In the post-Soviet area,
oligarchs are defined as representatives of big business who are able
to influence the politics of a country for their own benefit owing to
their assets. The term was coined and popularized in the mid-1990s in
Russia.

Since then, the
relations between the Kremlin and big businessmen have changed
completely. At present, big business does not have such a strong and
decisive influence on politics in any other Eastern European country
as it does in Ukraine. The Ukrainian oligarchic system, which
developed and took its final form during Leonid Kuchma’s second
presidential term, turned out to be a stable phenomenon. The nature
of the close ties between the government and business elite have not
changed, neither after the 2004 Orange Revolution nor following
Victor Yanukovych’s victory in the 2010 presidential election.

Big business not only
controls entire sectors of the Ukrainian economy and the mass media
but it also has a vast influence within political parties. It is
often the case that the overriding goal of a given grouping’s
existence is to represent the oligarchs who sponsor it. A network of
mutual connections exists between politicians and oligarchs. In some
cases these connections are so durable that it is fair to say that
oligarchic groups have been formed (consisting of businessmen,
politicians and state officials who support each other).

In Ukraine specifically
the representatives of big business are often much more important
players on the political scene than the politicians themselves. It
can be even claimed that it is the interplay of the interests of the
oligarchs that is the real mechanism which shapes Ukrainian politics.
When giving their support for a given political grouping,
representatives of big business are guided by nothing more than their
own interests, and they do not identify themselves with the views of
the political parties and politicians to whom they offer financial
support. If the political configuration changes, the oligarchs
usually have no problems finding common ground with the new
government. One Ukrainian political adviser defined it shortly and
precisely: “As a rule, the big business simply cannot be in
opposition to a government”.

The current parliamentary
election campaign provides an example of just how strong the
political influence of some oligarchic groups is. Almost all main
political parties are either financially supported by the oligarchs
or were established by them. “Oligarchic” money is an inseparable
part of the Ukrainian political scene and it is even hard to imagine
Ukraine’s politics without it. Many parliamentarians are not the
representatives of their voters and ideas but rather of their
sponsors i.e. the oligarchs. What is perhaps the most astonishing is
the fact that society accepts the current situation.

Paradoxically, the
oligarchic system does have some positive elements as it contributes
to some pluralism in politics and the media. Nevertheless, the
overall influence of Ukrainian oligarchic structures is harmful and
hinders the country’s political and economic developments. The
monopolization of crucial economic sectors has constrained
competition and created an unfavorable investment climate in Ukraine.
What is even more important, the dependence of most political forces
on big business means that the government in many cases is guided by
the interests of the oligarchs.

This is why the oligarchs
benefit the most from the current flux in which Ukraine finds itself.
They benefit more from the status quo in the country than they would
if Ukraine pursued European integration within a free trade agreement
or a customs union with Russia.

Some reshuffles inside the
oligarchic system have been observed and it will evolve in the
future. A new phenomenon observed after 2010 is the expansion in the
Ukrainian economy and politics of “the family”, a business group
linked to President Yanukovych and his sons. The further
strengthening of “the family” could cause some conflicts inside
the Ukrainian oligarchic system. However, even if it would happen, it
will be just a change inside the existing system but not the creation
of a new one. In the medium term it seems unlikely that Ukraine’s
oligarchic system could cease to exist as it would demand a deep and
far-reaching transformation of Ukrainian politics and economy. At the
moment it is hard to identify any strong political force which is
interested in a “deoligarchisation” of Ukraine and – what is
crucial – has the instruments to perform such a change.

Wojciech
Konończuk

is an analyst in Warsaw-based Centre for Eastern Studies (OSW). The
OSW has just published a comprehensive report on the influence of
business groups on Ukrainian politics. The complete English version can be found at
http://www.osw.waw.pl/sites/default/files/Prace_42_EN.pd