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RUSSIAN PRESIDENTIAL AIDE BLASTS GOVERNMENT ECONOMIC INTERFERENCE... Speaking at a press conference in Moscow on 28 December, presidential economic adviser Andrei Illarionov condemned the takeover of Yukos subsidiary Yuganskneftegaz by state-owned oil major Rosneft, as well as the takeover of Rosneft by Gazprom, as the "swindle of the year," and other Russian media reported. President Vladimir Putin last week called this deal "absolutely legal" (see "RFE/RL Newsline," 28 December 2004). Contradicting Putin's 23 December statement, Illarionov also said there is "no way" Russia can double its gross domestic product (GDP) by 2010. Illarionov said that in 2004 Russia adopted a new model of economic development, "switching from an inertia model to an interventionist one, moreover, one with extremely incompetent state intervention in economic policy." Finally, Illarionov said that the victory of Viktor Yushchenko in the Ukrainian presidential election will help Russia to rid itself of "imperial complexes." VY

RUSSIAN SPIN MASTER: MOSCOW'S 'IMPERIAL PROJECT' IS FINISHED Russian political consultant Marat Gelman told RosBalt on 29 December that following Ukrainian opposition leader Viktor Yushchenko's victory in that country's 26 December presidential elections, Russia must forget about its "imperial project." "The already improbable scenario of restoring the empire has vanished and that is a very serious problem," Gelman said. "Our imperial mentality has been constrained and, if we are to talk about its influence on our political processes, we will see a flow of Unified Russia supporters to Motherland." Gelman, who advised the campaign of Prime Minister Viktor Yanukovych, admitted that there was massive falsification of the vote on the part of Yanukovych's staff. He also admitted he and other Russian spin masters made a lot of mistakes, but lamented that Yanukovych's campaign staff did not heed his advice, but relied instead on falsification. "Falsification is not a campaign technique; it is simply breaking the law," Geman said. "Just like censorship in the mass media." VY

WOULD-BE YUGANSKNEFTEGAZ BIDDERS ARRESTED. Moscow police on 28 December arrested Lev Gorskii, board chairman of Interkom, and Interkom General Director Igor Merkulov on charges of fraud and forgery in connection with the 19 December auction of Yuganskneftegaz, Interfax reported on 29 December. An unnamed law-enforcement source told the news agency that the two men allegedly attempted to use Interkom's Yuganskneftegaz bid to defraud Western creditors. "Kommersant-Daily" reported on 29 December that Gorskii is a retired KGB general and Merkulov served as an adviser to former Ukrainian President Leonid Kravchuk. The paper reported that the two men never submitted to the Federal Property Fund the $1.7 billion deposit required for participation in the Yuganskneftegaz auction and that, as a result, Interkom's bid was disqualified two days before the tender. The daily reported that Merkulov was carrying forged letters from state agencies claiming that Interkom had been authorized by the government to take over Yuganskneftegaz and to pay off the tax debts of oil giant Yukos when he was arrested at Moscow's Sheremetevo Airport. RC

FOREIGN MINISTRY LOOKS BACK ON 2004... The Foreign Ministry on 29 December posted its assessment of Russia's foreign-policy achievements in 2004 on its official website ( According to the statement, "the main result of the year" was the "substantial intensification" of cooperation between Russia and the countries of the CIS on "new, mutually beneficial terms." The ministry noted Russia's "coordinating role" in promoting the economic integration of the CIS. The statement also notes the "qualitative strengthening of Russian cooperation with the states of Central Asia," including joining the Central Asian Cooperation Organization and the upgrading of the status of Russian forces in Tajikistan. The ministry also lauded Russia's role in combating international terrorism and the proliferation of weapons of mass destruction. It highlighted border agreements with Ukraine and China and Russia's role in mediating the conflict between Georgia and the self-proclaimed Republic of South Ossetia. Finally, the statement noted progress in Russia's bid for membership of the World Trade Organization and said that "the entire world welcomed the ratification by Russia of the Kyoto Protocol." Interestingly, the Foreign Ministry's statement did not mention the United States. RC

END NOTE: FORGING POLITICAL ALLIANCES IN THE NEW UKRAINE xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

YANUKOVYCH REFUSES TO STEP DOWN AS UKRAINIAN PRIME MINISTER. Following a call on 28 December from Viktor Yushchenko, a group of his supporters blocked the entrance to the government offices in Kyiv on 29 December and prevented Premier Viktor Yanukovych's cabinet from holding a scheduled meeting there, Ukrainian media reported. Outgoing President Leonid Kuchma, who defied the Verkhovna Rada's vote of no confidence in Yanukovych's cabinet on 1 December and on 7 December relieved Yanukovych of his duties for the remainder of the presidential election campaign, recently reinstated him by decree. Yanukovych reportedly held a cabinet meeting at a different location in Kyiv later on 29 December. "When they [the opposition] say I should resign now [as prime minister], my response to that is: Let them continue their lawlessness, but, as a matter of principle, I will not submit a resignation," Yanukovych told journalists on 29 December. "I know why they insist on my resignation," he added. "It is because they are shivering with fear now, just as they did in the beginning. And they have every reason to think so. We will have our say in the future -- in the near future." JM

YUSHCHENKO TIPS TYMOSHENKO AS NEW UKRAINIAN PRIME MINISTER... Yushchenko, whom the Central Election Commission declared winner of the 26 December presidential election (see "RFE/RL Newsline," 28 December 2004), said on Channel 5 on 29 December that his parliamentary bloc, Our Ukraine, will support Yuliya Tymoshenko for the post of prime minister in a new cabinet that is to be created in the coming weeks. Yushchenko said a working group, which includes Tymoshenko, is now discussing the formation of the new cabinet. Asked what other candidates are being considered for the premiership, Yushchenko named one of his election campaign leaders Petro Poroshenko, Socialist Party leader Oleksandr Moroz, and Party of Industrialists and Entrepreneurs leader Anatoliy Kinakh. JM

...AND SETS POLICY PRIORITIES. Yushchenko also said on Channel 5 on 29 December that fight against corruption, social policy, and European integration will be key priorities of his presidency. Yushchenko simultaneously stressed that Ukraine's European integration should not be a "policy of extremes." "We need to understand that we can go to the West only after we have normalized relations with our neighbors," he said. "I am sure that Europe will never accept someone with a suitcase of new problems." Touching upon Russia, Yushchenko said this country is "our eternal neighbor with which we are due to have wonderful relations." JM


Ukraine's Central Election Commission has announced that Viktor Yushchenko won 52 percent of the vote in the presidential ballot on 26 December compared to Viktor Yanukovych's 44 percent, according to its preliminary figures. Yanukovych has contested the results with the Central Election Commission and the Supreme Court, claiming that amendments to the presidential election law introduced between the abortive second-round runoff on 21 November and its repeat on 26 December were unconstitutional and deprived millions of disabled Ukrainians from exercising their right to vote from home.

Yushchenko's victory was so convincing, however, that even Yanukovych's election staff does not appear to believe that the Central Election Commission or the Supreme Court will sustain the complaints. So Yushchenko is likely to be inaugurated by mid-January.

But the man who has led Ukraine's amazing political rebirth and survived potentially deadly dioxin poisoning still faces serious political threats.

Apart from awakening grand hopes both at home and abroad that democracy might take deeper root in Ukraine, the "Orange Revolution" has instilled in millions of Ukrainians the firm belief that Yushchenko is truly capable of ousting "criminal clans" from power in Kyiv and making the lives of ordinary Ukrainians better in the short rather than long term -- as he pledged during the election campaign. He will have to deliver substantially on his election promises in 2005 if he wants to improve his political position ahead of the parliament-approved reductions in presidential powers that will take effect in one year and the March 2006 parliamentary elections. Arguably, 2005 will be a year of primarily domestic concerns for Yushchenko. Kyiv's relations with Moscow and Brussels will likely remain on the back burner as Yushchenko grapples with the political legacy of outgoing President Leonid Kuchma. And the domestic problems that Yushchenko will face in the coming year appear immensely complex.

To begin with, Yushchenko needs quickly to build a parliamentary coalition and propose a prime minister who might be acceptable to such a coalition. Both tasks will present major headaches. The main problem is that his parliamentary base, the Our Ukraine bloc, along with its current political allies -- Oleksandr Moroz's Socialist Party, the eponymous political bloc of Yuliya Tymoshenko, and Anatoliy Kinakh's Party of Industrialists and Entrepreneurs -- has just 150 deputies, which is well below the 226 votes needed to pass most resolutions in the 450-seat Verkhovna Rada.

The "Orange Revolution" has prompted numerous defections from previously pro-Yanukovych parliamentary caucuses, but these defectors -- who include a group of some 50 nonaligned deputies -- need yet to be effectively courted by Yushchenko. Still, even absolute success would translate into a total of 200 votes rather than the required 226. Yushchenko must therefore draw at least two other minor parliamentary groups into his camp in order to form a new government on solid footing. Presumably, such parliamentary maneuvers will lead to offers of government posts to people who appear distant from the ideals of the "Orange Revolution" -- or even who stood by his rival's side when the revolution was taking place.

Choosing a prime minister is a difficult problem, too. Yuliya Tymoshenko has made little secret of her willingness to accept the job. The same applies to lawmaker and businessman Petro Poroshenko, who supported Yushchenko's "Orange Revolution" both financially and propagandistically (Poroshenko owns the Channel 5 television station that took much of the credit for having promoted Yushchenko's presidential bid consistently throughout the campaign).

Tymoshenko is widely perceived as a radical and a bitter enemy of pro-Kuchma oligarchs, so her potential premiership could exacerbate tense relations between Yushchenko and the deep-pocketed elements from eastern Ukraine who supported Yanukovych and control a hefty segment of the national economy. Poroshenko is seen as a moderate in comparison to Tymoshenko, but his strong business connections arguably weaken his credibility as a fair-minded political dealer in the post-Kuchma era.

Yushchenko might indeed decide on a less colorful, less controversial, and less politically known than Tymoshenko or Poroshenko for the job of prime minister.

On the other hand, Yushchenko during his presidency will certainly face strong opposition from the political camp of his presidential rival, outgoing Prime Minister Yanukovych. Some 12.8 million Ukrainians voted for Yanukovych on 26 December, and his defeat appears to have inflicted a sort of personal trauma on many of them. The 2004 presidential election has doubtless made Yanukovych a natural opposition leader in Ukraine.

Yanukovych leads the Donetsk-based Party of Regions, which draws its support primarily in Ukraine's eastern and southern regions. But this regional party has every chance to become a major national player after the 2006 parliamentary elections, which are to be held under a fully proportional party-list system and a 3 percent threshold to qualify for parliamentary representation.

The Kyiv-based Razumkov Center conducted two interesting polls recently, one from 6-9 December and the other from 14-19 December, on voter preference on a hypothetical parliamentary ballot. The first poll offered respondents a list of 20 parties, while the other presented the same list of parties with the names of their leaders attached. The first poll found that just four parties -- Our Ukraine (with 28.8 percent backing), Yanukovych's Party of Regions (14.5 percent), Petro Symonenko's Communist Party (6 percent), and Oleksandr Moroz's Socialist Party (4.5 percent) -- could count on overcoming the 3-percent barrier in the current environment.

But the second poll -- with a list of parties and their political leaders -- painted a somewhat different picture. It suggested that six parties would have deputies in the Verkhovna Rada: Party of Regions-Viktor Yanukovych (20.5 percent backing); Our Ukraine-Viktor Pynzenyk (17.1 percent); Socialist Party-Oleksandr Moroz (8 percent); Fatherland Party-Yuliya Tymoshenko (6.7 percent); Communist Party-Petro Symonenko (6.2 percent); and the Popular Agrarian Party-Volodymyr Lytvyn (3.5 percent).

First, the Razumkov Center's December polls highlighted the crucial role of leaders in Ukrainian politics: Party stripes do not appear to be of paramount importance to Ukrainian voters.

Second, the polls disclosed a startling and little-known reality: that the Our Ukraine "brand" belongs legally not to Yushchenko but to his political ally, Viktor Pynzenyk. Pynzenyk appears to have managed to re-register his former group -- the Reforms and Order Party -- with the Justice Ministry under the name of Our Ukraine while everyone else from Yushchenko's Our Ukraine bloc was busy preparing and implementing the "Orange Revolution."

The "appropriation" by Pynzenyk of the Our Ukraine name could became an additional source of political grief for Yushchenko in 2005, after he forms a new government and starts to think about securing political support for himself in the 2006 legislative elections. It is highly unlikely that other parties from the Yushchenko camp would be delighted either to allow Pynzenyk to participate in the election under the victorious bloc so closely associated with the "Orange Revolution" or to agree to field their candidates on Pynzenyk's party ticket. Besides, as the polls suggested, support for Our Ukraine might be significantly lower once voters realize the astounding fact that the Our Ukraine party is not run by Yushchenko.

In other words, Yushchenko should perhaps be as mindful of his allies in 2005 as of his opponents. It is still unclear which side cause him greater troubles.