MANAMA: The demise of Ukraine’s government was not unexpected, according to Alisa Lockwood, Head of Europe/CIS, IHS Country Risk.
“The coalition was always a fragile one, and pressure had been building for early elections in any case. The parliament’s refusal until now to self-disband and open the way for early parliamentary elections—motivated by the fact that most of the current deputies have little chance of being re-elected—had exacerbated the general perception of stasis within the political establishment. Elections are therefore essential to rebuild the legitimacy of the government and parliament in the eyes of the public. Meanwhile, however, the lack of a functional government will complicate Kiev’s ability to conduct the anti-terrorist operation in the east, which in turn carries risks of civil unrest.”
“Officials have already warned that the inability to agree on a reformed budget could jeopardize payments for troops as early as August. In the view of IHS, failure to establish government control over eastern Ukraine by November would mean that Donetsk and Luhansk provinces would solidify their status as breakaway territories.
“The Ukrainian army is too ill equipped to fight at full strength in winter conditions and does not have sufficient financing to prepare sufficiently for winter months. In turn, a failure to contain the separatists would increase the likelihood of renewed protests in Kiev, potentially stoked by parties like UDAR or Svoboda for political gain.”