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A PM Natalie Jaresko – A unique opportunity?

March 5, 2016

Following on from yesterday’s entry that highlighted the rumour (which is gaining momentum) of a new Cabinet of Ministers by 15th March and possibly a new Prime Minister in Natalia Jaresko, aside from the problems faced by any new appointees that were faced by the current incumbents, there is perhaps one unique, albeit unlikely, possibility that presents itself – and yes, pigs will probably fly first.

pig

As stated in the aforementioned entry, “Nevertheless, regardless of any subsequent Cabinet composition or new PM, whatever policy then flows from it will require the support of the current parliamentarians (and those behind many of them) for it to be effective – and those policies are not likely to be very different from those of PM Yatseniuk and current Cabinet as many are shaped by IMF and Association Agreement obligations.” – In short, would the oligarchy that support so many political parties and dozens of individual parliamentarians, provide more support for similar policies from a Jaresko Cabinet than it has offered to the current incumbents?

That Ms Jaresko would be probably the only consensus candidate to replace PM Yatseniuk was stated in October last year – “To be blunt, Ms Jaresko would be the only realistic possibility that could gather a domestic political consensus and also enjoy the support of friendly external supporters and donors in a change of Cabinet (rather than elections) – but is she interested?  She would probably take the role out of a sense of obligation to Ukraine to avoid internal implosion, but that does not equate to wanting the role.  Notwithstanding a serious corruption fumble between now and any ouster/resignation of PM Yatseniuk, she is perhaps the only “consensus alternative.”

She is the only possible consensus domestic candidate for she is the only realistic possibility not beholding to a specific oligarch or the oligarchy collectively.  She is free of nefarious political history or business dealings in Ukraine, and entered Ukrainian politics at the behest of the Ukrainian political class.  She would also enjoy, and does enjoy, support from all of Ukraine’s external supporters and institutions.  In this regard she would be absolutely unique as a Prime Minister as far as Ukraine is concerned, for all previous incumbents have either been oligarchy themselves, or beholding to one or more oligarch.  No previous incumbent has been so politically clean.

Whether her Cabinet lasts 6 months or 12 (or perhaps longer) very much depends upon the individual and/or collective will of certain oligarchs via the parties and individual parliamentary votes the “own”.

The opportunity, as slim and as unlikely as it may be, is a chance to negotiate with the oligarchy to remove/dramatically reduce their odious presence in politics and contain them within the business/economic sphere where they belong.

For those that have ever had the opportunity to speak to the oligarchs alone (and many of the minigarchs), there seems to be a general consensus that all would (theoretically) reduce their political machinations if only they could be certain the others would do the same.  Most seem quite aware that society will suffer their continued games only for so long.  They are getting older and there is an ever-growing politically active younger generation that simply holds them in contempt.

The next Maidan happens either within the Verkhovna Rada or with the oligarchy (and their puppets) as the target of public ire.

(Indeed sooner rather than later perhaps, it seems probable that Governor Saakashvili is going to have to call out President Poroshenko for hindering reform and anti-corruption efforts.  As Governor Saakashvili is constitutionally barred for many years hence from becoming President, he may well back Andri Sadovy, (head of Samopomich and Lviv Mayor) in the next Presidential elections with a view to becoming his Prime Minister.  We may also see Yulia Tymoshenko lurch to the political left in an attempt to gather in the unrepresented socialist/communist voters via her usual populist policy necrophilia (populist policies that have long since proven to be dead but which she cannot let go of).

A persistent problem regarding negotiations with the oligarchy has been one of trust.  The oligarchy do not trust each other, and as one or several have always backed any sitting President or Prime Minister to the cost of the others, there has been limited (or no) trust in any political leader when it comes to negotiations and guarantees of solutions to remove them (and the costs they incur) from politics thereafter.

What has been consistently lacking is somebody that they can all trust – or perhaps better written, somebody none of them distrust.  Somebody that does not work with any of them and is beholding to none of them.  Somebody who will also defend the interests of the State whilst also defending the interests of business – or in the case of the oligarchy, big business, fairly.

Ms Jaresko has given none of them reason to distrust her.  Neither is she somebody beholding to any of them.  She answered the call of the Ukrainian State yet clearly has an understanding of the interests of big business.  Further Ms Jaresko is clearly a more than reasonable negotiator, having reached agreements with the IMF and those holding substantial Ukrainian debt successfully.  Even if those negotiations have done little more than kick the can 5 years or so down the road, kicking that can was successfully achieved in very difficult circumstances.  It was in fact essential.

If a Prime Minister Jaresko is to become reality – and it is by no means certain – then she is uniquely placed to attempt to have these discussions with the oligarchy.  They may even take her up on the offer of renegotiating the political and economic rules if their concerns are somehow met.

The first concern is that any reduction in influence occurs across the oligarchical board at the same time and to the same level.  A strong driver for their continued interference is to be able to protect their (questionably/nefariously acquired) property rights.  Political influence and oligarchical property rights ebb and flow in unison historically, depending upon who backed who at the political pinnacle of any incumbent power.

Ergo, the sensitive topic of guaranteeing their already misappropriated and misused assets from future State and peer attempts to remove them would seemingly be a prerequisite.  In short, a line drawn over historical acquisitions of years past, yet a line that clearly defines further nefarious acts as unprotected by the agreement.

It is not something this blog would necessarily agree with, but it is a policy option that could provide the opportunity of removing/reducing the oligarchy within politics by agreement.  Over the next few years there seem few alternatives other than to see the oligarchy swinging from lampposts due to an angry mob, or to simply allow matters to continue (perhaps until they are all dead due to old age).

If that option be pursued, the question is then how such property rights are guaranteed without their nefarious and cancerous hands pulling the strings within Ukrainian politics.  Passing such a law is of course no problem should they all agree considering the parties and individual parliamentarians they control – but setting such a deal in law sits extremely uncomfortably with the blog (and no doubt many others).  Ergo some form of legal contract (rather than law) between “the State” and the oligarchy could be reached, the penalties within so onerous on either party to that contract, that breaking it would be folly.

In short the creation of conditions whereby the oligarchy have more interest in playing in business than in politics – and that seemingly requires a guarantee of property rights for existing assets first and foremost.  It will also require an end to government subsidies, bad debt write-offs and State recapitalisations across all State Owned Enterprises (SOEs) both in which the oligarchy currently own shares and also those they do not (yet) to both avoid temptation for one party, and ease the economic burden for the other.

A Prime Minister Jaresko, though unique in her distance from oligarch contamination, would still require extremely robust and forceful external support (and perhaps deal guarantors) not only to be successful, but perhaps simply to begin such negotiations.  (Rumours of yet more sealed indictments or money laundering probes ala Firtash perhaps?)   Some of those external guarantors would be hesitant to put it mildly – but if any Jaresko government is to succeed it requires the oligarchy not to obstruct it, and for her to treat them all equitably in return.

This is of course, all hypothetical.  Firstly PM Yatseniuk still sits in his chair as PM.  Secondly a PM Jaresko would want to take such a negotiation path and strike such a grubby deal.  The oligarchy would also have to want to negotiate too.  Lastly any deal made over irrevocable property rights for a significant and permanent political retreat would require guarantees (and guarantors) that would last far into the political future.

Looking past the possibility of a Prime Minister Jaresko appearing in the next few weeks (for however long that tenure prove to be), and to the results of any early Verkhovna Rada elections, there are but few even remotely possible outcomes that would produce any Prime Minister free from oligarchy influence.  Mikhail Saakashvili or………?  Certainly not Andri Sadovy, for his eye remains firmly on the presidency.  If, (and it is an if given the political mathematics and undoubted TV campaigning issues he will face) a PM Saakashvili were to appear, would the oligarchy rue having missed the chance to negotiate a deal (with guarantees and guarantors) with a PM Jaresko, (and in doing so also insured her tenure lasting longer)?

Nevertheless, despite the fact that a PM Jaresko and Cabinet may have a short tenure ahead due to the probability of early Verkhovna Rada elections prevailing, she would present a unique opportunity to negotiate with the oligarchy that has previously never presented itself.

Flying pigs, naturally, are more likely however!

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