Yushchenko Visits Canada leaving Political Crisis at Home

May 28, 2008

David Marples

Ukrainian president Viktor Yushchenko has been visiting Canada this week. During the visit he addressed Parliament, which was expected to recognize the 1932-33 Ukraine Famine as an act of genocide on 28 May.

However, he left behind in Ukraine a growing row with his Prime Minister Yulia Tymoshenko over the privatization of property and the distribution of authority between the office of the president and that of his former Orange ally.

Tymoshenko has made plain her desire to provide compensation for those citizens whose deposits in the former Soviet Savings Bank were rendered worthless by the collapse of the Soviet Union in 1991. She intends to do this by privatizing a number of key companies, chief of which is the Odesa Portside Plant (OPZ), which produces ammonia and nitrogen fertilizer. The Prime Minister proposed to sell the plant at an auction, and then use the funds accrued to compensate investors and sponsor social programs. Such measures would presumably raise her popularity with the public on the eve of new presidential elections, which will take place late in 2009 or early in 2010.

The Prime Minister’s other key declared task was to remove the intermediary company in Ukraine’s discussions of gas questions with Russia: RosUkrEnergo.

Yushchenko, who hosted an energy summit this week in Kyiv, has stood in the way of both projects, most notably by opposing Tymoshenko’s plans to install her own candidate, Andrii Portnoy, as head of the State Property Fund. In early February, the Prime Minister suspended the Fund’s leader Valentyna Semenyuk and appointed Portnoy in her place. Yushchenko issued a legal appeal against the firing, which was duly turned down by the Constitutional Court. Ultimately, both the president and Prime Minister threatened to use force to back up their candidates. In addition, the Prosecutor-General, following the president’s instructions, has filed a criminal case against Portnoy for trying to privatize state property illegally.

These events have been accompanied by another conflict concerning amendments to the Ukrainian Constitution. It is no secret that Tymoshenko would prefer that more power be given to the Parliament. She has assured Yushchenko that he would be allowed to extend his term in office, albeit with weakened authority. Yushchenko has accused Tymoshenko and leader of the Social Democratic Party Viktor Medvedchuk of causing a political crisis through surreptitious changes to the Constitution, without broad public debate. The Constitutional Council appointed by the president, meanwhile, has reportedly completed its own draft of a revised Constitution that would bring about power sharing while setting up a second chamber, the Senate, which would appoint key officials nominated by the president.

Some supporters of the president accuse Tymoshenko of a naked grab for power that would see her as the main figure in Ukrainian politics. Yet neither Yushchenko nor Tymoshenko have any support from the largest parliamentary faction, the Regions Party of Ukraine, led by their old nemesis and former Prime Minister Viktor Yanukovych.

Critics of Yushchenko complain that the president has no clearly delineated policy other than to remain in office, and that he has floundered, moving from one crisis to another and unable to put together a solid band of support in the Parliament. An April poll suggests that were a presidential election to be held at that time, the main contest would be between Tymoshenko and Yanukovych (both have the support of over 20% of the electorate), with Yushchenko a distant third at around 8%. Our Ukraine, Yushchenko’s political party, similarly commands only 8% support and won only one province in the 2007 parliamentary election. Such standings render Yushchenko a likely one-term president.

The president, however, is fighting resolutely. He has admonished Tymoshenko for unanticipated high rates of inflation in the country and ordered the Cabinet to come up with a viable economic plan. He has sent the Presidential Guard to patrol the State Property Fund, and he has declared the Odesa Portside Plant to be an object of vital strategic interest that cannot be subjected to privatization. He has dissolved Parliament twice since 2006, and it seems only a matter of time before he dismisses Tymoshenko for a second time (her first Cabinet in 2005 lasted for only nine months). At that point the confrontation would become an open contest for the presidency.

Yet none of these measures really address the main question, which is how Ukraine can bring about the sort of stable government it had under former president Leonid Kuchma in 1994-2004. Ironically, the much more democratic and far less corrupt regime established through the Orange Revolution has been mired by political in-fighting and power struggles, largely between the presidency and the Prime Minister’s office.

A version of this article appeared in the Edmonton Journal on 25 May.


Brand “Ukraine” will be reloaded in 2012

May 1, 2008

by Kateryna Malyhina

In today’s post-industrial world the creation of a positive and appealing image of a country has become very important. Transnational companies understood the rule a long time ago: customers pay more willingly for Starbucks or Nescafé, rather than for the average cup of coffee. This understanding came into the world of politics only recently – to stay competitive countries need “country branding”.
The pioneers in this sphere and the fathers of “country branding” in late the late 1990s were Wally Olins and Simon Anholt. Back then it was a brand new idea – to “sell” a country as a product, that is to do it deliberately, in an organized manner and based on a preliminary analysis. Countries have always been interested in creating positive images of themselves: such cultural institutions as the German Goethe Institute, Alliance Française or the British Council are well-known. But for the first time countries began to use the services of private persons and private campaigns for the formation of the “correct” image of a country in the world. For example, the Russian government signed a contract with the well-known PR agency Ketchum shortly before Russia took over the presidency of the G-8 in 2006 [1]. The contract was extended in 2007. Another example – the Croatian Government held consultations with the specialist in “country branding” Simon Anholt when working out a strategy for Croatia’s accession to the EU [2].
Thus, countries spend billions of dollars each year to attract investment, tourists and business. The US, for example, spends each year on public policy and promotion of its image abroad about $1.4 billion, the United Kingdom and Germany– about $1.2 billion, and France – about $3.1 billion [3]. Saudi Arabia spends annually $6 billion to maintain its image of a reliable partner in the West [4]. And such expenses would have been senseless, if they did not bring profits to these countries. For instance, the United Kingdom in 2006 attracted about £ 80 billion ($ 43.5 billion) of foreign direct investment in its economy [5], and spending in the UK by overseas’ residents amounted to £16 billion ($8,6 billion) in 2006 [6]. For comparison, according to forecasts of the Ministry of Economy of Ukraine, the volume of FDI in Ukraine will be $ 5.5 billion in 2008 [7], or eight times less than in the UK.
The country brands cost respectively more than budgets. According to the fourth Anholt Nation Brands Index, “Brand America” is worth $18 trillion which is about 152% of the US GDP, “Brand UK” is estimated at $ 3.5 trillion, or 163% of GDP [8]. How many billions would Simon Anholt give for the “Brand Ukraine,” one wonders?
Unfortunately, there is not yet any understanding of the importance of “nation branding” in Ukraine. The Concept of the State Program on the Formation of the International Image of Ukraine for 2007-2010 foresees a budget provision of UAH $20 million with a 10% increase per year [9] – that is about $4 million annually! The prospect of any serious intentions of the program is out of the question. The country’s image abroad is being formed by foreign journalists, Ukrainian students, and migrants rather than state policy. The “Orange Revolution” in 2004 provided an unprecedented opportunity to improve the image of Ukraine: Experts estimate that Ukraine would have needed to spend $10 billion for such wide publicity in the world. But the country wasted its chance. Today Ukraine boosts intensively the image of a politically unstable country: political instability was named the key factor militating against doing business in The Global Competitiveness Report 2007-2008 by World Economic Forum. In its Index Ukraine ranks 115th among 131 countries in the first pillar “Institutions” of the Subindex A: “Basic requirements”[10], which is comparable to Burundi and Cameroon. Is this really the way to membership of the EU? All the efforts toward “Euro-integration” are undermined.
Yet the country remains “terra incognito” for the average European. Knowledge of Ukraine is fragmentary and often limited to the “Orange Revolution” and a “post-communist country.” The well-known fact is that it is much easier to create attitudes and stereotypes than to change them. Simon Anholt, for example, believes that by helping developing countries one can see tangible results, while the outcomes for rich countries are minor [11]. Therefore, Ukraine can still fill the minds of foreigners with positive information about itself and do so at a lower cost. It has one more chance – Euro 2012. This will be a true test for the Ukrainian branding campaign. If it doesn’t fail, then brand “Ukraine” will be once again reloaded.

Notes:
[1] Ляпоров, Владимир: “Бренд-политика как основа внешнеполитической стратегии”, in: http://www.sovetnik.ru/pressclip/more/?id=20837, 19.04.2008
[2] Данаева, Зауреш: “Имидж страны”, in: «Эксперт Казахстан» №9 (35), http://www.expert.ru/printissues/kazakhstan/2005/09/09ka-kmbiz1/, 19.04.2008
[3] Approximate data. Source – Foreign Commonwealth Office,
http://www.fco.gov.uk/Files/kfile/Annex%20E%20International%20Approaches%20to%20Public%20Diplomacy.pdf, 19.04.2008
[4] Ляпоров, Владимир: “Бренд-политика как основа внешнеполитической стратегии”, in: http://www.sovetnik.ru/pressclip/more/?id=20837, 19.04.2008
[5] Office for National Statistics: Business Monitor MA4 Foreign Direct Investment, in: http://www.statistics.gov.uk/downloads/theme_economy/MA4_2006data.xls, 19.04.2008
[6] The Office for National Statistics: Travel Trends 2006, in: http://www.statistics.gov.uk/downloads/theme_transport/TravelTrends2006.pdf, 19.04.2008
[7] Алексеенко, Юрий: “Украина страдает от оттока инвестиций”, in:
http://www.glavred.info/archive/2008/02/21/124538-7.html, 19.04.2008
[8] The UK is world’s most favourite nation in latest international poll, in: http://www.gmi-mr.com/gmipoll/release.php?p=20060221, 19.04.2008
[9] Концепція Державної програми формування позитивного міжнародного іміджу України на 2007-2010 роки, in: http://www.mfa.gov.ua/mfa/ua/publication/content/6652.htm, 19.04.2008
[10] Global Competitiveness Index 2007-2008. World Economic Forum, in: http://www.gcr.weforum.org/, 19.04.2008
[11] Данаева, Зауреш: “Имидж страны”, in: «Эксперт Казахстан» №9 (35), in: http://www.expert.ru/printissues/kazakhstan/2005/09/09ka-kmbiz1/, 19.04.2008