Wed, Jun 04, 2014 - Page 9 News List

New president, Poroshenko, inherits bitter legacy in Ukraine

By Gareth Jones and Pavel Polityuk  /  Reuters, KIEV

Winning the election was the easy part, now the real work starts for Ukrainian President Petro Poroshenko, and few in the nation have any illusions about the scale of the challenge facing their new leader.

The burly billionaire businessman who built a vast fortune selling cakes and sweets has inherited a bitter legacy — a wrecked economy, rampant corruption, armed rebellion in eastern Ukraine and hostility from giant neighbor Russia.

His unprecedented feat of winning the election in Sunday’s first round of voting granted him an unexpectedly strong mandate, but it also reflected the anxiety among Ukrainians who took to heart his pre-election appeal for a swift victory because the country might otherwise face disaster.

The mood in Kiev, an elegant and normally relaxed city of 3 million people famed for its golden-domed churches and leafy boulevards, is somber, but also cautiously hopeful — not least in the business community, which broadly backs Poroshenko.

“I would say people are anxious for positive news. And they don’t want just declarations; they really want to see actions that can change perceptions of Ukraine,” said Anna Derevyanko, chief executive of the European Business Association in Kiev. “Of course the situation is tough, indeed unprecedented. We have never had such problems in the east and south... But if there is a change in the mindset of the people governing the country, if they tackle corruption and promote the rule of law, I would say there would be chances of improvement.”

The economy, still dominated by smokestack-heavy industry and reliant on exports of steel and grain 23 years after Kiev won its independence from Moscow, is expected to shrink by 3 percent this year as it reels from political turmoil and Russia’s annexation in March of the Crimea region.

Kiev clinched a US$17 billion bailout with the IMF to avoid defaulting on its large debt load, and Poroshenko has vowed to sign a deal on closer economic ties with the EU after his inauguration, expected on Saturday.

For Vadim Bodayev, vice president of agricultural firm Agro Generation, hope now lies with entrepreneurs who must be freed from the shackles of venal, intrusive bureaucrats.

“Only business can provide a way out. We need to review all the rules of the game,” he said, calling for cuts in the number of bureaucrats and higher salaries for those who remain so they will be less tempted to demand bribes from job-creating firms.

Ukrainians believe that Poroshenko, as a successful self-made businessman, understands such things very well.

“He is rich enough already, so we hope he will not steal from the state coffers,” said Katya, 22, a student.

Ukrainians say they can no longer be placated with fine words about reform, uttered by successive leaders in the past two decades, including former Ukrainian president Viktor Yanukovych, the Moscow-backed leader ousted by street protests in February and whose name is now synonymous for many with sleaze and abuse of power.

Some Ukrainians doubt Poroshenko, even after his resounding election win, will get much done without the active cooperation of the oligarchs, the fabulously wealthy individuals who wield clout in parliament and own much of the economy.

“Changing things will depend more on the oligarchs than on the president,” said Tatyana Nesterenko, 43, owner of a beauty salon in Kiev. “The oligarchs have influence on investment and on the laws. If they don’t squirrel away their cash and instead invest it in companies and develop them, people will have work.”

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