension in society will result in careful and moderately conservative, rather than radically reformist nature of the government’s socio-economic policy. In general, the political background will hardly contribute to large-scale economic reforms in view of the continued Russian aggression, political turmoil, limited capacity of the government and high risks of destabilisation. The results of 2019 elections should give answers to the following key questions: will Ukraine continue its European integration course approved by the people of Ukraine during the Revolution of Dignity? Will newly elected institutions continue reforms? Which political leaders and forces will assume responsibility for the reforms and their results? Answers to these questions primarily depend on Ukrainian voters, as well as on candidates and political forces competing for public confidence. 3 Ukraine on the Eve of Election Year The Ukrainian political landscape in 2018 consisted of many mosaic pieces. Among them – building a legal framework to defend the country’s interests in international courts against the aggressor state; pushing through reforms despite the lack of support for this process from the society and most political forces represented in the Verkhovna Rada; implementing the extremely unpopular measures, including the increase in gas price for the population to ensure the continued cooperation with the IMF and other international financial institutions; the society’s “war fatigue” and socio-economic problems. The government and political architecture agents (i.e. the President and the Government) have achieved certain stability in their relations, which, however, has not been unwavering. The legal framework was developed for establishing several anti-corruption agencies. Not without pressure from international partners the decision on establishing a High Anti- Corruption Court was approved. It is expected to start operation already in February 2019. Anti-corruption policy in 2018 was far from being a success story, first of all, due to deterioration of relations among the anti-corruption bodies (NABU, SAPO, NACP), their lack of capacity for efficient action. Yet it remained strictly within the legal framework, and included professional and efficient preparation of evidence base. The most significant event at the end of the year was the creation of Ukrainian Orthodox Church that pushed to the background other events like Ukraine’s exit from the CIS and its decision to terminate the Ukraine-Russia Treaty on Friendship, Cooperation and Partnership (de facto, both events were a mere formality). The President Petro Poroshenko played a central role in creating a fully autocephalous Ukrainian Church. The upcoming elections have, on the one hand, slowed down the overall pace of reforms and led to intensification of political competition. On the other hand, these processes have revealed both the society’s expectations and proposals from the political forces hoping to win the elections, and have intensified contradictory processes within the party system (where fragmentation is more visible, than unification). On the eve of elections, many political actors currently in power are likely to use populist measures. The anticipated changes in key government institutions are the main peculiarity of the 2019 electoral processes. This renewal of institutions