Ukraine learns to engage in the scrappy politics of a proper democracy where cabinet rivalries are highlighted by a boisterous press and politicians are not scared to speak their mind, say some analysts. But appearances may prove deceptive.

"The political situation is very competitive in Ukraine. There is no single centre of power which dominates the whole of political life and this is much healthier," said Katia Malofeeva, an analyst at Renaissance capital, a Moscow investment bank.

That is a stark contrast with Russia where President Vladimir Putin has presided over a centralization of power in the hands of the Kremlin and growing state control over broadcast media, a development which some find alarming. "Ukraine's situation is more volatile and harder to predict than Russia," said Malofeeva.

Ukraine's policy drift may be more apparent than real as key politicians, led by Yushchenko and his ambitious Prime Minister Yulia Tymoshenko; they position themselves ahead of the March 2006 election.

"The government which emerges next March will determine Ukraine's future," said a fund manager based in Kiev who asked not to be identified. "The entire public administration needs to be reformed and the real reforms will not start until April."

"This government is not stupid. They know that to go ahead with a root-and-branch reform of the civil service now would have a very high political cost and could lead to defeat in the election," he added.

And a slump in gross domestic product growth, which fell to 3.7% between January and July from 13.5% in the first seven months of 2004, has more to do with falling prices of steel, Ukraine's main industrial export, than any mishandling of government policy, say economists.


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