Volodymyr Zelenskyy proposes to make a law that would limit the influence of the oligarchy on the country’s life. The idea is generally good, but it will not work, according to the experts with whom has spoken. And our leader is dissembling: he is going to fight not so much with all the oligarchs, as with one specific representative of this class. And the name of the opponent of the current guarantor, who is bothering him, is well-known — it is Petro Poroshenko. However, is the whole point really only in him?
Blast from the past—back to 1990s
Let's remember the homework. Oligarchy is the merging of power with big business. A modern oligarch in Ukraine is a representative of big business, created with the help of an administrative resource, and its monopoly in a certain market sector is artificially supported by the authorities within systemically organized corruption.
The first oligarchs of Ukraine were spawned by Leonid Danylovych Kuchma personally. To put the history of the oligarchy formation in one sentence, it arose after the collapse of the USSR as a result of the misappropriation of former state-owned enterprises or state resources, that in the whirl of the 1990s suddenly turned out to be "nobody's", by smart businessmen.
Recalling the first years of independence, Kuchma writes in his memoirs that he had no choice. Either let the Russians have eyes on our part of the Soviet legacy, or raise our own "strong business executives" on our native Ukrainian soil. Choosing between two evils, Kuchma chose the misfortune that was closer, and because of this—dearer. Moreover, it promised him preferences.
Actually, the whole history of Ukraine is a choice between bad and bad, but that's another story.
So, the oligarchs in Ukraine have been present as a phenomenon for nearly thirty years. None of the previous presidents defeated this phenomenon (to be honest, they did not try) until Volodymyr Zelenskyy decided to confront them.
He said that himself
It all started with the fact that on April 15, Volodymyr Zelenskyy came up with a proposal to prescribe in the law the status of an oligarch and mechanisms for limiting their influence. It is necessary, he said, "to develop a basic draft law on the status of oligarchs—in order to exclude their influence on the economy, laws and the Verkhovna Rada," Zelenskyy said after one of the NSDC meetings.
The Head of State did not disclose the details of the future document. But he noted that "the oligarchs will be turned into businessmen," namely, they would be deprived of their monopoly in specific sectors of the economy and influence on the government and the parliament. These words were in line with the guarantor's previous positive assessment of the new US sanctions against his former business partner Kolomoisky.
"We support this decision and are working to return funds to Ukraine, to return justice to Ukraine. Its main principle is that we clearly see the difference, what the big business and the oligarchic class are. And the surnames do not make any difference here. It can be Medvedchuk, Kolomoisky, Poroshenko, Akhmetov, Pinchuk, Firtash or any other. One thing is important—you are ready to work legally and transparently, or you want to continue to create monopolies," he stated.
It seems that the sanctions against Kolomoisky pitched Zelenskyy the idea of how good it would be to confront all the oligarchs en masse. Is this idea good or bad? Chairman of the Board at the Center for Applied Political Research "Penta", notes in a comment to that it will be possible to have a substantive conversation on this issue when the outlines of the presidential plan become clearer.
In addition, the discussion of this issue is only an attempt to understand what exactly the leader of the state had in mind. And the answer to this question may not be known to Zelenskyy himself.
Law alone is not enough
«The President is right, we need de-oligarchization, because this is our path to Europe. But one draft law cannot solve this. We need a number of actions, a number of draft laws, in particular, to restrict certain companies in the energy sector, because there is a big problem there. But how to restrict the influence of oligarchs on politics? There is no simple solution, because even the big business, that has no associated deputies and officials, is looking for opportunities to lobby for their interests.»
The expert notes: you can’t just prohibit large businessmen from participating in elections (read: in the struggle for power). No one will ever make or sign this kind of discriminatory law. Then what remains? According to Fesenko, it is necessary to thoroughly monitor all the ways of financing political projects, and those that are illegal should be categorically cut off. And also to fight corruption among the deputies, with additional payments in the envelopes—for voting, for the submitted parliamentary requests, simply for beautiful eyes.
All this is a task for NABU, Fesenko stresses out. But NABU should really work, and not imitate working, and be sure to bring cases to court, otherwise what is the point in them?
The second point that should be paid attention to, the political scientist notes, is the media component. Because an oligarch without their own TV channels is like a wedding night without a bride.
"We are talking about limiting the political and media influence of the oligarchs, because this is what makes big businessmen oligarchs. But how can such a restriction be achieved? By forcing the oligarchs to get rid of their TV channels? No, this is impossible, because here is private property. There are no simple recipes," says Fesenko.
Moreover, the political scientist adds, it is important that the oligarchs do not arrange the circulation of channels in nature. Now, Fesenko says, Pinchuk is supposedly going to sell his media resource, but if Medvedchuk buys his media resource, there will be no sense in this.
No oligarch gets hurt
It really doesn't matter what and who buys from whom. In the struggle of Volodymyr Zelenskyy with the oligarchy, no oligarch gets hurt, the Director of the Institute of World Policy Yevhen Magda is convinced. Literally, he says the following about that:
"The President promised us the de-oligarchization, this is part of his election program, but his success is like that of the sailor Zheleznyak: he sailed to Odesa, but reached Kherson. Oligarchic channels keep Zelenskyy in a warm bath. Kolomoisky still makes a lot of money. Lyovochkin has influence on decision-making at Bankova. Pinchuk solves some of his own issues, Akhmetov is generally doing the best. Then what’s the point of this?
To pin the label of an oligarch on Poroshenko and bring him under certain restrictions. But I don’t think that Zelenskyy has enough specialized knowledge to write a legally flawless draft law that then cannot be appealed anywhere—neither in Ukrainian courts, nor in the ECHR."
Magda is right: just declaring someone an oligarch, that is, a bad person, and then subjecting them to reprisals smells like discrimination a lot.
"Yes, people like it when oligarchs are mistreated, so this subject is being pitched to us. But this is not an issue of the president's wishes," the expert says.
In addition, his conviction remains unchanged: "This is, first of all, a blow to Poroshenko."
South Korea example
By the way, Poroshenko is not even the richest Ukrainian. According to the latest Forbes rating, Petro Poroshenko is on the sixth line of the largest capitalists and gives way to Rinat Akhmetov, Viktor Pinchuk, Kostyantin Zhevago, Ihor Kolomoisky, and Hennadiy Boholyubov.
And after him in the top ten moneybags are Yuriy Kosiuk, Oleksandr Yaroslavsky, and the spouses Oleksandr Hereha and Halyna Herega. All these people not only move in their business world, but also have a significant influence on politics. If not directly, then indirectly.
Economist and financial analyst Oleksiy Kushch compares our oligarchy with the South Korean one. There were their own poroshenkos and akhmetovs, too, he says, but they were called "chaebols"—the leaders of financial and industrial groups. Why were "chaebols" dangerous? Because they "multiplied" horizontally.
That is, "for example, the Daewoo company could build bridges, produce cars, telephones, go into the banking business—in other words, conquer areas that it did not initially claim. It is in the West where a corporation, for example, BMW, specializes in narrowly focused manufacturing of products and stays out of related industries," explains Kushch.
Did they manage to defeat the influence of the "chaebols"? Yes, but not by repression. Common sense and self-preservation instinct won out.
«When the Asian crisis of 1998 began, South Korea got scared. They remembered what post-war poverty had been like and did not want to repeat it. They found the strength to push the "chaebols" away from power. The chaebols were forbidden to develop horizontally. It was only possible to build a vertically integrated company. For example, if you extract oil—then produce gasoline, if ore—produce metal. But if you work with metal, stay away out of energy and finance. In South Korea, chaebols were forced to choose core businesses and were forced to sell the horizontal branches.»
Economist and financial analyst
This is an option for Ukraine, says Kushch, but there are big doubts that it is possible to carry out such an operation in our state. Although the secret of de-oligarchization lies precisely in anti-monopoly and anti-nepotism, the economist is convinced. We already have antitrust legislation, we just need to make it work. Plus, to establish a taboo on nepotism in the corridors of power and restrictions on the accession to power of those who already have a business.
But in general, Zelenskyy is doing himself a disservice with his ideas about laws on oligarchs. He kind of broadcasts the message that the oligarchy is for a long time. As long as crime accompanies humanity—criminal codes against it are written in all countries.
"When the law on oligarchs is being adopted, we are told that this is a phenomenon that will always exist. Music will last forever if you replace the battery. And each new government replaces the battery for the oligarchs," Kushch is convinced.
And what about Trump?
On the one hand, oligarchy is a litmus test that clearly shows at what stage of development a society is (this stage is by no means the highest).
"Oligarchy is a sign of a developing society," notes Vlolodymyr Fesenko. But on the other hand, no one is completely protected from the oligarchy, even countries with long-standing democratic traditions. "This phenomenon also existed in the United States, they had to fight it for a long time, to restrict it for several decades," he adds.
And Donald Trump, and the former Italian Prime Minister Silvio Berlusconi, and the current Prime Minister of the Czech Republic, and billionaire Andrej Babis—all these are examples of the wealthy men in power, Fesenko says. "But the main thing is that they do not try to make money on the authorities," the expert recalls. This, of course, is the main thing, but then the whole meaning of taking power is lost for the Ukrainian nouveau riche. After all, they are trying to take power in order to preserve and secure the current wealth, as well as to acquire a new one.
Finally, let us quote the already mentioned Kuchma, who once said that there are two enemies in Ukraine. No, these are not fools and roads. These are Russia and the oligarchs. "Well, the oligarchs can be quickly destroyed, but what about Russia?" asked Leonid Danylovych. And, it seems, he was deeply mistaken. Because it is just as difficult with the Kyiv nest of oligarchs as with the Moscow nest of the enemy.
Unless Zelenskyy will be able to defeat the oligarchy and dispel the memory of it down the wind. But this is not a fact.