Ukraine's oligarchs and elections in 2019

Author : Kyrylo Ryzhanov

Source : 112 Ukraine

A statement about the oligarchic character of the Ukrainian state has become ordinary, that is why insufficient attention is paid to the oligarchs' influence on the state political processes
19:00, 10 December 2018

Open source

A statement about the oligarchic character of the Ukrainian state has become ordinary, that is why insufficient attention is paid to the oligarchs' influence on the state political processes. Back in 2006, oligarch Rinat Akhmetov personally tried to become an MP as a member of the Party of Regions. In 2014, oligarch Igor Kolomoisky personally headed the Dnipropetrovsk Regional State Administration. The very essence of the oligarchic system does not change, the number of oligarchs is really limited to a “spotted influence” on politics; this is the reason for their “invisibility.”

Related: Switzerland arrests $2 million on bank account of Ukraine's oligarch Kurchenko

Rinat Akhmetov remains the leader of the lists of the richest Ukrainians. Focus Magazine has estimated his wealth at 3.1 billion USD, Forbes speaks about 5.5 billion USD. According to Forbes, in 2017 Akhmetov’s condition grew by almost a billion dollars. Despite his role in the coming to power of Viktor Yanukovych, Akhmetov could not avoid fierce competition with his surroundings. Maidan and Donbas war seemed to be the inevitable end of his business empire.

However, Akhmetov managed to survive, and the growth of his condition shows that he even managed to establish mutually beneficial contacts with Poroshenko’s administration. Today one of the pledges of the success of the oligarch is the Rotterdam + formula. In accordance with the methodology, the cost of fuel is determined by the formula "the price of coal in the ports of Amsterdam - Rotterdam - Antwerp + the cost of its delivery to Ukraine." The coal comes from Donbas. As a result, with the introduction of the formula into force (from May 2016), tariffs began to break records, and from January to November 2016, the price of thermal electric power doubled. These are the best times for Akhmetov’s business, which, according to experts of the Economic Truth, at the time of entry into force of Rotterdam +, controlled 76% of the thermal generation market.

Of course, it would be impossible to conduct such a super-profit business without a series of large-scale mutual agreements with the authorities. And it's not so much about the "share" in joint schemes - but about certain political obligations of Akhmetov. So, he became the main sponsor of the Lyashko Radical Party. Lyashko and his team, with all their declared opposition, “correctly” voted for the needed laws even if it contradicted all their previous rhetoric. The most recent examples are voting for repressions against NewsOne and 112 channels, as well as for the state budget for 2019.

Related: First they talk about freedom of speech, then vote for sanctioning NewsOne and 112 Ukraine

Akhmetov’s support for the Lyashko project was one of the important evidence of his loyalty to the authorities. However, the position of the "Akhmetov" part of the "Opposition bloc" in the Verkhovna Rada is 22-23 MPs. It was an excellent move for the oligarch to have "political actions" both on the "Maidan" and on the "anti-Maid" field. Until recently, it was possible to keep the balance. For example, during a recent vote for the budget, Akhmetov’s deputies gave several votes in support of the power’s project, and then they started talking about a technical error. The unification processes among oppositional forces, initiated by Viktor Medvedchuk, turned out to be a serious challenge for Akhmetov.

The 8th place among Ukrainian oligarchs, according to the Focus materials, belongs to Vadym Novinsky. He does not have the necessary “experience” of living in Ukraine; accordingly, he has no right to run for president.

Until recently, Borys Kolesnikov has been an extremely non-public figure. At the moment, he is trying to dramatically increase his presence in the media, but he is unlikely to have enough time to acquire sufficient recognition before the presidential election.

Related: Great Britain to impose sanctions against six Russian oligarchs, - The Telegraph

Many politicians and political observers skeptically reacted at the initiatives of Medvedchuk. Knowing all the complexities of the processes within the opposition, they would unlikely to unite.

However, the electoral prospects, the new opportunities, and, probably, the feeling of self-preservation took up. As a result, even Serhiy Lyovochkin and Vadym Rabinovich, who are suing each other, were able to unite.

Unlike the restrained and non-public Rinat Akhmetov, Igor Kolomoisky is completely different. He personally participated in Ukrtransnafta shoot-out, declared Putin a schizophrenic, and then stated that Ukraine fights against itself in Donbas.

Related: Ukraine sponsoring Kremlin oligarch by selling scrap metal to Transnistria?

During the post-Maidan times, his starting positions were better than Akhmetov’s, however, the general dynamics were negative. The conflict around Ukrtransnafta, nationalization of Privatbank (albeit on favorable terms), and the actual squeezing out of the country. Moreover, Kolomoisky had to pay a large part of the assets of the Privat Group, including UIA aircraft, railway rolling stock, real estate, etc., as collateral for the refinancing loans of Privatbank. As a result, his economic and political influence decreased. However, Kolomoisky managed to maintain control over a number of media resources, primarily over the "1 + 1 media." In the Verkhovna Rada and a number of local councils, Igor Kolomoisky controls a number of deputies, primarily through the UKROP and Vidrodzhennia parties. At the same time, the absence of complete control over Vidrodzhennia does not embarrass him. It is rather considered as an opportunity to optimize the “cost/benefit” ratio. Well, his long-term partner Hennadiy Boholyubov (who has 1.5 billion dollars) provides an additional financial support; by the way,  Boholyubov is number three in the Focus list is.

Founder and owner of EastOne investment consulting group, Viktor Pinchuk, with a fortune of $ 1.4 billion, comes the fourth. He has ICTV, Novyi, M1 and M2 TV channels, as well as Facts and Comments newspaper. Also, according to a number of media reports, Viktor Pinchuk is one of the key sponsors of the Anatoliy Hrytsenko campaign. But his rating is gradually declining. Yulia Tymoshenko (16.2%) and Yuriy Boyko (9.2%) remain the undisputed leaders of the rating, only strengthening their lead.

Related: Presidential candidate Tymoshenko meets with Ukrainian oligarch behind the scenes

If the experience of the top 4 Ukrainian oligarchs indicates that, having reached certain peaks, you are more or less protected from the political ups and downs, the positions of the followers Konstantin Zhevago ($ 1 billion), Yuriy Kosyuk ($ 900 million) and Andriy Verevsky (785 million dollars) still do not look completely defined.

A classic example of the transition of a big businessman from the public to non-public policy is the biography of Andriy Verevsky (Kernel Group). In 2002 – 2013, he was an MP (excluded for skipping the parliamentary meetings, combining parliamentary and business activities). He did not take an active part in the events of 2013-2014, however, increased his influence significantly. In the current parliament, the Vidrodzhennia faction is mainly focused on him. So, when voting for the budget, votes of this faction were obtained only after taking into account the interests of the Kernel Group. While remaining not too noticeable, Verevsky managed to increase business assets, and, probably, now he will be engaged in political assets. It is most likely that the oligarch would distribute his bets between the candidate from Vidrozhennya and one of the favorites of the presidential election.

Related: Fugitive oligarch and equestrian patron denied German visa

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This column does not necessarily reflect the opinion of the editorial board or 112.International and its owners.

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