Ukraine’s Chocolate Tycoon Set for Victory as Unity Frays
A billionaire chocolate magnate is
sure he’s the man to hold Ukraine together as gun-toting
separatists threaten to rip it apart.
Petro Poroshenko, the front-runner in the May 25
presidential election, says he’ll unite the nation by bolstering
democracy and sealing deeper European ties. A regular presence
at the Kyiv protests that toppled President Viktor Yanukovych
and a minister in the last two governments, the tycoon is a
pragmatist who can strike deals to ease tensions, according to
Iryna Bekeshkina, head of the Democratic Initiatives Foundation.
“Poroshenko comes across as strong, reliable and non-confrontational, a person who’s able to reach compromises,” she
said by phone from the capital, Kyiv. “His work with different
camps is seen by voters as a plus, an ability to agree with
different people.”
Poroshenko’s challenge is unlike that facing most
presidential candidates. Not only will he have to convince his
compatriots to vote for him, he will have to do so in the face
of hostility from Russian President Vladimir Putin and
separatist rebels who have seized swathes of Ukraine’s
easternmost regions.
The U.S. and the European Union say the May 25 ballot will
help Ukraine heal and have warned Russia of tighter sanctions if
it meddles. Putin deems the cabinet in Kyiv illegitimate.
Poroshenko leads a field of 21 candidates ranging from the
nationalist Pravyi Sektor group that fought Yanukovych’s riot
police in February to the communist party. The chocolate magnate
has more than five times the support of his nearest rival,
former Prime Minister Yulia Tymoshenko. His goal is to capture
more than 50 percent of the vote and avoid a second-round
runoff, which would be held June 15.
Chocolate Empire
The tycoon, who also has interests in media and has a
fortune of $1 billion, according to the Bloomberg Billionaires
Index, is flaunting his business acumen in appearances from pro-European western cities such as Lviv to the crisis-stricken
east, where separatists face off against government troops.
“I know how to create new jobs,” Poroshenko, 48, said on
a talk show broadcast by private TV channel ICTV on April 22.
Born in the Black Sea Odessa region near the Romanian
border, his business empire sprouted up from cocoa trading in
his early years into Roshen Confectionery, a chocolate maker
with operations in Ukraine, Hungary, Lithuania and Russia and
2012 revenue of $1.2 billion.
“I like that he has his own business so he understands how
it works in practice, not just in theory,” said 37-year-old
Oleksandr Skrypnikov, head of Mir Comforta, which sells air
conditioners in Kyiv. “He can reach agreements with everyone.”
Lawmaker, Minister
Poroshenko, a lawmaker, served as foreign minister under
President Viktor Yushchenko, hero of the 2004 Orange Revolution
that helped overturn Yanukovych’s election win. He was economy
minister under Yanukovych, who was eventually ousted in deadly
protests sparked by his snub of a European integration accord.
The billionaire is promising to boost wages by nurturing
employment and gearing the economy toward Europe through a free-trade pact. His posters carry the slogan “A New Way to Live!”
“We can’t compromise with Russia on our European choice,”
he said May 18, according to a transcript posted on his website.
“I will ensure immediate ratification of the Association
agreement with the EU.”
Poroshenko’s is also showing off his deal-making skills in
campaigning, sealing the endorsement of fellow billionaire
Dmitry Firtash, who has close ties to Russia.
Tymoshenko Feud
The backing of Firtash, who’s fighting extradition to the
U.S. from Austria on bribery charges, persuaded ex-heavyweight
boxing champion Vitali Klitschko to drop out of the election,
leaving Poroshenko to square off against Tymoshenko.
As well as being the tycoon’s closest rival, the ex-Prime
Minister is also his long-time foe. They bickered under
Yushchenko over the premier’s job, contributing to infighting
that hamstrung the Orange Revolution and presented Yanukovych
with a second chance.
“I won’t vote for Poroshenko,” said Denis Horokhovsky,
27, deputy head of public relations at COOP-Ukraine, company
with interests in retail, banking and insurance. “He’s changed
his political views from one party to another and has already
had the opportunities to implement what he’s now promising to do
after winning the post.”
Poroshenko’s relations with Russia have also soured since
he threw his weight behind Ukraine’s plan to sign the EU deal
rather than join a Putin-backed customs union. Roshen’s Russian
bank accounts were frozen in March, its products were banned and
the billionaire’s wealth has plunged by almost $500 million this
year, according to data compiled by Bloomberg.
Putin’s Decision
“Normalizing ties with Russia depends on Putin, in
particular whether he recognizes Poroshenko as Ukraine’s
legitimate president,” said Oleksandr Parashchiy, head of
analytics at investment bank Concorde Capital in Kyiv.
The Russian leader may need to make that decision soon,
with Poroshenko so far ahead in the polls. His backing is at
44.6 percent, compared with 8.4 percent for Tymoshenko, a May
14-18 poll by the Kyiv-based Razumkov Center and Democratic
Initiatives Foundation showed. He’d win a second-round runoff
with about 52 percent backing, according to the survey of 2,011
voters. It had a margin of error of 2.3 percentage points.
On track to victory, Poroshenko is set to be in charge of
tackling Ukraine’s deepening economic crisis. Gross domestic
product may shrink 7 percent this year, according to the
European Bank for Reconstruction and Development.
‘Investment Boom’
The country’s banks need at least 50 billion hryvnia ($4.2
billion) in fresh capital, central bank Governor Stepan Kubiv
said last week. The hryvnia has weakened 31 percent to the
dollar this year, the worst performance among more than 170
currencies tracked by Bloomberg.
“I assure you that as soon as there is stability in the
east, there will be an investment boom in Ukraine,” he said in
a statement on his website. “It will create jobs, bring revenue
to the state budget and build a strong Ukraine.”
While Poroshenko leads in the predominantly Russian-speaking south and east with about 26 percent backing, many
voters there says they’ll boycott the ballot because none of the
candidates on offer represent their needs.
“Poroshenko isn’t my candidate because he’s a collaborator
and I’m sure he’ll cut a deal with the other oligarchs and
Putin, hurting Ukraine’s national interests,” said Oleksiy, 28,
an entrepreneur in the eastern city of Donetsk, where
separatists are attempting to form an independent state.
‘Broken Pieces’
About half of the voters in the violence-ravaged Donetsk
and Luhansk regions may stay away from the election, according
to the Razumkov poll. Clashes flared up again yesterday, with at
least 16 pro-Kyiv servicemen dying in their worst day of the
campaign yet.
With no one else polling anywhere near Poroshenko, the
tycoon is the only candidate with a hope of uniting the country
of 45 million, according to Simon Quijano-Evans, head of
emerging-market research at Commerzbank AG in London.
“Ukraine needs an elected president who’s able to pull all
the broken pieces together again and Poroshenko appears to face
the least resistance on all fronts combined,” he said by e-mail. “An elected president is only the first step toward
regaining investor and electorate confidence. The hard work of
consolidating all sides comes thereafter.”
To contact the reporters on this story:
Daryna Krasnolutska in Kyiv at
dkrasnolutsk@bloomberg.net;
Daria Marchak in Kyiv at
dmarchak@bloomberg.net
Denis Kazansky in Donetsk at
dennis_1984@i.ua
To contact the editors responsible for this story:
Balazs Penz at
bpenz@bloomberg.net
Andrew Langley