Ukrainian voters will elect a new parliament on Oct. 28 in which President Viktor Yanukovich's Party of the Regions looks likely to retain its majority, cementing his grip on power in the former Soviet republic.
Although polls show the Party of the Regions will probably come out on top, it is hard to predict the overall balance of forces in the assembly and its victory could be tainted if Western observers find the vote unfair, deepening Ukraine’s international isolation.
ELECTION CAMPAIGN
The elections will be first in which half of the deputies in the 450-member chamber are elected by a majority system. The other half is to be elected by a party system, as in the previous vote.
The change makes it harder to predict the outcome, even when final results are announced, as many of the elected deputies may have no formal party affiliation.
Political analysts expect the Regions to retain its majority in the end but their tactics may come under fire from Western observers who have already criticised what they see as biased media coverage and selective justice applied to opposition politicians.
Ahead of the election, the government launched a $3 billion spending package which includes pension increases and other benefits, subsidised mortgages and compensation to depositors of the Soviet Union’s state savings bank whose wealth was wiped out by hyperinflation.
Some observers have questioned the government’s ability to finance that spending at a time when macroeconomic forecasts are likely to be revised downwards.
TYMOSHENKO AFFAIR
The EU has shelved agreements with Ukraine on political association and free trade while international meetings have been derailed since the conviction last October of former Prime Minister Yulia Tymoshenko, Yanukovich’s fiercest opponent.
Tymoshenko, who narrowly lost the presidency to Yanukovich, was jailed for seven years for alleged abuse-of-office in what she described as a “lynch” trial.
Despite pressure from the EU and the United States Yanukovich has refused to intervene to secure her release and prosecutors have piled more charges against her for misdeeds they say go back to the 1990s.
LANGUAGE POLICY
In what critics said was another ploy to boost poor poll ratings, pro-Yanukovich deputies rushed through parliament a bill to upgrade the status of Russian in Russian-speaking regions traditionally loyal to him.
Brawls in parliament and street protests over the bill, which opponents say will undermine the status of Ukrainian as the state language, did not stop Yanukovich signing it into law in August.
The Regions has since pledged to officially make Russian the second state language, meaning that the sensitive and divisive issue is certain to surface again after the vote.
IMF, RUSSIA
Ukraine’s agreement with the International Monetary Fund, signed shortly after Yanukovich came to power in February 2010, was suspended in early 2011 after the government balked at raising gas and heating prices for households for fear of losing public support.
An IMF team will visit Ukraine between Oct. 26 and Nov. 2 for talks on banking sector reforms and other policies while the Kiev government is not showing any sign of reversing policy and raising utility prices.
Russia, meanwhile, refuses to review a gas supply deal which Yanukovich’s government says sets an exorbitant price for the fuel.
ECONOMIC SLOWDOWN
The lack of IMF financing makes Ukraine, whose economy depends heavily on exports of commodities such as steel and grain, more vulnerable to external shocks such as the euro zone recession.
Economic growth has already slowed down significantly, with gross domestic product rising by 1 percent year-on-year in the first nine months of 2012, down from about 5 percent in the same period of 2011, and some analysts see zero full-year growth.
The market also believes that the hryvnia, pegged to the dollar since early 2010, is over-valued and its exchange rate could be readjusted at some point after the election.
