UA-69458566-1

Monday, April 22, 2019

Ukraine's New President: The Stakes for Ukraine and the West

By Nataliya Bugayova

Key Takeaways
  • Comedian Volodymyr Zelensky won the second round of the 2019 Ukrainian Presidential Elections on April 21. Zelensky may yet pleasantly surprise his critics and serve as an effective reform-oriented president. Until he does the U.S. should recognize the risks his presidency poses for Ukraine and the West.
  • The Kremlin likely sees Zelensky as an opportunity to gradually regain economic and political influence in Ukraine. The West and Ukraine could risk mistaking the Kremlin’s likely shift in approach for a shift in the underlying goals held by Russian President Vladimir Putin.
  • Other actors including oligarchs and allies of the former pro-Russian Ukrainian President Victor Yanukovych also perceive an opportunity for a comeback under Zelensky. Their regressive agenda has the potential to disrupt critical reforms in Ukraine.
  • Ukraine has much to lose, including its course towards a free and open society and its integration with the West. The ability of Ukrainian reformists to consolidate ahead of the October 2019 Ukrainian Parliamentary Elections will be key to Ukraine’s ability to preserve its gains since the 2014 Euromaidan Revolution.
  • The West can also play a major role in helping preserve these gains. The West must nonetheless strike a nuanced balance between supporting reforms and not inadvertently enabling Russia's interests in Ukraine.
Comedian Volodymyr Zelensky won the second round of the 2019 Ukrainian Presidential Elections held on April 21. His presidency presents at least six key risks for Ukraine and the West.

RISKS

Risk #1: Zelensky is vulnerable to external influences.

Zelensky lacks well-defined policy positions. He has shared only a limited vision for Ukraine’s future rooted in populist promises such as direct democracy via referendums.[1] His team is the primary source on his political platform and it is not obvious how he came to adopt its contents.[2] He has largely avoided policy debates.[3] His few public policy statements have reflected poorly on his understanding of key issues, particularly regarding national security. For example, he has stated that Ukraine “should just stop shooting” as a first step to end its conflict with Russia in Eastern Ukraine.[4] This statement ignores the nature of the conflict, multiple prior failed ceasefires violated by Russia and its proxies, and the Kremlin’s overall goals in Ukraine.

Zelensky’s lack of political experience or informed policies creates a risk of dependency on external advisors and powerbrokers. His policy team includes some reformists but there is no guarantee that they will be the dominant or longest-lived voice in his inner circle.[5] Necessary reforms will likely be deeply unpopular with both the electorate and the domestic oligarchs weighing their support for Zelensky. Oligarch Ihor Kolomoyskyi in particular could outcompete the reformists through his own associates who are on the team advising Zelensky.[6] The Kremlin is also almost certain to attempt to influence the personnel and policy surrounding Zelensky.

Risk #2: Kolomoiskyi’s agenda will likely have a negative impact on Ukraine’s reform progress and will not be necessarily anti-Russian.

The Institute for the Study of War (ISW) has assessed that Kolomoyskyi holds influence over Zelensky that he seeks to use to pursue policies favorable to his business interests in Ukraine.

Kolomoyskyi’s policy preferences will likely impede or reverse the reform process in Ukraine’s critical energy and banking sectors. He intends to regain a controlling stake in oil and natural gas producer Ukrnafta as well as PrivatBank – the largest commercial bank in Ukraine – after losing major equity in both organizations under incumbent Ukrainian President Petro Poroshenko.[7] Kolomoyskyi will also likely attempt to entrench his interest by facilitating the creation of a coalition for Zelensky in the Ukrainian Parliament.[8] Zelensky might thus end up aligned with populists such as Yulia Tymoshenko or politicians favorable to Russia if reformists do not coalesce around him.

Kolomoyskyi is also not necessarily an opponent of Russia. Kolomoyskyi did act to halt the advance of Russian-controlled separatists in the Dnipropetrovsk Oblast in 2014 by directly funding militia units. He is unlikely to intentionally empower Russia in Ukraine. He has nonetheless acted – and will continue to act – primarily in line with his business interests, which might require concessions to Russia. The Kremlin may also choose not to work directly against Kolomoyskyi given that his self-interested pursuits will likely slow domestic reform efforts and thereby indirectly support Russia’s goals in Ukraine.

Risk #3: Former powerbrokers displaced by the Euromaidan Revolution in 2014 see an opportunity to resurge.

Allies of former Ukrainian President Victor Yanukovych, whose pro-Russian regime was run out of office after the 2014 revolution, have expressed optimism regarding Zelensky, framing him as a “chance for change” in Ukraine.[9] These actors likely perceive an opportunity to regain political and economic influence in Ukraine. Their return would bring regressive policies likely to curb reform gains and civil liberties. They may also seek to take revenge against reformists and other political rivals who played a role in Euromaidan.

Risk #4: Zelensky’s presidency could polarize reformists in Ukraine.

Reformists are not unified over questions regarding Zelensky’s personal competence, integrity, and independence as well as the merits of serving in his administration. The presence of reformists in the Ukrainian Government and Ukrainian Parliament is one of the major gains of the Euromaidan Revolution. For years, public service had been unattractive to reform-oriented professionals for a number of reasons. Euromaidan provided an unprecedented window of opportunity for such individuals to enter government or effectively support it from the outside, albeit still in insufficient quantities with insufficient authority. Zelensky’s presidency threatens to fracture this already fragile group and thereby reduce its sustainability and influence.

Zelensky’s victory could on the other hand provide an impetus for reformers to unite and run as a consolidated bloc in the 2019 Ukrainian Parliamentary Elections on October 27.

Risk #5: Zelensky’s presidency could provide a vector for the Kremlin to regain its influence in Ukraine.

The Kremlin understands that it will not immediately be able to regain its dominant influence over Ukraine. It is instead focusing on improving its overall position in the political landscape of Ukraine throughout the 2019 Ukrainian Presidential and Parliamentary Elections. Its interim objective is to nudge Ukraine out of alignment with the West and closer to Russia’s orbit. Its strategic objectives remain the same: to politically reorient Ukraine towards Russia and ensure that Ukraine does not become a functional democracy that could challenge the authoritarianism of the Kremlin and Putin.

The Kremlin likely perceives an opportunity to start reorienting Ukraine towards Russia’s orbit in the long-term. It had already begun to soften its domestic propaganda narrative towards Ukraine and Zelensky in anticipation of his victory in the 2019 Ukrainian Presidential Elections.

If Putin manages to gain this renewed foothold in Ukraine, he will likely focus on guaranteeing long-term influence over Kyiv. The Kremlin’s likely approach could encompass elements of the following dangerous scenarios.

Gradual Trade over Rapid War

The Kremlin will likely prioritize a gradual revival of its economic presence in Ukraine in its effort to regain influence. The Kremlin can potentially exploit favorable sentiment among those segments of business class in Ukraine, which stands to benefit from renewed trade with Russia. These actors include many oligarchs as well as Yanukovych’s allies.

Russia’s economic outreach could well provide a short-term boost to Ukraine’s weak economy. The Kremlin would likely reinforce its effort with an information campaign to create the perception Ukrainians are living better.

However, this veneer of progress would conceal Ukraine’s growing economic dependence on the Kremlin. Ukrainians would in reality be surrendering their economic sovereignty and ceding any prospect of structural economic reforms. The Kremlin would likely push to roll back reforms in the energy sector and thereby reassert Ukraine’s energy dependence on Russia. Russia would aim to limit Ukraine’s domestic gas production, regain control over its transit system, and subordinate it to the natural gas monopoly wielded by the Kremlin.

The Kremlin might also choose to reduce overt military tensions in Eastern Ukraine over time, although it might increase military pressure in the short run. The Kremlin could then leverage its global propaganda machine to broadcast this decision as a step towards peace in Ukraine. The West might nonetheless view this narrative positively as it plays into a common sentiment that ‘stopping the fighting’ is more important than defending Ukraine’s sovereignty. Putin could thereby undermine sanctions against his regime by shifting only his approach rather than his underlying goals.

Away from the West

The Kremlin will also likely attempt to exploit Zelensky’s calls for referenda on Ukraine’s potential membership in NATO and the EU.[10] These proposals are inherently regressive. The Ukrainian Parliament codified Ukraine’s aspiration to join NATO and the EU in the Ukrainian Constitution. Referenda are also vulnerable to manipulation. Russia is likely to use disinformation and electoral subversion to ensure decisive defeats for these referenda, the results of which would be difficult to reverse.

Trojan Horse Inside Ukraine

The Kremlin will likely attempt to exploit Zelensky’s lack of foreign policy experience to convert Russia’s military campaign into political gains in Ukraine. Zelensky has already made several conciliatory statements on the need to meet “halfway” with Putin and establish a ceasefire in Eastern Ukraine.[11] These statements reflect a fundamental misunderstanding of the nature of the conflict in the Donbas. Russia illegally invaded Ukraine and built a proxy separatist force in Donetsk and Luhansk. The Kremlin retains the ability to escalate and deescalate the level of violence at will in Eastern Ukraine.

Putin has long desired to legitimize the self-proclaimed separatist republics that he created in Eastern Ukraine. Legal autonomy for the Donbas would grant the Kremlin a permanent lever of influence over Ukraine. It would also set a number of dangerous international precedents by de facto legitimizing the invasion of a sovereign nation, the principle that states have a right to intervene militarily ostensibly on behalf of related minorities, and the notion of truncated sovereignty for states that were part of the former Soviet Union. It would set a model for others to follow, namely that an aggressor can legitimize an invasion if it subsequently manipulates the internal political dynamics of the victim to “accept” its aggression.

Risk #6: Ukraine’s progress toward a free society will face challenges.

Ukraine’s current trajectory towards an open and free society should not be taken as a given. Ukraine, which faces major challenges, maintains a media landscape and civil society both capable and willing to criticize the Ukrainian Government. These liberties remain fragile despite their expansion since the 2014 Euromaidan Revolution.

Ukraine’s social progress under Zelensky will likely face converging pressures from the oligarchs, former powerbrokers, populists, and the Kremlin under Zelensky. Russia in particular has an incentive to disrupt a successful democratic model in Ukraine that could threaten Putin’s regime.

STAKES FOR THE U.S. IF THE KREMLIN REGAINS INFLUENCE IN UKRAINE

The Kremlin’s Ambitions 

Ukraine holds inherently asymmetric value to Russia. The Kremlin perceives Ukraine as not only a buffer state but also part of its cultural, economic, and military core. The Kremlin devotes a significant amount of its foreign policy bandwidth to its campaign to regain political control over Ukraine given the value Putin assigns to this goal. If the Kremlin regains its influence in Ukraine, it will likely be further emboldened and free some of its resources to focus elsewhere.

Cascading Effects in Europe 

The Kremlin intends to achieve a multi-layer zone in Europe with states that are Russia-neutral or Russia-friendly. It is working establish a core group of countries within the immediate orbit of Russia including Ukraine, Belarus, and Moldova. It is also attempting to create a second outer circle of Russia-neutral states by prying Hungary, the Baltics, and other countries away from the U.S. and NATO. The Kremlin in this vein has fueled internal instability and supported populist political parties and polarizing ideologies across Europe. Russia will have additional levers to politically and militarily pressure Europe and drive further wedges within NATO if it regains dominant influence in Ukraine.

Effects on the Rules-Based International Order

Russia’s gradual restoration of influence in Ukraine would legitimize its aggressive actions, including its illegal occupation of Crimea, its invasion of Eastern Ukraine, and its continued subversion campaigns across Ukraine. Other states such as China are likely to emulate this behavior.

Loss of Insight on Russia’s Operations 

Russia’s increased influence over Ukraine will likely result in a corresponding loss of influence and access for the U.S. and Europe. The U.S. and NATO could limit their economic, defense, and government reform cooperation with Ukraine in response to its deepening ties with Russia.

All pragmatic arguments aside, it is also in the national interest of the U.S. to support the genuine aspirations of nations to achieve democratic societies rooted in the rule of law and not stand aside when an authoritarian state erodes and destroys an emerging democracy.

CONCLUSION

Zelensky’s victory thus poses risks for Ukraine’s reform progress and integration with the West. It may open an opportunity for regressive forces ranging from oligarchs and former corrupt powerbrokers to the Kremlin to regain influence in Ukraine. The ability of reformists to mature their political platform and consolidate their influence will be critical to preserve and build upon the progress made by Ukraine since the Euromaidan Revolution. The 2019 Ukrainian Parliamentary Elections will play a deciding role in this effort. The U.S. should take steps to ensure that Ukraine’s reforms do not unravel. The U.S should specifically support reformists and civil society to ensure sustained momentum in favor of political and economic reforms.

The U.S. should also work to ensure that Europe maintains its support for Ukraine and its sanctions on Russia until the Kremlin withdraws its forces and halts its aggression against Ukraine. The U.S. should help keep an international spotlight on the conflict and ensure that Ukraine – not Russia – controls the narrative about the situation in Eastern Ukraine. Ukraine will become more vulnerable to Russia the moment it disappears from Western governments’ statements. The U.S. must be alert to quiet attempts by the Kremlin to expand its influence in Ukraine and not confuse shifts in Putin’s approach with shifts in his underlying strategic goals.

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[1] [“Election Program of Volodymyr Olekcandrovich Zelensky,”] Ukrainian Central Election Commission, February 27, 2019, http://www.cvk.gov(.)ua/pls/vp2019/WP009?PT021F01=233&PT001F01=719.
[2] Yuriy Smirnov, [“Zelensky’s Plan. The First Ten Decisions in Case of Victory,”] Liga, April 10, 2019, https://www.liga(.)net/politics/articles/plan-zelenskogo-pervye-desyat-resheniy-v-sluchae-pobedy.
[3] [“Media Movement Calls on Zelensky to Go to the Press Before April 19,”] Radio Svoboda, April 16, 2019, https://www.radiosvoboda(.)org/a/news-mediaruh-zaklykaye-zelenskogo-vyity-do-presy/29883668.html.
[4] Roman Kravets, [“Volodymyr Zelensky: April 1 - An Honorable Day to Win the Clown,”] Ukrayinska Pravda, January 21, 2019, https://www.pravda.com(.)ua/articles/2019/01/21/7204341/.
[5] Bermet Talant, “Who Are Key People on Zelensky’s Campaign?” Kyiv Post, April 12, 2019, https://www.kyivpost.com/ukraine-politics/who-are-key-people-on-zelenskiys-campaign.html; Bermet Talant and Matthew Kupfer, “Presidential Front-Runner Zelensky Presents His Team Two Days Before Election,” April 18, 2019, https://www.kyivpost.com/ukraine-politics/presidential-front-runner-zelenskiy-presents-his-team-2-days-before-election.html.
[6] Ibid.
[7] Artem Ilyin, “Ukrainian Oligarch Kolomoyskyi’s Diminishing Influence in the Oil Market,” Hromadske, June 6, 2018, https://en.hromadske(.)ua/posts/ukrainian-oligarch-kolomoiskys-diminishing-influence-in-the-oil-market; Bermet Talant, “Kolomoyskyi Rails Against Ukraine and Poroshenko,” Kyiv Post, November 23, 2018, https://www.kyivpost.com/ukraine-politics/kolomoisky-rails-against-ukraine-and-poroshenko.html; Oleksiy Sorokin, “Update: Kolomoisky Wants the Government to Return His Former PrivatBank Shares, Court Case to Be Held on April 18,” Kyiv Post, April 8, 2019, https://www.kyivpost.com/business/oligach-kolomoisky-says-he-wants-2-billion-in-compensation-for-privatbanks-nationalization.html; Nikola Mikovic, “The Role of Oligarchs in Ukraine’s 2019 Presidential Elections,” Global Security Review, March 27, 2019, https://globalsecurityreview.com/oligarchs-2019-ukraine-presidential-elections/.
[8] [“Negotiations on a Coalition Under Zelensky Began in the Rada, - Sources,”] RBK-Ukraine, April 11, 2019, https://www.rbc(.)ua/rus/news/rade-nachalis-peregovory-koalitsii-zelenskogo-1554965733.html.
[9] Olena Lukash, Facebook, April 7, 2019, https://www.facebook.com/ElenaLukash.ua/posts/2079554865677212.
[10] [“Election Program of Volodymyr Olekcandrovich Zelensky,”] Ukrainian Central Election Commission, February 27, 2019, http://www.cvk.gov(.)ua/pls/vp2019/WP009?PT021F01=233&PT001F01=719.
[11] Sevodnya, [“An Exclusive Interview with Volodymyr Zelensky,”] YouTube, April 7, 2019, https://www.youtube.com/watch?v=WqDbdqQzY7Q; [“Zelensky Is Ready to Negotiate with Putin,”] Korrespondent, April 7, 2019, https://korrespondent(.)net/ukraine/vibory2019/4083836-zelenskyi-hotov-k-perehovoram-s-putynym.