Petro Poroshenko, Ukraine’s chocolate king and new president

Petro Poroshenko, Ukraine’s chocolate king and new president

Petro Porshenko / Photo: World Economic Forum (Flickr Creative Commons license)
Petro Porshenko / Photo: World Economic Forum (Flickr Creative Commons license)

WASHINGTON, May 25, 2014 – Ukraine isn’t well known for chocolate. It’s better known for vodka, famine, and corruption. Thanks to Petro Poroshenko, that might change.

Poroshenko is the apparent winner of today’s presidential election. He held a commanding lead over former Prime Minister Yulia Tymoshenko in the polls going into the election, and exit polls give him the win. The other candidates were all minor and given no chance of victory.

Tymoshenko’s opposition to former President Viktor Yanukovych landed her in prison for over two years on charges of corruption, and her release was one of the demands of protestors who finally ousted Yanukovych.

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While the specific charges may have been trumped up, the odds are excellent that Tymoshenko was corrupt. She amassed a large fortune while she was in government, directed huge contracts to friends and family, and lived in a home almost as ostentatious as the Yanukovych spread. The wealthy of the former USSR aren’t known for their asceticism.

Tymoshenko was the strongest alternative to Poroshenko, but her ties to previous governments made her suspect. The protestors may have wanted her freed, but not in charge of the government.

Since its independence in 1991, Ukraine’s leadership has ranged from inept to corrupt. President Leonid Kravchuk was unable to create an honest framework of privatization in the transition from command economy to capitalist economy, and government insiders were able to loot state assets. Kravchuk was defeated in 1994 by Leonid Kuchma, who ran on a platform of reconstruction and the end of corruption.

Kuchma’s administration was marked by corruption, the mysterious deaths of several journalists critical of his administration, and closer ties to Russia. It ended with the contested, fraudulent election that resulted in charges that Kuchma’s government had rigged the results to favor Viktor Yanukovych over Viktor Yushchenko, widespread protests, and the Orange Revolution.

The Orange Revolution ended with the election of Viktor Yushchenko to the presidency. His administration was not distinguished for its competence, and Yushchenko was succeeded in 2010 by Yanukovych. In 2011, the Yanukovych Administration determined that Yushchenko’s prime minister and potential rival to Yanukovych, Yulia Tymoshenko, was corrupt. She was duly found guilty and sentenced to seven years in prison.

According to interim Prime Minister Arseniy Yatsenyuk, the Yanukovych administration embezzled $20 billion of gold reserves and $37 billion in loans. He claims that in the three years of the Yanukovych Administration, $70 billion were removed from Ukraine’s financial system to offshore accounts. Recognizing that Yatsenyuk might have a political bias that influences those numbers, it is widely agreed that the amounts stolen were huge. Just how huge they were is still unknown.

Will President Poroshenko usher in an era of honest government? It would be stupid to bet much that he will, but hope springs eternal. It would still be best to take this one step at a time and observe that Ukrainian chocolate is astonishingly good.

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Poroshenko is the owner of the Roshen group, which dominates Ukraine’s chocolate business. His personal wealth is estimated by Forbes at just over $1 billion. He ran on a platform of making life better. His standard stump speech started with him asking members of the crowd how much they earned. He’d then point out that people who work in his chocolate factories make more.

Poroshenko is one of the few politicians in Ukraine who draws more praise than criticism. When protests broke out at Maidan Nezalezhnosti, Poroshenko worked the crowds, handing out chocolate. He owns Kyiv’s Channel 5 television station, and gave the protestors coverage from the beginning. His credentials in support of the protests are solid.

His credentials as a self-made tycoon are also impeccable. He started selling cacao beans out of college and built his wealth on candy. He didn’t build it through insider contracts to control energy supplies and heavy industry. If he entered into sweetheart deals with the Ukrainian government, it wasn’t to hold Ukrainian citizens hostage for oil.

Most appealing is that Poroshenko isn’t Yulia Tymoshenko. He played a role in the last two administrations and demonstrated an ability to work with the competing parties, but he has managed to avoid the taint of the insider.

That comes with disadvantages as well. Winning the presidency is one thing; governing Ukraine is another. The country is an economic, political and security catastrophe. Poroshenko will need all the help he can get to fix it. He is allied with the Udar party, which has no experience in power, and he has none of the political machinery and patronage networks that have been a staple of power in the region for generations.

The Russian word “blat” describes a system of connections, networking, an economy of favors. In Soviet days, you got nothing done without blat. The word is falling out of use, but it still effectively describes what Poroshenko doesn’t have. That isn’t a bad thing – Ukraine desperately needs to move away from that approach to getting things done – but it makes Poroshenko’s job a little harder.

So too does Russian President Vladimir Putin. He has said that he will respect the results of today’s election, but he wants Ukraine to remain outside of NATO, and he wants his $3 billion. Poroshenko will be under pressure to improve ties with the west, and he will be desperate for the loans being offered (about $17 billion) by the west to prop up his government, but Putin will make sure that there is pressure on him not to take those ties too far.

Petro Poroshenko may not be able to make Ukraine’s government honest or transparent, but he is the best hope of change to appear on the scene in the generation of Ukrainian independence. Genuine reform may not be possible until more of the people in government who were raised in the USSR die or retire, but there is a new generation ready to take over.

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Poroshenko doesn’t have to lead them into the promised land. He need only lead them in that direction and not get in their way. He is a breath of fresh air. Ukrainians should savor the moment, eat some chocolate, and then get to work. Ukraine has almost all the elements of greatness. It needs only a sense of the possibilities, support from its friends, and a government that can take its people beyond Soviet and post-Soviet corruption.

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