A mixed day for the Ukrainian Ministry of Health

A day of contrasts for the Ukrainian Ministry of Health on Wednesday – albeit one with symptoms that runs through the current government.

Firstly and in a move lauded by Human Rights Watch, the decision to approve easier access and dispensing of pain killing drugs such as morphine to terminally ill people was approved.

“This is a major advance, ensuring that Ukraine’s drug policy addresses the legitimate needs for medical opiates for pain relief.  Tens of thousands of patients who are in pain will benefit from this reform.” – Diederik Loham, Human Rights Watch

Some pain relief for a nation all too often decried for its human rights issues.

Thus it should have been a good day for those within the Health Ministry, and in particular the Health Minister Raisa Bogatyryova.

Raisa Bogatyryova

However whilst Human Rights Watch was quite properly lauding the aforementioned decision, the cancer called corruption, a systemic disease that cannot have the pain dulled by morphine, was simultaneously being called to account in relation to the Health Ministry by the RADA.

With the Communist Party unusually siding with the opposition, a vote was taken and passed to create a parliamentary committee and inquiry into corruption within the Health Ministry and opaque purchases of UAH 203.48 million of drugs from certain companies.

One has to strongly suspect that once the biopsy of the opaque drug purchases has been made, more than a hint of corruption will be found in the system of the Health Ministry.

The question then arises over whether the infected parts can or will be efficiently surgically removed and if so, whether remission will be a long lasting result.

Sadly, I fear not!

$40 Billion annual road maintenance budget – Ukraine

The current budget for road maintenance in Ukraine sits at $16.9 billion – which sounds, and indeed is, a lot of money – and yet the state of Ukrainian roads resembles something like those of Berlin circa 1945 after the 363 air raids to which it was subjected by bomber command.

As such, Vice Prime Minister Oleksandr Vilkul has made very forceful representations to increase the annual road maintenance budget to $40 billion – almost a 300% increase.

He also proposes to reorganise the accountability of those responsible for road maintenance.  In short, the 117.7 thousand kilometers of regional roads will become the personal responsibility of the heads of the regional state authorities – thus removing the involvement of Ukrautodor, the State agency responsible for road maintenance, leaving it responsible for a paltry 52 kilometers of State adopted roads.

Naturally there is an increased opportunity for either direct theft of funds, or cronyism and associated kick-backs, but there is also a very clear area of responsibility and indeed personal responsibility for road maintenance within the regions – which is a good thing.

Odessa, March 2013

The above is a rather extreme example of holes in the road in Odessa I will grant – most are only ankle deep, but there are so many ankle deep holes that the 1.5 million residents of Odessa could all put a foot in each hole and there would still be more holes than feet to put in them!

The question relating to the solid lobbying for such a massive increase in funding is really whether it has been worked out on a cost basis for maintenance alone – or whether there is a percentage included for the undoubted graft that will occur at regional level to be plundered for personal gain, and yet still provide a significant and noticeable difference to the quality of the regional road infrastructure.

With no noticeable improvements over the decade I have lived in Odessa at $16.9 billion annually – what improvements will $40 billion annually get me?

A positive outcome will only be forthcoming if some regional authority heads are suddenly lopped off should road quality remain exceptionally poor I suspect – but  I won’t hold my breath for that to happen!

Ukraine – An energy hub – Be careful what you wish for

On Friday 3rd May, whilst I was enjoying my time off in the Odessa sunshine and taking in the beach life, Ukrainian Energy Minister Eduard Stavytsky had a meeting with the EU Energy Commissioner Gunther Oettinger (as well as Royal Dutch Shell and Exxon Mobil amongst others) in Brussels.

What became immediately apparent, if it wasn’t already clear before, is that Ukraine has decided that it can become a gas hub for the European continent and intends to pursue that strategy, making the most of its gas transport system and more particularly its vast underground gas storage facilities (50 billion cubic meters).

The infrastructure, whilst somewhat decrepit and thus in need of some serious investment, does at least exist already.

Very good – and an obvious goal to pursue given the soviet legacy Ukraine inherited.

But then there is the widely talked about “resource curse” to consider should Ukraine actually achieve its aim of both Black Sea Shelf and fracking production, transit and storage.  It may very well turn into an oil and (mostly) gas State.

Quite possibly a very good thing for the Ukrainian economy, GNI and indeed citizen income as well.

But at what social cost?

Of all 23 nations on the planet where 60% or more of GDP is derived from oil and gas – not a single one can be classed as a democracy.

Further all are very corrupt, almost completely unresponsive to the demands of their populations and have extremely low accountability amongst the political elite.

Looking at the Human Development Index which is a key identifier when it comes to identifying liberal consolidated democracies, almost all oil and gas States with 60% of GDP coming from those sources have extremely low HDI scores regardless of citizen wealth and GNI per capita.

That is not to say a low HDI score prevents democracy, of the bottom 46 ranking nations in HDI, 13 can be deemed a democracy of sorts and 2 of those, as liberal democracies.

Looking at the top 25 HDI scoring nations, only Singapore is not a democracy – and from the top 40 HDI scoring nations they are all democracies less Singapore and a few small oil and gas States (Qatar, UAE etc.)

Thus becoming an energy producing exporter and hub may well have dire consequences for an already “feckless” (per academic definition) political system in Ukraine.

One of the best ways to identify an effective and consolidated democracy seems to be to take the Freedom House score and multiply it by the World Bank anti-corruption score, and more often than not it closely mirrors the HDI position in the HDI league table – Spooky!

In fact, discounting the Islamic world, there is a very strong correlation between democracy, freedoms and any HDI score a nation has.

So becoming an energy producer and energy hub as planned will destine Ukraine to the usual fate of oil and gas dominant GDP nations with regards to democracy?

Well, not necessarily.

“Feckless” as the Ukrainian politics are and have been historically, there is nothing to prevent the current “feckless democracy” of Ukraine moving to a consolidated effective and possibly liberal democracy prior to the full  realisation of the energy producing/energy hub plan.  Should that movement to an effective and consolidated democracy occur prior to, or even simultaneously with the “energy plan”, then all may bode very well for democracy in Ukraine.

A very smart scholar named Przeworski has proven that (again removing the Islamic world from the equation) should the personal purchasing power of a nation reach a certain monetary figure (currently about $10,000, but a figure that needs to be index linked to remain relevant), then no democracy has ever crumbled.

In effect with a diversified economy and the average purchasing power per capita of $10,ooo or more, democracy is not only consolidated but invincible to the challenges of other governance models due to the middle class/ independent bourgeoisie.

Ergo, empirical evidence and academic works from the likes of Lipset, Prezeworski, Welzel and Ingehart etc, would all point towards the necessity of moving Ukraine’s currently “feckless politics” to an effective democracy whilst simultaneously trying to reach $X personal purchasing power and climbing the HDI league table if democracy is to survive any significant oil and gas increased share of the Ukrainian GDP.

The question is can the feckless political system stop being feckless before it leads Ukraine into the black hole of the resource cursed nations?  Looking at the entire Ukrainian political landscape and personalities within, that seems very unlikely without consistent external pressure and guidance.

All in all, an obvious and achievable plan for Ukraine – with very scary possible outcomes should it succeed.

Is working in Ukraine as a foreigner about to get easier?

As it is my umteenth anniversary today, and thus via the “ball and chain” and the goodwill of Ukraine, I have permanent residency here, this entry really does not affect me in any way.

In fact it doesn’t affect anybody I know either.

It will undoubtedly affect some readers however – both currently and in the future.

It seems that the State Employment Centre has made assurances that the current (and no doubt overly bureaucratic) systems for granting work permits and temporary resident status (for the purposes of work) are going to be simplified – requiring far less documentation than currently is required – especially so as far as renewals/extensions are concerned, and which will subsequently be gratis if granted for those who have navigated the bureaucratic circus before.

They also state that consideration is being given to raise the duration of such permits from 1 year to 3 years.

A particularly good idea should the EU-Ukraine Association Agreement and DCFTA actually be signed – as not only will foreign confidence increase (to a greater or lesser degree) relating to entering the Ukrainian market at an SME/entrepreneurial level, those who want to do so, may actually stand a reasonable chance of navigating the bureaucratic hurdles that prevent so many currently.

It is necessary of course, to see just how the bureaucracy will be reduced – if at all – and I suspect not at all, other than the more expedited time line requirement for the bureaucracy to function and process applications.

Which documents will be subsequently scrapped from the current list will be far more interesting, as currently some of the documentation required is the barrier to entry – rather than the business environment itself!

Best guess thus far is here.

Enhancing public support for the EU-Ukrainian Association Agreement – FCO Report

Today I have very little to say, as I want to draw attention to the work of chaps at the Foreign & Commonwealth Office together with HM Embassy Kyiv under the imaginatively titled “A blueprint for enhancing understanding of and support for the EU-Ukraine Association Agreement including DCFTA in Ukraine“

It is also available in Ukrainian - Угода про асоціацію ЄС – Україна: дослідження обізнаності цільових груп та стратегія комунікаційної кампанії - a title just as lengthy as in English!

It is a very interesting read that will go a long way to questioning the predispositions of some relating to the Ukrainian public desire to head West (or East).

I could go on and on but I won’t – have a read, it will be worth it.

Ukraine ranked 64th for gender equality

There has been so much written on gender equality over the years I am not going to attempt to write anything that would be meaningful, thoughtful or new.

Suffice to say, Ukraine has just been ranked 64th globally when it comes to gender equality – drawing this response from Natalia Korolevska, the Ukrainian Minister for Social Policy.

It is difficult to disagree with anything she said.

Perhaps most poignant is this, “But if this programme remains solely a framework document, where it is written that we are all for good and against bad things, that we will hold round table meetings and let women go first, then it all would not be enough for our country to ensure the empowerment of women.”  - which as regular readers will know is a major criticism of mine regarding every government Ukraine has ever had - Ineffective implementation!

Danube Action Plan – Progress Report

What seems like a very long time ago, back in April 2011 in fact, I wrote about an EU sponsored action plan relating to the River Danube and the nations through which it flows.

It naturally effects Ukraine, as the Danube Delta is partly Ukrainian territory – shared with Romania.  It is in fact part of my home Oblast of Odessa, and the Delta happens to be a very beautiful place indeed.

It is now time for an update on how the EU action plan has progressed thus far.

Let’s hope that by 2020 the environmental and ecological targets are met – together with the social and economic targets too.

EU/Ukraine Mission DCFTA Workshop – 10th April 2013

For those of you who happen to be in Brussels on Wednesday 10th April, the Ukrainian Mission to the EU is holding a DCFTA workshop for business at the Press Club Brussels, 95 Rue Froissart, 1040 from 1500 – 1630.

Key speakers are the two main negotiators of the DCFTA Messrs V Piatnytskyi and P Cuisson.

Some may consider this somewhat hopeful given there are doubts the AA and DCFTA will be signed in Vilnius in November – however with the impending seemingly immediate release of Yuri Lutsenko, perhaps not.  His release will go a long way towards the “substantial progress” the EU has demanded over the issue of “selective justice”.  Possibly just far enough, as nobody really expects Tymoshenko to be released prior to 2016 and equally nobody expects much in the way of ratification before that date either due to German, French and EU parliamentary elections in 2013, 2014 and then Ukrainian presidential elections in 2015.

Who knows?  As is so often the case in Ukraine, it just manages to do enough by the eleventh hour – by hook or by crook – be it delivering a good Euro 2012 tournament on an international scale, or the tradesmen finishing and leaving a new shopping centre two hours before it is due to open domestically.

Whether the same time and effort will be spend within Ukraine making the same explanations to business and entrepreneurs  remains to be seen.  Perhaps it is felt better to leave that until any signing actually happens?  That said, signed or not signed, I fully anticipate mutually beneficial parts of the DCFTA to be implemented anyway – as is always the case with what is considered politically expedient to all concerned.  After all the framework is already agreed and initialed, sealing the framework.

I have to say, that despite my invitation to this event, I will not be traveling to Brussels for the sake of a 90 minute workshop – particularly one that is more focused towards the Europeans looking at the opportunities the DCFTA offers in Ukraine, rather than one aimed at Ukrainians and the opportunities it offers looking west.

If a traveling roadshow passes through Odessa attempting to educate on the specifics of the DCFTA and opportunities it offers Ukrainians looking west – then I will surely attend – just to let you know what was said!