Ukraine

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13:37 PM Monday, November 20, 2017
Government
Saakashvili-Poroshenko Political Circus Distracts from Reform Work
Political figures are lining up that may push for elections next year, one year early
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

Whichever way you look at this: unedifying on Ukraine and yet another sad indictment of Ukraine's political class.

Ukraine has so many bigger priorities than this. Its politicians need to get on with passing key reforms to get the stalled IMF program back on track, including pension reform and land reform.

It's strange that Saakashvili and Poroshenko were ex-university buddies. President Poroshenko brought Saakashvili in to run Odessa City administration and show that Ukraine could roll out an anti-graft agenda. Odessa is renowned for organized crime, so the assumption was that if Saakashvili could roll out his Georgia style anti graft reforms there, then it could be done anywhere in Ukraine.

Saakashvili, though, largely failed in Odessa. He claims for a lack of support at the national government level. He made some pretty strident claims of graft in the Poroshenko administration and likely earned many enemies as a result. Prime enemy: Interior Minister Avakov. It is likely that pulling his passport was payback from these same forces.

Mikheil Saakashvili gives a press conference Monday the front steps of Lviv’s Leopolis Hotel. Sunday evening, the Georgian-Ukrainian politician defied orders from Kyiv and entered Ukraine without a valid Ukrainian passport. (UNIAN)

Strange Political Bedfellows

It's notable, though, that aligned now behind Saakashvili is a hodge podge of opposition forces, including Yulia Tymoshenko and the Mayor of Lviv, Andriy Sadovyy. Tymoshenko and Poroshenko were arch enemies during the Yushchenko era. They served in the same administration, but fought tooth and nail. Sadovyy has been a target of political games by the Poroshenko camp to undermine his popularity in the run up to the 2019 elections.

There is also talk of the oligarch Kolomoisky lining up with Saakashvili, Tymoshenko and Sadovyy. Kolomoisky may be seeking payback against Poroshenko for nationalizing Privatbank earlier in the year. Saakashvili and Kolomoisky make strange bedfellows, but this is Ukraine where shifting political allegiances are the name of the political game.

But Poroshenko is moving against potential political opponents in the run up to the 2019 elections - Sadovyy, Saakashvili and elements in the Opposition Party. Others seem to aligning up behind Poroshenko, including the oligarch Rinat Akhmetov. Although he likely will be keeping all sides sweet as usual, and trying to play all sides. Recent energy sector privatizations played out quite well for Akhmetov, which likely assured the relationship with Poroshenko.

The West must be struggling now to figure out who to support, given that Saakashvili was the poster boy for the US under President George W Bush. Tymoshenko has been working overtime to use existing contacts in the GOP - and managed to meet Trump before Poroshenko. Poroshenko hardly helped his cause in the Trump White House by being so open in his support for Hillary Clinton in the US elections.

Putin Winner

The big winner in all this is President Putin in Russia.

His long time nemesis, Saakashvili, could end up getting detained in Ukraine and deported to Georgia. He also sees the Ukrainian political class in turmoil. He will argue before the Russian electorate in next year’s presidential elections that this show shows the advantages of his sovereign democratic model.

The big plus in all this is that, while the Ukrainian political scene is in such flux, Moscow will hardly feel the need to flex its military muscle imminently in Ukraine - despite concerns that the Zapad 2017 Russian military exercises are a cover for something more sinister.

This again affirms the need for Ukraine to use this window to push on with much needed economic reform.


Timothy Ash is a sovereign strategy analyst for Blue Bay Asset Management in London

Slider Photo: Happy to disrupt Ukraine's politics, Mikheil Saaskashvili talks to Ukrainian mass media gathered outside his hotel, the Leopolis, in Lviv. (UNIAN/ Ruslan Gumenyuk)


Saakashvili Faces Criminal Probe After Illegal Ukraine Entry

By Kateryna Choursina and Daryna Krasnolutska

(Bloomberg) -- Ex-Georgian leader Mikheil Saakashvili is facing a criminal probe after illegally entering Ukraine, though
Saakashvili quit as governor of the Black Sea Odessa region in 2016, accusing Poroshenko of contributing to corruption. He’s said the party he created will compete in elections in 2019, though it’s backed by less than 5 percent of voters. The party’s profile picture on Facebook shows Saakashvili face-to-face with Poroshenko in a golden king’s crown and calls for a “battle" against the system.

“The situation poses a dilemma for the authorities, as prosecuting Saakashvili and his supporters for crossing the border by force threatens to provoke a stronger backlash,” investment bank Dragon Capital said in a research note. “Ukraine’s divided opposition parties may now find a common platform to continue to press for early elections.”

Saakashvili now faces arrest and potential deportation to Georgia, where he’s wanted on charges including abuse of office. His lawyer, Markiyan Halabala, said he’s asked Ukraine’s StateMigration Service to block extradition on the grounds that he won’t get a fair trial at home.


--With assistance from Helena Bedwell.
To contact the reporters on this story:
Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net;
Kateryna Choursina in Kiev at kchoursina@bloomberg.net

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