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The Radical Party leave the coalition – and?

September 2, 2015

A few weeks ago when commenting upon the long anticipated/expected assimilation of UDAR and National Front into the Solidarity Party, this paragraphs appeared – “Entering into 2016, and the much anticipated early Rada elections may become far more questionable. UDAR and the National Front will have ceased to exist and Solidarity will be the dominant Rada party. Batkivshchyna and The Radical Party will be nothing more than a populist fringe whose alliance is no longer required. Their sensibilities far less important than previously.”

With assimilations well under way, how does the rest of that paragraph stand up?

Oleh-Lyasho

Yesterday Oleh Lyashko announced the Radical Party were leaving to ruling coalition – thus in doing so Vice-Prime Minister of Ukraine Valerii Voshchevskyi resigned from his post, and three Rada committee chairs also were withdrawn from the Radical Party.

The Radical Party has indeed move itself to the realms of a populist fringe – and to be blunt its alliance is not required for the daily functioning of the majority coalition in the Rada.  It was never really needed, but “inclusiveness” and some sway over volunteer battalions when the coalition was formed, then made sense to invite it into the coalition.

In leaving the majority coalition the theoretical constitutional majority held by the 5 parties of 302 is now reduced to 286.  Thus the 226 majority for daily functioning of the legislature in the Rada is in no way effected.

The constitutional majority is clearly theoretical as very recent votes have shown.

Indeed Batkivshchyna, the Radical Party and Samopomich all voted against Bill №2217a “On Amendments to the Constitution of Ukraine (concerning the decentralization of power) which as yesterday’s entry makes clear, despite the squawking of the chattering classes, the 300 (or more) votes to amend the constitution per that Bill simply aren’t there – positions or circumstance will need to change to secure such a vote.

So why then would an ultra-ego and ultra-populist (to rival Ms Tymoshenko in her prime), decide to leave the majority coalition that provided both a reliable political stage and political power?

A populist girly hissy fit after Bill №2217a successfully passed through the Rada on a reading that required a simply majority – a simple majority that was always going to be found?  Surely not.  Oleh Lyashko and the Radical Party are very well aware the Bill eventually needs to find 300 (or more) votes, which seems exceptionally unlikely unless Samopomich changes its position.

If Samopomich does change its position, then Batkivshchyna and the Radical Party don’t really matter in the voting numbers when the Opposition Block will vote for the amendments.

In short, neither Batkicshchyna nor the Radical Party are big enough to carry Bill №2217a over the line, or defeat it alone.  Samopomich is the key.

There seems to be no major gains for the Radical Party regarding voters in the local elections from leaving the majority coalition either.

The answer then is perhaps one of preemptive framing?

Over the past few months several criminal investigations have begun regarding some of those within the Radical Party.

What to do?

To accept that these investigations will probably lead to court cases and successful prosecutions is to admit, and be forced to deal with, nefariousness and criminality within the party ranks – which although presenting a “cleansing” spin if disavowing your own early enough – does not sit well with a populist with an ego the size of Oleh Lyashko.

With Mr Lyashko you are either for him, or you are against him – and if you are against him you are an enemy of “the people” by extension.

Therefore when that is the mentality of the ego that leads the party, with investigations on-going into the party, it is necessary to turn the coalition majority “against him” in the eyes of “the people” – and that can only be done by leaving it.

Having left the majority coalition, the on-going investigations will suddenly be framed as “political persecution” and “revenge” for “splitting the coalition”.

Bellicose appeals to the nationalist swivel-eyed loons to prevent such an “injustice” and stand against “political persecution” will be a logical progression.  Calls to the Europeans to witness such “political persecution” and requests to pressure the “regime” to stop the “politically motivated investigations” will be made.  Demands of the media made to galvanise and mobilse the public in “defence of democracy”.

It appears that yet another, possibly violent, challenge to the rule of law is being engineered by those populists who profess to want to bring the rule of law to Ukraine.

The results of the decision of the Radical Party to leave the coalition will have little effect within the Rada with regard to legislative outcomes (although more scuffles and rostrum blocking now seem likely).  The effects of this decision if matters will be framed as outlined above, are likely to be felt elsewhere.

That said, Mr Lyashko leading the Radical Party out of the coalition and into the irrelevant political fringe voluntarily is perhaps no bad thing – regardless.

Anyway, the changing political landscape within the majority coalition continues to progress along the expected route as forecast here long, long ago.

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Un-decentralisation? Rada passes 2nd “decentralisation vote”

September 1, 2015

On 17th July, this entry appeared relating to the successful passing of Bill №2217a “On Amendments to the Constitution of Ukraine (concerning the decentralization of power).

“Having garnered 288 votes (300 being a constitutional majority), the Bill now heads to the Constitutional Court for its consideration.

It has to be noted that the Venice Commission is generally in favour having seen the amendments, returned them with “recommendations”, and those “recommendations” were by and large acted upon. Thus any constitutional issues are not likely to be with content but with the procedures of the Bill passing through the Rada – if there were any.

Once given the Constitutional Court’s nod of approval, the amendments must then be returned to the Rada where a majority second reading, and final third vote on the Bill which must gather 300 or more votes in favour, lest it fail to meet a constitution changing majority, to then be sent to the President to sign these amendments into constitution changing force.

Ergo the 288 MPs that voted in favour today cannot change or waver in their position over the Bill, and another 12 or more must also be found to vote in favour – a vote probably some time in late September/early October to allow the Constitutional Court sufficient time to ponder the amendments thoroughly. Hurdles clearly remain.”

Since that entry was published, unsurprisingly the Constitutional Court has given an approving nod.  An extraordinary Rada session of 31st August predictably saw the second reading of  Bill №2217a, gather the simple majority it required to continue along the constitution changing route.  The vote, 265 in favour from the 320 MPs registered at the extraordinary session.

vote machine

All clearly progressing as outlined above, the plan being to hold the final reading requiring a 300+ vote in favour prior to the local elections of 25th October.

Immediately prior to the second reading, President Poroshenko changed the plan – or so it appears.

He announced to MPs that there would be no attempt to adopt the constitutional changes before The Kremlin removes all troops and equipment from the occupied Donbas and returns control of the internationally recognised border to Ukraine.

Thus as Minsk II deadlines are at the year end, the due date (theoretically) that Ukraine should retake control of its borders per the agreement,  it seems extremely unlikely that there will be a third vote this year .

It clearly shines a new light upon President Poroshenko’s statement regarding more local elections 2 years after the local elections of 25th October and the creation of a “framework” for decentralisation during that period.  Whether or not the Kremlin removes its troops, equipment and proxies from the Donbas or not – and one has to suspect not – the final decentralisation vote does not seem likely to occur any time before Easter 2016.

Indeed if the third reading is dependent upon the Kremlin pulling out its troops, equipment and proxies from the Donbas as President Poroshenko stated, it could very well be several years before the third final (and potentially constitution changing) reading.

An unpleasant and unexpected surprise for the Europeans, Council of Europe, and in particular Berlin and France and Washington?

Actually probably not.

Despite all the squawking of the chattering classes and hyperbole in the social media, this change of timing is somewhat forced upon President Poroshenko (whether he secretly welcomes it or not).

As the above tweet states, regardless of the chattering classes and social media hyberbole, what actually matters are numbers – the number of votes Bill  №2217a can actually muster.

Gathering the 226 (or more) majority was entirely achievable at the second reading.  Gathering a constitution changing 300 (or more) in the foreseeable future seems very unlikely indeed.  In fact it may become ever more unlikely.

Resignation of MP Oleg Musiy from Blocal Poroshenko following "Decentralisation" amendment vote

Resignation of MP Oleg Musiy from Blocal Poroshenko following “Decentralisation” amendment vote

The numbers that would vote favourably are close to the 300, but not close enough – to the point where electing an MP to replace the recently deceased Oleg Eremeev actually matters – as does the resignation of MP Oleg Musiy from Block Poroshenko/Solidarity following the second reading vote.

President Poroshenko will be keenly aware of this.  So to will Berlin, Paris and Washington – for a start he will have told them.  Secondly, the diplomats from these capitals will have (or should have) been talking to MPs and doing their own numbers too – no differently than your author.  Our respective numbers may not be exactly the same, but assuredly those numbers would have predicted a probable fail in the Rada regarding 300 votes or more any time soon.

Whilst the amendments on decentralistion would probably have garnered 300+ votes despite concerns relating to more presidential power,  the last minute inclusion of a specific reference to The Donbas effectively killed off any easy ride for the constitutional amendments when push eventually comes to shove.  Indeed it may have killed off the amendments entirely as they are currently written and/or packaged.

There is a large and fairly robust number of MPs that simply do not want to see The Donbas given any special mention whatsoever in the Constitution of Ukraine.  Their position – Adopt whatever special laws as are required, but nothing specifically identifying the Donbas as different from anywhere else within the text of the constitution.

The Rada, after all, is not the Russian Duma.  The Rada, has, can, and will continue to occasionally defeat both government and president of Ukraine.  Whilst it may be a theatre of the absurd no differently than the Duma, that absurdity takes a different manifestation.  It is certainly not a celebrity packed rubber stamp institution as seen in Moscow.

Thus, President Poroshenko was faced with either pursuing the October 300+ vote prior to the local elections as planned with the numbers hardly looking favourable, or putting matters on the back burner until amendment text, packaging or circumstances change those numbers in his favour.

A defeat over constitutional amendments is not to be relished as the keeper of the constitution, so why risk it?  Take the issue as far as can be comfortably assured of success.

The question arises as to what will insure the numbers eventually change in favour of the amendments?

Despite any misgivings over the interpretation of the amendments ceding more power to the sitting president, the removal of any and all mention of The Donbas will probably be enough to gather 300 (or more) votes.  The question for Berlin, Paris and Washington is whether they accept the democratic progression that decentralisation offers at the expense of an already pocketed concession to The Kremlin and the whining that will inevitably follow.

Do things look differently once the Minsk II clock has run down and Kremlin troops, equipment and proxies still occupy The Donbas?  Will striking out that line then become acceptable?

Repackaging seems particularly difficult.  How to separate the amendment line that relates to the Donbas, to subsequently offer it up separately for a vote, or attach it to a different constitutional set of amendments, yet progress decentralisation which most MPs otherwise accept?  In repackaging, would it not simply scupper whatever constitutional amendments it was attached to?

Is there a clever way to draft a standard law that provides for decentralisation within the existing text of the constitution, forgoing any constitutional amendment whatsoever – or at least facilitating “decentralisation” by statute until it is eventually enshrined in the constitution?

Yes The Kremlin would be very displeased by such an approach, for constitutional change specifying the differences of The Donbas was a Kremlin desire, but then Kyiv has long since stopped worrying about Kremlin sensitivities.  It believes the territorial space it has sacrificed for time to sort itself out now puts it in a much stronger position.  Perhaps it is right to think so too.

Will the Kremlin settle for the un-decentralisation of power in Ukraine as a reform-busting, European integration scuppering second prize by leaving its troops, equipment and proxies in The Donbas?

If it cannot reverse Ukrainian course back toward Moscow (and that Rubicon has been crossed), then insuring central/foundational proposed reforms fail and European integration/democracy falters simply by leaving troops, equipment and proxies in The Donbas may be seen as a least worst outcome.

Would “western” messaging about reduced/removed funding insure enough constitution changing votes?  To write standard laws and adopt them probably – to force MPs to change the constitution for The Donbas, possibly not, regardless of the consequences.

No matter how much western pressure is put on President Poroshenko, it won’t necessarily equate to enough Rada MPs prepared to acquiesce and drag the amendments over the Rada finish line.  Further, in applying a good deal more pressure, would that weaken President Poroshenko and the current government?  No matter how good or bad a reader may believe them to be, it is hard to see any better options.

Thus whilst acknowledging a further legislative step toward “decentralisation”, and ignoring the squawking of the chattering classes, quite where things go from here remains somewhat unclear when the numbers required for the next and final Rada step simply don’t appear to be there without a significant change of position or circumstance – somehow.

Meanwhile the local elections of 25th October will occur under the old electoral systems and laws, with the winners inheriting the same powers as their predecessors.

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Big picture, little picture, FDI – Odessa & Ukraine

August 31, 2015

Some time ago an entry was published here that raised certain questions surrounding the “projects” and “project selection” machinery of Sasha Borovik and team, Governor Saakashvili’s “project manager” for the “Odessa project”.

“Specifically concentrating upon those volunteers that end up with Sasha Borovik who looks after “projects” (are casinos and gambling projects for the Singaporean dream?) within the Administration, there have been some highly visible, and eyebrow raising incidents with regard to recruitment of those that have ended up as his volunteer pool/team. Incidents that anybody who frequently drops into the Bristol Hotel in Odessa on a weekend cannot have failed to miss over the past months.

The Bristol Hotel on a weekend for the past few months has been home to regular visits (and stays) by a lot of successful businessmen and politicians from Georgia. Somewhat questionably some of these people have apparently been pre-interviewing/pre-screening volunteers. They claim to be (and perhaps they are) assisting Misha (Saakashvili) and Zarub (Adeishvili) in the processing of volunteers and their appropriate team placement.

Meanwhile Koba (Nakopia) it is rumoured is involved in the interviewing process for top Oblast positions, such as Oblast architect, customs chief etc – Not a role for executive search and selection companies?

That this occurs in the open and in a public (if rather swanky) location may indeed make such events legitimate and deliberately transparent – or it may not.

Some may see it as a brazen way to select volunteers for Mr Borovik’s team in “projects” by those affluent and connected that will be submitting “projects” that get the approving nod of the volunteers and are passed further up the chain – rather than being dismissed upon initial presentation.”

It concluded – “Is this messy impression all simply a matter of a discombobulated approach to the administrative issues surrounding voluntarism within public administration, when the paid administrative personnel are really working very hard in the boiler room generating and implementing change themselves in oder to make the boss look good? A matter of daily administrative priorities resulting in a disjointed and ad hoc response to a very large response by volunteers?”

Sasha Borovik

Sasha Borovik

Whatever the case, Sasha Borovik is the man who seemingly has the ultimate decision over what “projects” will become projects and which won’t – whether those “projects” come from local sources and the local constituency or indeed from external sources (recognised or not).

For the external recognised sources, generally it can be presumed that they will also have had some engagement with the relevant Oblast Rada committees, throwing another decision maker/interested party into the decision making/negotiating mix – for better or for worse.

Whether there is an Oblast plan into which “projects” will fit (or not), who knows?  Certainly not the constituency of Odessa Oblast.

Perhaps some indication will be forthcoming from a major investors conference in Odessa on 10th September?  Perhaps not?  Perhaps there is no plan other than trying to simulate the “Singaporean Model” – somehow.

Naturally to reform and reinvigorate the Oblast, not only does there have to be societal “buy in” but also financial investment too – both from central government and external actors.

Clearly as a corporate/private investor in Odessa, you do so in order to make a profit on your investment.  Such returns upon investment are not normally associated with “public goods” or investment in local governance/democracy promotion – at least those returns are not directly associated despite any long term benefits.

Likewise, the same can be said of “democracy promotion” with regard to democratic and local governance infrastructure that provides both greater access and a sense of inclusiveness.  Odessa Oblast is bigger than Belgium with far worse infrastructure.  Therefore if it is exceptionally difficult for the constituents in far flung corners to get to the Oblast Rada in Odessa, then perhaps the Oblast Rada should go to the far flung corners of the Oblast?

An entirely reasonable “project” that Sasha Borovik and team should consider?  Particularly so if external parties are willing to pay for this Oblast Administration projection?

On 23rd June there was meeting between the East Europe Foundation, representatives of the Oblast Rada and Sasha Borovik regarding just such a project.  A project that the East Europe Foundation has instigated in several other Ukrainian Oblasts.  It is one of those organisations that anybody with an interest in developing local governance, local economics, local society, local energy efficiency etc., hopes will comes knocking at their door rather than to have to chase after it and try to gain its attention.

The EEF planned to open 10 administration centres across the Oblast and create on-line facilities to accompany them.  The total investment (in Swiss Francs) was to be SF4 million over a four year period.

Needless to say the Odessa Oblast Rada was very much “on-board” with the concept and very amenable to signing the ubiquitous “Memorandum” that accompanies such agreements.  It transpires however that Mr Borovik was not so keen.  In fact not keen at all.

We now enter the realms of “big picture” verses “little picture” and the priorities that Mr Borovik is expected to have as a representative of the Oblast Administration against those of somebody in the National Administration – if indeed they are conflicting.

Questions were asked of the fund as to why such projects were not occurring in all oblasts across the nation.  The suggestion of “Balkanisation” was made – no joke!

To this one must ask whether Mr Borovik asks all potential investors in Odessa why they are not investing equally in other oblasts?  The answer is probably not – in fact almost certainly not.

If there are going to be investment hot spots in Ukraine (Kyiv, Odessa, Lviv where ever) is that not an issue for central government to address, perhaps pointing more domestic investment into the regions where other investment won’t go rather than an issue for somebody charged with a hand in Odessa Oblast development?

There is absolutely nothing wrong with keeping the national (and even international) picture in mind when making Odessa Oblast “project” decisions – but would 10 Oblast administration centres constitute “Balkanisation” or a threat to national security/unity?

If so, do the preexisting projects through this fund in other oblasts reflects the relevant local decisions makers inability to consider the “big picture” when putting the local “little picture” and their constituency’s accessibility to the Oblast administration first?

One has to suspect not.

It would appear that Mr Borovik wants only one main Oblast administrative centre, and that those that need it will manage to get there regardless of the inconvenience and time taken to navigate the crumbling Oblast infrastructure to do so.

Apparently the 4 year investment period was also not timely enough.  Investment is required now and there is (and perhaps will remain) a single Oblast Administrative Centre that will happily accept funding.

It should go without saying that on 23 June there were a lot of surprised faces both from the EEF and the Rada Oblast representatives.

Is it a logical statement to make regarding the “Balkanisation” of Ukraine when a fund has invested in certain oblasts but not others?  Perhaps it will invest in the all over time?  Would Mr Borovik prefer Odessa was last?  Does Mr Borovik consider both the Oblast and Ukraine too weak to open alternative (and subordinate) Oblast local government offices lest control over them be lost?

Was it simply (yet another) unwise/ill-considered statement by Mr Borovik (albeit this one made privately rather than publicly) to rebuff a “project” that could not be kicked back lower down his “Project Team” chain?  A “project” that he simply doesn’t like and that doesn’t fit into his Oblast plan (if there is a plan)?  Was it a poisonous seed planted by first deputy chairman of the Odessa Regional State Administration Vladimir Zhmak, the source of much recent discord and disinformation from within and amongst the Governor’s administration?  (In fact Mr Zhmak is perhaps deserving of his own entry at some point.)

So leaky is the Governor’s administration, when making such questionable statements it should be anticipated that employing the term “Balkanisation” when talking to an international investment fund, that such things will not remain private – so why say them?

Misguided or otherwise, if Mr Borovik’s is placing the “bigger picture” (as he sees it) before the “little picture” of Odessa Oblast, is it an indication that he believes he will not be here long and anticipates a move to “the centre” where the “big picture” is concentrated?  If so that will happen in tandem with the Governor in all likelihood.  How long to give them before they move on?  A year?

Perhaps there are similar “projects” that have already been given the “Borovik nod” – and it is simply that nobody (seriously nobody) knows about them?

If this project fails to materialise despite available finance and experience within Ukraine of the relevant fund, in all probability to the detriment of democracy, Oblast accountability, and societal access and inclusiveness in the far flung corners, we are perhaps to presume that almost all “projects” submitted will require to have an economic output (one or more Georgian owned/backed casinos in Odessa perhaps?) , rather than a democratic or administrative constituency benefit in order to get his approval?

Whether Mr Borovik has had a rethink and whether during the 2 months since the meeting of 23rd June a Memorandum has been signed – or if not whether this “project” will ever get signed off by the “Oblast Project Manager” – is unknown.

Nevertheless the entire incident, and particularly the “Balkanisation” reference, seems somewhat bizarre prima facie.  There must surely be more diplomatic ways to question the intent of potential international investors in the Oblast.  Can or should Odessa, and by extension Ukraine, be seen to be turning away solid investment in local governance projection and administrative infrastructure at the expense of societal access and inclusion?  Probably not!

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A long hot Autumn/Winter – Ukraine

August 30, 2015

If the summer has not been hot enough, both by way of weather and political, diplomatic, economic and military engagement, the Autumn is likely to get far hotter even as the summer sun fades.

31st August will see the constitutional amendments relating to “decentralisation” strong-armed through the Rada, delivering nothing like the outcome The Kremlin envisaged.  It’s interpretation of what Minsk II required of Ukraine being roundly rejected by Ukraine, the USA and the Europeans alike.

The current up-tick in fighting on the Donbas front line, the most visible and widely reported of the numerous “hot fronts” being employed to display Kremlin displeasure.  Whilst it may be able to console itself that the “separate law” the constitutional amendments mention with regard the Donbas is still in some way to play for, if a strong Ukraine emerges over the next 5 years or so, legislatively it is far easier to repeal the “separate law” than it is to change the constitution again to remove any detailed constitutional status for the Donbas.

It is a matter of processes and Rada numbers when it comes to the ease of legislatively doing things – or indeed, and far more to the point, undoing things at a later date.

It remains to be seen whether the envisaged 1st September ceasefire will hold or not.  Recent history would suggest not, but sooner or later one will (more or less) occur.  Nevertheless, as it is far from certain that it will hold, the remainder of this entry will be written in line with consistent recent historical ceasefire failures.  (To be blunt, either prior to immediately after any ceasefire takes hold, we could perhaps expect to see Zakharchenko “sidelined” somehow and replaced.)

Presumably the release of the MH17 report in mid-October will be met by a defiant, albeit perhaps brief, up-tick in violence by the Kremlin and Kremlin sponsored proxy forces – as well as a renewed diplomatic and “troll” effort to mislead and misinterpret anything the Kremlin finds distasteful/unhelpful within the text.  By now it will have an advanced copy of the report, thus its spin and rebuttal strategy is likely to be well advanced too.

Ukraine will also have an advanced copy of the report (as will other capitals), is Ukraine (or other capitals) as PR/media/diplomatically prepared for its publication as The Kremlin will be?

Skipping past the local elections and the opportunities for Kremlin subterfuge and sabotage to insure Ukraine appears unchanged by way of democratic progress, and loudly condemning any democratic failures (imaginary or real) internationally – perhaps sabotaging the election process is not necessary considering the vested interests in Ukraine that will corrupt the process for the sake of their own survival and/or influence – the next “hot issue” will be a resolution to gas prices and pricing to and through Ukraine as brokered with the EU.

220px-Gazprom-Logo.svg

With oil currently dropping and no significant increase anticipated for quite some time, Ukraine will be keen on getting a gas price of less than $200 per unit after transit fees to Europe have been deducted.

Oil and gas pricing has a certain linkage within the Kremlin petro-state machinery – and both Russian gas and oil State companies are seeking subsidies and loans from the Kremlin.  Anything approaching a current market price, considering the grotesque mismanagement of Messrs Sechin and Miller, would dictate actual losses once corruption, managerial ineptitude and Kremlin politicking with their business unit economics take their collimative effect.

How good a gas deal is reached remains to be seen.  On the one hand, The Kremlin can spin any good deal for Ukraine as a market driven business transaction free of political linkage to its domestic constituency.  On the other, all know that Gazprom, Rozneft et al., are simply extensions of the Kremlin/State and are often little more than tools on the political tool kit.  Their economic wellbeing secondary to Kremlin realpolitik.

It is claimed by those who (should) know, a deal will be reached by the end of October/early November.  We will see.  Whether the lead up to, and aftermath of the gas deal negotiations is accompanied by increased military front line engagement will depend upon the Kremlin desire to separate what can be feasibly spun as an entirely business arrangement from the politicking over Ukrainian future direction out of the Kremlin orbit.

Any “Normandy Four” or “Contact Group” meetings will continue to see the preceding and following notable up-tick in front-line engagements and attempts at diplomatic framing.  It would appear that the Kremlin still believes an up-tick in the violence and threats via its proxies of taking more ground, constitutes it “negotiating from a position of strength”.  It also appears to believe that when those negotiations do not reach its desired outcomes, punishment at the front line will weaken rather than entrench the Ukrainian negotiating position.

The “elections” within the “DNR” and “LNR” will naturally not be recognised by anybody – perhaps not even The Kremlin  officially.   It may simply “take note” of the results and try to use them to try and force Kyiv (or have other capitals try and force Kyiv) to enter direct dialogue.  Either way it seems entirely unlikely Kyiv will enter into direct negotiations from elections that are not conducted in accordance with Ukrainian law – quite rightly too.  This unless, as inferred in yesterday’s entry, a special electoral law is to appear for the Donbas which would naturally therefore be according to Ukrainian law (or at least a law of Ukraine) that ultimately then facilitates direct dialogue.

A defiant up-tick in front line engagement once Kyiv (and everybody else) refuse to recognise those elections would appear probable if/when any 1st September ceasefire fails.

Another issue will be the $3 billion bond due to The Kremlin at the year end, a bond that Ukraine seeks to restructure.

At the time of writing, it is particularly difficult to see The Kremlin agreeing to this, for no other reason than its domestic audience expects Russian “victories” rather than the Kremlin handing “victories”, no matter how small, to Ukraine.  Notwithstanding that, the war the Kremlin is conducting against Ukraine is not just military.  It is political, diplomatic and economic.

For all the fluffy thinking about various ways to delay the Ukrainian payment – for example not paying and reducing the $3 billion from the war reparation claims Ukraine has and continues to submit against Russia etc., the bond is legally due.

If restructuring is not an option, Ukraine will either pay – or not.

If it pays the Kremlin, then there will be the perverse situation of financing a war against itself.  If it doesn’t and defaults, the question is how markets and other lenders will react.

There is then the key dates of 31st December 2015 and 1st January 2016.

At the time of writing there seems very little likelihood of The Kremlin meeting the Minsk II agreement terms.  It has shown no desire to do so thus far – its only interest in Minsk II being that Ukraine unilaterally meets all conditions that favour Kremlin outcomes in the hope of pocketing them and then making yet further onerous demands, or simply failing to deliver its side of the agreement.

Few realistically believe (or have ever believed) that control of the internationally recognised Ukrainian border will returned to Ukraine by the year end, particularly in light of the failure of the Kremlin to force its interpretation, and thus desired outcomes, into the new text of the Constitution of Ukraine.

Thus the year end in all probability (although it cannot be ruled out that there may be a rapid change of policy by somebody somewhere) will come and go, and the date within the Minsk II agreement pass without successful conclusion.

An increase in front line violence seems very likely in an effort to try and force new concessions from Ukraine in a Minsk III agreement, yet there seems very little likelihood that any Minsk III would gain further concessions from Ukraine.  It no longer needs to buy time by conceding space.

A major offensive by the Kremlin, despite posturing, does not seem particularly likely either – although it cannot be ruled out.

Thus any negotiations regarding Minsk II when deadlines expire will probably related to new deadlines (that will probably come and go once more) and a heated front line during those negotiations.

It should be noted that despite the numerous mentions of increased military action at the front line, that does not necessarily translate into territorial gains – or indeed the desire for territorial gains from a Kremlin perspective.  It does not want or need The Donbas for any other reason than to use it as a Trojan Horse within Ukraine to control, or at the very least, frustrate the Ukrainian future and stop the trajectory from Moscow’s orbit.

Thus far that plan is failing.

Hot

The other major deadline that will arrive, without any major concessions to The Kremlin will be the full implementation of the EU-Ukraine AA/ DCFTA on 1st January.  This seems very likely to see The Kremlin simply put a ban on (almost) all imports from Ukraine in retaliation – probably simultaneously.

Whilst the Ukrainian military is charged with holding the line against Russian troops and Kremlin proxies, the next three months (and into early 2016) are going to be defined by a significant battle of governance and the holding of political nerve.

All of that being said, the biggest battles for Ukraine still remain the internal battles – Rule of law, structure and sustainability.

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After the local elections – expect local elections (Ukraine)

August 29, 2015

On 25th October local elections will be held across Ukraine (other than in occupied Crimea and Kremlin controlled regions of the Donbas).

The thinking behind it, following a presidential election in May 2014, and a Rada election in October 2014, local elections in October 2015 will provide the Ukrainian constituency with the opportunity to have reset the political landscape from top to bottom in a post-Maidan Ukraine completely.

So be it.

Unfortunately despite a very good draft law gathering dust at the Rada, the October 2014 Rada elections were conducted under the then existing very flawed law.  Naturally the adoption of the far better draft law didn’t happen due to the fact it relied upon the Yanukovych era Rada passing that law in order for it to be in force for the current and sitting Rada.

What did happen, is that when the Rada election campaigning was in full flow, the president signed some amendments to the then existing law regarding electoral bribery and corruption – far too late to prevent bribery and corruption in the elections for the current Rada.

However, at the time, this blog noted “Indeed, one of the first laws that should probably be passed by a new RADA are the currently pending new election laws. It would give those laws 5 years, via numerous minor elections a chance to bed in, being amended to fine tune if necessary – in the best case scenario. In the worst case scenario, the new laws would be in force for any early RADA elections should a full 5 year term not be the fate of the RADA sworn in post 26th October.”

That did not happen either.

Thus electoral campaigning, officially or otherwise, is already underway for the local elections to be held on 25th October – despite candidates and party lists yet to be officially compiled and announced – under a substandard electoral law that has yet to be replaced by a far improved and entirely ignored draft law now almost 2 years old .

However, and it is never a good idea to change electoral laws with an impending ballot date, no election law changes are anticipated before voting day.  Instead, this time, on 31st August, the powers of those victorious in the elections will have changed via the “decentralisation amendments”.

That then, theoretically will see a full reset of political power until 2020 per the legal 5 year terms – unseemly and flawed as the journey may have been.

Except it appears not.

Yesterday President Poroshenko stated that following these local elections, yet more local elections will be held in two years time!

Why?  They are supposedly elected into office for 5 years.

Apparently – “Following the voting for the amendments to the Constitution, another local election will be held in two years after we form the regulatory framework for decentralization.  These local elections should be organized in fair and transparent fashion, as they form the international reputation and image of the whole state.

I ask you to elaborate amendments to the law that will make it impossible to bribe voters, and responsibility for the use of such schemes should be toughened. I am sure that candidates who buy votes should never take part in Ukrainian elections again.”

We are to infer from this that after 31st August sees the constitutional amendments relating to “decentralisation” strong-armed through the Rada, that those amendments will not fully take effect until two years later when a “regulatory framework for decentralisation” has been formed?

There is no regulatory framework already drafted?  The plan is to muddle through somehow trying to adhere to the newly amended constitution – or not?

Does a lack of preparation and framework planning by “the centre” legitimise or justify new early local elections?  If so should there not be new elections every time a major legislative or framework change occurs that effects “the system”?

Is it a nod toward the Donbas in 2 years time?  Perhaps a hopeful time frame?  Perhaps an indicator of a “special law” arriving to facilitate elections within the occupied territories “according to Ukrainian Law” to cover a 2 year period that allows for “direct negotiations”?

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Some cynics, considering that the October local elections may not give “the centre” the results they anticipated as outlined in yesterday’s entry, may think that there will be more or less permanent election cycles until “the centre” gets the results it likes (not that Ukraine can afford such frequent electoral luxuries).

We are also to infer from this that the very reasonable electoral draft law thus far ignored and gathering dust on a shelf somewhere in a dank office located just off a dimly lit corridor within the bowels of the Rada is to be ignored once more?

The preference being yet more amendments to a poorly crafted electoral law that currently sits within the statute books – the amendments aimed at making it  “impossible to bribe voters, and responsibility for the use of such schemes should be toughened. I am sure that candidates who buy votes should never take part in Ukrainian elections again.”

From this we can imply that voter bribery and corruption will occur at the October elections and be tacitly accepted because those amendments are yet to be drafted and passed?

But what of the amendments made mid-election campaigning for the Rada elections in 2014?  Weren’t they supposed to provide deterrence from engaging in electoral bribery and corruption?

What were the amendments made on the eve of the Rada elections in 2014?

“Thus it is now an offence for organisations, institutions, and enterprises to provide undue advantage, or the provision of free goods and services to voters for fear of imprisonment for 2 – 4 years, and/or depriving those responsible within from holding certain public office for a period of 1 – 3 years.

Those that would obstruct the execution of free universal suffrage (violating electoral rights), including the functioning of election commission personnel and observers, together with acts of bribery, fraud or coercion, now face a prison term of 2 – 3 years.

Abuse of office, including members of the election commission now carries a sentence of 3 – 7 years.

Also illegal instruction to an election official in order to effect or influence the election commission now carries a 5 – 10 year sentence, forgery of election documents 3 – 7 years, and theft or concealment of ballot boxes 5 – 7 years.

There is also some adjustment in the existing fines mechanisms.”

These are not sufficient penalties?  They do not deter those pondering electoral nefariousness?  There needs to be more amendments with a far sterner outcome which will mysteriously have far greater effect with regard to prevention?

Would it not be simpler, with the local election campaigning already underway, to actually enforce the aforementioned 19th/20th October 2014 amendments AND START THROWING PEOPLE IN JAIL!!!!

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Local elections result predictions – Odessa

August 28, 2015

Following on from yesterday’s entry and the numerous questions raised regarding prickly agendas and subsequent local election political fallout, extremely unfairly a reader emailed and asked for predictions regarding Odessa and the local elections – this before any candidates and party lists have been formalised.  Solidarity meets later today to select candidates and form lists, and it is probably going to be the first to reach agreement and publish.

But, for what it’s worth and based upon nothing more than living in Odessa for more than a decade and having a passing interest in politics, here is a (probably wildly inaccurate come the vote count) prediction as of the time of writing – including a very naughty (though legal) possibility.

It is of course necessary to deal with the City and the Oblast separately.

The first issue regarding the city, is who the assimilation of UDAR, National Front and Solidarity will put forward to run against the current Mayor, Gennady Trukhanov.

We will know later today, but to be blunt there are no good candidates.

The previous Mayor, Eduard Gurvitz?  At 67 years old and a “colourful” history?

If not him, who?  Who else has any current traction or political history with the city electorate (discounting Governor Saakashvili who features later)?  Sasha Borovik?  It seems unlikely the Governor would allow his “project manager for Odessa” to run when he would clearly lose to the current incumbent.

Obviously all numbers stated in this entry are “educated guesswork” but Mayor Trukhanov will probably garner anywhere between 55 – 60% of any votes cast for Mayor – possibly more being able to misuse city resources, owning almost all “big board” advertising space, having his on-line media, printed media, and TV channels – notwithstanding being the current incumbent and regularly in the local media as Mayor anyway.

Can Solidarity come up with a candidate to beat him?  No.

Short of an act of God – or an act of the rule of law, it seems highly likely that Mayor Trukhanov will comfortably remain Mayor Trukhanov.  His political party by association, will possibly garner somewhere between 15 – 20% and be a large party in the City Rada – though clearly not a majority, thus a coalition partner will be required.

Igor Markov’s Party Rodina will be a wipe out, as will Ihor Kolomoisky’s Ukrop.

Sergei Kivalov’s Morskaya Party will get somewhere between 5 – 7% (far less than the 10% he is aiming at).

Batkivshchyna and the Radical Party will probably both manage between 5 – 7% too.

Now for the difficult question of the Opposition Block.  As stated yesterday, “How toxic does it remain at a local level? It is important to draw a distinction between local and national politics. Perhaps it will do better than many think.”  In the city elections about 20 – 25% would be a realistic.  More in the Oblast, about which later.

Sergie Tigipko’s Strong Ukraine may get between 4 – 5% (and at 5% get over the line).

Samopomich, which will contest only the city and not the oblast elections, will possibly get between 10 – 15%.

Thus, for those doing the math, Solidarity may garner about 20 – 25%.

It follows then that City Hall will be messy – and a coalition of ex-Regionaires in Mayor Trukhanov, the Opposition Block and Kivalov’s Morskaya puts Solidarity in the opposition seats – and there are few if any remotely plausible coalitions that will put Solidarity into a majority.

And so to the Oblast.

This is far more difficult, as Samopomich will not contend the Oblast seats – probably because it would not do that well, so why spent the money and political energy?

Starting with the Opposition Block, a reasonable figure would be between 25 and 30% – possibly more.

Bativshchyna and the Radical Party about 5 – 7% each.

Solidarity about 20 – 25%.  Possibly more (but not much more) in the absence of Samopomich.

That leaves a massive 30% of unknown/undecided which is possibly more inclined to head toward the Opposition Block than Solidarity when it comes to a choice.

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Now to Governor Saakashvili and his “pull” factor – which is probably about 30%.

The Governor is not a member of any political party, although he has been offered Number 1 spot on the UDAR list, which will become part of the Solidarity list after the announced assimilation.

Later today we will see if he accepts the nomination when the (combined) Solidarity list is thrashed out.

If so, he may very well be the difference between a Solidarity majority (or coalition with a minor party) or Solidarity finding itself in the minority in both City and Oblast Radas.  A minority in both would be something of a disaster for “the centre” in Kyiv.

Thus do not be surprised by the end of today, if Governor Saakashvili joins a political party and becomes their Number 1 name on the Odessa Oblast list.

If that be so, be further prepared for some legal, although not particularly ethical, political shenanigans.

The entire point will be to use Governor Saakashvili’s “pulling power” to try and get Solidarity as the majority (with or without minor coalition partner) in the Oblast Rada.

However Governor Saakashvili cannot be Governor – or Prefect following the “decentralisation amendments” on 31st August – and also an elected candidate for the Oblast Rada.  He would have to resign from one or the other positions after the vote count and results are known.

As Number 1 on somebody’s list, he will surely get elected, leaving him a choice of appointed and powerful “Prefect”, or elected, possibly in a minority, or majority coalition, subject to the whim of any appointed “Prefect” that replaces him.

Clearly he will decide to remain the appointed “Prefect” and assume the power that comes with the role.

Thus he would almost definitely resign from his newly elected role as Oblast Rada Deputy – after having used his “pull power” (or being used by “the centre”) to perhaps pull Solidarity over the Oblast “majority” line.  The voter however does not get an elected Misha Saakashvili, but continues with Governor/Prefect Saakashvili.  What they do (possibly) get is a Solidarity majority (with or without coalition partner) that otherwise would have been far less probable.

Perhaps a clue to the accuracy of the percentage guesstimates above will indeed be whether Solidarity (and UDAR plus the National Front) feel they need to use Governor Saakashvili in this way to be even remotely optimistic of an Oblast majority – knowing he will resign from the elected Oblast rada role to remain Governor/Prefect the entire time.

In short a legal, but rather underhand and ethically questionable politicking tactic.

Time will very soon tell just how accurate the political shenanigans and percentage guesstimates above actually prove to be.  The blog will either look rather well informed/insightful, or alternatively rather silly – however the caveat of being asked to make such predictions before candidates have even been selected is a rather useful “get out” clause!

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Prickly agendas? – Odessa City Hall

August 27, 2015

Following along nicely from the previous entry, yesterday’s session of Odessa City Council – not to be confused with the Oblast Council – was canceled.

The City Council session was canceled due to only 56 deputies registering in the session hall, when the minimum number required for a legal quorum is 61.

An issue of squeezing every last moment from the official holiday period by the city deputies perhaps?

No.  The issue was the session agenda, and one particular item on it.

That agenda issue had been submitted by the “For a European Odessa” group of deputies and seeks the City Council to recognise The Russian Federation as an aggressor State.

“Many MPs were afraid of this political issue and decided to ignore the session.  A conciliation board was convened, and all the factions and the group decided to postpone the session until 10th September.” – Oleg Bryndak, Secretary of the City Council.

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So what?

The national parliament, the Verkhovna Rada, long since passed a resolution recognising The Russian Federation as an aggressor State – On the 27th January 2015 to be precise.

Therefore, does it matter?

For international purposes obviously not.  The Verhovna Rada resolution as a national parliament was done deliberately to enable international legal machinery that relates to nations identified as an “aggressor State” per UN definition.

Therefore placing this issue on the City Council agenda is clearly a matter of internal politics – but does it matter even then?

Clearly it sends signals domestically within Ukraine, and also to the local constituency – as the efforts to maneuver Kharkiv into recognising The Russian Federation as an aggressor State indicate.

It is no secret that the Mayor of Kharkiv Gennady Kernes is an odious (for many) and nefarious (to almost all) character with more than dubious allegiances.  His support for the Berkut during the violence at EuroMaidan was all to obvious.  There are on-going legal proceedings against him for his alleged involvement in sponsoring and enabling violent anti-Maidan activities against pro-Maidan activists in Kharkiv.  His questionable business portfolio include nefarious business dealings with Pavel Fuchs and Alex Shishkin.  (More inquiring minds may look toward the ЗАО Завод Здоровье company in Kharkiv and more than a few questionable pharmaceutical deals in Germany and Switzerland as a starting point.)

The first two attempts within the Kharkiv Administration failed to recognise Russia as an aggressor State – despite Kharkiv Oblast  having a border with The Russian Federation, the deadly 22nd February bombing of a pro-Ukrainian rally in Kharkiv city centre, and the war-torn Oblast of Luhansk nextdoor.

Eventually however, on 10th July, by 69 to 4, Kharkiv City Council voted to support the Rada resolution adopted of 27th January.  The most obvious question arising was why the “Kernes deputies” (and other aligned) all decided to move from an unfavourable to favourable view?  Do they anticipate the demise of Gennady Kernes at the local elections in Kharkiv in October, and thus were insuring they are “on-side” with Kyiv?  Alternatively, what grubby little deal had been cut between Mayor Kernes and Kyiv to enable that support?

Whatever the case, Kharkiv City Council fell in line, supporting the resolution of the Rada.  A domestic political win for Kyiv within a strategic Oblast and City Administration.

Nevertheless, the Kharkiv regional and city political class, wisely grasped this nettle back in early July, long before the rhetoric and political posturing relating to the local elections in October began.

The Odessa City deputies did not – and now so close to the local elections when (often libelous) black PR, posturing, jockeying, positioning and (often slanderous) rhetoric already abound – the issue has unsurprisingly appeared upon the City Council agenda forcing deputies to vote for or against, (in effect personally) recognising The Russian Federation as an aggressor State before the voting constituency – or not!

A vote for or against taken some months ago, long before the local elections would possibly have less resonance with the voters than the decision to vote for or against now.  That said, the bombings in Odessa have been absent only a few months, and to vote against whilst bombs were going off would not have sat well with the local constituency be they more inclined to favour closer ties with Russia or not.

When push comes to shove, the vast majority on either side do not take kindly to bombs going off in their city.  The pride the people of Odessa have for their city, regardless of political or social orientation, is a cross-cutting cleavage that simply does not support anybody setting off bombs in it.

However, what has been gained by failing to deal with what appears to be a prickly issue for some deputies on 26th August, and kicking the matter to 10th September, a lot closer to the local elections – long after all candidates and party lists for the forthcoming local elections will be known to the voting public?

Is it a question of finding out whether a deputy will be on a list or not prior to any voting?

If so why?

Historically the Odessa City Council is made up of deputies representing the vested interests of far bigger fish.  Ihor Kolmoisky has “his deputies” – but at the forthcoming elections has his own political vehicle in “Ukrop” rather than “his people” being spread across other party lines.

Clearly if Ukrop was in the City Hall Administration now, it would vote for recognising Russia as an aggressor nation – Ihor Kolomoisky very early on tied his colours to the mast of Ukraine.  “His people” under whatever banner they currently sit under will therefore presumably voting in favour of recognition.

How will Igor Markov and “Rodina” deputies manage to represent the interests of Igor Markov now he is absent Odessa and Ukraine at the forthcoming elections?  Will “Rodina” garner any support whatsoever?  Rodina deputies theoretically would vote against recognising Russia as an aggressor State if towing Mr Markov’s line – but would voting against insure political oblivion?.

Will Sergei Kivalov’s Morskaya party glean anything like enough votes to continue to forward his (often nefarious) interests within the city?  How would Morskaya deputies vote?  Kivalov is very anti the current Kyiv leadership (as you would expect from somebody so closely aligned and directly associated with the former Yanukovych regime.  He is also very close to certain Moscow circles too), but he is a survivor with little morality.  Does he try and capture the Kremlin-favouring vote in the hope it produces sufficient City Hall deputies to protect and further his interests, or does he bite the bullet and try to secure a reasonable amount of the vast majority?  The Morskaya vote is for, or against?  How to interpret a block abstention?

How will the current Mayor and his “Party Truhanov” position itself?  His media outlet was decidedly anti-Maidan and displayed a position favourable toward the Kremlin – until he decided to run for Mayor.  Can he stick close to Ihor Kolomoisky, a previous financier of his election campaign, despite the creation of Mr Kolomoisky’s Ukrop?

Will he try and distance itself from the Mayor’s organised crime associates – the likes of Alexander (Angel) Angert (whose company “Growth” does very well from City contracts), or the likes of Vladimir (Lampochka) Galaternik who does very well from favourable land deals from City Hall?  Does he keep them close, or perhaps more to the point, having broken bread with such people, do they let you leave?

How do “Trukhanov’s people” vote?  Follow the Kolomoisky line in the hope for financial backing and future coalition, or with organised crime which naturally gives little care for patriotism when money is all that matters?  Perhaps with Solidarity in the hope of keeping Kyiv on-side but distant enough not to interfere with nefarious interests?

What of the Opposition Block?  How toxic does it remain at a local level?  In favour or against recognition as an aggressor State?

Will enough deputies be returned to protect or advance Dmitry Firtash’s interests under the guidance of Mykola Skoryk?  Just how my pressure (and influence) can the unions so closely aligned to Mr Firtash put upon employers and employees in Odessa?  How would Firtash’s people vote?  For or against?  Abstention?  He cannot afford to offend his associations too greatly in Moscow any mopre than he can afford to risk his ill-gotten gains in Ukraine.

What effect will the assimilation of UDAR and the National Front have when all appear on the “Solidarity” ticket?  Solidarity currently holds the majority in the Oblast Rada, but can it hold onto that and comfortably take City Hall too?

Unquestionably existing Solidarity deputies would be expected to vote in favour of recognising Russia as an aggressor State in line with the Rada resolution – but has it done the public opinion surveys that would forecast comfortable majorities in both Oblast and City councils if doing so now?

Clearly the ‘For a European Odessa” group will include a large number of Solidarity deputies, and it is the “For a European Odessa” group that placed this seemingly prickly issue on yesterday’s agenda.  But have they done the math?

Will this issue be addressed on 10th September, or be further kicked into the local political grass in an effort to go beyond the local elections before dealing with it?  If it is dealt with prior to the elections, what if any, are the ramifications amongst the voting constituency and for the vested interests of the puppet masters?

Now the issue is known to be on the City Hall agenda, what are the implications of refusing to deal with it prior to the local elections within the local electorate?

Will deliberately placing this issue on the local political agenda at this particular time pay dividends for the “For a European Odessa” group – or not?

Ultimately, whether voted for or against, it fails to effect the January 2015 Verhovna Rada resolution, and whilst seeming not an issue for the 56 deputies that turned up at yesterday’s City Hall session prepared to deal with the agenda – for those that did not attend the session it appears to be a prickly issue best avoided.

Perhaps avoidance of the agenda issue says all a voter needs to know?

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