Archive for January, 2012


EU Foreign Policy – The school report says “Could do better”

January 31, 2012

Well, following on from yesterday’s post relating to Russian soft power and how it affects Ukraine, it is only right to look at the other geopolitical actor seeking to influence the nation, the EU.

Today those very clever people at  The European Council on Foreign Relations publish their annual scorecard on EU foreign policy relating to various actors and across numerous spheres of policy.

As I mentioned in yesterday’s post,  various bloggers and journalists were sent advanced copies of this years report on the understanding that reference to it or links to it were not to be made until today which coincides with its release.  Well today that embargo is now lifted and I can link to the “ECFR_SCORECARD_2012” without further delay.

Whilst it is all jolly interesting and covers many of the main actors, such as relations with China, the USA, Turkey, MENA and Russia (and within the Russian section Ukraine naturally gets a few mentions), for those in Ukraine, Section 47 that deals with the Eastern Neighbourhood is of most importance.

The scorecard for the Eastern Neighbourhood?  A very poor Grade C in the areas most applicable to Ukraine.

As many a schoolchild knows, Grade C is almost always accompanied by “Could try harder”, “Could do better”, “Easily distracted”, “Does just enough”, or “Has the ability but fails to apply fully to the subject” etc. etc.  This is a particularly poor grade when most of the failure falls within the human rights sphere which is the “silver thread” that is supposed to run throughout all EEAS/EU foreign policy according to Baroness Ashton.  As regular readers know, I have written about the “silver threads” and EU foreign policy failure in the EaP nations before.

We must recognise however, that the Grade C allocated for the EaP nations is an overall grade and not specific to any individual nation.  There is therefore the possibly distorting influence that is the basket-case of the Belorussian authorities who are gradually tacking up the mantle of a dictatorship some MENA nations would recognise, regardless of sanctions and other soft power EU tools employed to try and encourage meaningful engagement.

There is also Ukraine which is exceptionally unlikely to follow the Belorussian dictatorship model and also exceptionally unlikely to suffer any form of sanctions or EU funding cuts despite the incarceration of Ms Tymoshenko and others to the annoyance of the EU.

One quite likely scenario from the Ukrainian authorities is to comply with numerous ECfHR rulings still outstanding, progress on many Council of Europe/PACE recommendations and also to fully engage in many other EU institutionally encouraged reforms whilst retaining the “red line” over Ms Tymoshenko’s incarceration.

One can see the on-going investigation into the UESU/UESI/Somolli Ent/Lararenko money laundering, tax evading, outstanding debt to Russia case finding her guilty on actual criminal charges rather than politically criminal charges such as misuse of office for which she is currently doing time for.

After all if the US found Lazarenko guilty and jailed him for 9 years mentioning Ms Tymoshenko by name and UESU and Somolli Inc (over which she had full control) numerous times in their case, there is every chance that Ukraine will find sufficient evidence (much of which will have been used in the US case against Lazarenko) to reach a guilty verdict as well.

That may well lead to the removal of the misuse of office sections from law under which she has already been found guilty, the quashing and expunging of her record under those offences, but ultimately leave her in jail nonetheless.

As PACE/Council of Europe recently pointed out, whilst they have concerns over the justice system and procedures that jailed Ms Tymoshenko for misuse of office, no politician can be above the law and the on-going investigation into the UESU affair is a matter for Ukraine.

Should this scenario play out and Ms Tymoshenko technically have her conviction for misuse of office overturned, (but remain in custody for money laundering, tax evasion, theft and fraud in the UESU case) then there is wriggle room for both the EU and Ukraine to move forwards on the assumption that the October parliamentary elections are free and fair (despite Ms Tymoshenko not taking part but on the premise of a genuine criminal conviction rather than a politically perceived conviction).

That maybe enough to put Ukraine and the EU back on the right path without crossing any red lines in both the Ukrainian and EU camps (particularly if lesser political public figures are released, one way or another).

There is a necessary caveat to make and that is despite the EU (and others) believing the President has control of the parliament, that is not necessarily as true as it may appear.  The President has vetoed numerous laws that have reached him having passed through parliament.  This implies that the President is no more a rubber stamp for parliament than parliament is a rubber stamp for the President despite popular assertions.  Those within and behind the ruling Party of Regions do not always necessarily agree with Mr Yanukovych or he with them.

Quite what the EU thinking is with regards to Azerbaijan remains unclear.  Despite a heavy handed policy relating to protesters, there has been little public reaction from the EU.  One can only suppose the need for energy caused a different response for the leadership in Baku to that of the leadership in Minsk.  That said, what goes on behind closed doors between Brussels and Baku we are never likely to know.

One of the most interesting issues on the horizon (discounting the Ukrainian parliamentary elections in October) relate to Georgia.  All things being equal, President Mikheil Saakashvili should not remain in power in 2013 having served two terms as President.  One has the horrible sense of foreboding that he will “do a Putin” and swap Presidency for the role of  Prime Minister in an effort to remain in power.  This would be a tremendous kick in the teeth for democracy and how the EU will react to that is unclear.  For certain the Georgians I know in Odessa anticipate this happening despite a clear desire to see the back of him.

The situation with Moldova and Transnistria also seems to be slowly plodding along after a period of stagnancy.  This week Odessa welcomed the new “President” of Transnistria in an effort to get some momentum to this frozen conflict being resolved.  Time will now tell whether the German decision to abstain from the Libya vote at the UN as part of a deal to get the Kremlin to move on Transnistria will pay dividends, or whether there was any significant progress at the recent meeting in Odessa.  All eyes will be on the next official meeting involving all negotiating partners in Ireland very soon.

The ultimate question will be whether Russia has more interest in Transistria than the newly forming troika with Germany and Poland, and how easily it can diplomatically disengage from Transnistria and the Russia favouring leadership without being seen to abandon this pro-Russia enclave.   Very sensitive.

On the question of sensitivity, Visa-free travel is also a difficult issue.  Not from the perspective of technology or security but politically in Eastern Europe (notwithstanding internally amongst the EU itself).  To say Russia was miffed at Ukraine joining the WTO before Russia is an understatement.  Should Ukraine become Visa-free with the EU before Russia it will be equally if not more miffed than over the WTO issue.

That is not to say Russia has any problem with Ukraine having Visa-free travel with the EU, it is purely a matter of national pride as far as the Russian leadership is concerned, as to which nation gets it first.  Historically Russia likes to be seen as the leader in this region and if the WTO issue was a slight, coming second to Ukraine over Visa-free travel with the EU would be a bloody nose that would not be shrugged of by the Russian populous as easily.

This has not gone unnoticed within the EU naturally, and led to a joint Polish/French/German letter being circulated at a meeting of foreign ministers in 2011, encouraging the EU to treat Russia differently when it comes to the requirements of any road map to Visa-free travel for its citizens in a favourable way.

It will be interesting to see how this plays out, but as far as Ukraine is concerned, the EU border service based in Odessa has Ukraine on track with the road map it was given.  Given its current momentum, Ukraine is likely to meet all requirements and pass necessary audits within 18 months at the most.  The fly in the ointment currently is the recent Presidential veto on biometric passport legislation.  That legislation is to be redrafted and resubmitted this year I understand.

Anyway, have a read of the  European Council on Foreign Relations report, whether your interest is in EU/China, EU/Turkey, EU/US, EU/Russian or EU/EaP policy, it is well worth a read.


Russian soft power in Ukraine

January 30, 2012

Ever wonder why the EU, which possesses nothing but soft power (when it can agree internally to use it), struggles when up against Russian soft power in Ukraine?

Well here is one of the most perceptive pieces of writing on the subject I have read in the last decade.

My cap is necessarily doffed, and I admirably defer to the authors Alexander Bogomolov and Oleksandr Lytvynenko.  There is really nothing more to say other than it is a wonderful piece of work and very worthy of your time to read!

Tomorrow, we stick with a similar academic theme, this time looking at EU soft power and Ukraine (amongst others).

Although it would be reasonable to place it in this post to give additional context and perspective with the above link, I have given my solemn oath  as a gentleman not to discuss it or link to the advanced copy of the report sent to a few selected blogs and journalists (so humbling to be chosen) a few days ago, prior to its official publication.

To quote the accompanying text that came with the document ” Please note that this is embargoed until 31. Jan – so please do not publish anything related to it before this date!”

Therefore you will have to wait until tomorrow as I never break my word or betray a confidence.  It is though, like the above link, a very interesting read!


Ukraine’s “To Do” list from the Council of Europe

January 29, 2012

The recent PACE/Council of Europe draft resolution on “The functioning of democratic institutions in Ukraine” has had the Ukrainian media, whether favourable to the government or unfavourable to the government, picking and choosing selected parts of the 15 page resolution without linking to the entire document.

Well as you can see, above there is a link to the entire document.

Unfortunately for governments past and present, as is clearly evidenced in the document, Ukraine’s failings today are the same failings it had 17 years ago when it acceded to the Council of Europe.  In short, all Ukrainian governments past and present are culpable for the failing of Ukraine to meet CoE benchmarks.

So, for the current government, the CoE “to do” list is very well detailed in the above link.  The question is, will the current authorities disregard this resolution just as previous governments have disregarded the numerous previous CoE resolutions?

You may anticipate that no significant changes in line with the resolution will occur given the 17 year political history of Ukrainian governments ignoring to such matters, or you may see all changes implimented that do not revolve around Ms Tymoshenko, or once found guilty of the criminal charges relating to fraud, theft, money laundering, tax evasion etc that nailed her partner Lazarenko in a US court, then all amenedments will be made, Ms Tymoshenko technically freed from the current 7 year sentgence but remaining in jail for the criminal offences she is currently being investigated for.

Whatever, we will see how far the current authorities go towards implementing this list (or not).


Ukraine’s next first lady of politics?

January 28, 2012

As is always the case in politics, the demise or difficult circumstances of a fellow politician, from your own party or another, presents itself as an opportunity for those of such a mindset.

Amongst Ms Tymoshenko’s party, prior to her incarceration, was a lady called Natalia Korolevska.  A stalwart Tymoshenko advocate as you would expect and seemingly loyal to the core.

However, since Ms Tymoshenko’s incarceration, Ms Korolevska has resigned from Ms Tymoshenko’s party and assumed the leadership of another opposition party called the Ukrainian Social Democrat Party (USDP).

Ms Tymoshenko and Ms Korolevska

That is not to say she has turned her back on Tymoshenko’s party entirely, the USDP will unite in opposition with them and put forward candidates for the next parliamentary election on a single united opposition ballet.  To be quite frank, the USDP has no real alternative as otherwise its current parliamentarians would probably fall foul of the new 5% voting threshold that easily passed through parliament with joint support from the ruling PoR and Ms Tymoshenko’s party.

Interestingly, but not surprisingly, not all opposition parties have agreed or signed up to a single list of candidates for the opposition ballet at the next elections.  A united opposition still seems a long way off although things may change.

Also somewhat interestingly, Ms Korolevska has not been ostracized by her old party or disciplined at a time when they probably needed a female parliamentary face fighting for Ms Tymoshenko under her party banner more than any other.

Maybe an issue to be revisited in the future with political blow-back pending for now?

Anyway, Ms Korolevska has actually managed to say something quite bright recently.  To you and I it is of course obvious for any electoral campaign, but this is Ukraine where policies, platforms and manifestos barely register in what is a essentially a personality contest whether the election is party or individually based.  Essentially the amount of MPs any party gets in parliament has very little to do with their policies but the popularity of their leader, in effect no different from presidential elections which are no more than personality contests here.

Ms Korolevska has come up with the idea of a Ukrainian development plan, in simple terms for Ukrainians to understand (slightly condescending as she is no luminary herself) and have all the opposition parties who signed up to the single opposition candidate list (so not all opposition parties) agree it and sign it off.

Well bravo!  Regardless of whether such a plan ever actually occurs, regardless of whether the opposition actually win enough votes to become the majority and be able to implement such a plan, and regardless of whether they would be the first government to actually deliver a plan rather than just talking about one or holding up a single piece of an otherwise unknown puzzle to the masses every now and again, she actually thinks there should be a plan and that it should be shared with the Ukrainian public in full!

Of course the downside to that, is the Ukrainian public would know the plan and be able to hold the political elite to account should it fail to deliver on it.  Maybe that is far too radical and transparent for the rest of her colleagues in the opposition parties that have signed up to cooperate together at the parliamentary elections.

So how is Ms Korolevska going to raise her domestic and international profile?  Well she is currently at Davos where undoubtedly everyone is asking who she is, at least for now.  What seems quite obvious though is that Ms Korolevska sees a political opportunity somewhat at the expense of her old boss, Ms Tymoshenko, whilst retaining (publicly at least) good relations with her old party.  She has become an opposition party leader, she is currently hobnobbing at Davos and has been doing the rounds in Brussels.  On a purely aesthetic platform she looks very good on the television.

The longer Ms Tymoshenko remains incarcerated, the more Ms Korolevska will become the very attractive female face of Ukrainian politics.  Is this a case of the Queen is dead, long live the Queen, or a beginning to a quiet coup?


Developing civil society – A Ukrainian government responsibility?

January 27, 2012

Whose responsibility is it to develop civil society/NGOs?

Yes once more I am banging the civil society/NGO drum.  For those of you who read this blog regularly,  it is becoming something of a secondary theme to all things Ukrainian.  If you are not a regular reader, just put NGO in the search facility of this blog  to discover my issues with NGOs, particularly in relation to those operating in Ukraine.

Anyway, returning to the question, whose responsibility is it to develop civil society/NGOs in Ukraine?  It appears that the President has signed a decree (32/2012) creating “The Coordinating Council for the Development of Civil Society” to be headed by Maryna Stavniychuk, who sits within the Presidential Administration.

The role of this new governmental entity is to coordinate interaction between civil society/NGOs and the organs of government (one assumes national, regional and local government), and also implement the president’s public policies to make civil society/NGO operations easier.  This is being done under requirements Part 2 of Article 102, paragraph 28 of Part 1 of Article 106 of the Constitution of Ukraine and to give momentum to Ukraine in reaching European standards for the protection of human rights and civil liberties.

Without exhausting all the issues that become immediately apparent, otherwise I will end up writing a doctoral thesis, let’s look at a few basic points.

Firstly why civil society/NGOs exist in the first place.  Cutting right down to the basics, whether the NGOs are foreign or domestic, government or privately funded, they come into existence when a number of people have a shared grievance or issue that joins them together and that issue then moves from a private moan to a public cause.  When that happens the issue moves from public to political whether it is local, regional, national or global.

I will not bore you with the perspectives of Hegel, Locke, Paine or Tocqueville.  As intelligent adults you will have your own ideas about civil society/NGOs.  For the record I tend to fall in the Hegel camp.  In fact if the President is trying to achieve European standards he is better to concentrate on reading Locke and Hegel.  For a US mindset, Paine and Tocqueville.

Inherently NGOs and civil society began as grass roots issues over grass roots causes and depending upon finance and weight of numbers sympathetic to that cause either grew or remained small.  Depending upon their cause, the public globally, whether the issue was on their doorstep or not, if they were like-minded, could rally to the flag and/or donate to the cause.

In effect, civil society/NGOs fill a space between society and the State as a rallying and focal point for issues that remain to be addressed by the State.  Should the State meet those demands, the NGOs continue to exist to monitor the situation in many cases.

One can say that civil society/NGOs have possibly taken the traditional place of the church and even part of trade union responsibilities and remit.  Certainly they overlap in several areas.

However, as those of you who have read my ruminations about civil society/NGOs here historically will be aware, such entities seem to have become a profession for their management.  Those who originally championed a cause often sidelined and replaced by an experienced NGO management team more academically sound and socially delicate in order to raise funds, engage with government ministers, and produce reports to show progress to those who donate to the cause.

Immediately one wonders just how much genuine empathy any such imported manager has for the cause they represent and how much damage is done to the grass roots supporters when local championing heroes are sidelined for somebody with previous NGO managerial experience.  There ideally needs to be both public expression and instrumental engagement.  Circumstances can evolve to a point where the NGO/civil society has lost touch with the people and cause it claims to represent.  For foreign NGOs parachuted in behind enemy lines, there is then not only the government to contend with but also the “them” and “us” framing of the public psyche when “foreigners” are interfering in domestic life.  Many see the academia as far removed from reality even if Ukrainian.  A foreign academic?  Well what do they know about the realities of being a Ukrainian? – You know what I am saying here, we default to the classic “self” and “other”.

You also need to consider that any professional NGO management team need to show results to their financial sponsors.  Inevitably that means getting uncomfortably close to the government with which they have an issue with over their cause.  How much of the cause or their soul is sold to produce some glacial movement in a government’s position to justify the sponsors funding?  How much of the core issue is sacrificed for measurable and reportable movement on peripheral issues to justify continued financial support from donors?

It is quite possible that the NGO management will get so close to the government that either they seem to become part of the “governmental establishment”, or in order to advance part of their cause, will turn against another NGO publicly that is more of a thorn in the side of the government than they are.

Given the roots of any NGO, the perception of independence is what gives it legitimacy in the eyes of the public.  That perception is not doing very well of late, in a recent global poll just under 50% of the global populous had faith in civil society/NGOs.

With the rise of social media, one wonders for the long term future of NGOs.  The biggest protest in Ukraine since the protests of 2004 occurred over the Tax Code attracting 10,000+ people, it was A-political, and organised via social media.  Occupy Wall Street and the global spin-off Occupy movements were hardly NGO/civil society orchestrated either.

Enough of that – What exactly should the government be doing as part of their responsibility to build a useful and vibrant civil society, and what shouldn’t be their responsibility but that of society itself?

Firstly. every nation has rules within which civil society/NGOs must operate.  If not there would be no requirement in every nation for NGOs to register with their hosting nation.  Those rules must be clear and transparent to civil society.  They must also be respected by both civil society and government alike.

Secondly there must necessarily be freedom of expression.  The whole point to civil society is to air the grievances and causes of society at large to which the government does not choose to listen.

With that comes freedom of assembly.  We are not only talking about mass rallies and demonstrations but also simple meetings with internal and external actors such as foreign embassies, financial donors and other like-minded groups and individuals .

Lastly, civil society must be seen to be engaged with when it comes to policy input.  That is not to say a government must acquiesce to all demands of NGOs and civil society but that they should be included in any policy debate.  After all what would be the point of an elected government if it simply caves in to unelected NGOs every time they raise their voice?

That is really about as far as any domestic government can be expected to go in accommodating a functioning platform for civil society operating within its national boundaries.  The question therefore, is whether the new  “The Coordinating Council for the Development of Civil Society” created by Presidential Decree (and now in force) will become and additional gatekeeper adding an additional barrier to civil society/NGOs, or a door opener to doors that were always shut to them before.

As with all new policies and initiatives, time will tell.  The question that always remains unanswered is how much time is needed to make a decision on whether a policy or initiative has been successful?


There’s gold in them there hills! Well Lugansk actually

January 26, 2012

There’s gold in them there hills!

Well actually there isn’t.  Or maybe there is, but this is not the Klondike.  I am actually writing about a gold mine.  Not a metaphorical gold mine but an actual gold mine.

I am talking about the Bobrikova deposit in Lugansk which has attracted the attention of the Australians.  Good miners the Australians you know!

I know what you are thinking.  Well of course if there is gold in Ukraine, given the fact that currently everybody loves gold (despite the obvious bubble bursting when the markets get brave again and leave that safe haven) then Ukraine will obviously mine it.  Even if it has to be in a joint venture with the Australians.

Although its news, it is hardly news that interests me very much!

Well, that depends if you are what is known as a “sophisticated investor”, or as they are known in the financial investment world, “Sophs”.  If you are, the mere fact I am mentioning your little circle and the fact the above link states that the companies mining for this gold are looking to raise $50 million in investment has now got your attention, fleeting or more sustained.

I can tell you “Sophs” that there is an IPO in the next few months on an exchange that is not Ukrainian but is an EU exchange to raise this investment.

As you “Sophs” are generally quite intelligent, you will be able to read between the lines of what I am about to write and compare the opportunities to those that make US Congressmen very rich when they obtain shares prior to an IPO and then sell them once the IPO has been successful, or indeed keep them in their portfolio as is their want.

I may or may not be in a position to point you in the right direction to negotiate share purchases prior to the IPO.  I may or may not be in possession of the geology survey.  I may or may not know the who and how for entry in this deal.

Being “Sophs” you will be aware of the risks of buying non quoted stock prior to the IPO, but you will also be aware of the returns after a successful IPO.  Needless to say I am about as qualified to give financial or investment advice as Gordon Brown was to run the UK budget for a decade, however, you are “Sophs” and need only to know the opportunity exists.

If you are an interested “Soph”, you may want to leave a comment below that will never reach the public domain or be published here, but will provide some contact details for others to contact you in due course and confidentially.

OK – on to other matters tomorrow that will certainly no be of interest to “Sophs” but maybe to the simply sophisticated.  Then again maybe not!


Ukraine to resume Carbon Credit trading

January 25, 2012

It seems the powers that be have decided to reenter the Carbon Credit trading market after a 2 year absence following a complaint from Japan about breaches to the Kyoto Protocol and the funds it paid for AAU’s from Ukraine apparently not going into strictly environmental budgets as per contracts here.

Yes of course Ms Tymoshenko is being investigated for that as well, although there really seems little point as if things were not where they should be found on the accounts, then they were put right fairly quickly.  No financial harm done, just embarrassment for Ukraine when another sovereign nation inquires why Ukraine is breaching a contract.

At the time that issue was brewing it is fair to say I was close enough to the periphery of this trade to know what was going on.  Indeed I had UK buyers for Ukrainian Carbon Credits wanting an introduction.  All Ukrainian Carbon Credit trading ceased abruptly and completely about 6 weeks prior to matters becoming public knowledge and headless chickens were running around Kyiv trying to work out what to do and what had happened when Japan initially (and quietly) raised the issue.

Anyway, that was then and this is now.  Ukraine has now decided to reenter the Carbon Credit market once again and is prepared to sell off its excess AAUs, CERs, CDMs, ERUs, and all the other wonderful 3 letters carbon credit formulas and derivatives that come from AAUs.

To be honest Ukraine couldn’t do so before as when the international experts went through the Ukrainian carbon books following the Japanese incident, Ukraine was banned from selling until the books resembled reality.  A further check from international experts has now allowed Ukraine to sell once more.

Of course economically it is in Ukraine’s interest to market its unused carbon credits to boost the budget funds as well as send a political message that the international experts are now happy that what Ukraine says and sells is actually based on some form of reality.  Generating a legitimate trade as soon as possible and putting the stain of recent events behind it seems like a reasonable thing to do, particularly when the EU Energy Policy will continue to have Carbon Credits at its core until 2050.

All very good, however the Carbon Credit market it not doing particularly well.  That is not to say the market is not working, it is, but the prices of such credits are at an all time low.  Ukraine reentering the market with even more assorted credits will do nothing by drive down the prices even more as supply already outstrips demand.

A quick telephone call to the Chief Carbon Credit Trader of a UK entity who was initially looking to buy Ukrainian Carbon Credits  a few years ago, informs me that it is likely to be close to 2020 before demand overtakes supply once again.  Not a particularly good thing given that Carbon Credits and the need to buy them was supposed to act as a deterrent to make polluters go for carbon capture technologies as a cheaper option than Carbon Credits.

One assumes that governmental targets for national CO2 emissions will be under pressure if Carbon Credits are going to prove far cheaper than carbon capture technologies for the next 8 years.  The reentry of Ukraine and its available credits in the market can only put further downwards pressure on the price of Carbon Credits and thus less incentive to literally make polluters clean up their act.

You could very well question the credibility of a scheme where supply outstrips demand when the entire premise is that supply forces polluters to go for carbon capture rather than pay very high prices for Carbon Credits instead.  One for the policy makers to think about.

Anyway, Ukraine is back in the market with an audited and believable (according to external experts) inventory.  Let’s see if there are any takers and what price is agreed.


Laundered cash – UESU and Ukraine

January 24, 2012

Well, aside from the political repercussions of Pavel Lazarenko’s forthcoming release which I wrote about at the beginning of the year and the fallout likely to hit Ms Tymoshenko who is currently under investigation for her alleged role in these nefarious dealings, is there another reason Ukraine has an interest?

Well, of course there is.  There is the question of recovering the money.

It seems Gazprom, the US and banking liquidators from Antigua are all chasing the laundered cash.  Quite obviously Ukraine will want to throw its hat into the ring as well and stake a claim to the money.  That may go someway towards explaining the apparent rush to progress the trial of Ms Tymoshenko in the Ukrainian courts rather than a more sedate investigation.

It will be interesting to now follow the money and what happens to it, having followed the money to the US all those years ago.

Not particularly helpful timing by those chasing the cash allegedly siphoned away by her companies to be making a public noise about it mind you!

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