[note, I have updated this article (cleaned it up from its rough form) on January 25]

Kuchma’s appointment of Yushchenko as PM was extremely grudging, and appointing Tymoshenko was an even more grudging add-on. Throughout their terms in office he consistently criticized both of them and tried to pass blame to them for alleged problems in almost every piece of major legislation they were a part of. Below is a short and spotty, but at least indicative, history of Yushchenko and Tymoshenko’s interaction with Kuchma while they were in his government.

Late NBU Days (1998-1999)

Back during Yushchenko’s days as National Bank governor (1993-1999), Kuchma had been ambivalent. When the Russian banking crisis hit Ukraine, in 1998, Kuchma attempted to blame the country’s problems on Yushchenko.

Shortly thereafter Yushchenko successfully defended himself against a parliamentary inquiry launched by the still-powerful Communists. The next spring he had to defend himself again, which was odd. It was odd because a) the currency had recovered and Ukraine had just avoided the crisis, and b) economists and bankers (including Kuchma's own economic advisor) certainly believe Yushchenko was the key man in keeping the hryvnia from collapsing. Yushchenko was also getting praise from the IMF for his consistent tight money policy, which was economically responsible but is always politically unpopular. The fact that he was under inquiry while being praised for good work makes a lot more sense when you know that the inquisitors were primarily the Communists, who distained all the respected Western economists and financial bodies praising him. (and, indeed, the entire system he was trying to fix)

To give Kuchma his due, the Kyiv Post believes Yushchenko successfully defended himself against the Communists because Kuchma's allies sided with him. Kuchma's allies, in turn, probably sided with Yushchenko because of Kuchma's support and praise immediately before the vote of no-confidence. However, KP also believed Kuchma defended Yushchenko because he feared Yushchenko's popularity, and the chance that he might run in the presidential election five months later if not occupied with NBU business.

Shortly after the failed no-confidence vote, the Parliament passed a new law limiting the NBU’s freedom, and attempts to get rid of the law failed all summer. This law subordinated Yushchenko to a Parliamentary council and, of course, limited his ability to enact reforms. The Ukrainian election campaign started and ground along throughout the fall.

Kuchma Resorts to Reform

In November of 1999, Kuchma was reelected. He’d promised reform and Ukraine was in desperate need. The country had gone years without reform, and was stagnating. That Kuchme needed to reshuffle, or better yet, fire his unproductive Cabinet was obvious.

Instead, that December he asked Parliament to reelect his do-nothing PM Valeriy Pustovoitenko. (who’d served for the last two years)

You’ve never heard of Pustovoitenko before because he had no major accomplishments, and thus was immediately forgotten after Parliament rejected Kuchma’s request. With massive debts and major economic recession to think about, plus a request from many center and rightist factions to appoint Yushchenko as the new Prime Minister, Kuchma was under quite a bit of pressure. A week later he finally appointed Yushchenko as PM and Parliament happily voted Yushchenko through. (minus the Communists and other hard lefties of course) It is important to know the extremity of the situation in which Kuchma hired Yushchenko. It better explains his later activity.

It was Yushchenko who submitted a list of Cabinet candidates to Kuchma in January. Kuchma approved them, including the candidacy of one Yuliya Tymoshenko. She had been, of all things a supporter of Kuchma since UES had come under investigation, but unpopular with the oligarchs, and since she'd worked at UES and made money like them, they had something to accuse her of. Again, Kuchma accepted Yushchenko's choice in this, he did not choose Tymoshenko himself.

Two of the biggest issues for the new Cabinet were energy/gas matters and agricultural policy. Russia had been threatening to turn off the tap to Ukraine in retalitation for illegal siphoning from Russian pipes in the country. Agriculture was moribund after years without necessary reforms.

Kuchma was thinking of other things. A week after filling his Cabinet, Kuchma threatened to hold a national referendum if Parliament didn’t pass a constitutional amendment. Basically, the purpose of the amendment was to give him more power. The process by which he finally pushed through reforms that gave him significantly more power took a number of months and presumably a lart part of his attention. During this period Kuchma supported Yushchenko, or at least refrained from criticizing him.

In April, Kuchma changed tack. His Cabinet had been working for three months when he accused the members of overstating their gains and improvising too much, as well as doing superficial reform without addressing deep structural issues. Yushchenko defended the Cabinet by saying a number of promising reforms were getting underway, and they would lead to an improved economic situation.

Over the summer, Kuchma rejected a preliminary agreement signed by Tymoshenko and representatives from Turkmenistan, stating that it was unprofitable. He also gave an interview in which he dismissed Russian complaints about the illegal siphoning of Russian gas from Ukrainian pipes.

By fall, Tymoshenko had presented a report to Parliament and weathered through the inevitable attacks from the left-leaning parts of government. Kuchma had approved a gas deal with Turkmenistan and done an about-face in his comments about theft of Russian gas; now he said something should be done about it. This was probably because Russia's threats had become more pressing. Yushchenko’s popularity rates were rising and Kuchma’s falling.

In November of 2000, Yushchenko struck a deal to pay off debt to Itera, a big Russian gas firm, which meant the firm retracted its threats. The siphoning problem was not a major worry in the next two years. Shortly thereafter, Kuchma criticized Tymoshenko’s energy policies and the Kyiv Post said Yushchenko threatened to resign if Kuchma forced her out. Kuchma then criticized Yushchenko for reaching an agreement with Russia whereby Ukraine would pay cash for Russian gas that year.

That December, the Melnychenko tapes came out, and Kuchma was faced with massive protests by Ukrainians who believed the tapes were indisputable proof that he had ordered the murder of journalist Georgiy Gongadze.

Kuchma knuckled down.

Spring of 2001 - Kuchma Drops the Reform Agenda

By January he had fired Tymoshenko and by February she was in prison. That spring she was released and then imprisoned again. Many in the anti-Kuchma forces started expressing their support for Yushchenko, while Yushchenko refrained from returning that support.

Leftist deputies managed to organize a vote of no-confidence in Yushchenko for April. Kuchma called for a “dialogue” in Parliament and refused to support Yushchenko. Yushchenko's allies went ballistic, as the economy was rising, gas problems with Russia were on a back burner, as it were. In addition, Yushchenko had been instrumental in ensuring the privatization of agriculture, signed by Kuchma in December, actually happened, instead of just sitting on paper like so many other failed reforms before it.

The April no-confidence vote was put off two weeks because of the ruckus. Just before the vote Kuchma seemed to change his mind and conferred with Parliamentary groups, calling for political stability. Nonetheless, Viktor Medvedchuk (an ally of Kuchma at the time and a much closer ally now), led the anti-Yushchenko voters in Parliament, in alliance with Petro Symonenko of the Communists. They pushed through the no-confidence vote and Yushchenko resigned in response.

The avowed reason for the no-confidence vote was that Yushchenko had failed to improve the economy and lead the country to ruin. Let's see what they were talking about:

The year before Yushchenko got into office, GDP growth had been stagnant at 0%, after being negative for a number of years. In 2000 growth was 5.9% (see this graphic for growth figures, currently only in Russian, we’ll try to change that tomorrow), and grew to a whopping 9.2% in 2001. To see what happened to it in 2002, please take a look at this link. The line graph of growth on this World Bank page shows how growth picked up again in 2003, but it is interesting to see how closely Yushchenko's term as PM tracks with Ukraine's booming return to positive GDP growth.

The fall back to 5.2% after getting rid of Yushchenko probably has a lot to do with the economic troubles of that year. But it also probably has something to do with this: after the marriage of convenience between Communists and oligarch centrists broke down, it was months before Kinakh was finally elected PM. During that time and afterward, the number of questionable privatizations rose, starting within a month after Yushchenko left. In that month alone, Rosava tire company and Donbasenerho power company were both privatized in bizarre and untransparent deals that involved them being sold at extremely low prices to powerful businesspeople (at least as far as anyone knows; like I said, they were highly un-transparent). Many commentators saw crony capitalism behind the sales.

That spring Kuchma finally defeated the headless "Ukraine without Kuchma" protests, (or hydra-headed, the protesters were divided between Socialist supporters of Moroz, various groups of radical rightists, and less radical nationalist organizations paralyzed by infighting among their leaders)

That summer Kuchma was criticized for his activities against the media by international journalist organizations, and Yushchenko was placed highly against other politicians (aside from Kuchma) by a poll of Ukrainians. In answer to the question “Please choose five persons from the following list of 48 leaders whom you would choose to head the party list for which you would be most likely to vote,” Viktor Yushchenko made it on to 26.0% of lists; Petro Symonenko, 21.1 percent; Oleksandr Moroz, 11.4 percent; Anatoly Kinakh, 9.5 percent; Natalia Vitrenko, 9.1 percent; Viktor Medvedchuk, 7.4 percent; Viktor Pynzenyk, 6.5 percent; Yulia Tymoshenko, 6.3 percent.

Here is the complete list of Kyiv Post articles I references for this posting. Unfortunately they are only available on a subscription basis. The opinion article called "Sleeping with the Reds," which I indicated, is one I highly recommend.

http://www.kyivpost.com/nation/nation_general/458/
http://www.kyivpost.com/nation/nation_general/155/
http://www.kyivpost.com/nation/nation_general/195/
http://www.kyivpost.com/nation/nation_general/213/
http://www.kyivpost.com/nation/3624/
http://www.kyivpost.com/nation/4997/
http://www.kyivpost.com/nation/5138/
http://www.kyivpost.com/nation/5256/
http://www.kyivpost.com/nation/5227/
http://www.kyivpost.com/nation/5916/
http://www.kyivpost.com/nation/6008/
http://www.kyivpost.com/nation/6032/
http://www.kyivpost.com/nation/8452/
http://www.kyivpost.com/nation/8476/
http://www.kyivpost.com/opinion/editorial/8567/ - Sleeping with the Reds
http://www.kyivpost.com/nation/9432/
http://www.kyivpost.com/nation/9492/
http://www.kyivpost.com/business/8590/
http://www.kyivpost.com/opinion/editorial/8532/
http://www.kyivpost.com/business/privatization/8676/