1998-2004

Having consolidated power and gained control over resources, theoligarch-controlled regime in Ukraine faced systemic external pressure. The government only responded to some challenges from outside. If not for the Orange Revolution in 2004, Ukraine could have ended up under the complete external control of the Russian Federation

• In 1998-2004, the government seemed to be “the most powerful ever,” said Viktor Medvedchuk, one of the major antagonists of the time. It was the era of a perfectly controlled parliamentary majority, large yet ineffective opposition, and a mass media dominated by the ideas imposed from above.  Still, the oligarch system failed to use this resource to either develop the country or at least duly protect its interests and sovereignty.
• The first vulnerability of the system was corrupt scams for resource supply, privatization tenders or determining control over leading industrial plants.  Under these circumstances, those who acted to please Russia got access to strategic enterprises and industries in Ukraine. Western investors did not rush to invest in an unpredictable and corrupt country thus offering zero counteraction to the promoters of Russian interests.
• Another weak point was human resources policy, based on favoritism and narrow corporate interests. Top government positions were ultimately held by people who not only worked to drag Ukraine into the Russian orbit, but also openly boasted about it.
• The third vulnerability was that the leaders of the oligarchic system lost contact with the people of its own countryand sees no need for such contact. Even though they understood the true roots of the Kuchmagate cassette scandal rooted (from the very start, Leonid Kuchma himself spoke of the signs of the work of secret services, the origin of which he later named as being Russian). the Ukrainian government never did find the courage to start an honest dialogue with Ukrainian society. Instead, took the path of satisfying the Kremlin’s whims and at best, trying to soft-pedal them.
• Ultimately, the indicated “specific features” of the oligarch regime resulted in the state’s negative reputation in the world, thus limiting its maneuverability in responding to external threats and pursuing its own interests.

In this section:

The Wind from the East

The Energy (In)Security of Ukraine