Ukraine: Current Issues and U.S. Policy

Publication Date: March 2009

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

Type:

Coverage: Ukraine

Abstract:

In January 2005, Viktor Yushchenko became Ukraine's new President, after massive demonstrations helped to overturn the former regime's electoral fraud, in what has been dubbed the "Orange Revolution," after Yushchenko's campaign color. The "Orange Revolution" sparked a good deal of interest in Congress and elsewhere. Some hope that Ukraine may finally embark on a path of comprehensive reforms and Euro-Atlantic integration after nearly 15 years of half-measures and false starts. However, subsequent events have led to a certain amount of disillusionment among Yushchenko's supporters. These include infighting within his governing coalition and a political non-aggression pact Yushchenko made with his opponent from the presidential election, Viktor Yanukovych. Economic reforms were hampered by political conflict, including over an effort to reprivatize firms sold to the previous regime's cronies at very low prices. Economic growth slowed after the Orange Revolution.

On March 26, 2006, Ukraine held parliamentary elections. No party won a majority of the vote, resulting in protracted talks to form a coalition government. Analysts interpreted the election results as a sharp rebuke to President Yushchenko and his Our Ukraine bloc. The largest vote-getter in the elections was the Party of Regions, headed by Yanukovych. After the failure of protracted attempts to reconstitute the Orange Revolution coalition, the Socialist Party formed a coalition with the Party of Regions and the Communists, which put forward Yanukovych as its candidate for Prime Minister. President Yushchenko reluctantly appointed Yanukovych as Prime Minister, and the Ukrainian parliament approved the new government on August 4, 2006.

After taking office as President, Yushchenko said that Ukraine would seek integration into the global economy and Euro-Atlantic institutions. The Ukrainian government's main foreign policy goal is to join the World Trade Organization (WTO) by the end of this year. In the longer term, Ukraine's leaders seek to join the European Union and NATO. Ukraine is seeking to retain good ties with Russia, but relations have been troubled since Yushchenko has taken power, particularly after Russia cut off natural gas supplies to Ukraine in January 2006. The supplies were quickly restored, but only after Ukraine agreed to a hefty increase in gas prices. Yanukovych's return to power may result in closer Ukrainian ties to Russia and less effective Ukrainian government support for the country's efforts to join the WTO and make progress toward Euro-Atlantic integration.
U.S. officials supported the "Orange Revolution" in Ukraine in late 2004 and early 2005, warning the former regime against trying to impose fraudulent election results, and hailing Yushchenko's ultimate victory. U.S. officials have remained upbeat about Ukraine's successes in some areas, such as adopting legislation needed for WTO membership and in improving media freedom, while acknowledging difficulties in others. Administration officials have also praised Ukraine's efforts to hold a free and fair parliamentary election on March 26, 2006 and have vowed to work with the new government led by Prime Minister Yanukovych. This report will be updated as needed.