To rig, or not to rig?

 

May 28th 2012,

As Kiev enjoys this year’s first drawn out spell of summer weather, growing social tension suggests that the parliamentary elections in October will be key for Ukraine’s future stability. Given its deep unpopularity as a result of an economic slowdown and series of corruption scandals, the temptation for the government to rig the vote is strong. Unfortunately, its track-record in this area is not good: Viktor Yanukovich first came to national prominence because he was able to help deliver a majority for Leonid Kuchma through his influence in the eastern part of the country during the 1999 polls. Indeed, it was Yanukovich’s Party of the Regions (PoR) which was allegedly responsible for most of the fraud that occurred during the November 2004 vote, sparking the Orange Revolution.

And while Yanukovich won the February 2010 presidential contest fair and square, those elections were administered under his opponent, Viktor Yushenko. Yushenko was a disappointment in many ways, but made a point of  ensuring that the election administration was improved, and the 2010 poll well run. Subsequent trends have not been as promising: local elections held under the new government in November 2010 were marred by fraud allegations. More recently, opposition leader Yulia Tymoshenko has been imprisoned on charges seemingly motivated more by political considerations than legal ones. It is likely she will be barred from running for parliament on a technicality, even if released.

Yet the government is fearful of upsetting the US and EU too much, since that might force it into accepting Moscow’s financial embrace, with the potential impact this would have on the local oligarchy’s political and economic position. So there remains a chance that Western diplomatic pressure, including via election observation outfits such as the OSCE, might have a moderating influence on the way the polls are conducted.

Even so, on the basis of events in parliament after the last presidential elections, much of the most important manipulation will probably take place in the weeks following the vote rather than on election day itself: back in 2010, Yanukovich initially lacked sufficient support in the Rada. However, several MP’s switched sides following his win, providing the PoR with the required majority. For some this may have been result of financial inducements, but in other cases blackmail cannot be ruled out as a factor.

That may not happen this year. If the elections are genuinely free and fair the sheer number of opposition MPs would make such a scenario hard to pull off. The government has lost much of the popularity it had, especially in its traditional heartland in the east. However, if there is fraud, or if the vote is followed by the defection of MPs leading to a clear subversion of the popular will, violent protest is likely.

The Ukrainians demonstrated that they will only be pushed so far in 2004. In October we will see to what extent the government is willing to test their patience once more.

Ukraine: Awaiting the Protestor’s Return

May 21st 2012,

The period since the election of Viktor Yanukovich to the Ukrainian Presidency in February 2010 has been a shambles: Support for his Party of the Regions (PoR) has slumped even in its traditional heartlands in the east of the country. There has been a massive and apparently uncontrollable rise in corruption. Ukraine dropped some 18 places in Transparency International’s Index to a woeful 154th place last December, and things now appear to be getting even worse. Potential fraud in parliamentary elections in the autumn may provoke a violent backlash.

President Yanukovich is in the process of creating a highly personalized style of government. According to our sources, all revenue streams have now been put under the control of family or close friends, including the national bank, finance ministry, treasury, tax, and customs. Additionally, the main security organs have come under similarly personalized control, including the prosecutor’s office and the Security Service (now run by the President’s elder son). Even the Party of the Regions is its losing relevance as the President comes to draw more and more on direct ties.

FDI has dried up, and most M&A activity is domestic, with international firms taking a cautious back seat. The exception to this rule is oil and gas, where Shell and Chevron are being bought in because local companies lack expertise to extract recently discovered shale gas. Anecdotal evidence suggests that many ex-pats have already left, or are making plans to do so over the next few months. Additionally, there is speculation that visa requirements might be brought back in for EU nationals.

These developments have been distressing for those who voted for former Prime Minister Yulia Tymoshenko in February 2010, but even more so for those, concentrated in the south and east, who voted for Yanukovich on the basis that he might offer something better than the political and economic instability which followed the 2004 Orange Revolution. In fact corruption, and the expropriation of businesses through a captured legal system have been especially evident in these parts of the country.

But while popular resentment is running high throughout Ukraine, the opportunity for the population to make its voice heard at the elections in October may be subject to interference. The current administration does not have a good track-record when it comes to electoral fraud: Yanukovich was initially summoned to Kiev precisely because he was able to help the PoR garner a majority for Leonid Kuchma during the 1999 polls. The falsification during the 2004 presidential elections remains an exemplar of all the varied means by which manipulation can be achieved, not least the 1.1 million votes added to Yanukovich’s tally by computer hacking during the second round. It cannot be ruled out that the current government might again resort to these familiar tactics.

Ms. Tymoshenko has already been imprisoned on apparently politically motivated charges, as a way of preventing her running in October, and it seems that technical measures will be found to ensure she is unable to stand for parliament, even if she is freed in order to placate the EU. Nonetheless, her imprisonment has acted to boost her waning popularity, and if released she can be expected to campaign with her usual dynamism for the opposition. This will boost their poll ratings considerably and raise the stakes in advance of the 2015 presidential election.

However, if mass falsification does take place and is uncovered, the question of the 2015 polls may become less relevant. There is real anger on the streets at the lack of official accountability. This was demonstrated by the nationwide unrest that took place in March after local police refused to charge two politically connected youths who raped an 18 year-old girl and left her for dead in the southern town of Mykolayiv. The potential for violence on all sides is becoming clearer. The most important question to be answered in October is therefore: Will popular anger once again explode into protest as it did in 2004, or is the population, especially in the eastern Donbass, so scared that they will stay at home during the election period? The reaction of these towns is critical because, if eastern Ukraine comes out in protest, the traditionally opposition-minded west will rise for sure.

Lviv: Nationalist Overreaction in Galicia.

25th June 2011,

Continuing our exploration of Ukraine’s kaleidoscopic regional diversity, Democratist recently spent a couple of days in Lviv: One time capital of Austro-Hungarian Galicia, architectural gem and UNESCO world heritage site, it was the focus of the western Ukrainian national revival in the late 19th century, and again in the 1980’s. Under President Yanukovich, it has become a rather defensive and self-conscious center of Ukrainian cultural and national independence and, since last October, electoral home to the reactionary, populist Svoboda party at the local level.

What is most immediately striking about Lviv and its surrounding oblasts is just how unlike the rest of Ukraine it is in terms of history and ambiance. Arriving by train,  Lviv station (1904) is an elegant, vaulted Art Nouveau monument to the Habsburg Monarchy which oversaw its construction, and which ruled Galicia from 1773 until 1918; a relic of a lost world of Austrian officials, Polish landowners, Jewish traders, and Ukrainian peasants. It is a testament to the extraordinarily diverse multi-ethnic, multi-lingual, multi-confessional society that gave birth to the city’s many magnificent buildings, and which still existed when Galicia became a part of Poland at the end of the Polish-Soviet War (1919-1921); a world finally torn to shreds by Nazi genocide, and Stalin’s forced expulsion of the Poles after Galicia became part of the Ukrainian SSR at the end of the Second World war.

In fact, it was only after 1944 that the Ukrainian peasantry moved en masse into Lviv from the surrounding countryside and the city took on the ethnic character it maintains today: Up until then, Ukrainians had mostly eked out their lives in the country, while Poles and Jews dominated in the town. It was the grinding rural poverty and hunger that these peasants faced which had forced some two million of them to emigrate from Galicia, mostly to the US and Canada in the late 1900’s, thereby giving birth to the large Ukrainian diasporas in those countries.

But despite its provincialism, thanks largely to the efforts of the well-organized and civic-minded Ukrainian “Greek Catholic” church and related civic organizations, as well as the Czech and German examples, and an unusual degree of encouragement from the imperial administration, Ukrainian nationalism and culture flourished in Galicia in the second half of the nineteenth century. This occurred while a process of russification was continuing (especially after the 1876 Edict of Ems) in the Ukrainian territories to the East which had become part of the Russian Empire. However, the basis for the Habsburgs’ indulgence of the Ukrainians – including some representation in the Galician Diet after 1861, and the development of their own political parties, civil society and newspapers – was not liberalism, but rather imperial calculation: Vienna sought to build up Ukrainian national consciousness as a bulwark against rebellious Polish nationalism – to balance the Ukrainian peasantry in the countryside against the Polish landowners in the town.

Nonetheless, it was the Austro-Hungarian period, which was to provide the historical-sociological groundwork for the subsequent strong resilience of Ukrainian culture and language in the region compared with the rest of the country. Following the Soviet (1939), and then Nazi (1941) invasions, this found military expression through the creation of Ukrainian Insurgent Army (UPA) in 1943 under the leadership of Stepan Bandera. The UPA sought the creation of an independent Ukrainian state, and fought against the Poles, Soviets and Germans to this end: As such, at different points in the war it co-operated with the German Wehrmacht and Waffen SS, and also played a role in the killing and ethnic cleansing of Poles in Galicia. While it officially disbanded in 1949, some units continued operations against the Soviets until 1956. Bandera himself was assassinated by the KGB in Munich in 1959.

It was therefore unsurprising that Galicia, as the “heartland of Ukrainian nationalism” – where the Uniate church remained strong (if underground) throughout the Soviet period, and dissident activity significant, should have been at the forefront of calls for Ukrainian independence from the USSR in the late 1980’s. As Anna Reid writes in her excellent Borderland: A Journey Through The History of Ukraine (1997) it was the nationalist movements based there that tipped the scales towards the Ukrainian Communist Party’s decision to declare independence after the failed coup of August 1991. And without them, given the ambivalence of many Ukrainians outside of the region towards their national identity at the time, the country may never have become independent at all.

Nor is it surprising that the region should have been a strong supporter of the Orange Revolution in 2004. However, the failure of the revolution to deliver on many of its promises, and the victory of Viktor Yanukovich in the 2010 Presidential elections have left Galicia frustrated and defensive. While the traditions of language, church and political activism remain strong, last October’s local elections saw the vociferously xenophobic (both anti-Russia and anti-western) and anti-democratic Svoboda party take up to 30% of the vote in the region, and it has now become a key player in local politics.

In turn, there is much speculation that Yanukovich’s Party of Regions (PoR) has been happy to provide Svoboda with publicity (and perhaps financial help) as a way to split the “Orange” vote – safe in the knowledge that such extremists will almost certainly never garner any significant support outside of Galicia. Many of the PoR’s policies, not least the closure of Ukrainian language schools in the East of the country by the divisive Russophile education minister Dmytro Tabachnyk, also seem calculated to provoke nationalist anger and reaction. However, since Svoboda gained about 5% of the national vote last year, it may well reach the 3% threshold required to be represented in parliament in the polls due in October 2012.

The PoR’s apparent covert support of Svoboda is a clever ploy that plays effectively on local fears and seems likely to further weaken the mainstream “national democratic” vote as represented by Yulia Tymoshenko. On the basis of Democratist’s discussions with various contacts within Ukraine, it appears to be part of a broader series of measures which are being introduced by the PoR to facilitate the weakening, demoralization, division and co-opting of the opposition, and the entrenchment of a managed democracy.

The Crimean Tatars: Future opportunities, lingering threats.

11th June 2011,

By way of a short summer break, and in order to broaden our understanding of Ukraine’s regional diversity, Democratist has just returned from a week in Crimea. Long the Soviet apparatchik’s holiday destination of choice, it remains popular with Ukrainians and Russians today, despite the lure of Turkey and Egypt.

While we recommend both the Simferopol-Yalta Trolleybus line (at 86 km, the longest in the world, and a mere 12 UAH or 95 pence for a one way ticket), and the Sebastopol harbour/Russian black sea fleet boat tour, by far the most intellectually rewarding aspect of our 5-day trip was the opportunity we had to meet with representatives of the Crimean Tatar community, at the their Mejlis (cabinet) secretariat in the regional capital, Simferopol.

The Crimean Tatars are a Sunni Muslim, Turkic people. They formed in Crimea in the 13th century as a branch of the Golden Horde, and dominated the peninsula for some 500 years. They were prominent in the slave trade until the early 1700′s, and provided Russian, Ukrainian and Polish slaves to the Ottoman Empire – under which they had become a protectorate in the late 1470′s.

However, Russia annexed Crimea in 1783, and the subsequent 200 years proved a disaster for the Tatars, with a tentative recovery only beginning in the late 1980′s.

From the time of annexation, and for much of the following century, the Tatars were subject to repression and an extraordinary degree of systematic cultural destruction. This in turn provoked mass emigration, as much of the population fled to remaining parts of the Ottoman empire. By 1897, they came to compose only about 30% of the inhabitants of Crimea.

The early Soviet period was marked by an initial resistance to the revolution and declaration of the first secular democratic republic in the Islamic world, the Crimean People’s Republic, in Simferopol in December 1917. This was followed by military defeat at the hands of the Bolsheviks a month later, then repression, mass executions, and deliberate starvation in the 1920′s and 1930′s. It has been estimated that about half the remaining Tatar population was killed by the mid-1930′s.

Given this course of events, it is perhaps understandable that the Tatar leadership should have chosen to collaborate with the Nazis after the 1941 invasion of the USSR. However, once the Red Army reestablished control over Crimea in 1944, Stalin responded with what was effectively his own “final solution” to the problem of the Tatar presence in strategically important Crimea. Under influence from the NKVD, he ordered the mass deportation of the entire remaining population to central Asia. While it was probably not his intention to physically destroy an entire people (as was the case with the holocaust), it is clear that the deportation essentially amounted to genocide within the terms of the 1948 UN Convention. According to Tatar NGOs just under half of those deported died within the first couple of years of exile.

Although all charges against the Tatars were lifted in 1967, they were not formally permitted to return to Crimea until 1989. Even since then, the steady trickle of returnees have faced discrimination at the hands of the heavily sovietized Russian/Ukrainian majority, many of whom moved to Crimea in the post-war period and were given confiscated Tatar property.

As of 2011, about 280,000 Tatars have returned to Crimea, so that they now constitute about 13-14% of the population. A further 100,000 or so remain in central Asia, many of whom would like to return, but lack the financial means.

In terms of political representation, while it does not have any official powers or legal status, about 90% of the returned Tatars support, and elect deputies to the 250 member Kurultai (parliament), and its 33 member executive Mejlis, both established in 1991. The Mejlis is led by respected former dissident and Human Rights campaigner Mustapha Cemilev, and has become the main point of contact for Ukrainian government dealings with the returnees.

According to Cemilev, and other representatives of the community Democratist spoke with, the main contemporary potential threats and problems facing the resettled Tatars include:

• The possibility that Crimea (only designated part of Ukraine by Khrushchev in 1954, and 65% ethnically Russian) might secede from Ukraine back to Russia, which would almost certainly lead to open conflict.
• The intensification of inter-ethnic tension as a result of Soviet-era and contemporary propaganda which seeks to justify the deportation. Many Russian nationalists in Crimea go as far as to say that the Tatars should be re-deported.
• The need for legal rulings on the status of Tatars in Crimea, saying that they have a right to settle there, to preserve their identity, as well as restitution for property confiscated in 1944.
• The need for increased international facilitation to help the return of those Tatars who wish to do so.
• The need to address a lack of amenities, high unemployment, and discrimination in terms of access to land.
• The need to create a comprehensive Tatar-language education system and cultural/media sphere (only 10% of Tatar children are currently educated in their own language). The establishment of Tatar as an official language in Crimea.

The Tatars’ main strategy in addressing these issues is currently more focused on deepened cooperation (and possible eventual Ukrainian integration) with the EU and NATO, rather than in trying to cut deals with local political groupings. They see the best hope for long-term stability, economic growth, and the legal rights, religious, cultural and educational autonomy they seek as lying with deeper Ukrainian integration into Euro-Atlantic structures. In this regard, while NATO membership is firmly off the table for the foreseeable future, the Yanukovich government’s recent renewed seriousness with regard to the signing of a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU will surely come as a welcome development.

The Tatars are now faced with both future opportunities and lingering threats. To a large extent, the threat of Crimean succession back to Russia (it is currently supported by 70% of ethnic Russians in Crimea) will remain for many decades to come, and is dependent as much upon developments within Russia itself, as it is on the political and economic development of Ukraine and the Crimean peninsula.

Nonetheless, in order to benefit as much as possible from the opportunities presented by Ukraine’s European aspirations, the emergent generation of Tatar leaders is going to have to develop its ability to lobby persuasively and professionally at the international level. If the voices of this small ethnic group are to be heard above the din of competing interests, a new cadre of professionals, fluent in English, and with qualifications from Western Universities will be required to make the case for Tatars in Brussels and Washington over the coming decades.

The Crimean Tatars: Opportunities and Threats.

11th June 2011,

By way of a short summer break, and in order to broaden our understanding of Ukraine’s regional diversity, Democratist has just returned from a week in Crimea. Long the Soviet apparatchik holiday destination of choice, it remains popular with Ukrainians and Russians today, despite the lure of Turkey and Egypt.

While we recommend both the Simferopol-Yalta Trolleybus line (at 86 km, the longest in the world, and a mere 12 UAH or 95 pence for a one way ticket), and the Sebastopol harbour/Russian black sea fleet boat tour, by far the most intellectually rewarding aspect of our 5-day trip was the opportunity we had to meet with representatives of the Crimean Tatar community, at the their Mejlis (cabinet) secretariat in the regional capital, Simferopol.

The Tatars are a Sunni Muslim, Turkic people. They arrived in Crimea in the 13th century as part of the Golden Horde, and dominated the peninsula for some 500 years. They were prominent in the slave trade until the early 1700’s, and provided Russian, Ukrainian and Polish slaves to the Ottoman Empire – under which they had become a protectorate in the late 1470’s.

However, Russia annexed Crimea in 1783, and the subsequent 200 years proved a disaster for the Tatars, with a tentative recovery only beginning in the late 1980’s.

From the time of annexation, and for much of the following century, the Tatars were subject to repression and an extraordinary degree of systematic cultural destruction. This in turn provoked mass emigration, as much of the population fled to remaining parts of the Ottoman empire. By 1897, they came to compose only about 30% of the inhabitants of Crimea.

The early Soviet period was marked by an initial resistance to the revolution and declaration of the first democratic republic in the Islamic world, the Crimean People’s Republic, in Simferopol in December 1917. This was followed by military defeat at the hands of the Bolsheviks a month later, then repression, mass executions, and deliberate starvation in the 1920’s and 1930’s. It has been estimated that about half the remaining Tatar population was killed by the mid-1930’s.

Given this course of events, it is perhaps understandable that the Tatar leadership should have chosen to collaborate with the Nazis after the 1941 invasion of the USSR. However, once the Red Army reestablished control over Crimea in 1944, Stalin responded with what was effectively his own “final solution” to the problem of the Tatar presence in strategically important Crimea. Under influence from the NKVD, he ordered the mass deportation of the entire remaining population to central Asia. While it was probably not his intention to physically destroy an entire people (as was the case with the holocaust), it is clear that the deportation essentially amounted to genocide within the terms of the 1948 UN Convention. According to Tatar NGOs just under half of those deported died within the first couple of years of exile.

Although all charges against the Tatars were lifted in 1967, they were not formally permitted to return to Crimea until 1989.  Even since then, the steady trickle of returnees have faced discrimination at the hands of the heavily sovietized Russian/Ukrainian majority, many of whom moved to Crimea in the post-war period and were given confiscated Tatar property.

As of 2011, about 280,000 Tatars have returned to Crimea, so that they now constitute about 13-14% of the population. A further 100,000 or so remain in central Asia, many of whom would like to return, but lack the financial means.

In terms of political representation, while it does not have any official powers or legal status, about 90% of the returned Tatars support, and elect deputies to the 250 member Kurultai (parliament), and its 33 member executive Mejlis, both established in 1991. The Mejlis is led by respected former dissident and Human Rights campaigner Mustapha Cemilev, and has become the main point of contact for Ukrainian government dealings with the returnees.

According to Cemilev, and other representatives of the community Democratist spoke with, the main contemporary potential threats and problems facing the resettled Tatars include:

• The possibility that Crimea (only designated part of Ukraine by Khrushchev in 1954, and 65% ethnically Russian) might secede from Ukraine back to Russia, which would almost certainly lead to open conflict.
• The intensification of inter-ethnic tension as a result of Soviet-era and contemporary propaganda which seeks to justify the deportation. Many Russian nationalists in Crimea go as far as to say that the Tatars should be re-deported.
• The need for legal rulings on the status of Tatars in Crimea, saying that they have a right to settle there, to preserve their identity, as well as restitution for property confiscated in 1944.
• The need for increased international facilitation to help the return of those Tatars who wish to do so.
• The need to address a lack of amenities, high unemployment, and discrimination in terms of access to land.
• The need to create a comprehensive Tatar-language education system and cultural/media sphere (only 10% of Tatar children are currently educated in their own language). The establishment of Tatar as an official language in Crimea.

The Tatars’ main strategy in addressing these issues is currently more focused on deepened cooperation (and possible eventual Ukrainian integration) with the EU and NATO, rather than in trying to cut deals with local political groups. They see the best hope for long-term stability, economic growth, and the legal rights, religious, cultural and educational autonomy they seek as lying with deeper Ukrainian integration into Euro-Atlantic structures. In this regard, while NATO membership is firmly off the table for the foreseeable future, the Yanukovich government’s recent renewed seriousness with regard to agreement of a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU will surely come as a welcome development.

The Tatars are now faced with both future opportunities and lingering threats. To a large extent, the threat of Crimean succession back to Russia (it is currently supported by 70% of ethnic Russians in Crimea) will remain for many decades to come, and is dependent as much upon developments within Russia itself, as it is on the political and economic development of Ukraine and the Crimean peninsula.

Nonetheless, in order to benefit as much as possible from the opportunities presented by Ukraine’s European aspirations, the new generation of Tatar leaders is going to have to develop its ability to lobby persuasively and professionally at the international level. As such, a new cadre of professionals, fluent in English, and with qualifications from Western Universities will be required to make the case for Tatars in Brussels and Washington over the coming decades.

Ukraine: The other 2012.

24th May 2011,

Last week, Democratist presented our readers with a vision of Ukraine’s future as seen from the upper reaches of the Party of the Regions (PoR). This week we’ve been talking to some friends from the other side of the political divide about the current situation, and ongoing preparations for the October 2012 parliamentary elections.

They made the following points;

Opinion polls are of varying quality, but it seems likely that the PoR has lost up to half the support it had at the time of the presidential elections last February, and is unlikely to be able to recapture it. This may be one reason why the government has decided to hold the next parliamentary elections as late as possible.

The popular mood has become angry and frustrated due to continuing problems with the economy, and more specifically in relation to rapidly increasing corruption. This is more pronounced in the east, where politically connected criminals have started to demand larger sums from local businesses.

The oligarchs that fund the PoR are interested in access to European markets, and support the signing of the Deep and Comprehensive Free Trade Area (DCFTA) as part of an Association Agreement with the EU. However, it is necessary for the leadership to maintain the rhetoric of continued good relations with Russia to placate their supporters. There are doubts about whether the EU will be ready to sign the DCFTA by the end of the year, despite the fact that it has become a central element of government policy. The EU may seek to postpone the deal on the basis that greater progress needs to be made on human rights issues, or reforms proposed by the IMF. The normal process of ratification is, even without additional complications, is usually rather drawn out. A continuing unwillingness to upset Russia may also be a factor.

The language issue is critical for the PoR. Currently, only Ukrainian has the status of a state language, even though many Ukrainians prefer to speak russian. The PoR has repeatedly promised to make Russian an official language, but has not yet delivered. The reason for this may be at least partly that, given how unpopular they have become, they fear that if they were to do so before the parliamentary elections next October, many of their voters would see no further reason to support them. However, this presumably depends on how the other parties react.  Nationalist grandstanding from the opposition could in fact help the PoR considerably.

With its ratings falling, the PoR would almost certainly fare very badly in next year’s parliamentary elections, given a free vote. They are therefore in the process of introducing a number of measures to tilt the situation to their advantage. These include;

• The politically-motivated legal harassment, and possible future imprisonment of Tymoshenko (and other opposition figures).
• Increasing the threshold for party representation in Parliament from 3% to 5, 7, or even 10%.
• The creation of an electoral system which allows for half of MP’s to be drawn from party lists, and the others to be elected as independents (thereby allowing these to be bribed or blackmailed into joining the PoR’s ranks after the election, as happened in he wake of last year’s presidential elections).
• Plus all of the usual post-soviet electoral fun and games.

Additionally, given the popularity of acting Mayor of Kiev Oleksander Popov (who took over the running of the city from the erratic Leonid Chernovetskyi last December) it seems likely that the PoR will push for a mayoral vote in Kiev at the same time as the parliamentary elections.

Ukraine may be turning back towards the EU, but integration remains a distant prospect.

18th May 2011,

Democratist has spent the past couple of days in Odessa, where he met a new contact who seems to know everyone worth knowing there, and certainly talks a good game.

Our new friend informs us that the next 18 months are about to witness a significant and decisive shift in Ukrainian foreign policy.

Apparently, the intensified wave of high-level corruption since Yanukovich came to power last year is essentially a final fight over the spoils as part of a prelude to a new period of Ukraine making a concerted effort to deepen its relationship with the EU. This in turn will lead to enhanced domestic reform, a clampdown on corruption, and an unequivocal return to the path of democratization.

In this regard, the PoR’s key aims over the coming months are the completion of an EU Association Agreement, including a Deep and Comprehensive Free Trade Area (DCFTA) by the end of he year, and the agreement of a much simplified visa regime for Ukrainian Citizens visiting the EU next summer (perhaps to coincide with Ukraine’s joint hosting of Euro 2012 with Poland in June/July). The PoR believes that the successful conclusion of these agreements would give it a considerable (and badly needed) boost in the October 2012 parliamentary elections.

This renewed concentration on EU integration comes after Ukraine ignored Russia’s invitation to join its Customs Union in late April, despite Putin’s promises that Ukraine would earn an additional $6.5 billion to $9 billion per annum from the deal. It has been rumoured for some time that the oligarchy that funds the PoR has come to see the Russian “virtual mafia state” as a key threat to its own independence (although this does not automatically make them keen Europeans, or mean that they will easily accept restrictions on their own activities). Additionally, according to almost everyone Democratist has spoken to, there is considerable popular sentiment throughout the country that Ukraine will be far better off as an independent state than it would be as a glorified southern province of Russia. More specifically, the pro-European policy is being driven to a considerable extent by the First Deputy Head of the presidential administration, the economist Irina Akimova.

From Democratist’s perspective, Ukraine’s timely completion of the Association Agreement and DCFTA would be most welcome, as it would prove beneficial to both the European and Ukrainian economies and set the stage for further integration. If these negotiations are indeed successfully completed by the end of the year then it certainly would make a great deal of sense to reward the government with a relaxation of the EU’s visa requirements next summer (provided all required criteria are met) with a view to scrapping visa requirements entirely for Ukrainians over the medium term. The current tight restrictions are very unpopular in Ukraine, with many people feeling that they are being treated more like potential criminals, than potential “Europeans”.

However, further progression towards full integration beyond that point is clearly going to take some time, and the current situation is not very promising. A critical indication of whether Yanukovich is really serious about Ukraine’s eventual European orientation will come during the conduct of the parliamentary elections next October: If domestic and international observers conclude that these are run in a free and fair manner (with none of the problems witnessed in the municipal polls last year), if the media and judicial situations show sharp improvements, if there is no abuse of “administrative resources”, if the rumours that the PoR is secretly funding the nationalist Svoboda Party in Western Ukraine suddenly cease, and if Tymoshenko does not discover that she is unable to contest the poll because she is in prison on politically-motivated charges, then even the more reluctant EU member-states will have to concede that Yanukovich is someone who means to transform Ukraine, and with whom they should do business.

Ukraine Under Yanukovich.

May 14th 2011,

Over recent weeks, Democratist’s attention has started to shift towards Ukraine. Here are some of our initial thoughts on the current domestic situation;

The two key trends that have dominated Ukrainian politics in the period since Viktor Yanukovich became president last February have been a marked expansion of authoritarianism, and an increase in high-level corruption. As Anders Aslund recently commented in the Kiev Post, reforms introduced as part of a $15 billion IMF loan arrangement have not boosted Ukraine’s competitiveness or market freedom, but have instead benefitted a few businessmen close to the President. Officially the economy appears to be bouncing back from the global financial crisis, with growth projected at 4.5% this year and 6.5% for 2012, but this does not yet appear to be filtering down to the popular level. While the opposition leadership remains weak and unpopular (a result of Orange-era bickering and stagnation), social tension and resentment of the government is increasing, and a number of protests are planned in Kiev over the coming days.

Last year saw a return to the 1996 constitution, which has in turn meant a far greater concentration of power in the Presidency than had been the case under the constitution agreed in 2004 (and followed by former President Yushenko). The Rada has become a compromised and unpopular rubber stamp, with parliamentarians regularly and illegally voting for others who have not bothered to turn up to work, or passing laws at the first reading – sometimes apparently without knowing what they contain. Some MPs switched sides shortly after Yanukovich came to power (perhaps as a result of financial or other inducements) and are therefore very unlikely to be re-elected. There were also a number of credible allegations of electoral fraud in relation to last October’s local elections from the respected non-partisan OPORA NGO, and Freedom House downgraded Ukraine from “Free” to “Partly Free” in its annual Freedom in the World Index for 2011. It currently seems unlikely that Parliamentary elections set for next September will pass smoothly, considering the increasing unpopularity of the current government, even in its Eastern strongholds.

The media (TV and most papers) are owned by oligarchs with close connections to the President, and have very quickly fallen into self-censorship. The IMI Press Freedom NGO reported a drastic decline of freedom of expression in Ukraine last year. Only a couple of smaller independent titles remain, such as Dzerkalo Tyzhnya and Ukrainska Pravda (both owned by the journalists who write for them). Pressure has also been applied to the English-language press, including the Kiev Post, although both the Post and Ukrainian Week magazine are still independent, and both critical of the government.

The judiciary has also become a tool of the regime; the high court and prosecutors office have come under Presidential control, and last year saw a number of selective and politicised criminal cases launched against at least eight Tymoshenko allies, including former interior Minister Yuriy Lutsenko (arrested on 26th December, and still in jail). Meanwhile only one, very junior cabinet minister from the current government, plus a couple of PoR officials, have been charged with corruption. The SBU (Security Service) was reported to have been attempting to place pressure on Ukrainian Catholic University rector Borys Gudziak in May 2010. It’s role since that time remains unclear.

In terms of corruption, while independent Ukraine has always been corrupt (part of the Soviet inheritance) quite a few of the current ministers appear to be trying to steal as much as possible, in as short a time as possible – and regardless of the damage they might be inflicting on the wider economy, to Ukraine’s international reputation, or even whether they are discovered (indicative of how tightly the media and judiciary are controlled by the government, and of a lack of desire to control this problem at the highest level). Ukraine has been slammed on this count by both Transparency International and the World bank.  A well placed source has suggested to Democratist that up to 30% of the state budget is siphoned off by various scams.

Perhaps the most instructive case in this regard relates to the grain export quotas that were set after an apparently disastrous harvest last summer (in fact only 13% down on 2009). In August 2010, Deputy PM Andrei Klyuev announced that state control of the grain market needed to be strengthened and a previously unknown company called Khilb Investbud was appointed as the state trading agent in the grain market with exclusive rights to effect all operations connected with grain on behalf of the state. Then in October the government decided to introduce grain export quotas, and who should get a big chunk of the much-prized licenses required in order to export Ukrainian grain, other than the very same Khlib Investbud. It later transpired that, while 49% of Khlib Investbud belonged to the Ukrainian state, the other 51% belongs to a company called Kolossar. Kolossar is partly owned by a man called Mykola Prysazhniuk, who just happens to be…the Minister of Agriculture (and an old friend of President Yanukovich). The other major owner of Kolossar is Russian bank Vneshekonombank. No action has been taken against  Prysazhniuk, and there are no plans to withdraw the quota system, despite the fact that Ukraine is a member of the WTO, and grain quotas restrict an important source of export earnings and tax revenue.

A similar degree of murk surrounds the privatization of the national telecommunications company UkrTelecom which, after having large sums of public money invested into it over the past decade, was sold for a minimal $1.3 billion in an auction in which only one firm, a mysterious Austrian private equity firm called EPIC, was permitted to bid, thereby excluding competitors including Deutsche Telekom. UkrTelekom is currently the only company to have a 3G license, and looks set to have a monopoly on 4G services as well.

A similar story is apparent from the introduction of a series of new tax laws passed by the Rada. These seem to have been specifically designed to favour large corporations at the expense of Small and Medium sized Enterprises (SMEs), and allow greater scope for corruption: Tax inspectors are now allowed to raid businesses as often as they want (previously this was a maximum of once per year), and they are able to seize property for up to 96 hours without a court order. One result of this is that FDI into Ukraine (once money reentering the country from Cyprus is discounted) remains negligible. More significantly, there’s a growing sense of anger among SMEs that may well soon spill over into protest.

In terms of the broader  economy, it currently looks unlikely that Ukraine will convince the IMF to part with the two remaining $1.6 billion loan tranches to be decided in July because of  lack of action on pension reform, VAT and gas prices. However, cash from the UkrTelecom sale was received by the treasury in April, and along with an unexpectedly strong trade balance, and the planned privatization of 700 state-owned companies over the coming year (due to bring in about $1.2 billion), fears that Ukraine will default on its $42.1 billion of short-term public debt due for repayment, refinancing or restructuring in over the summer have waned slightly, although they remain considerable.

Nonetheless, Ukraine is now suffering from a number of serious economic problems including soaring prices (especially food and fuel), a weak credit market, wage arrears and  unemployment. As a result, according to an article in 12th May Russian Nezavisimaya Gazeta, in a recent survey some 45% of respondents said that they might be willing to participate in antigovernment protests. While we feel that this figure may be exaggerated, a number of protests are planned in the coming days in Kiev, and the level of participation in these will give a better indication of the level of popular anger.

Going Postal: Press Freedom Under Fire In Kiev.

April 16th 2011,

Democratist has got wind of an emerging scandal in Kiev, which may provide some additional clues as to the current state of the country’s business and media environments, as well Ukraine’s ongoing struggle with high-level corruption.

Staff at the English language Kyiv Post went on strike yesterday following owner Mohammad Zahoor’s decision to fire editor Brian Bonner over publication of a rather tense interview with agriculture Minister Mykola Prysyazhnyuk which centered on the question of allegations of corruption in relation to Ukraine’s multi-billion dollar grain export business, and the possible involvement of Party of the Regions (PoR) lawmaker Yuriy Ivanyushchenko with a company that has received some rather favourable treatment in this regard. The staff are calling for Bonner’s reinstatement.

According to a note on the Post’s Facebook page, the dispute began on Friday morning, when after the paper had been sent for printing, Zahoor called Bonner to say that the Post would be shut down if it published the interview. After considering this request, Bonner refused and said he would not participate in the censorship of the paper.

Prysyazhnyuk gave the interview on 11th April, but subsequently had cause to reconsider his position, and apparently asked Zahoor to block publication.

Media freedom in Ukraine has come under increased pressure since last February, when Viktor Yanukovich (who famously lost the repeated second round of elections in 2004 after the “Orange Revolution”) was elected to the presidency. Human Rights Watch states that 2010 also saw increased pressure and attacks on human rights activists and in other areas.

Zahoor is probably the richest foreigner in Ukraine, with a net worth estimated at anywhere between $500 million and $1 billion. He made his money in the Donetsk steel business over the last two decades, after having initially studied in Ukraine as a metallurgy student in the 1970’s.

He is now chairman and owner of the ISTIL Group which, after selling up in 2008, went on an asset-buying spree, including the purchase of various properties in Kiev, and the Post in 2009 for a reported $1.1 million.

Revealing, Mr. Zahoor has already had somewhat strained dealings with the Ukrainian political class; after having given a speech praising President Leonid Kravchuk during the  1994 presidential campaign, he apparently came under pressure for several years when Kravchuk’s rival, Leonid Kuchma, came to power.

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The Great “Arab Spring” of 2011: Causes and Consequences.

28th March 2011,

As the “Arab Spring” rolls onwards through Libya, and towards Yemen and Syria, Democratist – like many others (not least a number of red-faced foreign policy professionals), has been looking to get some sort of an explanatory purchase on recent events in the middle East. Why there? And why now?

For Democratist,  the key factor lies in the interrelationship between globalization (Al Jazeera, Twitter, Facebook, Wikileaks and the rest), and a number of other historical-sociological factors that have been perhaps slightly less eagerly grasped upon by (especially the US) media.

These include the rupturing of corrupt political, economic and social systems dominated by authoritarian cliques (and supported by the West) for decades; tremendous social upheavals provoked by poverty, the evident injustice of crony capitalism (abject poverty cheek by jowl with decadent wealth), the rising expectations of the (literate and tech-savvy) young; and the delayed flowering of civil society.

Looking at the broader, global context, a superbly insightful, if so far largely ignored framework for understanding these events is to be found in Revolutions and World Politics: The Rise and Fall of the Sixth Great Power. (Palgrave, 1999) by the late Professor Fred Halliday of the LSE (1945-2010).

One of the main conclusions of this 300-page comparative study of revolutions and their international aspects is that over the last three centuries, the focus of revolutionary upheavals has been, not (as Marx had hoped) on the most developed states, but rather in the contrary direction; that revolutions have historically tended to occur in less developed countries, and during periods in which the “conflicts of modernity” were at their sharpest, with these states only subsequently settling down into democratic reformism.

In other words, the historical pattern has been one in which revolutions take place in societies that have embarked on, but are at a comparatively early stage of economic and political development: One of Halliday’s key insights is the idea that, in the contemporary world, revolutions express the pressures placed on traditional societies by international structural factors, in addition to the tensions that occur within societies in transition, and the drive for accelerated development.

All three elements have been present in Tunisia, Egypt and Libya. They are also present to a very considerable degree in a large number other less developed countries – including Yemen, Syria and Iran, and throughout much of the former Soviet Union.

What the revolutions in the middle East represent therefore, are the increasingly inevitable consequences for states which refuse to meet their citizens expectations, after a certain level of development has been attained, in an increasingly integrated world.

While not linear, or liable to easy prediction, this trend has become all the more evident since 1989; in the collapse of the USSR itself, in Serbia (2000), Georgia (2003), Ukraine (2004), Lebanon (2005), Kyrgyzstan (2005). Moldova (2009), and now with the great Arab Spring of 2011, whereby the democratic agenda has been firmly set for much of the rest of the developing world.

As Halliday notes;

“Revolutions are moments of transition which, once passed, may not need replication. Instead, they lay down an agenda for political and social change that through reform, struggles and democracy may take decades or centuries to be achieved. This is at once evident from the programmes on rights of the American and French revolutions, the radical egalitarianism and the international programme associated with each; the point is not whether America or France always, or ever, lived up to these ideas, any more than Russia was to do after 1917, but rather how ideas and aspirations that emerged from these revolutions retain their validity in subsequent epochs.”

2011 may then therefore eventually come to mark the decisive point at which among the populations of developing states, democractic reformism ceased to be seen as essentially a restrictedly “Western” phenomenon, and became recognized as a potentially universal one.

See also my pieces:

Russian Autocracy and the Future of the Arab Spring

Revolution, Democracy and the West.

The Arab Spring and Structural Power

The Egyptian revolution and the precariousness of autocracy.