On this day 2005: Nemtsov will advise the President of Ukraine
February 15, 2005 — Ukrainian President Viktor Yushchenko has tapped liberal politician Boris Nemtsov, an old friend who stood by his side during the Orange Revolution, as an adviser to help boost Russian investment and restore ties with Russia.
“The decree on my appointment clearly describes my task: I must attract Russian investments, and thus help to improve the investment climate in Ukraine,” Nemtsov said on Monday.
“I am not a Ukrainian government official and I am not a Russian government official, so there will be no stubborn lobbying,” he said by phone.
Nemtsov – a former leader of the Union of Right Forces party who has held various government posts over the past decade, including a stint in 1997-98 as deputy prime minister – said he would continue to live in Moscow and would receive no salary as an adviser to Yushchenko.
Yushchenko’s spokeswoman, Irina Gerashchenko, said Nemtsov would not join the presidential staff but would act as an outside adviser – and as such would not receive a paycheck. Ukrainian law prohibits the president from hiring non-Ukrainian staff.
Gerashchenko said Nemtsov was appointed with the aim of not only increasing Russian investment, but also strengthening Kyiv-Moscow relations. “At the moment there are a lot of myths about Ukraine in Russia – myths that we are anti-Russian,” she said. “If it can help to show that’s not the case, that would be wonderful.”
Nemtsov is the second liberal from Russia’s business and political elite to be exploited by a government of a former Soviet republic. Last year, industrialist Kakha Bendukidze was appointed Georgian minister after Mikheil Saakashvili became president of that country’s Pink Revolution.
Nemtsov strongly supported Yushchenko during the Orange Revolution, the weeks of nationwide protests against a fraudulent November 21 election won by Kremlin-backed Viktor Yanukovych. The election was canceled and Yushchenko won a new vote at the end of December.
Nemtsov and Yushchenko struck up a friendship in 1997, when Nemtsov was deputy prime minister and Yushchenko was chairman of the Central Bank of Ukraine, Nemtsov said.
During the election crisis, Nemtsov made serious efforts to persuade the Kremlin to adopt a friendlier stance toward Yushchenko, a source close to the Kremlin said.
Nemtsov also stood with Yushchenko in Kiev’s Independence Square as it was packed with tens of thousands of protesters. “A union between a chekist and a repeat offender is perverse,” Nemtsov told the crowd the day after the Nov. 21 election, referring to President Vladimir Putin’s KGB career and Yanukovych’s criminal record.
“We need a democratic Ukraine the same way we need a democratic Russia,” he said.
Nemtsov continued to criticize Russian leadership on Monday and suggested that Russian companies may move to Ukraine if the investment climate does not improve in the country. “It’s no secret. Many of my friends and acquaintances look to Ukraine with envy. And many are considering moving there permanently if the situation becomes unbearable here,” he said.
Russian business leaders are very worried about their investments, capital and personal safety, he said. “But instead of putting their money in offshore accounts, they would gladly invest it in the Ukrainian economy,” he said.
The legal assault on Yukos, stalled reforms, widespread corruption and signs of crackdowns on civil liberties have raised serious concerns among investors, political observers and parts of the public.
Nemtsov said many Russians see the Orange Revolution as an opportunity for change, but “I’m not talking about exporting revolutions. That’s a very bad approach.” Instead, he said, they are encouraged by Yushchenko’s drive to bring Ukraine closer to Europe and embrace democratic reforms. “If they succeed, it means Russia has a chance too,” he said.
One of Nemtsov’s first tasks as an adviser will be to deal with fears that Ukraine will backtrack on shady privatizations carried out under President Leonid Kuchma. Only on Monday, Kiev announced that it had canceled the sale of the Kryvorizhstal steel plant to a member of Kuchma’s family last year. The plant was sold for nearly half the price offered by other bidders.
“My position is that there should be a law limiting these renationalizations to a specific list, so others know they are safe,” Nemtsov said, adding that he will urge Yushchenko to support the necessary legislation.
Market watchers said Nemtsov’s appointment is partly a symbolic gesture of Yushchenko’s commitment to economic transparency, democratic freedoms and the fight against corruption – platforms that the Our Yushchenko’s Ukraine and Nemtsov’s SPS.
Andriy Blinov, senior economist at the Kyiv International Center for Policy Studies, said Yushchenko was trying to create a stark contrast between his promises to level the playing field for business and Putin’s style of government. “Yushchenko’s policy is to be rather anti-Russian, not in an ethnic sense, but in the sense that he is against Putin’s vertical of power,” he said.
Blinov said the appointment could ruffle some feathers in Moscow. “Many politicians will probably see this as a hostile act,” he said.
Dmytro Tarabakin, head of sales at Dragon Capital, Ukraine’s largest brokerage firm, said Nemtsov should be able to strengthen business relations, even though Russian interest in Ukrainian assets is already very high. . Ukraine’s economy jumped 12% last year and more than 9% in 2003. The benchmark PFTS index has risen more than 200% last year and about 30% since Jan. 1.
“There was a huge pickup from virtually all Russian brokers,” Tarabakin said. “Before, we used to go to Moscow to meet them. Now they come to Ukraine to meet us.”
Sergei Markov, a former Kremlin consultant, noted that while Nemtsov’s appointment could be seen as a slap in the face, it would likely be overshadowed by other controversial appointments, such as Yulia Tymoshenko as prime minister.
Valeria Korchagina reported from Moscow and Greg Walters reported from Kyiv.