The fall of former Ukrainian President Viktor Yanukovich led not only to a change in government in Kiev, but also to a significant shift in the fortunes and political influence of Ukraine's top oligarchs. Some changes have benefited Kiev: Oligarchs are likely to cooperate when it comes to enacting reforms that could ensure Ukrainian access to international funding in the short term. However, newly empowered oligarchs could eventually pose a challenge for the governing coalition.
The privatization of state firms and the acquisition of large-scale industrial entities during the 1990s contributed to the rise of a group of influential oligarchs in Ukraine, a trend seen across the former Soviet Union. These oligarchs have played a major role in Ukrainian politics, financing favored political factions and even running for office. Most oligarchs are politically flexible, shifting their allegiances and financial support to best protect their economic interests.
The changing power dynamics among Ukraine's oligarchs have in some ways aided Kiev, which relied on individuals such as Kolomoisky to use their wealth and networks to keep parts of the country stable. Still, the rising influence of certain oligarchs could pose a threat to the cohesion of the government and its efforts to get much-needed financial assistance from Western institutions. Ukraine is considering a broad array of reforms, some of which may not serve the interests of the oligarchs. In fact, they are designed to reduce the role of oligarchic interests in Ukrainian politics. The pro-Western coalition led by Prime Minister Arseniy Yatsenyuk and President Petro Poroshenko came to power on the promise of wide-ranging reforms. Activist groups, growing in strength and influence since Yanukovich's ouster, will pressure the government to implement reforms, challenging the newly empowered oligarchs' efforts to shape policy. Moreover, reforms are the prerequisite for financial assistance from the International Monetary Fund, which Ukraine needs in order to avoid bankruptcy.
For the oligarchs, reforms could threaten long-standing business arrangements and sources of profit. While some of the newly empowered businessmen will continue to selectively challenge the government's reform agenda, the prospect that the IMF could withhold funds because of a lack of progress will motivate the oligarchs to offer consent and temporarily cooperation in the short run. A worsening of Ukraine's economic crisis would harm oligarchs, many of whom own stakes in partially government-controlled firms and benefit from government contracts. In the long run, the country's top oligarchs will work to undermine any significant reforms that run counter to their economic interests, presenting a challenge for the stability of Ukraine's diverse pro-Western ruling coalition.
