Ukraine: A Tour of the Biggest Stumbling Blocks Ahead

Editor’s note: As peace is re-established in Ukraine, the country faces big challenges ahead. Steven Pifer looks at six stumbling blocks Ukraine will confront, including managing the politics among the leaders, cultivating inclusivity, taking public opinion into account, ensuring democratic norms, financial pressures and relations with Russia.

Things change fast. Just a few days ago, Ukraine teetered on the brink of violent chaos. Thousands of demonstrators faced off against riot police in pitched battles in central Kyiv that left scores dead and hundreds injured. Now, calm is returning to the capital, President Yanukovych has fled, and the pro-European opposition has taken charge.

Putting Ukraine on a successful trajectory will require hard work and political sensitivity. Success is far from guaranteed. The new government, which is expected to be in place by the end of the week, will face serious challenges.

The first challenge is managing the politics among the leaders. Vitaliy Klitschko, Arseniy Yatseniuk and Oleh Tyanibok presented a united opposition front over the past three months of crisis. They joined this past weekend to support the appointment of Olexander Turchynov as chairman of the Rada (Ukraine’s parliament) and acting president.

They need to continue to work together as the Rada elects a prime minister and a new cabinet takes shape. Yulia Tymoshenko returned to Kyiv from prison on February 22, adding yet another player to the mix.

The inability in 2005 of President Viktor Yushchenko and Prime Minister Tymoshenko to work together was a big reason why the 2004 Orange Revolution failed. In-fighting now could likewise derail things—and a looming May 25 presidential election may generate splits.

A second challenge is the need for inclusivity. Until last Friday, Yanukovych’s Party of Regions constituted the largest bloc in the Rada, though defections have since then markedly reduced its numbers. A genuine national-unity government, including some who speak for the interests of the Party of Regions’ constituency, could make those who voted for Yanukovych and the Party of Regions feel that their interests will receive due consideration in the new cabinet of ministers.

This will be critical in eastern Ukraine and Crimea, Yanukovych’s political base. Many there were shocked by the violence, as well as the opulent corruption on display since Yanukovych’s residence was opened to the public, but they are uncomfortable with how events played out in Kyiv. One should not overstate the potential for separatism, but making the eastern constituency feel vested in the government and its policies makes good political sense.

A related question is how the government holds accountable those responsible for past crimes and corruption. Kyiv has issued an arrest warrant for Yanukovych. Those responsible for the shootings of demonstrators certainly should be punished, as should those who stole millions of dollars from the state. But the new government cannot afford to become consumed by the need to settle scores from the past.

The third test facing Ukraine’s leaders is staying in touch with—and taking account of—public opinion. The “Maidan,” a term that collectively refers to those who demonstrated so many times over the past three months in the heart of Kyiv, is skeptical of virtually all politicians. Nothing would undercut public support more quickly than a sense that the new government has slipped into old habits of making politics a nontransparent dialogue among select elites.

The fourth challenge is getting things to work. The quicker the return to normalcy, the more confidence the government will generate across the country. In the rush to get things done, however, it needs to fully observe democratic norms. Taking shortcuts would only undermine its legitimacy in the eyes of the public, and opponents would seize on that.

The fifth challenge is managing the looming financial crunch. Even before the political crisis, Ukraine’s financial situation in 2014 looked grim, with estimates that the country would require $15-20 billion this year in external financing to avoid having to default on its obligations. If anything, the requirement has grown.

Following Yanukovych’s November 21 decision to suspend pursuit of an association agreement with the European Union, Vladimir Putin rewarded him with a $15 billion credit line. The Russians suspended those credits last week (only about $3 billion had been applied).

The United States and European Union have worked with the International Monetary Fund on a financing program that will require that Ukraine adopt serious economic reforms. Some of those changes—such as raising the heating price charged to households—will prove politically painful. Kyiv needs to work out terms that give the IMF confidence that it is committed to change while not provoking broad public discontent. In any event, the government must prepare the populace for some austerity steps.

The sixth test that Kyiv faces is Russia. The recent turn of events in Ukraine has dismayed the Kremlin. Prime Minister Dmitry Medvedev on February 24 expressed “serious doubt” about the legitimacy of the new authorities in Ukraine, and the Foreign Ministry has strongly criticized the weekend’s turn in events.

Putin’s image of Russia as a superpower includes a sphere of influence in the post-Soviet space. A Ukraine that opts for an association agreement with the European Union—something that all the main opposition leaders endorsed—will leave a big hole in his desired construct.

This also matters to Putin at home. Many Russians have yet to reconcile with the fact that Ukraine became an independent state following the collapse of the Soviet Union in 1991. Bringing Ukraine closer to Russia’s fold would resonate well with conservative elements in his domestic political constituency.

If the Kremlin wishes, it has levers to make trouble for Kyiv beyond suspending the suspending the $15 billion credit line.

Moscow could freeze the import of Ukrainian goods, as it did last summer to show its pique at the prospect of Kyiv signing the association agreement. The Russians might rescind the 30 percent cut in the price of natural gas that they applied in December, and could even threaten to shut off the flow of gas, as happened in 2006 and 2009.

Should the Kremlin decide to play true hardball, it might try the more dangerous game of encouraging separatist sentiment in eastern Ukraine or Crimea, home to much of the Russian Black Sea Fleet.

Kyiv will need to engage Moscow and explain that, while it pursues closer integration with the European Union, it also has a compelling interest in positive relations with Russia, including strong commercial links. A Ukraine with growing links to Europe and stable, constructive relations with Russia arguably should not pose a threat to the Kremlin’s interests, but few believe Moscow can be brought to such a view.

Managing these challenges will test the wisdom and political skill of even the most capable Ukrainian leaders. The United States and European Union should understand the depth of these tests—and the risks of failure. If the new government shows itself to be committed to building a more democratic state with a less corrupt and reformed economy, Washington and Brussels should look for ways to ease its burdens.

This piece was originally published by The National Interest.