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Home no longer sweet for Ukraine's Yanukovich

Source: Reuters - Wed, 26 Feb 2014 12:55 GMT
Author: Reuters
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* Party chiefs, oligarchs abandon Yanukovich in home region

* Disdain for fallen leader common ground across Ukraine

* Russian-speaking east remains wary of now ascendant west

* Yanukovich on the run after being ousted by parliament

* Concentration of wealth, power reduced breadth of his base

By Gabriela Baczynska

DONETSK, Ukraine, Feb 26 (Reuters) - In Viktor Yanukovich's party headquarters in Donetsk, eastern Ukraine, a stain on the wall marks where a framed picture of the ousted president used to hang.

It is not only the photograph that has gone since Ukraine's parliament stripped Yanukovich of his powers on Saturday.

So has the support he once enjoyed in his home region, his power base as he moved from minor Soviet bureaucracy into local politics in the 1990s and rose to become the governor of the coalmining region around Donetsk, prime minister and eventually Ukraine's president - at the second attempt - in 2010.

Easterners turning against a president accused of shooting demonstrators and of lavish self-enrichment may notch down the tension over his fall between the east and west of the country, which world leaders fear could start pulling Ukraine apart.

But Russian-speakers, a powerful electoral force in the big, eastern, industrial cities, remain wary of new leaders promoting Ukrainian nationalism and ties to the European Union.

Nikolay Zagoruyko, leader of the Party of the Regions group in the regional parliament in Donetsk, makes no apology for his long support of Yanukovich - nor for turning against him now.

"He was a good governor, prime minister and president," Zaguruyko told Reuters at his party office. "I worked actively in his 2010 election campaign. I never regretted that. I was sure I made the right choice all along the way, until Jan. 19."

That was the day when violent clashes began in Kiev between riot police and protesters. Several deaths ensued, culminating in bloodshed a week ago that killed over 80 people.

Though he has known Yanukovich since the 1980s, Zagoruyko has no hesitation in saying: "Of course he is guilty.

"He was the president," he said. "The guilt for what happened lies with Yanukovich."

The 63-year-old Yanukovich was indicted by his opponents for "mass murder" over the police shooting of demonstrators. He is now on the run, with the national parliament resolving to refer him to the International Criminal Court at The Hague.

Having left Kiev by helicopter on Friday, he was prevented from flying out of the country from Donetsk and was last seen on Sunday on the Russian-speaking Crimea peninsula.

Some Ukrainians believe he may now be hiding in Donetsk or the surrounding Donbass coal and steel region, where he was born and worked as an electrician after a troubled childhood and lengthy spells in jail for assault and petty theft.

The area was the bedrock of his election victory over Yulia Tymoshenko, then the darling of the Ukrainian-speaking west.

But many of his most loyal political allies distanced themselves from their former patron as he found himself condemned by Moscow for failing to end the protests and by his backers among wealthy business "oligarchs" over the bloodshed.

His attempt to concentrate power and wealth among relatives and close friends may have fatally narrowed his support base.

Like other Ukrainians, some former loyalists say they were shocked by the gaudy opulence of Yanukovich's residence outside Kiev, its chandeliers, statues and ostrich farm now thrown open to public view. Talk of corruption and cronyism also offends.

Andrey Shishatsky, governor of Donetsk region and a senior figure in the Party of Regions, said he accepted Yanukovich's dismissal by parliament and that the ousted president was responsible for the bloodshed, the worst upheaval in Ukraine since it gained independence from the Soviet Union in 1991.

"We have to face the truth," Shishatsky told a conference in Donetsk this week. "Very many mistakes were made, including tragic ones that led to people dying."

BUSINESS MOVES ON

There seemed a chance the east might stand by its man when regional leaders meeting in Kharkiv backed a resolution on Saturday challenging the authority of the national parliament.

But thousands of anti-Yanukovich protesters on the streets outside forced them to back down. Only in Crimea is there a significant movement among ethnic Russians against rule from Kiev and for a takeover by Moscow.

Many Party of the Regions officials have urged national unity and oppose military intervention from Russia.

Ihor Todorov, a professor at Donetsk National University, said that makes good business sense: "Any split of the country would in fact be trouble for Donbass businessmen," he said.

"Who would recognise any separate 'East Ukraine' apart from Russia? That would mean trade sanctions.

"Local elites want to have carte blanche in the region, as they always have, and they will be ready to officially declare their allegiance to the new power in Kiev in return for that."

Donetsk is home to Ukraine's richest man Rinat Akhmetov, who bankrolled Yanukovich and his party. His imprint is visible all over the city of a million, a grimy patchwork of Soviet apartment blocks, mines and factories on the banks of the Don.

Akhmetov's involvement includes a luxury hotel and the new Donbass Arena, home to UEFA Cup-winning soccer club Shakhtar. Through System Capital Management (SCM), he controls more than 100 companies, from mining to telecoms to grocery stores.

On Feb. 18, as violence escalated, the billionaire issued a pointed public statement saying that the loss of human lives in Kiev was "an unacceptable price for political mistakes".

As party leaders have disavowed Yanukovich, Akhmetov's SCM is also coming to terms with the change of guard: "It is very clear, the path that Ukraine is on. There is a new government in place, a new interim president," investor relations director Jock Mendoza-Wilson told Reuters. "I don't think there is a future in the return of the previous government."

Mendoza-Wilson said SCM needed political stability and Ukraine's acute economic troubles needed addressing. SCM's main foreign trading partner is the European Union, followed by former Soviet republics including Russia, he said.

Akhmetov issued a statement to employees in which he urged them to keep business moving: "Today many are asking what is next? My answer is continue to live and work honestly.

"Our goal is a strong, independent and united Ukraine. Today I specially stress - 'a whole and united Ukraine'."

Yanukovich critics long accused him of being a political pawn for big business, serving the interests of tycoons from the Donbass who helped him climb the ladder of power.

When he lost power, he lost his value.

"It's pure business thinking," said Sergiy Shtukarin, head of a Donetsk-based civil rights organisation, the Center for Political Studies. "The oligarchs and the party followed his lead because that gave them most benefits.

"If the new authorities in Kiev let them be, the oligarchs will go on doing their business. That is what they want - to prevent any protests, any ferment, keep people at home, keep the status quo."

EYES ON RUSSIA

Shtukarin also said Yanukovich had tried after taking office to reduce the influence on him of Akhmetov and others in the Donbass, seeking to amass wealth within an inner circle of relatives and friends that came to be known as "The Family".

That may also have narrowed his support base, both among the rich and powerful and among ordinary voters who backed him in 2010, as his adversaries took to the streets in November.

Zagoruyko echoed these comments, saying that even though Yanukovich did take many of his Donbass aides to Kiev, local party officials had long complained of a lack of access to him.

Yanukovich's drive last year to sign trade and political agreements with the European Union - which he reversed under Russian pressure, triggering the Kiev protests - had been resisted in the Donbass. There, businesses feared losing out to Western firms if restrictions on EU imports were lifted.

Many still look east, to Russia for trade and culture.

This week, people are still keeping overnight vigil's on Donetsk's main square to protect its giant statue of Lenin, after similar monuments to the founder of the Soviet state were toppled last week by Ukrainians resentful of Moscow.

"Lenin is part of our history, our ties with Russia," said Olga, a 25-year-old economist standing below the statue, who feared there could be job losses from free trade with the EU.

"I have friends living in the EU who say we will end up in serious trouble if we move towards the West. Our economy is just not competitive enough."

Yet after Yanukovich's policy zig-zag and failure to find a strategy to see off the protests, she lost faith in him.

"It's clear we are better off making friends with Russia. But there's no point in Yanukovich any more. He failed us, he proved weak," she said. "I am for stability, peace and order."

Nakhro Ali Mokhammad, an Iraqi Ukrainian who said he worked with Yanukovich on business management books in the 1990s, had also given up on him. Back in Donetsk after visiting the Kiev protest camp, he said: "Protest in Ukraine was inevitable sooner or later given what Yanukovich's rule was like."

But he warned that if the West wanted Ukrainians not to turn to other pro-Russian leaders, it must send money, fast, and open up visa-free travel: "This is geopolitics. Now the Ukrainian people have risen up, the EU must do its bit," he said. "But if Brussels just talks, it's Russia who benefits." (Additional reporting by Lina Kushch in Donetsk; Editing by Timothy Heritage and Alastair Macdonald)

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