On September 30, Ukrainians flocked to vote in the early parliamentary elections. The Organization for Security and Cooperation in Europe found the voting to be free and fair, despite fears of fraud. To strengthen Ukraine's ties to the West and increase opportunities for its citizens, the United States must assist the country's transition to the rules-based market system--especially its efforts to combat corruption.

From a Crisis to Elections

The decision to hold early elections was a compromise between President Viktor Yushchenko, the leader of the Our Ukraine-Self Defense Bloc (known by its Ukrainian acronym NUNS), and Prime Minister Viktor Yanukovych, who heads the Party of Regions. Under the Ukrainian constitution, if a single political party does not win a majority of the seats in the Verkhovna Rada (Parliament), a coalition must be shaped to form the Cabinet of Ministers.

The pro-Western "Orange Coalition" led the country's democratic revolution in 2004-2005. Headed by Yushchenko and the former Prime Minister Yulia Timoshenko and her BYuT bloc, the coalition was unable to successfully form a parliamentary majority following the March 2006 elections. As the result, Oleksandr Moroz, leader of the Socialist Party of Ukraine, who initially supported the Orange forces, defected to the Yanukovich camp, forming the Anti-Crisis Coalition with the Party of Regions and the Communist Party of Ukraine. Yanukovich then proceeded to gnaw on Yushchenko's presidential powers, painting the President into a corner and triggering the recent elections.

Yulia's Surprise

The election results are a sign of increased political competition and a tribute to Ukraine's democratic development. The "orange" blocs, Tymoshenko's BYuT and Yushchenko's NUNS, both received more support than pre-election polls anticipated. BYuT's performance was particularly surprising, receiving more than 30 percent of the popular vote, up nearly 10 percent from the March 2006 elections. Tymoshenko's increased popularity, particularly in the Central and Eastern regions, which previously supported Yanukovych, will not only give her legitimacy as Prime Minister, but also place her in an excellent position for the 2009 presidential elections. Too close of an outcome may open the door for yet another political crisis, particularly if Yanukovych acts on his threats to force new elections. For all preliminary results please see Table 1.

The necessity to form a new coalition has lead Yushchenko to negotiate once again with former Prime Minister Yulia Tymoshenko, who outperformed Yushchenko's Our Ukraine-People's Self-Defense by 2 to 1. Relations between Yushchenko and Tymoshenko have been strained since Tymoshenko, who served as Prime Minister after the Orange Revolution, was fired after being accused of mishandling the economy. Nevertheless, Tymoshenko may be returning as Prime Minister after an impressive electoral performance in the September 30 elections. While some have predicted a Yushchenko-Yanukovich coalition, only 6 percent of Ukrainians polled support such an outcome.

U.S. Should Encourage Reform

With pro-democracy forces returning to power in the Rada, it is hoped that the next Cabinet can address several key issues. Ukraine has experienced significant political turmoil since the Orange Revolution, often leaving the government paralyzed and unable to address important policy issues. In particular, the Ukrainian parliament should consider the following constitutional reforms in order to strengthen the political system and prevent further institutional crises:

• Clearly defined delineation of power between the President and Prime Minister;
• Elimination of overlap in duties among various ministers;
• A shorter time limit for forming a government and approving the candidacy of the Prime Minister;
• Well-defined grounds and procedures for dissolving the Rada by the President; and
• A more accountable and precise organizational chart for "power" ministers, which include those for law enforcement, interior, security services, and defense.

Additionally, Ukrainians should also hope for economic reforms in line with law-based market principles. On the Party of Regions' watch, the Ukrainian economy suffered from price controls on some commodities and excessive and arbitrary regulations for sales of crucial commodities such as natural gas and grain.

Tymoshenko's prior performance as Prime Minister drew heavy criticism from both inside and outside the country, but her surprising achievement in the recent elections may give local and foreign investors hope for a liberalized, investment-friendly economy.

While talk of full NATO and EU membership remains premature, it is expected that Washington will continue to support Ukraine's Euro-Atlantic agenda. More hands-on engagement from the EU would be welcome. Although the country remains highly divided on the key issue of NATO membership, it is hoped that the renewed power of the pro-Western forces will break the country's political deadlock and allow the government to make significant strides in foreign policy, including Ukraine's final negotiations for WTO membership.

Finally, much of the new coalition's success will be determined by its commitment to actively pursuing anti-corruption reforms. Unfortunately, some of Yanukovich's close Cabinet associates were high on the corruption "A-list." President Yushchenko has also failed to fulfill his campaign promise to "put the bandits in jail." Some of his supporters were uncomfortably close to the highly lucrative and opaque oil and gas trade. Corruption has hurt Ukraine's energy security and prevented completion of key pipelines, such as Odessa-Brody-Gdansk.

The murder of journalist Georgiy Gongadze, a catalyst in the Orange Revolution, remains unsolved, as has the related "suicide" of Kuchma's former Interior Minister, Yuri Kravchenko. Ukraine's powerful oligarchs continue to protect their financial interests by funding all political parties. Without full commitment to fighting corruption--an essential element of its democratic and economic future--Ukraine may remain in a limbo of post-communist transition.

Conclusion

The United States should congratulate the Ukrainian people on their democratic breakthrough, an increasingly rare event in the former Soviet bloc. The Bush Administration should provide technical assistance to a political system that suffers from entrenched, high-level corruption. It is in both the Ukrainian and American interests that transparency and executive competence play an essential role in the future of democratic governance in Ukraine.

Ariel Cohen, Ph.D., is Senior Research Fellow in Russian and Eurasian Studies and International Energy Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation. Carla Bock, an intern at Heritage, contributed in producing this article.