Archive for September, 2011


As the EaP leaders chat about DCFTA’s and AA’s – China invests $10 billion in Ukrainian agriculture

September 30, 2011

As the EU and EaP nations sit in Warsaw reaffirming commitments and pushing their respective positions collectively and individually, Eximbank of China has stated it will invest $10 billion in Ukrainian agriculture and set up a permanent working group to identify suitable projects in Ukraine.

$10 billion is not small money when it comes to FDI in a specific part of any domestic market in Ukraine.

This is additional to existing and agreed Chinese FDI in infrastructure, joint R&D in Space research, oil and gas exploration and production on the Black Sea Shelf and Sea of Azov and several arms deals as well (to name just a few Chinese maneuvers in Ukraine in the past 18 months)

Neither does it take into account the demand for Ukrainian raw materials China purchases in quite large quantities.

In 5 or 10 years time, one can almost see China buying up large opportunities in Ukraine (steel works, coal mines etc) and exporting jobs and manufacturing to Ukraine from China.  (Sounds crazy doesn’t it?)

The problem with the EU is that it has “sensibilities” that it ties to issues which Russia, China and Turkey are happy to segregate from business in order to get things done that are to their economic advantage when it comes to Ukraine.

China and Turkey are both WTO members like Ukraine (unlike Russia) so there would be little to stop a FTA with either nation based upon WTO principles.  Turkey is already pushing quite hard for a FTA with Ukraine and undoubtedly that makes sense for Ukraine.

Should we take bets on whether, and despite the DCFTA negotiations completing between the EU and Ukraine by the end of this year, an FTA between Turkey or China (maybe both) is signed and ratified before the EU Member States ratify the DCFTA and AA between the EU and Ukraine (the delay in EU ratification being those “sensibilities”)?

Will we see a splitting of the DCFTA and AA from their joined status if the “sensibilities” surrounding the AA prevent the DCFTA getting ratified thus allowing the powerful China and increasing more regionally powerful Turkey stealing a march on the best opportunities in Ukraine where being nimble, having cash and not being directly from the Kremlin are plus points?

Both Turkey and China are far more nimble than the bureaucracy heavy EU when it comes to seizing the moment and to be fair, both have economies in far better shape.

Now I don’t want this to come across as there being anything wrong with EU “sensibilities”.  There is a definite place for “sensibilities” on a political and diplomatic level as these are used to nudge nations in directions (normally rule of law, democracy, human rights etc).  It does not follow that sanctions or geese laying golden eggs will necessarily speed up change or even make change a consideration.  Reform depends on how far the national leadership being nudged is prepared to go along this path and how quickly.

The question is whether those “sensibilities” tied to the AA agreement and Copenhagen Criteria justify the delay in the DCFTA and the economic opportunities that provides, given increasing Chinese and Turkish interest in Ukraine together with the ever-present Russia.

One hopes that those currently sitting around in Warsaw are fully aware (and keeping a tally) of FDI and business interests flowing into Ukraine from China and the old Ottoman Empire.  As an example, there would be no real point to arguing over the agricultural part of the DCFTA, eventually come to an agreement, to then discover China has all the best bits and agreed the lion’s share of exports now would there?

Which is the EU priority, simplified trade or “sensibilities” if push came to shove?

The principled would hope that “sensibilities” carried more weight than trade.  The pragmatic may see things differently.


Eastern European Partnership meeting 29/30 September

September 29, 2011

Well today over the border in Warsaw the Eastern European Partnership meeting takes place between the EU representatives and the six nations within the EaP.

So off have trotted the EU high level representatives, suitably encouraged by Baroness Ashton in her warm up speech.  Quite.  Nothing new in that lot or the agenda.

Anyway, I shall be keeping as close an eye as possible on the two days of talks from a Ukrainian perspective, however I must admit to not expecting anything that will change the rules of the game, rhetoric, or the current positions of either side.

Also occurring simultaneously in Sopot, north of Warsaw, is the business orientated end of such gatherings who no doubt will be scrutinising closely the trade figures with theEaP nations with the DCFTA in Ukraine’s case close to the finalising of negotiations.


Ukraine – EU Parliamentary Club

September 28, 2011

Anybody out there heard of the Ukraine-EU Parliamentary Club?

I have been following this website for a while.  I have decided to follow some of the MEP’s involved on Twitter, not that those I follow have tweeted anything at all, let alone anything of substance since I began to follow them.

I have emailed one of the MEPs asking about the strategies and policies being pursued, whether meetings held here (if they are ever held in Ukraine) are open to public and civil society or a closed shop avoiding questions from the hoy polloy about what they are doing and how they are going about it with no answer as yet.

I wonder how much money this website and the political chin-wagging behind it costs by way of EU funds and what it delivers per Euro spent?

Is it a necessary parliament to parliament channel or is it a pointless institution surpassed by numerous other politically high-powered channels.

Looking at the About Us page of the website this group claims that the “Parliamentary Club of the Ukraine-EU will not duplicate, or replace, nor confronts with other structures, and is seen as a form of international dialogue involving a wide range of members.”

Very good, no duplicity, no replacing other channels or confronts with other structures and yet it goes on to say “The group plans to work on several areas namely: adaptation of legislation, the issue of transit, electoral law, visa regime etc.”

First question would be to whose legislation would Ukraine be adapting?  Italian blogging laws, or Hungarian media laws, both of which have been roundly criticised by the EU within the last 12 months?  The working time directive so hastily opted out of by the UK?   Ensreg atomic regulations and recommendations which are rather meaningless in comparison to the IAEA decisions?  I could go on but you get my point.

Is it simply to adapt to EU legislation?  Is that EU legislation that every EU Member State is in or EU legislation that most EU Members States are in (and did not opt out)?  What’s the rush?  The EU has publicly stated it won’t be expanding until 2025-2030 (with the exception of Croatia).  Will the EU still exist in 2030?  If it does it won’t be as it is today so will Ukraine even want to join it?  Will it benefit from anything more than AA status and economic agreement?

There is an on-going raft of legislative changes to facilitate the DCFTA, pension reform, Visa rules (Ukrainian reforms already in effect from 10 September) etc., so duplicity is assured.

As it is a matter of both fact and public record that Ukraine is working with both OSCE and the Council of Europe over the electoral laws (as well as others like the Criminal Code), are they not duplicating the work of those other structures?  Which electoral system laws would the EU Parliamentary Club be attempting to mirror in Ukraine?  The German PR system?  The UK FPP system?  What about the electoral college system or even AV?

Should it be a parliamentary system with an almost ceremonial presidential figurehead like many EU nations?  But what about the French?  Mr Sarkozy is hardly a powerless or A-political head of state like the Queen for instance.

I was under the impression that a road map for Visa-free travel had already been given to Ukraine by the European Commission, so that and the Association Agreement, are both subject to that structure.  Thus it appears once again that the Ukraine-EU Parliamentary Club are indeed duplicating yet another area.

From their statement of relating to the areas they are looking at, if they are truly not duplicating the work of other structures, then they seem to be left with “etc.” from their list of policy areas.

They have an entire national structure to “Europeanise” and yet have named areas that are certainly being addressed by other EU structures with far more political and diplomatic clout, that have been pursuing these areas long before this group was created.

Given the complexities and philosophies that form a society, there must surely be some niche areas in which they would operate more effectively.  It returns us to the age old dilemma of international aid and nation building.  Do you deal with the big issues, take but one example, let’s say of education, and ignore the countless broken windows and broken radiators in every school you visit as they are mere minor details, or do you fix things as you find them whilst keeping the big picture in mind, slowly but surely making a real difference where you find a small problem whilst hammering away at the big issue?

They do not have to be mutually exclusive.

Considering the highest level of political and diplomatic engagement and energy between the leadership of the EU and Ukraine, I would suggest that the big issues have enough political power and momentum to succeed should there be such a desire from both sides.

No offence meant, but surely this parliamentary club should be setting its sights on something far more commensurate with their level of responsibility and ability in order to deliver something tangible rather than warm handshakes and taking turns with expense accounts?

I do appreciate that personal relationships are often essential when climbing the slippery political career pole, and international relationships will trump domestic ones, however, if there needs to be a new channel of communication then that channel needs to produce some results or it is pointless.

Can this group deliver more than the likes of Von Rompuy or Ashton?  Is the leadership of Ukraine and the Ukrainian parliament more likely to listen to the EC, OSCE, the Council of Europe, Euronest or the Venice Commission?

In short, without getting answers as to the strategies and what “etc.” actually is in their statement, on the face of it there is nothing to be gained by this new channel of communication.

It does seem to be just another EU “thingy” that is well meant but actually does not really have a “grand plan” but more a “suck it and see” agenda.

I hope to be proved wrong and for it to be an absolute success justifying every Euro it costs, and yet I feel a sense of foreboding given the false grandioseness and importance that the EU parliament masquerades in.

Time will tell I suppose, however in the meantime, the big kids in the playground will sort out the DCFTA and AA.


More executive prosecutions at Odessa City Hall

September 27, 2011

Only a few days ago I mentioned the arrest of Deputy Mayor Mykola Ilchenko for what I assumed at the time would be accepting bribes.

This would seem to be the case as he was arrested under Section 3 of Article 368 of the Criminal Code which to cut a long story short is used for those taking large scale bribes.

As stated the Odessa Mayor who was in Kyiv at the time, either by coincidence or by design (and whether his design or that of the police we will probably never know), subsequently made a statement supporting his subordinate claiming there was some mistake or misunderstanding.

Unfortunately for the Odessa Mayor, Deputy Mayors Chernenko and Orlov can now be added to that mistake or misunderstanding as they too will be arrested under the same section of the same Article when they can be found.

Orlov is apparently in Spain on holiday and Chernenko’s whereabouts are unknown.  So who is running Odessa with three Deputy Mayors absent?  Good question as according to Anna Osypchuk, media spokeswoman for Odessa City Hall, the Odessa Mayor is in Kyiv.

At a time of an obvious political crisis in Odessa City Hall, why is the Odessa Mayor in Kyiv?

When three of your Deputy Mayors are under investigation by the PGO (and you have to ask how many Deputy Mayors you need), is it possible that one should consider their position?  Should one stand by his colleagues and maintain faith in them whilst investigations get under way?  Should one sacrifice his subordinates, maneuver oneself into a position of driving force against corruption within the Odessa political elite in order to take some of the political plaudits for cleaning up City Hall?

It seems any answers you may have should be sent to the Odessa Mayor in……Kyiv.


Progress in Moscow when all eyes are on the UN

September 26, 2011

Over the last week, my email and twitter have been absolutely carpet bombed by press statements and tweets from various  official press centres and the enlightened in equal measure far in excess of the usual information overload.

The reason of course was the gathering at the UN.  Everybody who is a political anybody has to be on record saying something whether people stay to listen or walk out is irrelevant.  Those words are transmitted globally by the Internet in real time via live webcast or with the absolute minimum of delay via press statements.

You start to feel some pity for those in GCHQ, MI6, MI5 and Whitehall who have to trawl through huge amounts of data on a minute by minute basis and decide what is of interest and what is not, what requires and immediate response, what may require a response later and what can be completely ignored.  Who has said what and is there any actual or potential changes in their position which may also mean blowing the dust off some contingency plan written for that eventuality some time ago or creating one.

Multiply this by the many channels of communication of government and other actors, which may be spook to spook, minister to minister, gov to gov, department to department, non-state actor to any of the aforementioned plus many others and in any possible combination from these multitude of information emitting nodes and the carpet bombing of my email and twitter looks like an easy day at the office for some unfortunate mandarin working on a particular desk.

The UN was obviously going to be dominated by the Palestinian UN application and various other Arab and African events.  Ukraine seemed to be most noticed relating to all things atomic during the meeting and whilst that is an important and global issue, that is not what caught my eye.

My attention was drawn to the on-going issue of Transnistria and the 5+2 negotiations to which Ukraine is party.  New commitments to restarting meaningful negotiations were not made at the UN, but in Moscow during the UN gathering in New York, however it did get a mention.

Regionally this is particularly important for both Moldova, Ukraine and the EU.  Transnistria is no more than a 30 minute drive from my home and a place I have been several times.

Transnistria is (classed as) a frozen conflict that happens to sit on the borders of Ukraine (and Odessa) and presents a major obstacle to both Moldovan and Ukrainian European aspirations.  Although this very recent European Commission Report on Moldovan and Ukrainian Visa-free progression does not make it clear, should Ukraine become Visa-free with the EU long before Moldova reaches that stage, it may very well land-lock (by Visa necessity) a very small and rather poor nation on all sides which would be a particularly bad result over a long period of time.

Quite obviously if Ukraine were to become Visa-free with the EU, both the EU and Moldova would hope that Moldova follows swiftly in the wake of Ukraine.  That is rather difficult when there is a frozen conflict involving an officially unrecognised region that seeks autonomy from Moldova and alignment with Russia.  To give credit where it is due, Germany has been particularly active with engaging with the Kremlin over a resolution in the past year to allow Moldova a route towards Europe.

As Stefan Fule stated, sadly almost as a footnote, in this speech a few days ago, “If Ukraine’s role is to be enhanced as we hope, I think it is important to end with a strong reminder of the importance of the human element. At last year’s Summit I was pleased that we were able to announce a concrete Action Plan towards Visa Liberalization. I think the prospects are positive.”   Unfortunately there is no mention of the intangible link with Moldova that certainly exists.

Thus, despite the fine words and matters of great global interest discussed at the UN over tha past week, possibly the biggest and most advantageous event of last week involving Ukraine and its foreign policy took place in Moscow and hardly got a mention.


Overhaul of the Ukrainian Criminal Code by Christmas?

September 25, 2011

As many of you dear readers will be aware, successive Ukrainian governments since independence have done very little by way of updating historical Soviet laws that weren’t in their interest at the time to do so.  (Namely if such laws did not stand in their way to achieve X or Y, then they have remained unchanged.  If they did, they were changed.)

Thus we are still in a situation where the Soviet 1974 Labour Laws are technically providing the boundaries to the work place, Ms Tymoshenko is being tried on a 1968 Soviet “misuse of office” article obscurity undoubtedly in the Criminal Code to react to “party members” overstepping the mark back in the deepest, darkest days of the USSR.

Great swathes of Ukrainian life in the 21st Century are still technically marshaled by 20th century Soviet laws which are quite obviously either technically still in existence but completely ignored and never implemented (like large sections of the Labour Code) or employed if you manage to annoy somebody of importance (as is possibly the case of Ms Tymoshenko).

You will note that the existing and pending allegations against her are under the obscure “misuse of office” Soviet “control system” and she is not charged with corruption under more recent laws.  (To use the corruption law would open up a can of worms and leave the RADA bereft of MPs as you simply don’t get into the RADA unless a beneficiary of the patronage system that runs throughout Ukrainian life.)

Anyway, the Speaker of the RADA, Mr Lytvyn, has confidently stated that the new Criminal Code, as submitted to PACE/Council of Europe in August, will be passed by the year end.  If there is ever a way to put an end to the politicalisation of the Tymoshenko trial it will be to repeal the Article she is being tried under during this process (or repeal it before).

Now a new Criminal Code is all very well, especially if the CoE/PACE decide it meets European norms (if there is such a thing as European norms.  After all, law runs to the very heart of sovereignty and in many EU Member States what is legal in one nation is illegal in another.)  The question is the repealing or canceling of the existing Criminal Code in part or in full.  Will it be done or will it be allowed to lay dormant as so much outdated and superseded statute does on so many nation’s books?

What laws have been changed, repealed or updated in the new Criminal Code or is the new Criminal Code a reform of processes rather than existing laws?  Is it both?  As with many things in Ukraine, whilst there is a need to have the laws of the land, the implementation of them, even very good and reasoned laws, does not necessarily happen consistently, fairly or “blindly” as justice would necessitate.

When will CoE/PACE give their opinion on the new Criminal Code?  Surely having only received it in August, they have not given an opinion (or any recommendations) in a matter of weeks.  This is a European collective institution and by its very nature, speed is not one of its defining traits, especially over something so fundamental as providing opinion (and/or recommendation) to a nations criminal code.  Such things need consideration, exploration, rumination and comparison in order to provide a fair and reasoned response.

We will see how this develops with interest, particularly as this is a busy session in the RADA already.


Its all in the timing – Corruption and arrest in Odessa

September 24, 2011

Well dear readers, I had a draft post relating to changes to the Criminal Code prepared for today as I tend to write a day in advance.

The post draft will now wait until tomorrow if it ever sees the light of day at all.

Why the delay?

Well unfolding upon my TV last night on one of the local channels was the arrest of the Vice Mayor of Odessa.  A very slow to unfold drama I must say, eventually concluding about 1 am.

Why did it take so long?  It followed the tried and tested Soviet script.

That script dictates that an alleged nefarious act takes places, the police arrive and arrest the dastardly politically connected criminal, who when confronted and arrested suddenly feels so incredibly ill the police are duty bound to await medical attendance and hospitalisation, thus preventing immediate questioning and time in a rather nasty cell.

It also, of course, provides thinking time for the alleged offender and the ability to make frantic telephone calls to the patrons who put them in the positions of power the subsequently allegedly abused, hoping that same patronage can get them out of the difficulties they now find themselves in.

It is a script so well used and so tired, every time it is used it is like watching a series re-run of All Creatures Great and Small for the 43rd time.  Tedious and unsurprising.

Now it just happens that the Odessa Mayor was not in Odessa when the Vice Mayor was arrested.  He was in Kyiv.  That is not that unusual other than the fact the Odessa Mayor does not normally stay in Kyiv overnight when he has to go there.

I know this because last time I flew back from Kyiv to Odessa in June this year, my plane was delayed 40 minutes to accommodate the Odessa Mayor getting from Kyiv city centre to the airport to fly back to Odessa, in the process screwing up the arrangements of everybody else on the plane who had people and taxis waiting at Odessa Airport of course.

Strangely though, the Odessa Mayor did not delay planes or drive at Warp Factor 3 back to Odessa to the aid of his Vice Mayor, but remained in Kyiv or slowly returning from Kyiv long enough for the Vice Mayor to be taken from City Hall at 1 am.  He did however manage to make a statement in Kyiv along the lines of the fact he did not believe the allegations.

Now it maybe the Odessa Mayor was deliberately in Kyiv when his Vice Mayor was arrested, or it maybe the police deliberately arrested the Vice Mayor knowing the Mayor was in Kyiv and could not interfere so easily.

So what is the substance to the arrest?  It appears the Vice Mayor allegedly  received  an amount of cash in return for his action over a certain issue.

Normally the Odessa agencies be they UBOB, SBU or other criminal investigative bodies, when knowing somebody is corrupt, use undercover officers to pay bribes for these individuals assistance over certain matters with marked money and recorded money, preferably also filmed by covert cameras where they can.

I know this for a fact, as I know such a person who paid $2 million in such money whilst on camera to a Mayor from a neighbouring city during the years of the last administration and has also carried out numerous other stings on corrupt school directors, and minor city officials.

If this was the same method used for the Vice Mayor of Odessa, and as I say it is the preferred method, explaining away large bundles of individually marked and recorded $100 bills takes a fair bit of imagination.

That said, as was with the case of the Mayor from a neighbouring city and the $2 million bribe, the old administration of Yushenko/Tymoshenko squashed the case despite the evidence and the Mayor in question even kept his job.  The press though did not get a sniff of that incident unlike that of yesterday with the Vice Mayor of Odessa which makes it far harder to sweep under the carpet.

To be honest, Odessa was due to be hit by the anti-corruption stings as so far it has avoided it under the new government.  The fact that the Odessa Administration is the same party as the national administration is of course a deliberate action to show a non-political angle to prosecutions for corruption.

Before comparisons are made between Ms Tymoshenko and a Vice Mayor of Odessa, we should remember that she is not being investigated for corruption but rather for an old Soviet Misuse of Office law.  She is not accused of corruption.

Cynics amongst us would possibly highlight the fact that amongst all the reasonably high profile and possibly corrupt officials in the Oblast and City structures, the Vice Mayor of Odessa is about the lowliest of them all and thus the lamb for the sacrificial alter of corruption.

Optimists may hope that regardless of past nefarious and corrupt deeds carried out by almost all Ukrainian officials, and Odessa officials are no different, that the Vice Mayor is the only one remiss enough to continue such practices knowing friends and colleagues around  Ukraine have been getting arrested for corruption in various cities for the past 18 months or so with some regularity.

Whether there is any substance to the arrest of the Vice Mayor of Odessa we have yet to see.  Whether he will be saved by a particularly strong patronage agreement if he did do something corrupt we will see.  How long he will remain in hospital we will see.

Nevertheless, a little bit of high profile local scandal unfolding on my TV until the early hours of this morning seemed to justify bumping back the drafted post about changes to the Criminal Code.


European Supergrid – Ukrainian opportunity?

September 23, 2011

Is the list of website subscriptions and twitter identities you follow a reflection on who you are? I think quite probably it is, in which case, my children even though in their twenties and therefore no longer juvenile (at least in the strictest sense of the word) would look at who and what I follow on twitter and the websites that I subscribe to and place me firmly in the category of “Sad”. A definition they would apply to me being in their eyes, boring, based upon the tweets and email notifications I get daily from entities like the UN, OSCE, EU, Energy Ministry of Ukraine, Houses of Parliament, RADA etc.

Hmmm – maybe not as fashionable as it could be (possibly even “sad”, but following Lady GaGa is not really me.

Also a thank you to HM Amb Leigh Turner who not only reads this blog frequently but has also decided to follow me on twitter (I can be found under OdessaBlogger on twitter). I must admit to not tweeting very often, although I will do my best to change that, and what I normally do is re-tweet matters pertaining to Ukraine from the enlightened rather than informing you all that I am just going to the shop, which dear children, I would consider a “sad” thing to do.

Anyway, a day or so ago, I received an email notification from the House of Commons website relating to a committee report entitled “Energy and Climate Change – Seventh Report. European Supergrid” and the European policy of trying to connect a grid of both conventional and alternative energy producing nodes.

Of course a good idea although one hopes it will be done in the most environmentally and ecologically friendly way possible when deciding when and where to put cables below or above ground.

Now Ukraine has recently joined the Energy Community on the continent recently and prior to this exported electricity to Poland, is a transit nation for gas and oil, has huge untapped (yet) hydrocarbon reserves both on and off shore and is very much wanting to be involved in the transit of hydrocarbons from the Caspian Sea to Poland and the Czech Republic via extensions to the Odessa-Brody pipeline.

Its first commercial solar farm is now on line and it has a huge expanse of land and coastline available to alternative energy production.

However, amongst my “sad” website subscriptions is one to the Energy Ministry of Ukraine which is quick to send headlines and a few accompanying words, but nothing as in depth as the link above and the results of the ruminations of the enlightened.

There is no doubt that the current administration has a great interest in being an integral part of the European power grid in a far more meaningful way than simply being a transit nation for Russian oil and gas. The EU has offered Ukraine unconditional entrance to any EU projects it wishes to participate in as long as Ukraine picks up its own bills in doing so.

Just as the UK parliamentary committee notes that UK grid is far beyond the “patching up” stage and in need of complete renewal, the same can be said for the Ukrainian system. In a country that is bigger than France and a population only 66% (ish) the size of the UK, you would expect far less NIMBY’s here than in the UK as the country is just nowhere near as congested and has less mechanisms for NIMBY’s to interfere in the strategies of government.

Such mechanisms do exist and are not necessarily circumvented as some would suggest is always the case. It just happens that if there is likely to be a protest against a specific project, public meetings to discuss them are not always that well advertised (but are advertised to comply with the rules) and although held, may take place at 0500 one morning to insure the minimum attendance whilst technically adhering to the rules.

So, what is Ukraine doing about participation in the European Supergrid? I know for a fact from those I have talked to who would undoubtedly know, there is a great deal of interest in involvement to a noticeable level but actions speak louder than words. In the absence of words, or to be correct, the presence of a few words none of which answer the question, actions would speak louder.

Any sign of any action?

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