Ukraine’s president battles oligarchs at home as Russia’s threat emerges

According to U.S. intelligence, his country faces an impending full-scale invasion with more than 100,000 Russian troops amassing on the border. But the popular president of Ukraine, Volodymyr Zelensky, has chosen a dangerous time to strengthen ties in the country with the country’s richest oligarch, Rinat Akhmetov.

During a press conference late last month, Zelensky claimed, without providing evidence, that his intelligence agencies had discovered a plan for a Russian-backed coup to gain support. from Akhmetov.

“I think [Akhmetov] may not know about it,” the president said before adding: “I invite Rinat Akhmetov [my office] to listen for information that can be shared. ”

Zelensky’s unusual decision to involve a powerful businessman in an alleged conspiracy has alarmed Western analysts and diplomats, given the growing threat from Russia and numerous problems. including the country’s low Covid-19 vaccination rate and high death toll.

Oleksandr Danylyuk, national security director briefly under Zelensky, said his weakness “is a lack of goodwill and a possible inability to strengthen society and elites amid threats of aggression of Russia”.

A Western diplomat who worked closely with Ukraine said: “At a time when Russia is threatening to attack, it is very important for pro-Western forces in Ukraine to work together. “The current domestic war in Ukraine is damaging.”

Zelensky was elected president in 2019, promising to end the war in eastern Ukraine and root out corruption. He made a bit of progress the first time around and has a mixed record of reform. A hope of a strong economic recovery from the pandemic has faltered.

Ukrainian President Volodymyr Zelensky visits combat positions and meets with servicemen on the front lines with Russian-backed separatists in the Donetsk region

Ukrainian President Volodymyr Zelensky visits combat positions and meets servicemen on the front lines with Russian-backed separatists in the Donetsk region © President of Ukraine / AFP / Getty

Akhmetov, a steel and energy tycoon, has denied involvement in a coup plot as “a lie”. Experts say his TV channels are increasingly critical of Zelensky, heightening the fraught relationship between two of Ukraine’s most powerful people.

Meanwhile, the ever-present fear from Washington for Kyiv is that Russia’s military build-up is planned by President Vladimir Putin to destabilize Ukraine and possibly launch an all-out military offensive. Ukraine’s military is fighting Russian-backed separatists in the far east, in a proxy war that broke out in 2014 shortly after Putin’s occupation of Ukraine’s Crimean Peninsula.

“I don’t remember any other president ready to challenge Akhmetov,” but “the Russians will exploit this moment when Ukraine is weaker internally,” said Daria Kaleniuk, director of anti-corruption watchdog Antac. ”, said Daria Kaleniuk, director of anti-corruption watchdog Antac.

Timothy Ash, an analyst at BlueBay Asset Management, said: “It is possible that Zelensky thinks the pursuit of oligarchs will rally the population and ultimately help the national cause in the resistance against Russia. ,” said Timothy Ash, an analyst at BlueBay Asset Management.

Since being elected president in 2019 after many voters voted in protest against his predecessor, Zelensky’s poll ratings have dropped. A recent poll suggested he could lose his re-election bid, with previous ally Dmytro Razumkov, who was ousted this fall as parliament speaker, positioned to defeat him in the run.

Experts say that Razumkov received favorable coverage on Akhmetov’s television channels. In turn, Zelensky’s MPs boycotted what they saw as hostile media.

Maria Zolkina, an expert at Kyiv’s Democratic Initiatives Foundation, said: “Because Akhmetov started garnering Zelensky’s popularity using his media, the president paid for it. claiming “like a fairy tale” that the tycoon could be part of a coup plot.

© Mykola Tys / SOPA / Sipa US / Reuters

Their dispute is also grounded by legislation passed this fall aimed at the influence of wealthy business figures.

The so-called anti-oligarch laws will officially register the oligarchs – identifying them by reference to their wealth, media and political influence. It would ban them from sponsoring politics, ban their participation in the privatization process and require all contact with public officials to be reported.

“Akhemtov is really unhappy about this anti-oligarch act, and to some extent it is really a tipping point,” said Yuriy Vitrenko, chief executive officer of state gas company Naftogaz and a a close friend of the president said.

“Chairman is very difficult to do [the rest of] his reform agenda unless he changes the situation with the oligarchs. ”

In written commentary to the Financial Times, Akhmetov questioned the fairness of the law, saying: “I am not a financier, I am an investor. And I am ready to defend it before Ukrainian and international courts.”

He added: “We all need fair competition and a level playing field.

Political analysts see the scope of compromise between Zelensky and Akhmetov. “Zelensky wants to end the big criticism. . . was broadcast on Akhmetov’s channels,” said political analyst Volodymyr Fesenko. “Akhmetov wants the president to withdraw or soften the oligarchic act.”

A Western diplomat in Kyiv said: “The Billionaires Act” is not the best solution. “The way to debunk the oligarchs is to improve antitrust laws, accelerate judicial reform, and build anti-corruption institutions. . . These will have a bigger impact in the medium to long term.”

Some experts and diplomats fear the oligarchs law could be used by Zelensky to selectively suppress disloyal business figures.

“The question is whether the same approach applies to all tycoons,” says Kaleniuk. She points to positive coverage for Zelensky on channels owned by Igor Kolomoisky, a financier who supports the presidential election campaign.

Since before Zelensky’s election, Kolomoisky has been involved in legal battles over PrivatBank, a commercial lender that was nationalized in 2016 after authorities discovered a 5.5-inch loss. billion dollars on the bank’s balance sheet. Ukrainian authorities and PrivatBank allege in court sessions spanning multiple jurisdictions that Kolomoisky and his partners siphoned money out of a bank in their possession.

Ukrainian prosecutors did not give all charges against Kolomoisky, who denies corruption allegations.

Addressing parliament this month, Zelensky dealt another blow to Akhmetov and other oligarchs without mentioning their names. He unveiled plans to use taxes from natural resources for a fund for the country’s next generation to fund higher education and home purchases.

“Then our financiers will become real investors in our children,” Zelensky said.

“For the first time in 30 years, we begin a systematic struggle against the oligarchs. And I am sure that Ukraine will win this war”. Ukraine’s president battles oligarchs at home as Russia’s threat emerges

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