The Hindu Business Line : Ukraine democratically moves West

PEOPLE with time to count report that the US President, Mr George Bush, mentioned `freedom,' `free' and `liberty' 49 times in his inaugural address to the nation on January 20, when he took the oath of office for his second term.

Now that ``weapons of mass destruction'' has been swept under the carpet as the main reason for invading Iraq, establishing democracy there to ensure freedom and liberty has taken top billing, with Iraq taking bloody steps with an election.

Moreover, the President's speech was, perhaps, also meant to warn others in that neighbourhood that the US would not think twice about sending its forces in to thrust democracy on them too.

But a more powerful lesson in democracy unfolded before our eyes when Mr Victor Yushchenko took office as President of Ukraine in the last week of 2004, at the end of a peaceful and democratic process that often seemed to verge at the edge of a precipice. To briefly recap the events, in a first round of elections in October last year, Mr Yushchenko led his rival, the Prime Minister, Mr Yanukovich, by a narrow margin among 24 candidates. In a subsequent run-off election, Mr Yanukovich was declared elected amidst widespread reports of fraud.

Public, non-violent protests led to an estimated 500,000 people occupying the Independence Square in Kiev holding rallies and camping there for 16 days in sub-zero temperature. Cases were filed in the Supreme Court, and Parliament also joined the fray refusing to accept the results. A third round of election was held on December 26 and Mr Yushchenko emerged the clear winner.

In a talk given at Suffolk University in Boston, Mr Sergiy Korsunsky, the Deputy Chief of Mission of the Ukrainian Embassy in Washington made an important point about the events back home. Over the last few weeks, he said, over 1,000 articles about Ukraine appeared in the major newspapers about the events in Ukraine and ``we did not pay for any of them!''

Ukraine needs all the publicity it can get as it seeks to establish itself. The events pertaining to governance sent a signal to the world that here is a nation that believes in due process and will attempt to fix its problems peacefully. That is a message that needed to get out. Only a few years ago, EMC, the information storage company, was said to be considering a $100 million (Rs 450 crore) investment in Ukraine, motivated by the fact that several of its employees hailed from that nation. Finally, the deal did not go through and some attribute it to events in the country such as the scandal about the killing of a journalist in the country and the possible involvement of important people in that episode. EMC must have had justifiable concerns of the operation of the law in Ukraine.

Small countries, as they compete for FDI, need to be careful about how they are perceived overseas. The People's Republic of China could comfortably mow through hundreds of demonstrators in Tiananmen square in mid-1989 with hardly a blip in the inflow of investment. China has reached the enviable stage of being too big to ignore or challenge by the business community. Ukraine is not there yet.

As Ukraine was sorting through its political problems, the ideological leanings of the two contenders made the fight a larger one for the world's economy.

Mr Yushchenko was seen as leaning towards the West. The West supported him and his avowed policy is to join the European Union at some time in the future. Mr Yanukovich was seen as pro-Russian and Russia's leaders supported him.

It was the Cold War being fought all over again in Ukraine. Russia is getting increasingly worried at how all the nations of the erstwhile Soviet Union and later CIS are seeing their bread buttered better in the west. More recently, Georgia also made a dramatic swing in its preferences when it changed its leadership. Leaving aside the various `..stans' of Central Asia, Russia is feeling increasingly isolated and NATO is approaching its doorsteps. It is to Mr Yushchenko's credit that recognising the sensitive geographical position of his country, he has not waved his victory gleefully under the Russian President, Mr Putin's nose, but made a symbolically important first overseas visit to Russia.

The protests in Ukraine were not so much the anger of the partisan supporters of Mr Yushchenko, as the anger of a nation that was sick of how its leaders were manipulating elections. Private businesses were encouraging their employees to join the `orange' revolution, so named after the colour adopted by Mr Yushchenko's party. Farmers were voluntarily bringing food into town to feed the protesters. Finally, with the country following its own rules, it managed to reaffirm its faith in its own institutions.

As Iraqis went to the polls on January 30, they were caught between a rock and a hard place. They suffered under the previous regime, but do not have a current authority in power in which they can place faith and confidence. The elections under the previous regime, if they were ever held, were a farce and the current one also is far from perfect. Yet, over 55 per cent of eligible electorate is said to have cast its votes; a vote for hope, and a feather in the UN's cap for having organised the elections. Mr Saddam ruled with the power of the gun, and the images of armed US soldiers and local forces providing security for the elections makes one wonder at what cost democracy is being given birth.

President's Bush's push for freedom during his inauguration speech is not new. Speaking at the National Endowment for Democracy in November 2003, he admitted that past US policy of backing dictatorial regimes did not improve US safety or security and that democracy in Iraq would be a beacon of hope for nations from `Damascus to Tehran'. Noble sentiments but democracy does not flow from the barrel of a gun.

Moreover, American-style democracy may not be what will work there. Perhaps seeing that the billions of dollars in annual aid to Egypt over the years have not resulted in that country moving an inch closer to liberal democracy, the US is now trying to see if the same can be achieved with the help of guns. It would be in keeping with the administration's underlying belief that the means justify the ends.

Another product (and that is how these are looked at) that the present US administration hopes to export to Iraq is US-style free-market ideology. A contract given to BearingPoint Inc, formerly known as KPMG consulting (estimated at $240 million, or Rs 1,080 crore), is meant to restructure the economy, including modernising the stock market, and privatisation. And we are still seeing the mess created by the previous US-advised rapid privatisation that took place in Russia.

Countries that now try to export the rapid democracy model themselves took hundreds of years to develop confidence in that system, and that gave time for their people to understand what the system meant. Elections are the least significant part of it, as the Ukrainians will tell you.

Even while Mr Yushchenko and his followers celebrate democracy, the defeated candidate continues to challenge the results and has not conceded defeat. It will take many more elections before leaders there get the confidence to accept defeat graciously.

Meanwhile, West Asia should be reading about Ukraine too, to counter some of the wrong lessons they may be learning about what democracy is from Iraq.

(The author is professor of international business and strategic management at Suffolk University, Boston, US. His Internet address is cgopinat@suffolk.edu)

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