Ukraine turns to its oligarchs for help

WEALTHY GOVERNORS::The oligarchs exercise great influence over thousands of workers in the east, but their appointment may be seen as favoring the rich

NY Times News Service, KIEV

Tue, Mar 04, 2014 - Page 7

As tensions rose on the streets of the Russian-speaking eastern portion of Ukraine, the response of the new government in the capital on Sunday was not to send troops, but to send rich people.

The interim Ukrainian government, worried about Russian efforts to destabilize or seize regions in eastern Ukraine after effectively taking control of the Crimean Peninsula in the south, is recruiting the country’s wealthy businesspeople, known as the oligarchs, to serve as governors of the eastern provinces.

The strategy, which the news media are attributing to former Ukrainian prime minister and party leader Yulia Tymoshenko, is recognition that the oligarchs represent the country’s industrial and business elite, and exercise great influence over thousands of workers in the east, which is largely ethnically Russian.

The office of Ukrainian President Oleksandr Turchynov announced on Sunday the appointments of two billionaires — Sergei Taruta in Donetsk and Ihor Kolomoysky in Dneprotrovsk — and more were reportedly under consideration for positions in the eastern regions.

The approach is a gambit, the latest of many, for the interim government that is swaying between efforts to avoid angering its nationalist base in western Ukraine, while trying frantically to put in place a political strategy to tamp down tensions in the east, lest the Russian military find a pretext to intervene.

Tymoshenko, who met late on Saturday with Turchynov and Ukrainian Prime Minister Arseniy Yatsenyuk, who are both members of the Fatherland Party that she leads, is a savvy operative in Ukrainian politics and was a wealthy businesswoman before entering politics in the late 1990s. A spokeswoman for Tymoshenko declined to discuss her role in devising the strategy.

After the meeting, the Ukrainian government began asking the oligarchs to take the positions in the regional governments.

“It was a plan for stabilization,” an aide to one of the leaders, who was not authorized to discuss it publicly, said of the decision.

The ultra-wealthy industrialists wield such power in Ukraine that they form what amounts to a shadow government, with empires of steel and coal, telecoms and media, and armies of workers. Persuading some to serve as governors in the east was a small victory for the new government in Kiev.

“The government is doing what it can to avoid provoking any internal divisions,” Steven Pifer, a former US ambassador to Ukraine who is now at the Brookings Institution, said in a telephone interview. “They need people who have credibility in eastern Ukraine. The risk is this will be seen as business as usual by putting wealthy people in government. That has been part of the problem for the past 22 years.”

The push on the Crimean Peninsula for decentralization that quickly found support from Russia’s military could easily spread to eastern Ukraine, a region deeply dependent on Russian trade and energy, and where the nationalistic words and deeds of the new government alienated many.

In another conciliatory gesture, Turchynov on Sunday vetoed a divisive law passed last week that would have eliminated Russian as an official second language. About half of Ukraine’s population speaks Russian.

What had been the country’s largest political party, the Party of Regions, led by former Ukrainian president Viktor Yanukovych, had its base in the east, but few representatives are now in the government in Kiev. The challenge is to quickly restore the foundations of political authority in the east to build up the interim government’s credibility as an inclusive leadership, willing to recognize Ukraine’s diversity, and in time to slow the centrifugal forces of an emerging pro-Russian uprising in the east.

Yuri Lutsenko, an opposition leader who played a prominent role in the three-month protest movement that led to the toppling of Yanukovych, told the newspaper Ukrainska Pravda that the purpose of appointing the oligarchs to run the regional governments “is to stabilize the situation in regions using not only state resources, but also private resources for the integrity of Ukraine.”