Ukraine: Four issues to watch as Zelensky claims a landslide victory

On Monday, Volodymyr Zelensky, a comedian with no prior political experience, was announced as the winner of the second round of the Ukrainian presidential elections. Zelensky, best known for his hugely popular television show in which he plays a history teacher who unexpectedly becomes the president of Ukraine, took 73% of the vote, a landslide victory over the incumbent, Petro Poroshenko. While Zelensky’s seven-page campaign brochure shed little light on his likely policies, his anti-establishment stance appealed to an electorate disillusioned by widespread corruption and economic stagnation.

Amid the uncertainty, Zelensky has the opportunity to reverse years of poor governance and fulfil long-held promises of reform. But he faces numerous challenges. He currently has no representation or majority in the Ukrainian parliament, and elections will not be held until October. As Ukraine’s constitution prohibits the dissolution of parliament within six months of elections, the president-elect will need to work with other political parties, including former president Poroshenko’s bloc, to make any meaningful progress over the next six months. Below, we examine four key issues that are likely to define the early stages of Zelensky’s presidency.

1. UKRAINE’S RELATIONSHIP WITH THE IMF 

In October last year, the IMF declared Ukraine the poorest country in Europe, before granting the country a multi-billion-dollar supplement to its USD 17.5 billion bailout package. Ukraine’s economy is heavily dependent on the IMF’s financial support — at present, foreign direct investment represents just 2 percent of the country’s GDP. Zelensky campaigned as a pro-Western candidate, urging continued cooperation with the IMF and pushing Ukraine’s accession to NATO and the EU by 2030, albeit after a national referendum. However, he has been critical of the conditions imposed on Ukraine by the IMF, particularly an enforced increase in utility prices. Negotiations with the IMF will be vital to the success of Zelensky’s presidency, and enthusiasm for their program will no doubt boost investor confidence in the country.

2. TACKLING CORRUPTION 

Corruption is, arguably, the most significant obstacle to Ukraine’s progress. Zelensky presented his lack of political experience as an asset in a field of candidates perceived to be part of a self-serving and corrupt system. But his commitment to tackling corruption, which so far amounts to lifting MPs’ immunity from prosecution and making military procurement contracts more transparent, lacks substance. A tendency towards impulsive decisions, such as plans to fire Yuriy Lutsenko, the Ukrainian prosecutor general, who sharply criticised the viability of Zelensky’s anti-corruption platform, could undermine his agenda. It is hoped that the long-awaited creation of an independent anti-corruption court in April 2019 will provide a robust legal framework that is capable of convicting high-level officials of corruption, a feat which the Ukrainian judiciary has failed to achieve in any major case since the 2014 Euromaidan Revolution. But while there is a strong cross-party consensus on tackling corruption, a weak rule of law and endemic corruption in the strategically important gas and defence sectors will take time to overcome.

3. DEALING WITH THE OLIGARCHY 

How Zelensky positions himself in relation to Ukraine’s oligarchs, who hold a disproportionate influence over the country’s media and politics, will be a defining factor of his presidency. Zelensky has vowed to decrease their influence but has come under intense scrutiny for his links to Ihor Kolomoyskyi, an exiled Ukrainian billionaire currently being sued by the government for the embezzlement of billions of dollars from PrivatBank, a large bank that he owned which was nationalised in 2016. Zelensky has played down his connections to Kolomoyskyi amid speculation that he may de-nationalise PrivatBank, a move that would likely put Ukraine’s agreements with the IMF and other Western partners in jeopardy. Oleksandr Danyliuk, the only former government minister appointed to Zelensky’s administration, was instrumental in nationalising PrivatBank and called the case against Kolomoyskyi a “litmus test” for the effectiveness of Ukraine’s battle against corruption. Zelensky’s handling of Kolomoyskyi will be a good indicator of his commitment to loosening the oligarchs’ stranglehold over the Ukrainian economy.

4. THE CONFLICT IN EASTERN UKRAINE AND RELATIONS WITH RUSSIA 

Perhaps the biggest immediate challenge Zelensky faces is the protracted military conflict between Ukraine and Russian-backed separatists in the country’s east. The conflict, which has taken the lives of 13,000 people since 2014, has ravaged Ukraine’s economy, cutting off the country’s mineral-rich eastern territories and threatening hopes of foreign investment. While Poroshenko made his anti-Russian sentiment clear, Zelensky has so far favoured a more conciliatory approach to Russia, expressing interest in an open dialogue with President Putin and suggested bringing the UK and US into Ukraine-Russia negotiations. Zelensky has managed to cast himself as a Ukrainian patriot without ostracising the country’s Russian-speaking east, which is a step towards healing the Ukraine’s deep internal divisions. After five years of Poroshenko’s military bluster, Zelensky’s pivot towards diplomacy is welcome, though Russia may not be willing to play along. Shortly after Zelensky’s victory, Putin introduced a controversial law that expedites access to Russian citizenship for residents in the separatist-controlled territories of eastern Ukraine, an offer which makes the prospect of an immediate settlement increasingly unlikely.

The transition from populist candidate to empowered and effective president will be a difficult one for Zelensky. His reform-minded team has hinted at many of the same ambitious policies that Poroshenko failed to deliver during his presidency, and the shortcomings of the outgoing administration underline the challenges of bringing meaningful change to Ukraine. Still, Zelensky’s outsider status and the free, democratic polls that led to his election should offer hope to Ukrainians that, despite these challenges, progress is possible.