Feb. 8 (Bloomberg) -- For Viktor Yanukovych, who won Ukraine’s presidency five years after the Supreme Court threw out his first victory because of fraud, the hard part is behind him. Now the harder part begins, analysts say.
With just over 2 percentage points between Yanukovych’s 48.38 percent and rival Yulia Timoshenko’s 46.00 percent in yesterday’s vote, Yanukovych’s vow to unfreeze a $16.4 billion bailout, boost trade with the European Union and end years of political gridlock may be shelved as a battle over the election results and control over parliament looms.
“Yanukovych will face mighty challenges ahead,” said Ivan Tchakarov, an emerging-markets analyst at London-based Nomura Holdings Inc., in a note to clients today. “Timoshenko has vowed to contest the elections in court if there is proof that they have been rigged.”
Yanukovych, 59, whose base of support is in the Russian- speaking east, campaigned across the former Soviet republic to erase his reputation as a Kremlin puppet and stressed that he is as enthusiastic about the EU as Timoshenko, who drew her support from among the followers of the 2004 Orange Revolution, which she co-led with outgoing President Viktor Yushchenko. Bickering between those two former allies disappointed voters and brought decision-making to a halt.
New Image
In the last weeks of the campaign, political analysts and emerging-market economists acknowledged he was succeeding in forging a new image of a business- and export-friendly candidate who would stabilize markets and push the country out of a recession.
The small margin of victory threatens to unravel those promises, at least for the next few months as an expected court challenge runs its course and he ponders holding early parliamentary elections to oust Timoshenko from her current post as prime minister.
“The margin is insignificant and doesn’t give Yanukovych a very convincing victory,” said Yuriy Yakymenko, the head of legal and political studies at the Kiev-based Razumkov Center for Economic and Political Studies. “There will be court action now and orchestrated street demonstrations will be used as a background to this or as an element of pressure.”
Yanukovych’s quest for the presidency has been a struggle from the beginning. In 2004, when he was prime minister, he was handpicked by then-President Leonid Kuchma, the Moscow-leaning head of state, to be his successor. Vladimir Putin, who was Russian president at the time, publicly threw he support behind Yanukovych and was the first to congratulate him for his initial victory in November 2004.
Protests
Yanukovych didn’t count on the millions of demonstrators, who spent a wintry December on the streets, to challenge the results. In the end, his win was thrown out by the Supreme Court during what was later coined the Orange Revolution. His challenger, Viktor Yushchenko went on to win the presidency on promises to bring the country into the EU and the North Atlantic Treaty Organization.
Yanukovych, who was born in a small town near Russian- speaking Donetsk in eastern Ukraine, has never backed down on his insistence that Russian be recognized as the country’s second official language. It was one of his few campaign goals that differed from Timoshenko’s platform, and he has stressed that he would repair relations with Russia that were soured under Yushchenko.
Splintered Forces
This time around, he also moved to embrace the western part of the country as well and wooed voters with a pledge to cut taxes and attract investors to help return the economy to growth of 6 to 7 percent a year. Gross domestic product slumped about 15 percent in 2009, Ukraine’s worst recession since 1994.
During the campaign, Timoshenko tried to rally the now- splintered Orange forces behind her by warned voters that a Yanukovych win would unravel the advances by Yushchenko and Timoshenko’s government.
Her campaign also passed out pamphlets that described his jail time in 1968 on a robbery conviction and 1970 for fighting. His convictions were later wiped from his record by a court, according to his campaign statements in 2004.
The past jail time “hurts a person but it fortifies you as well,” Yanukovych said on Jan. 30 in a local television interview. “It gives you the chance to think about life, makes a person more responsible.”
Fear Subsides
Razumkov’s Yakymenko said his past life had little impact on the campaign.
“They are not afraid of his biography,” he said. “They knew all the facts and do not consider his biography as something that hampers him from being a leader.”
Yanukovych may have to wait to show the nation those qualities, analysts said. Yanukovych yesterday called on Timoshenko to step down as prime minister so he could order a new coalition in the legislature that would abide by his policies.
That most likely will not happen, analysts said, leaving him with no choice but to dissolve parliament as soon as he is inaugurated and call legislative elections for as early as May.
Still, elections “would leave the country without leadership and without an IMF program for some time,” said Dmitry Gourov, a Unicredit emerging-market economist in Vienna. “This would not be welcome.”
Source:businessweek.com
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