Over the past two-and-a-half years, Ukraine has been transformed, but not for the better. In February 2010, Viktor Yanukovych -- whose previous "victory" in the 2004 election was overturned in what became known as the Orange Revolution -- was elected president with a slight margin in a free and fair election. This ex-convict from Russian-speaking eastern Ukraine has quickly consolidated power. Increasingly, his family loyalists, primarily represented by his son, the businessman Oleksandr, dominate the Ukrainian government.
On Oct. 28, Ukraine is holding critical parliamentary elections. These elections will be either the final step in Yanukovych's consolidation of power or his opponents' last chance to disrupt his family rule. This time, however, the most palpable threat to his rule comes not from the crowds on the street but the elite businessmen he has alienated.
Yanukovych was lucky to win the presidency in the first place. Ukraine was hit hard by the global financial crisis in 2008 under the tenure of Prime Minister Yulia Tymoshenko, who was running against him for the presidency. The uneasy Orange coalition government led by Tymoshenko and President Viktor Yushchenko was consumed by infighting and eventually collapsed. Yushchenko now leads an officially sanctioned splinter group that is taking votes away from the real opposition.
Yanukovych already had a parliamentary majority when he came to power and was thus quickly able appoint his government. He also managed to gain control over the Constitutional Court, which abolished constitutional amendments passed in 2004 and returned the country to its 1996 constitution, which included stronger presidential powers. Meanwhile, Tymoshenko was sentenced in a blatantly political prosecution to seven years in prison for an allegedly shady gas agreement with Russia while she was prime minister.
Yanukovych has also taken steps to increase his control over television. In particular, the stubbornly independent cable channel TVi has been refused licenses and is gradually being ousted from various cable services through pressure from the authorities. In the run-up to these elections, television is firmly in the hands of the incumbent.
But pure repression can't save the president if his support among Ukraine's most powerful business interests continues to erode. Yanukovych initially appointed a government dominated by nine big business groups, each of which was represented by one or more ministers in his cabinet, but their number has quickly dwindled. Instead, Yanukovych family loyalists now dominate the government. They control all the law enforcement bodies, the central bank, and the Finance Ministry, while the businessmen complain that they are being squeezed out by Oleksandr Yanukovych. As a consequence, Ukraine has fallen even deeper on Transparency International's Corruption Perceptions Index to No. 152 out of 183 countries, and property rights have been further undermined.
This year, I had a chance to observe the dissatisfied Ukrainian opposition up close. Each year, Victor Pinchuk, a highly respected international Ukrainian businessman, organizes a major international conference in Yalta. In mid-September, the ninth Yalta European Strategy took place, attracting the whole Ukrainian political elite as well as foreign luminaries including the Americans Condoleezza Rice, Newt Gingrich, Robert Zoellick, and William Daley.
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