Yulia Tymoshenko has been labelled many things during her more than two decades in politics – “Gas Princess”, oligarch, robber baron, criminal, etc. – but human rights violator is something most analysts and policy makers have never considered calling her. However, Tymoshenko’s increasingly socialist-populist political views including her staunch opposition to the sale of farmland in Ukraine may have finally put her reputation at risk of irreparable damage. A recent ruling by the European Court of Human Rights (ECHR), recognizes Ukraine’s moratorium of land sale as a violation of human rights. The Tymoshenko-led Batkivshchyna (“Fatherland”) party has repeatedly blocked legislation on the sale of private farmland, recklessly stating any such sale will make farmers beggars.
Western policymakers have viewed Tymoshenko and her Batkivshchyna party with increasing caution as Yulia, as head of the party, courts Ukrainian voters with her anti-globalization policies in advance of Ukraine’s 2019 presidential election. Ukraine’s economy grew at a robust 3.1% in the first quarter of 2018 and investors in the U.S., Europe, and Asia are taking note of President Poroshenko’s economic and anti-corruption reforms which have modernized Ukraine’s economy and made the country a far more attractive destination for foreign direct investment (FDI) than it was during the Yanukovych, Yushchenko, or Kuchma regimes. While levels of FDI fell dramatically following the Maidan Revolution, there are signs that foreign investors once again see the potential in Ukraine if the successful 2nd Annual Ukraine-Chinese Economic Cooperation Forum is any indication. Investors have signaled a Tymoshenko presidency could force them to reconsider planned investments in Ukraine, for fear of rolling back some reforms implemented during the Poroshenko presidency.
According to American sources with knowledge of potential joint venture deals in Ukraine, Chinese investors are keen to invest in Ukraine’s infrastructure and “commanding heights” in support of China’s One Belt One Road (OBOR) initiative. These sources confirm Chinese officials and investors have quietly asked contacts in Washington about Tymoshenko’s potential impact on Ukraine’s investment climate. More than one international investor has demonstrated interest in Ukraine’s electrical grid, which greatly needs funds from foreign investment to modernize, and most have indicated a need to accelerate the timetable to close any joint ventures in order to avoid the potential of a Tymoshenko-led Ukraine rolling back policies on FDI.
A U.S. Commerce Department official stated on-background that should Tymoshenko’s socialist-populist policies gain support amongst Ukrainian politicians, she will not only be known for human rights violations due to her opposition of land sale in Ukraine per the ECHR ruling, but held responsible for stunting Ukraine’s economic growth since investors could be wary of entering the Ukrainian market. This will further tarnish her already damaged reputation in Washington. This official acknowledged that if Tymoshenko had her way, critical infrastructure in Ukraine would stay in the hands of her corrupt cronies in Ukraine and – more troubling for Ukraine’s national security and Washington’s interests as well – her oligarch friends in Russia.
Overfilled with hubris as usual, Tymoshenko ignores Washington’s existing concerns about her perceived Russia ties and recent scandals ranging from allegedly receiving a $5 million campaign contribution from former Libyan strongman Muammar Gaddafi and hiring a Washington lobbying firm (Avenue Strategies) via Marlen Kruzhkov, a middleman attorney, who stated in an EU Observer interview that he represents Russian oligarchs. A U.S. Treasury Department official noted: “This is Yulia being Yulia. No one in Washington is surprised, but most are discouraged with her behavior.”
Policymakers in Washington and Brussels are taking note of Tymoshenko’s obstructionist economic policies. Atlantic Council senior fellow Anders Aslund who was critical of Tymoshenko during her first disastrous round as Ukraine’s prime minister following the Orange Revolution, has called for Ukraine to force Western-sanctioned Russian investors to divest from key strategic assets. Aslund cites the example of Alexander Babakov, who owns 11 of 24 regional electricity distributors in Ukraine. As Washington-Moscow relations continue to sour and the strategic alliance between the United States and Ukraine strengthens, Russia hawks in the Trump administration, such as Assistant Secretary of State Wess Mitchell and possibly Paula Dobriansky, are expected to encourage Kiev to force certain Russian investors to divest as well.
According to both a long-time Ukraine hand in Washington and a former U.S. intelligence official, Washington’s foreign policy establishment is growing increasingly concerned that Tymoshenko’s warm relations with Moscow would halt hopes for divestment of sanctioned Russian investors from strategic assets in Ukraine. A Tymoshenko presidency that draws Ukraine back into Russia’s orbit chills investors who hope Poroshenko or a like-minded politician wins the election in 2019. Tymoshenko and her populist cronies are viewed as a hindrance to Ukraine’s modernization and an impediment towards integrating with Euro-Atlantic institutions.
U.S. policymakers who have worked for two decades to modernize Ukraine’s economy and help integrate Kyiv with the West are encouraged at the progress of the US-Ukraine strategic alliance under Presidents Trump and Poroshenko. From financial aid to resources to help implement Ukraine’s reforms, Washington has invested time and money to ensure Ukraine is able to choose its own path, which is unquestionably westward headed. The growing consensus is Tymoshenko presidency put all of Washington’s, as well as Brussels’, efforts at risk.