Good-Bye Lenin? Is Ukraine’s ‘Revolution’ Pro-European or Pro-Oligarchic?

By Alla Semenova

Protesters topple a statue of a Soviet leader, Vladimir Lenin in downtown Kyiv, Ukraine on Sunday, December 8, 2013.

For more than two weeks, Ukraine has been swept by massive pro-European, anti-government protests, the largest the country has seen since the Orange Revolution of 2004. Hundreds of thousands of demonstrators have stormed the streets of Kyiv, following President’s Yanukovych decision to put on hold a major trade and cooperation agreement with the EU. Pressure from Putin’s Russia is cited as the main reason for the President’s U-turn.

In a symbolic rejection of Russia’s interference into Ukraine’s domestic affairs, protesters toppled and smashed into pieces Kyiv’s last remaining statue of Vladimir Lenin. The market for the pieces of the monument was quick to develop, with the statue’s hand selling for as low as $125. Other pieces could be purchased by weight for only $6 per kilogram. The highest bidder is yet to determine the price of the statue’s head.

As demonstrators continued to set up camp at Maidan (Kyiv’s Independence Square, the epicenter of the protests), President Yanukovych declared on Tuesday, December 10th that he would be willing to resume the EU talks with Brussels. At the same time, the President underscored the importance of strengthening the economic ties with Russia. Next day, December 10, 2013, clashes broke out between Ukraine’s special security forces Berkut and peaceful protesters in downtown Kyiv.

So could Ukraine really say ‘good-bye’ to Russia? Could Ukrainian business elites really say ‘good-bye’ to Russia-oriented business as usual? If so, they would have to have a very good reason.

As is well known, mega-rich business-owners (referred to as the ‘oligarchs’) wield huge political power in Ukraine because they own and control key economic resources. They have enriched themselves under the current, pro-Russian regime, and one would think the oligarchs would staunchly oppose any changes to the status quo.

Yet, upon closer examination, one discovers that the rules of the oligarchic game have started to change several years ago, to the detriment of many business tycoons. For the disadvantaged business moguls, the ‘European revolution’ is a way to reverse or at least to contain some of the negative changes that have been taking place.

I would argue that, if successful, the ‘European revolution’ (known as the EuroMaidan) would bring many European changes to Ukraine. At the same time, the EuroMaidan would strengthen the grip of many oligarchs upon key economic resources. In that sense, the EuroMaidan is both pro-European and pro-oligarchic.

To begin, Ukrainian oligarchs are not a unified group with clearly demarcated spheres of influence. At least not any more.

On the one hand, there is the ‘old’ oligarchy, closely aligned with President Yanukovych. A steel and electricity mogul, Renat Akhmetov, based in Donetsk (Eastern Ukraine), is the ‘old’ oligarchy’s most recognizable face. With an estimated $16 billion in net worth, Akhmetov is the richest guy in Ukraine, and the 47th billionaire in the world (he used to be 39th just last year). Commonly spotted alongside President Yanukovych during football matches, Akhmetov is the owner of a hugely successful Shakhtar Donetsk Football Club. He also boasts a premier One Hyde Park address in London, having purchased a 25,000 sq. ft. apartment there for a record high £136.4 million. It goes without saying that Akhmetov is an owner of a leading TV channel in Ukraine.

Would someone like Akhmetov, a business tycoon who amassed great fortunes under the current pro-Russian regime, and whose economic grip has not been challenged so far, support any pro-European changes? Certainly not. No doubt, Akhmetov would have to catch up with any pro-European changes later down the road, but he definitely would not push for such changes in the first place. And Akhmetov seems to be well prepared to face pro-European changes in the future.  For one thing, his TV channel has started to provide fuller and more ‘objective’ coverage of the EuroMaidan.

In addition to the ‘old’ oligarchy represented by Akhmetov and his friends, there are two other factions. One is an established faction, similar to that of Akhmetov’s. The other business clan is relatively new, and is commonly referred to as “The Family”. The Family is headed by Oleksandr Yanukovych, the President’s elder son. By its nature, the Family is very close to the President.

It is the rise of Yanukovych’s “Family” that has been posing a serious threat to the positions of many well established oligarchs in terms of limiting their business opportunities and encroaching upon their economic territories. The oligarchs challenged by the rise of the Family include guys like Dmytro Firtash, Victor Pinchuk, and Petro Poroshenko, among others. Firtash is an energy and chemicals mogul whose net worth is approaching $1 billion. Pinchuk is the second largest billionaire in Ukraine, boasting an estimated net worth of $3.8 billion. Poroshenko, Ukraine’s “Chocolate King”, the owner of “Roshen” confectionary, is the seventh richest guy in the nation, with an estimated net worth of $1.6 billion. Please keep in mind that Ukraine is a poor country.

Just to give an example, in August 2013, Russia blocked the importation of “Roshen” goods on allegations that they contained poisonous chemicals. Russia never backed its allegations with any official reports. One can see why Poroshenko feels threatened under the current pro-Russian regime. One can see why he is fed up with Yanukovych and the Family and would like to contain their intrusion into his business interests.

Firtash, Pinchuk and Poroshenko, as well as many other oligarchs would like to contain the rise of the Family which is so closely linked to Yanukovych and Putin, and they see the EuroMaidan as a politically convenient way to do so. Should Ukraine join the EU, it would be more difficult for the Family to encroach upon the economic interests of the old business elites. After all, the EU has legal standards, things like the rule of law, something Ukraine would have to commit to implementing.

Yes, I seriously doubt that the “pro-European” Ukrainian oligarchs are the true believers in free markets, free trade, democracy, transparency and the rule of law.  They enriched themselves under the current, corrupt, pro-Russian regime which was a far cry from free markets and transparency. Yet, if pro-European changes are a means of re-aligning the oligarchy and pushing the Family aside, why not support pro-European politicians? No wonder Firtash and Pinchuk provide support to Vitaliy Klitscho, a heavyweight boxing world champion turned politician and opposition leader, who they hope will win Presidential elections in 2015. No doubt, there will be European changes should Klitscho become the next Ukrainian President. (The extent and the degree to which Klitscho would commit to such changes is another question). But most importantly for the oligarchy, a pro-European ‘revolution’ would mean a repositioning among the business elites with the Family being sidelined.

Sidelining the Family will have its costs. Take the case of Firtash, for example. He currently enjoys a special gas deal with Russia’s Gazprom which allows him to import gas at favorable rates. Should Ukraine sign an Association Agreement with the EU, Russia would discontinue such deals and gas prices would rise. Yet it seems that the benefits (containing the Family) would outweigh the costs (higher gas prices).

So far I have presented a very cynical view of the ‘European revolution’, arguing it has been driven by business interests alone, not true convictions (that Europe is the right thing to do, etc). But what about the thousands of young people protesting on the bitter-cold streets of Kyiv? As with the Orange Revolution (which was started by students), youth and student movements have a massive presence at the EuroMaidan. What is more, the idealist young people categorically refuse to align themselves with political parties. They identify themselves as “Europeans”. They are the true believers. The true believes in the European future for Ukraine. For them, Europe is the promise of a system that works. Objectively and transparently. Where the same rules apply to everybody.  It is a promise of a system that embodies modernity, liberty, and freedom. Freedom of travel is one of the biggest concerns: to travel anywhere, Ukrainians need to obtain a visa, which could be an arduous process. The Association Agreement with the EU would be a step towards a visa-free regime.

But did the youth forget about the neo-liberal policies of the EU? The unemployment problem? The Generation Suitcase? The Generation Internship? Or are they willing to pay the price? Did the youth forget about the crack-down on anti-austerity protesters in Spain and Greece? Or are they willing to pay the price? Young, idealist, not yet disillusioned, they are hopeful the price will somehow bypass them.

While the youth movement is in no way political, the massive presence of the youth undoubtedly aids pro-European politicians and their supporters who carry political banners on the streets of Kyiv. And finally, among those protesting one could find thousands of Ukrainian Nationalists for whom saying ‘Yes’ to Europe is a way of saying ‘No’ to Russia.

I conclude that three movements can be discerned within the EuroMaidan. While these movements have different goals, they cumulatively reinforce each other. There is a genuine pro-European movement represented by the youth. There is a genuine anti-Russian movement embodied by Ukrainian Nationalists. And then there is an underlying struggle of Ukrainian business elites which paradoxically manifests itself as a pro-European pro-market movement while its true nature is pro-oligarchic. It is aimed at re-establishing the oligarchs’ control over the economy, control gained in pro-Russian Ukraine.   Out of these contradictions something new will emerge. But Ukraine will forever remain a country at the crossroads.

Ukraine’s special security forces Berkut are about to attack peaceful protesters in downtown Kyiv in the early hours of Wednesday, December 10, 2013. This action comes just one day after the EU foreign policy chief Catherine Ashton visited the EuroMaidan and expressed her support for the peaceful demonstrators.

8 responses to “Good-Bye Lenin? Is Ukraine’s ‘Revolution’ Pro-European or Pro-Oligarchic?

  1. Are they going to give up their currency ?

  2. Michael Hoexter

    Fascinating read! Thank you Alla!

  3. Mark Robertson

    I agree with most of the above article. The events in Ukraine reflect a battle between two rival camps of oligarchs. Both gangs are equally corrupt. Both want to get richer. Both claim to be “democratic. Both want total power. Both use ordinary Ukrainians as pawns.

    One camp is allied with President Viktor F. Yanukovich. These oligarchs have their fortunes tied up in the trade between Ukraine and Russia. They want Ukraine to continue to be a consumer of Russian oil and gas, since it makes this gang richer. Ukraine is one of the most energy intensive economies in the world, with antiquated steel mills, train and car factories, and fertilizer plants that burn vast volumes of coal and natural gas.

    The other camp, the rival gang, opposes President Yanukovich and his cronies. These oligarchs want to integrate with the West in order to boost their profits and power. They like the fact that Europe gives supremacy to rich people over governments and the masses. They like the fact that that Europe favors privatization, deregulation, and austerity. These oligarchs see themselves as princes with millions of Ukrainian slaves at their command, and they want to become members of the European Parliament. They want Caspian Sea oil and gas pipelines to run through Ukraine (not Russia), so that these oligarchs can take a percentage. They want to break into European markets, so they can ramp up their Ukrainian sweat-shops and become richer than ever.

    These oligarchs (the anti-Yanukovich gang) pay drunk, homeless, and unemployed people to come to Kiev and demonstrate against their rivals (against the government). And since these oligarchs own most of the media, they make the local TV stations offer 24-hour coverage of the Kiev demonstrations, making a few hundred people in Independence Square look like a hundred thousand. Meanwhile they ignore counter-demonstrations (pro-Yanukovich demonstrations) in eastern Ukraine.

    Both gangs of oligarchs own politicians. Some oligarchs themselves are politicians (Members of Parliament). The Yanukovich gang rules because it has a majority.

    The anti-Yanukovich gang are would-be globalists who are furious that President Yanukovich and his cronies (the rival oligarchs) halted “free trade” talks with the European Union last week. Since this gang favors the West, they are praised by Western politicians, and by the Western corporate media. They are lionized as “pro-democracy.” The Western masses cheer them, since the Western masses believe whatever the corporate media tell them.

    As for the common demonstrators in Kiev, some are paid to be there. Others are simply bored, frustrated, and unemployed people who join the crowd to vent their general angst. They condemn the government, not realizing that the opposition (i.e. anti- Yanukovich gang) despises them just as much.

    The Yanukovich gang played their rivals like a violin. For months the Yanukovich gang said they wanted a “free trade” deal with Europe; a pretense that made their rival oligarchs quiver in joyous anticipation. The pretense also made Russia give better deals to Ukraine. Then, at the last minute, the Yanukovich gang suddenly called off the deal, which enraged the anti-Yanukovich gang. They felt betrayed. So they mounted the demonstrations in Kiev.

    In the article above, author Alla Semenova writes, “I seriously doubt that the ‘pro-European’ oligarchs are the true believers in free markets, free trade, democracy, transparency and the rule of law.”

    No of course not. The rival oligarchs on both sides just want to get richer at the expense of ordinary Ukranians.

    Regarding the young people in Kiev who identify themselves as “Europeans,” they live in a dream world. Their image of Europe is childish and romanticized. They think Europe has no corruption, no austerity, no oligarchs, and no neo-liberal exploitation. Their fantasy is fueled by the anti- Yanukovich oligarchs, who tell young people that integration with Europe would bring them paradise. (In reality it would bring them the hell of poverty and austerity – but it would make these oligarchs richer.)

    The young people in eastern Ukraine are less naïve. They see no advantage in Euro-philia.

    Contrary to the article above, there is no “genuine pro-European movement,” since the Kiev clowns dream of a Europe that does not exist. They are like the “Occupy” people in the USA. Scared, anxious, and angry, but with no focused goals or objectives.

  4. I really hope the pro-Europe side prevails, but I find it doubtful. I found a great article about the geopolitical shift that is happening in eastern europe now, and not just ukraine:

  5. Robert Lavergne

    The “European” movement is one that Mussolini would have been proud of. The EU wants to do away with the idea of sovereign states and has a thoroughly corporate agenda – the “free” movement of both labor and capital. It means increasing exploitation, less regulation, and is the anti-thesis of the independent, sovereign socialism Lenin stood for. The only progressive class in the Ukraine is the working class. What was done to Lenin’s statue could have only been promoted by the most reactionary type of person – one who has absolutely no understanding of the huge contribution made in political thought – not only in the USSR, but all over the world. His political thought is still held in high esteem by scholars in every country. The west loves these symbols because it promotes the idea that communism is dead. But communism is an ideology, and to say that communism is dead is to imply that capitalism is dead. As long as there is capitalism there will be workers. As long as there are workers there will be communism. We owe a lot to the USSR – it was communists who defeated nazism. Communism was fascism’s essential enemy. I’m sure that losing ~30 million people in WWII, many who were surely communist, goes a long way in explaining why many Russians failed socialism. Of this I’m certain, though – socialism did not fail them. I’m certain that there’s many there who also feel this way. Capitalism and capitalists never had mass acceptance there, like it does in the west. It’s not Europe that Kiev should look to – it’s Lenin, whose ideas are as contemporary, today, as when they were written in the early 1900’s.

  6. This was my experience with Ukraine’s revolution. The media definitely makes it seem worse than it actually is!