Is this 2009 or 2004? This year’s presidential election campaign is starting out in disturbingly familiar ways to the campaign five years ago. Speculation persists about whether Victor Yushchenko was or was not deliberately poisoned by dioxin and who is to blame. The nation’s voters are said to be split along an east-west axis. Russia is again meddling in Ukraine’s elections. Accusations over the unsolved 2000 murder of journalist Georgiy Gongadze continue to fly in all directions.
That anyone in Ukraine’s warped power structure thinks it is flattering for these issues to dominate the current public debate is a damning indictment of all of them. The corruption and murder cases should have been solved years ago. Instead, it is shocking to realize how little progress has been made in solving the nation’s worst crimes, in making the government more transparent and democratic, in improving relations with Russia and, in general, with moving society ahead.
About the only improvement we expect over 2004 is that the intramural power struggle among the elite – otherwise known as the Jan. 17 presidential election – should help ensure a more democratic and honest vote in the same way that there is honor among thieves.
As the nation’s leaders continue to fail to solve national problems and crimes, new ones pile up. One cannot help but wonder whether Ukraine’s political elite are turning up the volume on old scandals deliberately to drown out tough questions about how they are refinancing banks and who is profiting.
Interior Minister Yuriy Lutsenko on Sept. 23 called the National Bank of Ukraine’s schemes part of one of the “the greatest financial frauds” since Ukraine’s independence. Since Lutsenko is given to hyperbole, some of this words can be discounted. He has launched criminal investigations. But considering his subservience to Prime Minister Yulia Tymoshenko and his overall impotence as a law enforcer, perhaps we can expect results five years from now.
Bank insiders are suspected of making piles of money by cashing in on their privileged status to buy dollars at the low NBU rates and selling higher. Others are suspected of engaging in wildcat speculation and currency manipulation by trading on their insiders’ knowledge of the timing and size of NBU interventions designed to stabilize the value of the battered hryvnia, lately trading at Hr 8.5/$1.
Now we are gaining a much better understanding of what critics mean by a central bank that is secretive and lacking in independence. Unfortunately, Ukraine’s international bankrollers, the International Monetary Fund and the World Bank, are seeing nothing wrong. Perhaps these officials could care less about the fate of Ukraine’s ordinary citizens, as long as the taxes of the nation’s downtrodden are used to repay the billions in misspent international loans?
It seems clear that Ukraine’s citizens are not going to trust their banks – or their government – anytime soon. This is bad news for the economy. One place to start cleaning up the mess is to make sure the central bank is independent, public and transparent, and to set up a separate regulatory agency for commercial banks.
This new mess Ukraine finds itself in happened on the watch of the current trio of leaders, ex-Prime Minister Victor Yanukovych, Prime Minister Yulia Tymoshenko and President Yushchenko. They have all proven they are unfit to rule. But it looks like one of them will win the presidency. And that means the nation may be in for another five years of the same old, same old.
