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Ukraine’s Multiple Crises

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If current conditions in Ukraine look revolutionary to you, that’s because the Yanukovych regime has maneuvered the country and itself into a series of reinforcing crises. If the regime holds on to power, the crises will only deepen. If the opposition comes to power, with or without Regionnaire participation, it will face monumental tasks requiring almost superhuman wisdom and skill. In a word, whatever the denouement of the ongoing standoff between opposition and regime in Kyiv, Ukraine will be a mess for some time to come.

Crisis is a sexy word that means all things to all people, but, if used rigorously, it usually means a life-threatening condition, one in which, to pursue the medical analogy, the patient faces a 50-50 chance of recovery. It’s impossible to apply the word with equal precision to social reality, but the point is that we should use crisis only with reference to extremely serious conditions that appear to be unsustainable for more than the short term.

Seen in this light, the Yanukovych regime has created three crises: a crisis of the regime, a crisis of the economy, and a crisis of presidential legitimacy. Significantly, all three are the result of the system of centralized rule Yanukovych introduced, or what I have called sultanism.

As I have repeatedly argued in this blog, sultanism is intrinsically unstable:

Yanukovych quickly accumulated vast powers, thereby transforming the presidency into a near-dictatorial office, while subordinating the other two branches of government—the Parliament and the courts—to himself and his party…. Given the evisceration of the non-presidential branches of government and the emergence of the Regionnaires as the party of both power and theft, it was inevitable that Yanukovych would become the focus of increasingly personalized rule, while his closest confidantes would join him in plundering the country. The logical end point of this institutional development was reached in 2012: the triumph of Yanukovych and his “Family,” the reduction of the Rada and the courts to meaninglessness and buffoonery, and the transformation of the Party of Regions into nothing more than an instrument of rapine. Because sultanistic regimes are invariably corrupt and conservative, there is no reason to think that the avaricious mediocrities who man the Yanukovych system will be able or willing to sacrifice their well-being to vague notions of reform, especially if reform undermines their power and privilege…. [S]uch a deeply dysfunctional regime is a leading candidate for stagnation and decay.

Sultanism is also responsible for the economic crisis, which is best described by Anders Aslund:

Rather than following its commitments to the IMF, the Ukrainian government has imposed strict currency regulations to make it exceedingly difficult to take money out of the country. It has also pursued very high interest rates…. The high interest rates have kept inflation at zero, but they have also killed investment and thus liquidated economic growth. Output has fallen for the last five quarters. The expected contraction for 2013 is now 1 percent, but it might become 1.5 percent.

It is difficult to imagine a worse economic policy…. Why would any government pursue such a harmful and mindless economic policy? The simple answer is that it benefits the ruling “family” and its closest friends. Previously unknown individuals, who are presumed to be connected with people at the top, have taken over a large number of private companies at low prices. The worse the economic situation is, the cheaper Ukrainian companies become for these selected buyers….

Yanukovych is walking on eggshells. Ukraine’s economic situation is precarious. The risk for a run by ordinary Ukrainians both on banks and the Ukrainian currency is evident, though Ukraine has been on the brink for so long that no panic is apparent. The rating agencies mercilessly downgrade Ukraine ever lower, and corporate defaults are all too common. Ukraine is in desperate need of an IMF agreement, but Yanukovych has recently firmly rejected any (necessary) increase in domestic gas prices, and it should depreciate the hryvnia in any case.

Finally, sultanism is responsible for the evisceration of Yanukovych’s legitimacy. Having arrogated to himself all the state’s powers, Yanukovych, unsurprisingly, proved incapable of meeting popular expectations. No one can be a sultan in today’s complex world. And least of all is a provincial politician with no understanding of politics and economics able to play that role.

In sum, the Yanukovych regime, the Ukrainian economy, and Yanukovych himself are in crisis. The only things in Ukraine that are not in crisis are civil society and the political opposition, which have been getting progressively stronger in the three years since their partial demobilization in the aftermath of Viktor Yushchenko’s disastrous administration.

Small wonder that this “Euro Revolution” has broken out. On the one hand, there’s a crisis-ridden president, regime, and economy. On the other hand, a vigorous civil society and opposition. Look at any historical revolution and you’ll find these same ingredients present.

Given the severity of this contradiction, do not discount the possibility of a regime collapse. There are ample precedents for just such an outcome. Also possible is a “managed transition,” involving regime and opposition, or a protracted standoff that intensifies the political and economic crises and makes Ukraine ungovernable and ripe for another mass uprising. Least likely is a Pinochet-like crackdown: crisis-ridden regimes lack the resources to pull off such feats.

Which outcome will produce a government most capable of dealing with Ukraine’s multiple crises?

Obviously, both a protracted standoff and a crackdown would only push Ukraine to the brink of systemic collapse.

Since Yanukovych and the Regionnaires caused the crises, their absence is probably the necessary condition of any sustained attempt at resolution. The sufficient condition is, of course, the ability of the democratic opposition to eschew cheap populism and promote wise policies. In principle, that’s possible. Riding on a wave of popular support, they could have the legitimacy to introduce painful measures that the people would be willing to accept. After the disaster of Orange rule, the opposition may have also learned a thing or two about effective policymaking. The problem with this scenario is that, rightly or wrongly, most Ukrainians have little regard for their opposition leaders—which might incline them to engage in the very populism they need desperately to avoid.

Since Yanukovych and the Regionnaires will be unwilling to leave the scene voluntarily, a managed transition and the formation of a coalition government will be more palatable to them. On the other hand, Regionnaire involvement in policymaking could easily doom new plans to ineffectiveness. After all, how likely are they to agree to the dismantling of the sultanistic system that feeds them (even though it created the crises)? That in turn means that such a government could work if and only if the Regionnaires were to be assigned a distinctly secondary role in policymaking. And that could happen only if the West, the opposition, and the people left them no choice.

There is, then, no easy way out of the Yanukovych-induced mess. But, for the first time in many years, there is hope in Ukraine. And for Ukrainians, who have had to live with the prospect of continued regime predations, that may be the most important thing.

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