Sunday, 11 November 2012

Ukraine: Vote-Rigging Reports Leave Electorate Cold

KIEV, Ukraine -- With nearly 100 percent of the vote now counted from Ukraine's controversial Oct 28 election, the Party of the Regions and its Communist allies look set to secure another term in power. While opposition forces are contesting the result, public protests are noticeably muted. Voting day saw widespread allegations of fraud, but this is not unusual in Ukraine, a country renowned for endemic corruption. Vote-rigging sparked the 2004 Orange Revolution, and every subsequent election has been marred by claims and counter-claims of falsification. However, in the recent elections, social media and the innovative use of technology in election monitoring meant falsifications were more visible and clearly substantiated than ever before. Polling stations in the Odessa region were temporarily closed after voters posted videos on YouTube of pens containing invisible ink. CCTV cameras providing live online streams of electoral stations captured incidences of ballot-box stuffing. The depths of widespread disillusionment were exposed on Russian social networking site VKontakte.ru, where large numbers of votes were openly sold for as little as $30. When civic organization Maidan Alliance had its website hacked, it utilized Twitter to continue to provide constant up-to-date source of information. In one highly contested district in Kiev, the opposition claimed election officials inflated the vote tally for Viktor Pylypyshyn, a government-aligned candidate. Pylypyshyn stands to win both a seat in the Verkhovna Rada and a convenient immunity from prosecution. He currently faces charges of abuse of office costing the taxpayer in excess of $2 million. As angry crowds gathered outside the electoral commission for the district, fights broke out and riot police used tear gas to quell trouble. The deputy head of the commission, Anastasia Prymak, blamed initial incorrect figures on a "computer malfunction" and broke down in sobs as she left a vote-counting session. Against this gloomy backdrop, home-video footage of a man dressed in a giant panda suit casting his vote quickly went viral, providing some much-needed light relief. Opposition parties Udar and Batkivshchyna have been quick to capitalize on these highly publicized problems of vote fraud. Vitali Klitschko, a former heavyweight boxer and leader of anti-corruption party Udar, has called for a cancellation of the election results. Jumping on the bandwagon, Batkivshchyna leader Arseniy Yatseniuk's call on the electorate to "defend their vote" was reminiscent of the Orange Revolution. However, the number of protesters who showed up to the Nov. 5 rally was not. In 2004, an estimated 1 million people took to the streets to demonstrate against vote rigging; in 2012, this number was reduced to approximately 1,000. The reasons for this comparatively dismal show are complex. One issue may be that the opposition is focusing on the wrong problem. While voter fraud undoubtedly occurred and deserved condemnation, the final vote count roughly corresponds to the findings of four independent exit polls. This suggests falsification was not extensive enough to affect the final outcome. A second and related issue is the international community and opposition's failure to highlight and respond to issues of corruption much earlier in proceedings. As noted by the independent electoral monitoring body OSCE, "a democratic election is not just about being able to choose which party to vote for, it is about ensuring parties are competing on a level playing field." In Ukraine, this was decidedly not the case; the election outcome was to an extent determined long before any votes were cast. In November 2011, the Verkhovna Rada approved constitutional amendments to the electoral system. The "new" mixed system, a combination of proportional representation and first-past-the-post seats, is almost identical to the one abolished after the 2004 Orange Revolution. According to political analysts, it heavily favors the incumbent party. During the election campaigns Yanukovych and his cronies heavily controlled media coverage. Charismatic opposition politicians Yulia Tymoshenko and Yuriy Lutsenko were incarcerated and unable to register as candidates, following trials condemned by the European Union as unfair and politically motivated. Indirect vote-buying practices were widespread with gifts bestowed on the electorate ranging from food parcels to free bicycles. Such voter manipulation tactics, while hard to quantify, were likely more pervasive and far-reaching than voter fraud. As there was virtually no public resistance to these corrupt practices prior to the elections, it is unsurprising there is little now. A key issue highlighted by the recent elections is the extent and depth of political apathy in Ukrainian society. The electorate, increasingly tired of a corrupt political elite, lacks the motivation to resist encroaching authoritarianism for the second time in a decade. That apathy is undoubtedly what Yanukovych is banking on.

Ukraine Slides Away From Democracy

KIEV, Ukraine -- Eight years ago this month, an inspiring movement took hold in Ukraine. 
After the 2004 presidential election, demonstrators filled the streets to protest a vote marred by fraud and corruption in what came to be known as the Orange Revolution.

A runoff election was annulled, a new vote was ordered by the courts, and the second runoff was deemed free and fair.

People power worked.

Given that promising moment, it is distressing to see Ukraine’s political system now backsliding.

The campaign leading up to the Oct. 28 vote for parliament was rigged to benefit President Viktor Yanukovych and his ruling Party of Regions.

This time, there was no revolution, just relatively small but determined protests, and a brushoff from the prime minister, Mykola Azarov, who declared, “These were the best organized elections in Ukraine in the history of its independence.”

In fact, they were “best organized” in a peculiar post-Soviet fashion now evident in Russia and elsewhere in Eurasia.

The features of this system are slicker than some of the pitched battles for power in the 1990s, but they are onerous nonetheless, designed to give the ruling party an insurmountable advantage through subterfuge and subversion.

In Ukraine, the rigging of the election began long before voting day.

According to a report by international election observers, the campaign lacked a level playing field for all candidates.

Those in power “abused” their state resources for political gain and benefited from “a lack of balanced media coverage.”

Not to mention that former prime minister Yulia Tymoshenko and Yuri Lutsenko, two prominent opposition political leaders, have been imprisoned following trials that were widely criticized as politically motivated.

While election day was largely peaceful, there have been allegations of fraud in the voting process and tabulation.

The campaign was outwardly competitive, with a wide range of parties and candidates.

But “harassment, intimidation and misuse of administrative resources” were used to prevent many candidates and parties from getting their message to voters.

State-owned newspapers attacked the opposition; public workers such as teachers and nurses were required to attend rallies; events for the opposition were blocked and obstructed; state television “displayed a clear bias in favor of the ruling party.”

Fortunately, there are other media channels and unrestricted Internet access in Ukraine, but their reach is limited.

The United States invested heavily after the collapse of the Soviet Union in the idea that Ukraine, with a population of 45 million, could become a member of NATO and look westward.

Russia has also beckoned from the east and holds enduring historic and economic ties to Ukraine.

Unfortunately, Ukraine seems to be sliding into the Russian mold of a pseudo-democracy, with elections, parties and candidates on the surface, but less and less real competition underneath.

Sunday, 4 November 2012

Ukraine Devaluation Angst Mounts As Yanukovych Secures Win

KIEV, Ukraine -- Banks in Ukraine’s capital didn’t have enough dollars to convert Oleksandra Ratushnyak’s hryvnia savings this week so she spent the rest to offload a currency investors bet will slide after the ruling party won re-election. “Nobody trusts the hryvnia,” Ratushnyak, a 29-year-old lawyer, said Oct. 29 in Kiev after buying $1,750 from three banks and being told four more had run out. “The exchange rate has been manipulated and no one knows how much it’s worth.” President Viktor Yanukovych’s victory in Oct. 28 parliamentary elections divided investors and citizens in a nation where payments from bank loans to apartment rents are often made in dollars. While international bonds advanced on optimism devaluation will improve the balance of payments as the economy skids toward recession, citizens may be concerned about the value of their savings. Dollar purchases by Ukrainians anticipating a weaker currency after the ballot were the highest in a year in September, official data showed, while the local units of UniCredit SpA (UCG) and OTP Bank Nyrt. reported increased demand for the greenback. The central bank has dipped into its reserves to defend the hryvnia, contributing to an almost $9 billion drop in the stash to $29.2 billion since August 2011. Ukrainians are again becoming concerned about their currency, four years after the hryvnia lost more than half of its value following the collapse of Lehman Brothers Inc.’s in 2008. Economic output plummeted 7.8 percent and consumer prices surged 22.3 percent that year. The contraction continued at a 6.7 percent pace in 2009. ‘Political Achievement’ The currency, which has lost 2.2 percent this year, will retreat to 9.4 per dollar in six months’ time and 10.42 in a year, according to non-deliverable forwards, which in June predicted declines to 9.04 and 10.22. It was down 0.2 percent at 8.1964 at 12:19 p.m. in Kiev, data compiled by Bloomberg showed. “Hryvnia stability is perceived as a political achievement on the part of the Ukrainian electorate,” Alexander Morozov, a Moscow-based economist at HSBC Holdings Plc (HSBA), wrote Oct. 22 in a note. After the election, “Ukrainian authorities’ hands may be untied and they may permit the hryvnia to devalue.” After expanding 5.2 percent last year, Ukraine’s economy contracted 1.2 percent in the third quarter from previous three months as Europe’s debt crisis damped demand for steel, the country’s main export earner. Erste Group Bank (EBS) AG and HSBC predict a second-half recession. Current Account The current-account deficit almost doubled through August to $8.6 billion as Russian natural gas prices rose. The gap will widen to 9 percent of gross domestic product in 2012, according to Morozov, who said a hryvnia rate of 11 per dollar is needed by end-2013 to narrow the shortfall to 5 percent. Investors and traders have been betting central bank support for the hryvnia will dwindle, helping stabilize the balance of payments, restore competitiveness and boost exports. The government may also unfreeze a $15.4 billion loan from the International Monetary Fund, halted last year after Ukraine refused to raise household energy tariffs, Ronald Schneider, who helps manage 700 million euros ($910 million) in emerging-market debt for Raiffeisen Kapitalanlage GmbH in Vienna, said Oct. 22 by phone. The Washington-based lender has urged a more flexible exchange rate for the hryvnia. Bond Rally Ukraine’s dollar Eurobond due 2017 climbed today, cutting the yield to 6.72 percent, the lowest level since it was sold in July. Credit-default swaps, which narrowed for four sessions, dropped 101 basis points last month to 605, reflecting an improved perception of risk. Citizens stepped up dollar purchases as devaluation speculation intensified in a country where about half of outstanding retail loans are denominated in foreign currencies. They bought $2.9 billion in September, double February’s amount, central bank data showed. “Because of increasing demand for foreign currency, a temporary limit of $1,000 per client per day has been set,” the local unit of Budapest-based OTP’s press office said Oct. 30 in an e-mailed statement. Heightened demand has led to a “difficult but manageable” situation in Ukraine, according to Sergiy Manokha, director of treasury and institutional business at UniCredit’s local unit. “The main positive thing is that they’re not removing deposits as they were in 2008,” he said Oct. 30 by phone. Fiscal Costs The authorities may only opt for a devaluation to 8.3 per dollar by year-end and 9 by end-2013, according to Alexander Valchyshen, head of research at Investment Capital Ukraine, who said the drop would increase repayment costs on foreign bonds, push public debt to 35 percent of GDP from 28 percent and widen the budget deficit by weighing on economic growth. “The fiscal costs of the devaluation will be sizable,” he said Oct. 30 by phone from Kiev. “The deterioration in the fiscal position is the main reason the authorities will try to resist market forces.” Ukraine’s central bank and government have “all resources” to keep the hryvnia stable after the elections, Prime Minister Mykola Azarov said Oct. 10. Policy makers are also seeking to deter people from buying foreign currencies as a hedge against devaluation risks, central bank Governor Serhiy Arbuzov said last month. Ukrainians aren’t convinced the hryvnia can hold its ground and neither are investors. “The elections are behind us and forwards show the market expects some devaluation,” said Steffen Gruschka, portfolio manager at fund SG Alpha, which manages $10 million of Ukrainian equities. “The question is now how it will happen and when.”

Former Ukraine Leader Awaits Ruling On US Status

LAGUNA NIGUEL, USA -- A former Ukrainian prime minister convicted in the United States of corruption in his homeland has been released from federal prison and turned over to immigration authorities, authorities said Friday. Pavlo Lazarenko will appear before an immigration judge to determine if he can remain in the country, said Lori Haley, a spokeswoman for U.S. Immigration and Customs Enforcement. She declined to say where he is being held. U.S. Bureau of Prison records show that Lazarenko, 59, was released from federal prison Thursday. He served as Ukraine's prime minister from 1996 to 1997, then fled to the United States and applied for political asylum in 1999. Prosecutors instead accused Lazarenko of corruption, extortion and a host of other charges alleging he used his position to illegally enrich himself. They claimed jurisdiction because much of the millions of dollars at issue ended up in the United States. A jury convicted Lazarenko in 2004, and he was sentenced in 2006 to nine years in prison. He was allowed to remain under house arrest until he exhausted his appeals in 2008, when the U.S. Supreme Court denied a request to review the 9th U.S. Circuit Court of Appeals ruling upholding eight of the 14 charges. A judge reduced his sentence in 2009.

New Kremlin Headache: Democracy Is Alive And Well In Ukraine And Georgia

MOSCOW, Russia -- Vladimir Putin is suffering back pains and is cancelling foreign trips and his annual November press conference marathon. He may also be suffering from a foreign policy migraine: multi-party democracy is alive and well in the most unexpected of places: Russia’s neighboring southern republics — Georgia and Ukraine. The key to democracy is decision by the voters. Any American who tells you he or she knows who will win the U.S. presidential vote on Tuesday is either lying or blindly partisan. Opinion polls indicate a very tight race. On Oct. 1, foreign reporters flew into Tbilisi, Georgia for the parliamentary elections. According to common wisdom, and the polls, the election would be won by the party of Mikhail Saakashvili, president of Georgia for the last eight years. Then, the thinking went, the Georgians would jump up and down about fraud, things would quiet down, and Saakashvili would sail on to become a super-empowered prime minister. Wrong. Georgian voters thought otherwise. In an unexpected turn of events, voters migrated heavily to the opposition party of Bizdina Ivanishvili. Ivanisvhili’s supporters won. Saakashvili conceded defeat. And last week, Ivanishvili became the new prime minister of Georgia. Last week, a similar scenario played out in Ukraine. The government of President Viktor Yanukovych held his midterm presidential elections. Going into Sunday’s vote, analysts predicted the worst, saying the government had done its best to tilt the vote in its favor. And the tilt was pronounced. According to OPORA, an election watchdog group, 41 opposition candidates were physically attacked or harassed by government officials. The most prominent opposition leader, Yulia Tymoshenko, was in jail, held largely incommunicado. In the three months prior to the election, the TVi, the nation’s only independent TV channel, was dropped from cable packages offered to six million Ukrainians. On the spending side, the government pumped so much money into social spending that the budget deficit tripled during the first nine month of this year. In addition, the government postponed two unpopular moves: allowing the national currency, the hryvnia, to devalue and household gas prices to rise. And then there was the sneakiness – confusing voters with clone parties. At one polling station I visited, there were three Green Parties. Two of them featured photos of candidates who looked like they’d been recruited from the middle management of the post office – solemn middle aged men in coats and ties. The third, presumably the real Green party, had women and younger men in edgy haircuts. Around the nation, OPORA counted 45 cases of “twins” – or clone candidates. My VOA Ukrainian Service colleague, Oksana Ustujhanina, a savvy political observer, writes me that she intended to vote for an opposition candidate, Teriokhin, Sergii. But, on filling out the ballot, she marked the space for Teriokhin, Andrii, a pro-government candidate. His name came first – A before S. She emails me: “And when I was leaving the station, I saw on the wall a picture of another Teriokhin. Only then did I realize that I had been deceived.” These kinds of election dirty tricks put a bad taste in people’s mouths. They prompted Brussels and Washington to give the election poor grades. On Monday, the State Department called the election “a step backward.” The European observer mission said: “Democratic progress appears to have reversed in the Ukraine.” But, as foreign observers packed their bags, Ukrainian poll watchers and vote counters in contested races were, in some cases, wrestling over control of boxes with ballots, in other cases, sleeping with their arms around them. One week after the election, the dust has largely settled. Vote counting in several districts has been so disputed that re-balloting may be needed. But, OPORA, the most respected election watchdog group, declared that the final results for the five big parties only varied from their own parallel vote counts by maximums of 1 percent point. For all the money spent, President Yanukovych’s Party of Regions won only 30 percent of the vote. His parliamentary delegation will be 186 — nine seats smaller than going into the election. His allies, the Communists, increased their delegation to 32. Huffy about coming in fifth out of five, the Communists now are threatening to not work with the president. The three opposition parties won a total of 50 percent of votes cast. Yulia Tymoshenko’s Fatherland Party reversed its slide, adding six new seats for a total of 104. President Yanukovych’s ham-handed handling of the opposition leader can be thanked for her political resurrection. Voters wiped out the party of Viktor Yushchenko, the former president who has been seen as soft on his successor. In its place, there are two new totally new opposition parties, Svoboda, or Freedom, and UDAR, the pro-European party lead by Vitaly Klitschko, the heavyweight boxer. On one side, President Yanukovych’s party controls 41 percent of parliamentary seats. On the other side, the opposition will control 40 percent. President Yanukovych will only fashion a working majority by luring back the communists and a large number of independents. Gone are his October dreams of a two-thirds majority that would allow him to change the constitution. To get legislation passed, he will have to create situational majorities. And, with the next presidential election two years away, the interest of independents in helping an unpopular president will not last long. And this brings us back to the policy headaches for President Putin. On the domestic front, Putin has been trying to persuade Russians that they are better off under his personalist rule – “vertical power” dressed up with democratic window dressings. But, Georgians and Ukrainians, his former Soviet brethren, seem to prefer real, multi-party democracies. On the foreign policy front, Russia’s President has spent two years alternately cajoling and threatening Yanukovych, trying to lure Ukraine into a Moscow-dominated Customs Union – sort of a Soviet Union lite. Now, it is clear that a majority of Ukrainian voters do not want that. The three opposition parties that collectively received half of the vote are all pro-Western and all favor a free trade treaty with the European Union. In Ukraine, the sour grapes mood is so strong in Yanukovych circles that government supporters demonstrated outside the Russian Embassy on Thursday. They charged that Ukraine’s opposition candidates were subsidized by Alexander Lebedev, a Russian oligarch opposed to Putin. In response, Lebedev, an investor in Ukraine, wrote in letter of complaint to President Yanukovych: “The masterminds behind this show clearly wanted to question the parliamentary elections results.” Maybe, instead of looking for wild, convoluted conspiracy theories, it might be best to go back to a basic rule of democracy: listen to the voters.

Ukrainian Election Dispute Stirs Up Thugs And Police

KIEV, Ukraine -- Nearly a week after Ukraine's parliamentary election, officials are still scrambling to tally votes in key districts, with the opposition and Canadian vote monitors saying it's an example of efforts to doctor the results. Western observers — among whose ranks was a 500-member mission from Canada — have denounced Sunday's election as unfair. The Canadian mission published its extensive concerns Friday, saying there were "serious problems" with the vote count and "terrible conditions" at polls. The criticisms included: 8 districts still haven't finished counting ballots; election workers there, who are having to work without rest in "crowded, tense" premises, sometimes leave with election materials in hand before having sent in their tallies. "The process of tabulation in several cases is non-transparent, chaotic, and marred by violations." Ad-hoc changes in election protocols that don't go through the correct approvals process. "Serious problems with manipulation of electronic results." Notably, results on the central election commission's website have been altered in districts even after all polls have reported. The mission said the issues are "evidence of attempts to purposefully manipulate results." In last weekend's parliamentary race, President Viktor Yanukovych's party maintained its grip on power. But the campaign has been considered marred all along because the country's top opposition leader, former prime minister Yulia Tymoshenko, has been in jail since last year. Among the irregularities, the opposition claims its candidate in Kiev's precinct No. 223 defeated the pro-government one, but that election officials are trying to inflate the government loyalist's tally and under count opposition votes. Election officials continued vote-tallying Friday amid shouts by the opposition and police fending off alleged pro-government thugs. In previous days, fistfights have occurred there and tear gas has been used. Similar incidents have occurred in other regions, prompting the opposition to threaten street protests. Initial results from the Ukrainian election have Yanukovych's Party of Regions at 186 seats, his Communist Party allies with 32, Tymoshenko's former faction at 104, various other opposition parties with 84 and independents with 44. Canada's observer mission wasn't without its own controversies. It was mired in accusations of political tinkering when two former Liberal cabinet ministers were abruptly dropped from the team and a Conservative MP who had had his election win overturned was added.

Ukraine Opposition Calls Protest Rally Over Election Count

KIEV, Ukraine -- Ukraine opposition parties called a public rally for Monday to protest against what they said was fraud by President Viktor Yanukovich's ruling party in the final stages of the vote-count from the October 28 parliamentary election. 
The united opposition, which includes the Batkivshchyna (Fatherland) party of jailed ex-prime minister Yulia Tymoshenko, issued its protest call with a handful of seats to the 450-seat parliament still in dispute between candidates favorable to Yanukovich's Party of the Regions or to opposition forces.

Over the weekend, nerves were at breaking point in several of nine disputed districts with election officials who were conducting the vote-count besieged by supporters from both camps, demanding a re-count or threatening court action.

In one district in southern Ukraine, black helmeted riot police used tear gas when tensions boiled over between representatives backing a Regions candidate and those supporting a Batkivshchyna member.

The Regions, seen as representing the interests of big business, still seem set to retain a majority of more than 225 seats in the assembly, assuming support from their traditional communist allies and some independents.

But Batkivshchyna has made a strong showing and the opposition will be re-energized by the arrival in parliament of the UDAR (Punch) party of world heavyweight boxing champion Vitaly Klitschko and the far-right nationalist Svoboda (Freedom) party.

An overall Regions victory is likely to be seen by Yanukovich as a mandate to continue policies which opponents say favor the big business industrialists who back him.

Equally, the leadership will continue to be cold-shouldered by the United States and the European Union over the imprisonment of Tymoshenko.

The EU has already refused to settle a major free trade pact because of her case.  
Calls by the opposition for a protest rally in central Kiev over alleged vote-rigging evoke memories of the "Orange revolution" street protests of 2004-5 which overturned an election of Yanukovich as president, dooming his first bid for power.  

"The authorities are carrying out bare-faced fraud in districts where opposition candidates are winning. The wishes of tens of thousands of citizens are being changed into a forged result in favor of pro-ruling party candidates," a united opposition statement said on Sunday.

"The united opposition is appealing to all opposition forces, to all those who are not indifferent to fate of the country, to come to the building of the central electoral commission and defend their vote," it said.

The Regions have denied allegations of vote-rigging.

International monitors, the day after voting, criticized the authorities over aspects of the run-up to the election, mentioning specifically Tymoshenko's imprisonment and biased media coverage.

They said the election marked a "step backwards" for Ukraine under Yanukovich's leadership, though they were largely positive about the way voting had been conducted.

External monitors have since been sharply critical of the way the counting of ballots was manually carried out across the former Soviet republic of 46 million.

The central election commission on Sunday said only three seats in individual constituencies still remained to be decided.

But complaints about the official result in several others, mainly from the opposition, have gone to local courts and are awaiting adjudication.

Referring specifically to the way the count was conducted, an observer team from Canada last Friday reported evidence of deliberate attempts to manipulate results, particularly where competition was at its keenest in places like the capital Kiev.

"We ... note that the process of vote tabulation has been marred by serious violations, which raises doubts about the integrity of the results in several districts," said a statement by the team, which fielded 500 monitors.

In a joint statement in Brussels on Saturday, senior European Union officials expressed increasing concern that final results of the October 28 election had still not been announced.

EU foreign policy chief Catherine Ashton and EU Commissioner for Enlargement Stefan Fule urged authorities and parties "to take the necessary steps to finalize the tabulation allowing for the rapid announcement of the final results, which should reflect the genuine will of the Ukrainian voters."

Half of seats in parliament are awarded to candidates who win the most votes in individual constituencies, and half are given out proportionately to party lists.  

Yanukovich's Regions have won 30 percent of the vote on party lists, with their traditional allies, the communists, taking 13 per cent.

Together with gains in individual constituencies, this should add up to a comfortable majority.

In the opposition camp, Tymoshenko's Batkivshchyna bloc stood at 104 seats, Klitschko's UDAR at 40 and Svoboda at 37.