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One interpretations of these recent events is that the Biden administration has decided to do something about Ukraine and in addition to identifying Russia as the major problem, it has now decided that The Oligarch Problem is equally urgent and will do something about that too.
And Ukraine is in trouble. Kolomoisky’s machinations have led to the suspension of the IMF programme. Amongst the many issues, it appears that he organised a decision by the Constitutional Court of Ukraine to strike down the main anti- corruption laws last November, which was anathema to the IMF. Without the next two tranches of $700mn, left over from last year, and the $2.2bn due this year, Ukraine will struggle to pay off some $16bn of debt redemptions due later this year. Zelenskiy doesn't really have a choice. He has to restart the IMF programme by the summer at the latest.
Confusion reigns
Despite Mendel’s strong comment, Zelenskiy himself has yet to criticise Kolomoisky in public.
After Mendel posted a link to her blog on twitter, famous Urkainian commentator, Swedish economist and a Senior Fellow at the Atlantic Council Anders Aslund challenged her, saying that Zelenskiy has yet to condemn Kolomoisky in public.
“Really? Can he name Kolomoisky? To challenge the oligarchs in general means nothing. That is the reason why everybody says so, but Kolomoisky is the main problem. Can @ZelenskyyUa says so? Or is he still tied to him? Why are all these Kolomoisky stooges still his MPs?” Aslund said in
a tweet, which led to a testy exchange.
“Mr.Aslund, I am pretty disappointed you’re so much influenced by too old disinformation narratives. Hope you’re speaking for high-quality analytics, not just because of an offence of being fired,” Mendel fired back.
“What "old disinformation narratives"?! I read all of @ ZelenskyyUa statements. Has he ever said ONE NEGATIVE WORD in public about Kolomoisky? (We all know what a crook he is.) No. Please give me one piece of contrary evidence or withdraw your inappropriate tweet!” Aslund replied.
This exchange was made doubly curious by Mendel’s choice to post her comment on the Atlantic Council’s website. While the Washington-based think-tank, which offers foreign policy advice to those inside the Beltway, is famously rabidly anti-Russia and pro-Ukraine, it is also part-funded by two of Ukraine’s biggest oligarchs, Rinat Akhmetov
and Viktor Pinchuk, as bne IntelliNews described in The Oligarch Problem.
While Mendel mentions several other oligarchs, including gas- scammer Dmytro Firtash and Viktor Medvedchuk, the head
of the Political Council of the Opposition Platform, For Life
www.bne.eu
Party – the first is in Vienna fighting an extradition to the US where he faces corruption charges and the latter was recently sanctioned by Zelenskiy – neither Akhmetov or Pinchuk have been mentioned by the Zelenskiy or included in any way in the new “de-oligarchisation” of Ukraine. Kolomoisky reportedly controls over 70 deputies in the Rada, but Akhmetov reportedly controls over 100 out of the 425-man body.
That opens up the possibility that the attack on Kolomoisky
is not only due to the need to restart the IMF programme, but also a black ops sting organised by the other oligarchs against their rivals. A similar thing happened in Russia at the end
of the 1990s when a “Bankers war” broke out and Russia’s leading oligarchs started taking swipes at each other in the press they controlled.
At this stage it is impossible to say what is actually going on, but what remains is that Zelenskiy continues to flip-flop. His main problem is as a novice in power he has no power base of his own. He relied on Kolomoisky to put him into office. Then he relied on the overwhelming majority of his Servant of the People (SOTP) party in the Rada. But now the party
is fragmented and Zelenskiy can no long ram laws through without the co-operation of the opposition parties, including his nemesis former President Petro Poroshenko, he is turning to the US for support.
With his popularity in the polls plummeting and two thirds
of the population saying the country is going in the wrong direction, Zelenskiy badly needs to score some reform victories
“With his popularity in the polls plummeting and two thirds of the population saying the country
is going in the wrong direction,
Zelenskiy badly needs to score some reform victories”
if he is not going to become a lame duck president. Kolomoisky is clearly in trouble as the pressure mounts,
but perhaps it is only temporary, as observers say that the government in Kyiv only ever make radical reforms when it is faced with a crisis. And Ukraine is facing a crisis in September when $11bn of debt comes due. But as soon as the IMF pays out its crisis-averting tranches the government goes back to ignoring the reform agenda.
As Russia’s former Prime Minister and ambassador to Ukraine Viktor Chernomyrdin famously said: “We hope for the best, but things turn out like they always do.”