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Jamestown Foundation
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Eurasia Daily Monitor
Volume 1, Issue 137
December 1, 2004
WILL TYHYPKO REPLACE YANUKOVYCH?
By Oleg Varfolomeyev

As opposition protests mount, Ukrainian Prime Minister Viktor Yanukovych's chances of proving that the presidential elections were not rigged in his favor get slimmer. Now there are signs that the ruling elite is considering a new candidate. This is Serhiy Tyhypko, who on November 29 simultaneously resigned from two positions: manager of Yanukovych's election campaign and chairman of the National Bank of Ukraine (NBU). "I will be a full-time politician," Tyhypko told a press conference in the morning. And at night, asked by Channel 5 TV whether he would possibly run for president if the country opted for repeat elections, Tyhypko replied with an unequivocal "yes."

Tyhypko hardly acted on his own initiative, as his ambitious statements coincided with a visible change in the mood of outgoing President Leonid Kuchma's team. After a telephone conversation with EU rotating president Jan Peter Balkenende and U.S. Secretary of State Colin Powell on November 29, Kuchma suggested calling new elections as a way out of the political crisis. And on November 30, an embattled Yanukovych said in a statement broadcast live by the Donetsk-based Ukraina TV that, if courts proved that the November 21 election runoff was falsified, he would bow out of the race -- if opposition leader Viktor Yushchenko did the same. "We have a lot of worthy politicians," he said. "Let the people choose from among them."

It was Communist leader Petro Symonenko who first came up with the idea of repeat elections, arguing that not only the runoff, but also the first round on October 31, was rigged. This was confirmed by OSCE, U.S., and EU observers. On November 27, Ukraine's parliament passed a non-binding resolution that did not recognize the second-round vote (see EDM, November 29), but pro-Yanukovych factions did not support the motion. Yet Kuchma spoke approvingly of the parliamentary resolution, speaking at the emergency session of the National Security and Defense Council on November 28, apparently trying to distance himself from Yanukovych's "victory." At the same session, Kuchma asked Tyhypko to resign as Yanukovych's campaign chief. Kuchma's words, "Your vacation has to end. You have to return to the National Bank," were immediately reported by all mainstream Ukrainian media. And on the following day, Tyhypko ostentatiously disobeyed Kuchma, resigning from both the bank and Yanukovych's headquarters.

Yushchenko reacted to Tyhypko's move angrily, calling him "a mischievous cat" and accusing him of trying to escape responsibility for legal violating the election law. Yushchenko referred to the fact that Tyhypko, on becoming head of the National Bank of Ukraine (NBU) in December 2002, did not resign as head of the Labor Ukraine party -- the political umbrella of the "Dnipropetrovsk clan" of Kuchma's son-in-law Viktor Pinchuk, the Privat group, and the Derkach family -- thereby exposing the central bank to political risks.

In fact, Tyhypko stopped steering the NBU this past July, when he accepted Yanukovych's proposal to head his election headquarters and officially took a leave of absence from the NBU. Since July, NBU deputy head Arseny Yatsenyuk has been managing the bank. Under Tyhypko, the NBU had performed quite well, maintaining the stability of the national currency - the hryvnia - and accumulating international reserves. But in September and October Yanukovych shattered the currency's stability, trying to buy potential voters by increasing pensions and diverting resources for his campaign. Inflation expectations triggered a high demand for foreign currency, which the NBU tried to abate by selling currency from its reserves. But this has not helped much. The growing speculative demand for foreign currency has prompted the NBU to impose restrictions on cash circulation. On November 30, the NBU restricted foreign cash sales by banks and slapped limits on withdrawing money from bank accounts. Formally, Tyhypko was not responsible for those unpopular measures, having resigned a day before.

Tyhypko has worked in several governments since 1997, including the Yushchenko government of 2000-2001, in which he was economics minister. He has long harbored great ambitions. He planned to run for president this year, and he rather reluctantly accepted Kuchma's choice of Yanukovych as his successor-designate. It was rumored that, in exchange for Tyhypko's agreement to manage Yanukovych's campaign, he was promised the post of prime minister under President Yanukovych. Tyhypko's role in Yanukovych's campaign, however, has been quite marginal. The refined Tyhypko mainly acted as an interpreter of statements by his coarse boss, while in practical matters Yanukovych relied on his "shadow" HQ, headed by Deputy Prime Minister Andry Klyuyev (who, like Tyhypko, took a vacation from the government for the campaign period) and on advice from Moscow spin doctors Gleb Pavlovsky and Marat Gelman. If the Supreme Court invalidates the elections and if a disgraced Yanukovych is written off by Kyiv's ruling elite, Tyhypko, with his experience of campaigning for Yanukovych, may be an ideal candidate for playing the lead role in the next act of Kuchma's play.

(Inter TV, Channel 5, November 28, 29; UNIAN, November 29; Ukraina TV, Interfax-Ukraine, November 30).