Archive for August 3rd, 2011

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Roads to transparency in Ukraine

August 3, 2011

Sometimes people say something that make you stop and profoundly reexamine what you do, why you do it and what it means.

Yesterday was one of those days.  Quite by chance I met somebody via a mutual acquaintance from Dnipropetrovsk who managed to get themselves stuck with almost 20 metric tons of steel billets when a buyer dropped out, thus incurring storage fees at one of the Odessa docks on a daily basis.

Did I know any foreign buyers who would be interested in a quick purchase?  Indeed I do, but that is rather irrelevant to this tale.

This particular individual then started asking questions of what I have done in my life, the qualifications I hold and all that sort of thing.  Undoubtedly the reasoning was to discover if I would be a good outlet/intermediary for him in the future, but day/spot trader I am not.   Term contracts on the other hand may raise my interest and those whom I know when it comes to striking a deal.

Anyway, for some reason he had the impression a civil engineer (which I am) was very similar to a social engineer (which I am not).  Quite how bridges, roads, shopping centres, airports, hospitals and other infrastructure can be construed as social engineering relating to national psychological structure, the various types of agencies governmental and non-governmental and societies interaction with them would at first seem quite a leap, other than providing society with the means to physically get from A to B or a center for logistical/medical/educational necessities (of whatever sort).

Those civil engineers more involved in city planning, on the other hand, may have more of a claim to some form of social engineering when deciding what goes where, and whom, what they put where, will serve within the community.  Their social engineering, if it exists, comes in the physical delivery rather than the ideals behind it.

However, having mulled over a few things in my usually unproductive and under-employed mind, there is a certain blurring of the lines when it comes to civil and social engineering from a certain viewpoint and in particular when stepping out of the UK “island” mindset that has traditionally governed my past history of civil engineering.

On the continent of Europe, where Ukraine sits in all its glory, connecting population centres A, B and C can very well connect three cities in three different nations.  Connecting three nodes on the British Isles inter-connects nodes only within the same sovereign entity (less projects like the Channel Tunnel of course).

What has this got to do with transparency in Ukraine?  I’m coming to that.

Firstly, there is a need to identity some reasons why things are not quite as transparent as they could and should be.

There is a need to recognise that Ukraine whilst a single entity on the map, is almost a federal collection of regional fiefdoms in reality.  For example there is a saying in Odessa that “Ukraine is Ukraine but Odessa is Odessa”.  It is quite true and reflects the attitudes of the majority of those that live in Odessa.  Very few here care what is happening in Kyiv or Donetsk or Lviv at a political or social level.  Those in power in Kyiv (of whatever party holds power) are somewhat deluding themselves if they think that most of the time people in Odessa care what they are doing (or not doing).

Even at the level of Odessa as a region, those in Odessa recognise Odessa as the “self” and Ukraine as the “other” in almost all aspects of every day life.  Political and civil society pressures are aimed at the Mayor and Oblast Administration and very rarely the government of the day.  It was the same under the last two mayors and this continues to be the case under the current one.  It has proved to be the case regardless of party lines of electorate or mayor.

This is an important contributor to transparency or opaqueness.  In short, political power, social interaction and economics are understood in smaller regional building blocks and not seen as a national inclusive.  That has serious implications for those in central power to penetrate the regions, as Odessa is certainly not alone in how it thinks of the nation when it comes to political power, social interaction and economics.  Local first and then national.

So much is this this case that the more forward-thinking nations are opening national consuls in the major cities as penetration into those regions without a local presence is particularly difficult (unless you happen to be a multinational with a rather famous brand/image).  This is particularly true if that sovereign nation has a particular strategic (current or future) interest in a region.  A few examples, China in Odessa due to the three commercial ports, refineries and soon to be built LNG terminal.  France in Lviv as a preemptor to the agricultural west of Ukraine.  Rocket science it is not.

This fact of regional, rather than national politics, social interaction and economics seems not to be identified by quite a few western nations, quite possibly due to the fact that our central governments have far less difficulty in projecting power and influence into our own regions and thus automatically make the assumption that talking to those in Kyiv will have an effect in the regions.  From living here for so long and witnessing things for myself, that is certainly a very flawed way to interpret Ukraine.

One of the major problems is that rule of law is not interpreted or dictated by the central powers in Kyiv when it comes to the regions.  On paper and in theory it is, however in practice that is certainly not the case.  The law in the regions is dictated by a very few people with self interest rather than party politics (even their own party), or social needs as their driver.  This leads to local patronage rather than central state rule of law.  As such, the big people get bigger and their patronage far more influential at a local level than the central government or rule of law.  Some would call it a mafia system but I prefer the word patronage as not all actions, in fact very few actions of the influential people in the regions, are actually illegal.

Whilst ever the regions and the patrons of the regions remain stronger than the central government, rule of law and communications to the regions from central government and national influence will gain no foothold.

What has this got to do with civil engineering and roads?

The DCFTA will increase trade for Ukraine with the EU and the EU with Ukraine.  Market opportunities will open up where they were difficult before.  Far more infrastructure will be necessary.  Ukraine has already made declarations to build 50,000 kilometers of new roads in the next 10 years.

With an inflow of those used to the rule of law in numbers far greater than ever before, those in the regions will swiftly find complaints, via Ambassadors and Consuls reaching central government that cannot and will not be influenced so easily by their patronage (or lack of).  Communication, like the logistics due to the new roads,  will be much easier, more direct and more efficient, circumventing the regional powers if they do not act fairly and within the law.

More and more legal action will be brought with the full knowledge of central government in regional courts.  More and more complaints of corruption will be brought by foreigners through the courts and via their embassies, consuls and via head offices in a different nation.  The pressure both externally and internally on the regional patronage system will grow and grow (from within and outside Ukraine) if the numbers of Europeans doing business throughout Ukraine dramatically increase due to the DCFTA.

Whilst the government sees the DCFTA and new roads as an economic route to national prosperity, it can, if handled properly (both by the Ukrainian central government and external sovereign governments) lead to a radical change of ethic and “understanding” in the regions.

It may also change the view society has of central government as this too is seen as nothing more than a patronage system on a grand scale by the general populous regardless of which party is in power.

With all major parties being in favour of the DCFTA and AA and moving into a more European (rather than Russian) orbit, inherently whoever is in power will have to insure the Europeans decide to stay in business in Ukraine after making such a big political noise about the benefits of the DCFTA domestically.  That will mean the Europeans can and will depend, ultimately, upon the rule of law and the transparency that is generally (but nor always, even in Europe) associated with it.

Therefore, whilst the DCFTA and new roads/infrastructure are seen as purely economic drivers, quite possibly within government as well, the ability for Ukrainians to deal far more easily in Europe and Europeans far more easily in Ukraine in a business sense may force the unwilling central and regional patrons to recognise their days are numbered and a reliable system of rule of law will emerge…….and with it, far greater transparency.

Much to be said for us road builders you know (even if I have retired from such pursuits myself).  Civil engineer or social engineer?  I’m not sure myself anymore!

Then, as I have said many times here, everything is connected…..even when it seems it’s not.

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