Disappointment is setting in among businesspeople who initially cheered Yanukovych’s rise as a welcome end to years of constant bickering between former Orange Revolution heroes Viktor Yushchenko and Yulia Tymoshenko.

Yanukovych has used his political strength to monopolize power. Regrettably, the country’s entrepreneurs are being hurt by the abuses that such a „vertical” system inevitably brings.

A report by Austria’s Erste Bank released on Oct. 16 carried the unsettling title: „Ukraine is heading into a recession.” Growth is already negative and likely to remain so until sometime next year.

Yanukovych is certainly not to blame for the world economy’s problems. But the examples of Germany and Poland show that, with sensible national economic policies and a fair playing field, nations can ensure decent growth or minimize the effects of a global slowdown. Another way is to encourage foreign investment in a bid to diversify, and shift away from a commodity-based economy.

Instead, the Yanukovych government has attempted to muddle through using Soviet-style micromanagement. Just this week, central bank head and Yanukovych loyalist Serhiy Arbuzov resorted to threats in attempting to get banks to lower their interest rates and spur lending. A better policy would be to end the insistence that Ukraine’s currency be pegged to the U.S. dollar.

Something is deeply wrong. In a couple of years, some well-connected businesspeople have seen their fortunes skyrocket as ordinary businesspeople face corruption and corporate raids of their enterprises. It appears that these shenanigans are often assisted by various people in government.

The Party of Regions’ president and his ruling majority coalition don’t show much interest in creating a free-market economy. Despite holding all power, the institutionalized abuses in regulation, privatization and government spending – to name just three areas – remain. There has been some success – Ukraine’s first-ever tax code, the start of a property tax and the outlines of pension reform.

All signs suggest that the Party of Regions will emerge from the Oct. 28 election as the dominant party in parliament. Regrettably, its leaders are promising more of the same. That’s bad news for Ukraine and its economy. The approach they are taking now is not working.