UKRAINE: Yushchenko rule holds out hopes for change.

Analysis

Turnout at the re-run of the presidential election on December 26 was down 4%, at 77%. However, there was no mass boycott in the east. The Office for Democratic Institutions and Human Rights (ODIHR) of the Organisation for Security and Cooperation in Europe (OSCE), and the Committee of Voters of Ukraine, reported polling closer to international standards. The latter claimed most violations were still in eastern regions, in Donetsk and Sumy. Most of those taking the controversial 'voting from home' option were from the Donbas. Despite widespread claims of intimidation from the Yanukovych camp, his vote held up more or less in the west and centre, falling by a few points rather than being squeezed to an implausible minimum.

This will make it very difficult for Yanukovych to contest the results, especially as so many elements from the outgoing administration have made their peace with the Yushchenko team.

Regional breakdown. The results are now more plausible. In the east, there was again a heavy vote for Yanukovych, but not an absurdly exaggerated one. Turnout in Donetsk was 86.9% (compared with 97.6% in November), with 93.7% (97.2%) voting for Yanukovych. In Crimea, 81.2% voted for Yanukovych and 15.4% for Yushchenko. Last time, the total supposed Yushchenko vote had been less than the local Crimean Tatar electorate, all of whom had pledged to vote for him. Yushchenko won 32.0% in Dnipropetrovsk, 27.5% in Odessa and 43.4% in Kherson. The build-up of his vote in the east and south over the three rounds has been gradual but significant.

Building bridges to the Yanukovych electorate will be difficult, but Yushchenko is within reach of becoming an 'all-national' leader -- if the right decisions are made early in his term. Sabotage options for the outgoing Kuchma team seem to have run out.

Yushchenko agenda. Yushchenko will not only be president, but plans to begin his term with a 'storm' of decrees, although many compromises were made to smooth his path to power (see UKRAINE: Yushchenko win beckons but problems remain - December 7, 2004):

• On December 8, Yushchenko settled for a compromise shifting power to parliament, probably in early 2006, compressing the active phase of his presidency into little more than a year. The radicals think that he conceded too much from a winning position; he will be under pressure to make immediate sweeping changes in personnel and in foreign and economic policy, before the 'transition' period runs out.
• The Central Election Commission needs a more radical overhaul before the parliamentary elections due in March 2006, especially as several of its members face criminal charges for abetting fraud.
• There will have to be a new government, and the coalition that Yushchenko hopes to accommodate within it is extremely broad, ranging from his business supporters to Oleksandr Moroz's Socialists and cultural nationalists in Rukh. Yulia Tymoshenko has positioned herself as the new government's radical conscience, whether she is inside it or out.
• The position of prosecutor-general will be crucial in any attempt to clean up the political and economic system -- and pursue those responsible for election fraud and Yushchenko's alleged poisoning. New Prosecutor Svyatoslav Pyskun is a compromise who may not last. He was removed from the post in 2003 as he was making progress in the Gongadze affair; however, the Tymoshenko camp still smarts at the legal moves he initiated against her and her family in 2002.
• Presidential Administration head Viktor Medvedchuk is set to follow his deputy Vasyl Baziv into obscurity or even exile. Such local bosses as Yevhen Kushnariov in Kharkiv and Volodymyr Yatsuba in Dnipropetrovsk have already gone; more will follow. Purges of the Interior Ministry and TV networks are inevitable. At least one controversial death has hit the headlines; that of former Railways Minister Hryhorii Kipra, a mayor player in Yanukovych's team.

Parliamentary balance. However, most of the bigger players dropped their opposition to Yushchenko after the constitutional reform package was agreed. They now have a power-base in parliament, which will become much more powerful after 2006. Continuing defections from the former artificial government majority will give Yushchenko a working majority of 250-270 out of 450 deputies; but significantly, there have been almost no defections straight to his camp.

There are three main forces in parliament:

• Yushchenko's Our Ukraine, the Socialists and Tymoshenko's supporters have 140 seats.
• The die-hard new opposition, likely to be made up of Yanukovych's Regions of Ukraine, Medvedchuk's Social Democrats and the Communists, have 150.
• The balance of power is now held by the 'Lytvynisti' -- the 64 deputies in the three factions informally controlled by Parliamentary Speaker Volodymyr Lytvyn (one of the biggest gainers from all the recent political machinations) -- as well as no fewer than 47 'independents' (including defectors from the former regime).

Our Ukraine assumes it can win a 'coat-tails' majority in 2006, but this depends on how Yushchenko performs as president.

Policy outlook. The government is likely to trade on the goodwill generated by the change in leadership to avoid making tough choices for a while:

• In foreign policy, there are likely to be immediate overtures to Russia and the EU. Yushchenko enjoys a standing in European capitals that no previous Ukrainian leader has had; but Moscow also needs to back away from its one-sided bet on Yanukovych without losing face (see RUSSIA/UKRAINE: Moscow muddles its policy on Kyiv - December 13, 2004). Predictions of an imminent association with the EU or the end of the Common Economic Space with Russia may be exaggerated.
• In economic policy, there is much unfinished business from the Yushchenko government of 1999-2001. However, returning directly to the issue on which Tymoshenko left office in 2001 -- the coal industry's massive subsidies -- would involve an explosive attack on Yanukovych's power base. Yushchenko made repeated campaign promises to re-examine the privatisation of Kryvorizhstal (see UKRAINE: Russians, denied steel giant, eye ore group - August 9, 2004) -- which will now be a touchstone issue for his early presidency.

It is likely that the Dnipropetrovsk 'clan' will try to clean up their act, and that the Social Democrats' business empire will be dismantled. However, Yushchenko's biggest test will be in the Donbas, where the political rumblings among Yanukovych's supporters are designed to force the president to accept a form of de facto economic separatism, with the Donbas business group left to its own devices. Whereas Yushchenko might have tried to gather strength to deal with the Donbas clan later in his presidency, the constitutional reform may now make that difficult.