Held back by oligarchs — Ukraine’s political, economic fate should be a warning to other nations


follow the money,” Deep Throat famously advised two reporters on the Watergate story. Coincidentally, this is one way to understand Ukraine’s politics and the twists and turns in its history since the collapse of the Soviet Union. Because if a country has been ruled by its oligarchs (businessmen who also dabble in politics and politics), it’s this schizophrenic country that’s mostly ethnically Ukrainian but also partly Russian (among other identities) and in a constant tug-of-war between the east is trapped and west.

The story should perhaps begin with a 2006 meeting convened by Ukraine’s then-President, Viktor Yushchenko, with his prime minister, some senior ministers and an oligarch named Dmitry Firtash, who headed the country’s chamber of commerce. As Herr Firtash refers to financial times Recently, the pro-Western President told the meeting that Ukraine must join NATO before Russia becomes strong enough to block such a move. The Russian-leaning Prime Minister (PM), Viktor Yanukovych, disagreed and stormed out after an argument.

Mr Firtash had made his money trading gas, selling it from Turkmenistan to Ukraine through Russia’s Gazprom pipelines. When Mr. Yanukovych’s job as prime minister went to Yulia Tymoshenko, she locked Mr. Firtash out of the gas business and made a deal directly with Vladimir Putin and Gazprom, which infamously led to much higher gas prices in Ukraine. Ms Tymoshenko is known in the West as the heroine of Ukraine’s 2004 Orange Revolution, which ousted a pro-Russian president. In Ukraine, she is the “gas princess” who made the deal with Mr. Putin. Wise, one might say, playing at both ends, except now she had a bitter enemy in Mr Firtash.

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In 2010, the “gas princess” ran for the presidency. So Mr Firtash successfully funded her opponent, the man she had replaced as Prime Minister. As Mr Firtash explained to him financial times, his support for Mr Yanukovych had nothing to do with being pro- or anti-Russian, he was merely settling scores with Ms Tymoshenko, who was soon jailed for the gas deal. Many inside and outside the country saw it as political, ie the kind of action taken by India’s “agencies”.


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Mr Firtash is just one of many Ukrainian oligarchs. Much taller than him is Rinat Akhmetov, the de facto ruler of the Donbass, home of Ukraine’s heavy industry that Putin has his eye on. Together, the two oligarchs are said to have controlled ministerial posts and half of Yanukovych’s party in parliament. Both thrived. mirror called their control of politics a “business joint venture”. But as smart gamblers, they had already started hedging their political bets before the Maidan revolution broke out in 2014. Mr Firtash, for example, feared the return of the “Gas Princess”. As it turned out, Mr. Yanukovych had to flee to Russia. An enraged Putin then seized Crimea and backed separatist rebels in Donbass.

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Now enter a third oligarch, Igor Kolomoisky, who in the 1990s teamed up with a fourth oligarch, Henadiy Boholyubov, to create Ukraine’s largest bank. Following a pattern, Mr Kolomoisky soon found himself in the crosshairs of new President Petro Poroshenko, an oligarch known himself as the “Chocolate King”. Mr Kolomoisky fled abroad, his bank was nationalized in 2016 for fraud.

But as the 2019 election drew near, Mr Kolomoisky was back in the game. His TV channel promoted Poroshenko’s rival, a comedian named Volodymyr Zelenskyy, who is now leading Ukraine’s fight against Russia. Mr Zelenskyy campaigned on an anti-corruption platform and won handsomely, but he fits the bill well. First, last year’s Pandora Papers revealed that the new president and key advisor benefited from a network of offshore companies. Second, two months ago, Mr. Zelenskyy attacked his former sponsor and resigned his citizenship!

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Ukraine is a warning to countries conquered by oligarchs. In Kyiv, they amassed vast fortunes while they and their media empires promoted and deposed political candidates to determine whose candidate would get which ministerial portfolio, who would supply gas at what price, which political party would back and control them, and who would Play Mr. Putin’s Cat Paw. Meanwhile, Ukraine’s pre-war GDP was at the level of 15 years ago. While the oligarchs have played fast and loose, the country remains by far the poorest of Europe’s former Soviet economies. Almost a third of the population has now fled to neighboring countries. This is the opaque place that could trigger nuclear war.

By special agreement with Business Standard


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