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08KYIV2263, EXPECT SOCIAL UNREST AND GROWTH OF RADICAL

November 18, 2008

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Reference ID Created Released Classification Origin
08KYIV2263 2008-11-18 15:18 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXYZ0019
PP RUEHWEB

DE RUEHKV #2263/01 3231518
ZNY CCCCC ZZH
P 181518Z NOV 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 6741
INFO RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE

C O N F I D E N T I A L KYIV 002263 
 
SIPDIS 
 
E.O. 12958: DECL: 12/31/2018 
TAGS: PGOV PREL SOCI ECON UP
SUBJECT: EXPECT SOCIAL UNREST AND GROWTH OF RADICAL 
PARTIES, SENIOR REGIONS MP TELLS AMBASSADOR 
 
Classified By: DCM James Pettit for reasons 1.4 (b,d). 
 
SUMMARY 
------- 
 
1. (C) A disaffected but influential Party of Regions MP told 
the Ambassador that an additional three million Ukrainians 
could lose their jobs in the next few months and that the 
country's leaders do not comprehend the magnitude of the 
economic crisis.  He predicted the Party of Regions would be 
the biggest political loser from the economic meltdown, which 
will devastate heavy industry in Regions' electoral base of 
Eastern Ukraine.  The Communist, radical leftist, and 
nationalist parties are poised to gain.  END SUMMARY. 
 
 
POLITICAL LEADERS OUT OF TOUCH 
------------------------------ 
 
2. (C) Ex-President Kuchma's former Chief of Staff and 
two-time Deputy Prime Minister, Dmytro Tabachnyk, currently a 
senior MP from Party of Regions' left wing, met with the 
Ambassador on November 13 to discuss Ukraine's economic 
crisis.  Tabachnyk said he had recently spent three hours 
discussing the economic outlook with Former Prime Minister 
and Party of Regions head Viktor Yanukovych.  It was clear, 
he said, that Yanukovych did not understand the seriousness 
of the situation.  Tabachnyk said that despite President 
Yushchenko's background in economics and banking, his 
proposals were "incomprehensible" and would not improve 
economic conditions.  He said that he did not know if Prime 
Minister Tymoshenko understood the severity of the economic 
situation, but that her cabinet lacked the skills necessary 
to deal with it.  Tabachnyk pointed to the cabinet's failure 
to manage contracts to buy textbooks and school buses and 
said "if they can't even do that, how can they keep the 
economy from collapsing?" 
 
 
STRIKES AND PROTESTS TO COME 
---------------------------- 
 
3. (C) Tabachnyk laid out a sobering scenario for Ukraine's 
economy in the near term.  He said that by late spring, an 
additional two to three million workers would lose their 
jobs.  Layoffs would be most severe among industrial workers 
in Eastern Ukraine and young white collar workers in the 
largest cities.  Tabachnyk said he expects this to lead to 
massive strikes and protests next year.  He warned that the 
spike in unemployment would mean a "massive surge" in 
criminality and corruption.  Tabachnyk said crime would be 
much worse than in the early 1990s because people had gotten 
used to living well and not merely surviving.  He said that 
Yushchenko, Tymoshenko and Yanukovych are like "Russian 
nobles in the spring of 1917, convinced that they are 
untouchable and in control." 
 
 
PARTY OF REGIONS SHOULD WORRY 
------------------------------ 
 
4. (C) Tabachnyk was pessimistic on the future of his party. 
He said that Regions would be the biggest loser politically 
from an economic meltdown.  Regions core electoral support 
was tied to improving economic conditions in heavily 
industrialized Eastern Ukraine.  Tabachnyk explained that 
beginning in 1998, as heavy industry growth resumed, support 
for Regions also grew at the expense of the Communist party. 
He said that Regions is still viewed as the party of large 
industrialists.  As long as Regions-connected businesses 
improved living standards, workers were content to vote for 
Regions. 
 
5. (C) However, this relationship is already deteriorating. 
Internal Regions polling shows support in the party's 
stronghold of Donetsk oblast down 12-15% since August.  The 
numbers were worse for Regions in Crimea.  Tabachnyk said 
things will only get worse for the party as laid-off workers 
see businessmen, the public faces of Regions, still driving 
their luxury cars and flying personal jets.  Regions will 
look powerless when it is unable to meet the demands of 
striking workers.  (NB: One example: During a recent visit to 
Donetsk, several university students we spoke with were 
scornfully aware of the exact model of Yanukovych's 
ultra-luxury late-model Mercedes -- a symbol to them of his 
lack of connection to his electorate.) 
 
 
COMMUNISTS AND RADICALS TO GAIN 
------------------------------- 
 
6. (C) The biggest beneficiaries in Tabachnyk's scenario will 
be the Communists and radical parties on both sides of the 
political spectrum.  The decline in support for Regions in 
favor of the Communists has already begun, according to 
Tabachnyk.  Voters will be attracted to the Communists' calls 
for nationalization of industry and guaranteed jobs. 
Tabachnyk said that other left parties, such as the 
unabashedly pro-Kremlin, anti-NATO Vitrenko bloc, will also 
attract new voters as they rail against what they describe as 
the failure of market economics.  If early elections were 
held this spring, the Vitrenko bloc would make it into 
parliament and the Russia Bloc would replace Regions as the 
majority party in Crimea. 
 
7. (C) Regions won't be the only losers on the national 
stage.  Tabachnyk said that nationalist parties on the right 
would also g
ain supporters at the expense of Yushchenko and 
Tymoshenko.  Yushchenko would lose support to strident 
nationalist parties such as Svoboda, which could make it in 
to parliament if early elections are held in the near future. 
 While Tymoshenko will also lose support, her Bloc will fare 
the best of the major parties because her populist message 
may resonate with voters who were reluctant to back her in 
the past. 
 
 
COMMENT 
------- 
 
8. (C) Other Regions MP contacts also predict social unrest 
to come in the East and South as unemployment surges -- 
particularly after the New Year.  However, Regions 
politicians more typically believe that the Tymoshenko 
government, as the party in power in Kyiv, and not Regions, 
will suffer the greatest political fallout.  We agree with 
Tabachnyk that a spike in unemployment would open up 
opportunities for radical parties to make significant gains, 
including entering the Rada, if pre-term elections take 
place.  The inclusion of such parties would, to say the 
least, not help Ukraine find the consensus it needs to meet 
the challenges before it. 
TAYLOR

Wikileaks

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