Ukraine. The year began in a critical economic situation, where before the New Year the government was forced to request increased credit from the International Monetary Fund (IMF) to meet its loan commitments and at the same time have the means to pay out pensions and public salaries.
According to COUNTRYAAH, Ukraine has a population of 41.98 million (2019). The January presidential campaign had a bitter tone, with Prime Minister Yulia Tymoshenko and former Prime Minister Viktor Yanukovych as main candidates directing fierce attacks against each other. The incumbent President Viktor Yushchenko was without a chance. His pursuit of Ukrainian NATO membership did not support public opinion, and his failure in relations with the Russian Federation was viewed negatively.
Yanukovych won the first round by 35.3 percent against Tymoshenko’s 25 percent of the vote. Viktor Yushchenko was only fifth with 5.5 percent. The second round between the first two candidates was a victory for Yanukovych with 48.9 percent against 45.5 for Tymoshenko.
But Prime Minister Tymoshenko refused to admit defeat. She claimed that electoral fraud was occurring and that her electoral commissioners were stopped in polling stations in eastern Ukraine, where Yanukovych has her strongest support. However, the OSCE election observers approved the election.
Yanukovych urged Tymoshenko to resign as prime minister, but she also refused. Tymoshenko demanded that the election result be annulled.
The outside world, however, acknowledged Yanukovych’s victory. He explained that he wanted to improve Ukraine’s relationship with the Russian Federation and avoid new gas conflicts that hit Europe. His Russian-speaking electorate in eastern Ukraine welcomed his desire to raise the status of the Russian language and give it the same position as the Ukrainian.
Tymoshenko eventually resumed its appeal of the election results, and Yanukovych was sworn in as president. He then declared that Ukraine would be an east-west bridge with good relations with the Russian Federation but also with the EU and the US.
Yanukovych’s regional party requested a vote of no confidence in Parliament against the government of Tymoshenko, which was cast by 243 votes out of 450. Tymoshenko was forced to resign, and one of Yanukovych’s allies, former Finance Minister Mykola Azarov, was appointed new prime minister. He took office in March in the leadership of a coalition with the Region Party, the Communist Party and the Lytvyn Bloc.
The new government’s urgent task was to reduce the state’s budget spending, so that the IMF would pay out the loans withheld since last year when Ukraine did not meet the loan terms. The cost of the Russian gas was a major item, and the new President Yanukovych was able to negotiate the price down by 30 percent with his good relationship with Moscow. In exchange, the Russian Federation was promised to keep its Black Sea fleet in Sevastopol on the Crimean Peninsula in Ukraine until 2042. The opposition raged against the agreement on the naval base and called Yanukovych’s traitors. There were dramatic scenes in Parliament, with smoke bombs, egg throwing and fights, when the settlement was approved there.
The government saw the agreement as inevitable to save the country’s economy, and in July, after extended negotiations, Ukraine received approval from the IMF for US $ 15.2 billion in two-and-a-half-year support loans. But before the first disbursement came, Ukraine was forced to take credit from the Russian Federation in order to cope with emergency expenses.
The Prosecutor’s Office stated during the year that the kidnapping and murder of the regime-critical journalist Georgij Gongadze in 2000 took place on the orders of the then Interior Minister Yurij Kravchenko. A police chief had previously acknowledged that he had committed the murder. In August, another investigative journalist disappeared in Kharkiv, Ukraine. The sitting interior minister explained that the journalist was probably murdered by someone in the police or judiciary.
The presidential office recovered much of the power transferred to Parliament in 2004, a transfer which, in October’s Constitutional Court ruling, had violated the Constitution. This strengthened the position of new President Viktor Yanukovych. According to opposition leader Tymoshenko, the court’s decision was tantamount to the introduction of dictatorship.
The new government also felt the protests of the people. The proposal to raise taxes to reduce the budget deficit was met by thousands of protesters in the capital Kiev in November. Market vendors, in turn, demonstrated new tax rules that forced even small business owners to make a comprehensive declaration. The police hit hard on the protesters, but President Yanukovych vetoed the proposal and called for amendments.
While there were protests at home, according to softwareleverage, Ukraine received praise from the IMF for its cuts, and at the end of the year a preliminary yes came to new loan payments. During the summer, Ukraine had been hit by severe drought, which halved the economically important grain exports during the year. But the economy had turned after the GDP race last year. It was estimated that GDP could grow by 5 percent in 2010.
Prosecutors opened an investigation in December against former Prime Minister Yulia Tymoshenko, who was charged with misuse of state funds following the sale of emission allowances. The income should have gone to pension payments instead of environmental measures. The investigation was followed by charges against Tymoshenko, who said the new regime witch-hunted the opposition, as several of her allies were accused of crimes. The action against Tymoshenko led to a physical fight in Parliament, when several members were injured.