Archive for January, 2012


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!


Odessa City Hall – Still a cesspit

January 24, 2012

Turning my attention to local politics, way back in May 2010, the UK Ambassador, British Council regional director etc. visited Odessa just prior to the Mayoral elections.

Being invited to attend and exchange views with Her Majesty’s representative in Ukraine (and others), I duly did so.  Inevitably the subject of the forthcoming Mayoral election arose during which I stated Mr Kostusev would win.  I was questioned as to why I thought this would be the case, in particular by the British Council representative who felt his son would win.

As it turned out, his son pulled out of the race, the incumbent Mayor Gurvitz  lost in opaque circumstances, Mr Kostusev won, all exactly as I said would happen.  (Duly acknowledged when we met again after the local elections in 2011.)

I also stated it would be a disaster for the city as despite Mr Gurvitz being less than whiter than white, he was a civil engineer who understood what makes a city tick, what infrastructure needs to be done and was by nature a planner and builder.  Only when significant progress was made in the city would he then skim from the city purse (indirectly of course).

Unfortunately I have been proven correct again.  Mr Kostusev has been an unmitigated disaster and a poster boy for corruption and crony-ism.  He has proven to have absolutely no idea about how to run a city.  That is not to say he is an uneducated or stupid man.  On the contrary, he very well educated and actually academically bright.  He is though an exponent of old-school elitism and closed networks.  He has proven himself to know how to run a fiefdom to the benefit of his patriarchy.  (You would expect nothing less from a senior member of Ukraine’s Anti-Monopoly Committee of course.)

It came as no surprise at all when the majority of his hand picked top officials came under investigation for corruption towards the end of 2011.  At the time I questioned why any elected official with any self-respect would not resign over such flawed judgement.  It was of course a rhetorical question as Odessa has been a fiefdom Mr Kostusev has wanted to control for over a decade.  The only way he would give it up would be if he was forced to give it up by greater powers in Kyiv.

By the end of the 2011 Sergey Kivilov, a man I know, was being touted as a replacement for the inept current Mayor.  I predicted the downfall of our current Mayor as imminent.  Thus far he remains, the New Year and Christmas holidays will have provided a welcome break from public scrutiny.

However, the heat is once again becoming stifling in the kitchen and yet further pressure is being applied.  This time in a letter to the President from the Association of Employers of Southern Ukraine asking quite bluntly for his removal with immediate effect and the instigation of direct Presidential rule for Odessa pending new elections.

I can only add my weight to their call despite having no personal dislike for the current Mayor.  It is the city in which I live and its need for competent management that is my motivator.  Odessa City Hall was run with military precision under Major Gurvitz, was impeccable in presentation and generally did well for the city.  Now, whilst the appearance may be the same, it is necessary to wipe your feet on the way out of such a corrupt cesspit and scrub yourself down as if decontaminating yourself from a biological incident as soon as is practicable.

That is not to say the current Mayor is necessarily involved in every nefarious occurrence, simply it is quite blatantly and overtly  happening on his watch, under his administration, and therefore he is ultimately responsible for discipline, management and leadership.

Being academically clever does not equate to having the management or leadership skills to run a city.

One wonders if the President will heed the call.  Odessa is a PoR stronghold in national elections despite the very popular ex-Mayor Gurvitz belonging to ex-President Yushenko’s party.  It may not bode well to retain an extremely disliked PoR Mayor in Kostusev for much longer with national parliamentary elections in October.

Let him return to the allegedly nefarious dealings within Ukraine’s Anti-Monopoly Committee from whence he came, as he clearly has no idea how to run a city.  The sooner that happens the better, both for the PoR and for Odessa.

Even though the failures of Kustosev may not be enough to turn Odessa anti-PoR, as most seem to blame the man rather than the party, it is not a risk not worth taking leaving him in post.  After all, having voted in a non-PoR Mayor in local elections historically, Odessa still voted overwhelmingly for the PoR on the national stage.

In times of unpopular reforms, is it worth the political risk of leaving such an obviously incapable PoR man in charge of Ukraine’s 4th largest city when the entire city is saying he needs to go?

Who ultimately replaces him is completely irrelevant for those who live in Odessa, as long as they have the ability to run the city.  If the city is run well, there is no real need for the PoR to worry about the national Odessa vote drifting, even if a non-PoR candidate wins the next (and hopefully early) Mayoral elections.

So, the question is, will Odessa fall under direct presidential rule in the near future and if so, for how long?


Immunity – A way forward or denial of the past?

January 23, 2012

In Yemen, a law has just been past to grant ex-President Saleh immunity from prosecution over past actions.  Some will undoubtedly call this an outrageous act granting him immunity from some quite hideous acts during his time in power.  He will now never face justice in Yemen for the acts he was responsible for there.

Others will see this as a way to move on and insure that internal issues are not reignited by any subsequent attempts to bring him to account.

What has this to do with Ukraine?

Well during the 2010 presidential elections, some candidates and their supporters were calling for a line to be drawn under all previous misdeeds of the political classes past and present in order to move on without repercussions allowing bygones to be statutorily bygones.

I was adamantly against such an idea becoming reality despite the fact it came from a candidate who otherwise I thought would be far better for Ukraine than Yanukovych or Tymoshenko, the eventual victor and runner up.  The prospect of all RADA members past and present not only getting historical immunity for their nefarious pasts, but also continuing to have almost absolute immunity that the current system provides for, thus granting immunity to any nefarious action they took yesterday, today and will take tomorrow, sets an entire class of people above the law, perversely on the solid foundation of the law.

Neither Yanukovych or Tymoshenko supported this idea (at least publicly) although now both may wish they had considered it more closely given the internal events of Ukraine and the external ripples it has caused in the international pond.

Although I wrote a few days ago that it is extremely likely that by design or default Yanukovych will remain president until 2020, he will not remain president forever.  At some point in his future he will be open to investigation by those who are not allied to him.  This is a fact I am sure he is well aware of.

So looking ahead to a likely second Yanukovych term, will the issue of historical immunity raise its head again?  Will the same non-Yanukovych, non-Tymoshenko aligned politician run for the presidency again in 2015 and have it as part of his policy manifesto?

If so, will this policy be considered more carefully by Yanukovych in his last term?  It would provide an opportunity to release Tymoshenko after he is safely installed as president again, whilst also legally insuring she gets no opportunity for pay back in the future.

Again I remain opposed to such an idea, although should there be a requirement to simultaneously remove all RADA members immunity other than something equating to and equally as limiting as parliamentary privilege, this could be the only way to prevent continuing misuse of office and acting with impunity by all RADA members  Would this soften my position? – Possibly.

Looking forward they would have no immunity to hide behind when committing their nefarious acts or dismissing the law and those who enforce it as insignificant issues that apply only to the hoy polloy.

It is very difficult to get turkeys to vote for Christmas but ultimately there must be a way to break the cycle of absolute immunity when looking to the future.  Is it necessary to grant absolute immunity to the past in order to draw a very necessary line under the immunity issue and force the future RADA members to face the consequences of their nefarious actions like the rest of us?

Is Yemen on to something despite my absolute dislike for such a solution?


PACE and Ukraine – Another resolution on the way.

January 22, 2012

The Council of Europe (PACE) is due to adopt yet another resolution over the democratic institutions of Ukraine on 26th January.  For anybody counting, that will be the third such resolution within the past five years.

Maybe they would have made even more resolutions than that if Ukraine had not held the presidency of PACE for six months of last year.  (After all it doesn’t do to criticise the nation holding the presidency over its internal democratic institutions.  It would seem duplicitous when PACE is criticising others for similar failing at the same time as being under a Ukrainian presidency.)

I know what you are all thinking.  Since when has duplicity ever stopped a sovereign state or supra-structure criticising another when one look in the mirror would display similar failings.  Double standards is a regular cry.  The question that should be asked in such circumstances is whether it is better to have and orate some standards rather than allow matters to dissolve to the point of no standards.  Even if you have to be seen to be duplicitous to try and uphold standards you yourself are struggling to achieve, should you say nothing?

Anyway, this resolution will come hot on the heels of the latest Freedom House global assessment which deemed Ukraine to have regressed more than any other nation on the planet in 2011. It didn’t change Ukraine’s overall “partially free” status however.

It should also be pointed out that Ukraine was one of twenty six nations that were deemed to have gone backwards, with only twelve countries deemed to have made any progress at all.  Every other nation was in effect marking time with no movement whatsoever.

Quite what those statistics infer about the world and democracy in general, I will leave to you to make your own conclusions.  Prima facie, the world is far less democratic than it was in 2010 according to the Freedom House figures.  Is part of the problem the need to reform current systems and therefore technocrats or autocrats actively stifle debate to accomplish what they deem necessary with the minimum of descent?

Will Italy plummet in the rankings next year due to the entire government being unelected and no democratic elections anticipated in 2012?

As always though, it is necessary to get behind the figures to discover who, what, where, when and how they are achieved.

The question therefore will be whether the Council of Europe assess Ukraine in a better light than those at Freedom House (and those who contributed to generating the statistics at Freedom House), or not.  If Ukraine emerges in a better light than that cast by Freedom House, why does it?

The answer to that comes back to the who, what, where, when, why and how of compiling statistics, the personal perceptions, objectivity and bias of those who take part in submitting responses for the collation and  methodology of any reporting organisation.

As you dear readers can probably tell, due to the amount of research I do and have historically done, to understand statistics, taking them at face value is never a good idea.  It is always necessary to get behind the numbers.

Anyway, let us see where the Council of Europe and Freedom House meet and where they diverge on their Ukrainian democratic institutional assessments.  It would have been far better if the CoE ruminations had been issued at the same time as those of Freedom House as this would have removed any influence of one entity over another, but you can’t have it all and even if you could, do such reports really make any difference to those who run Ukraine?

Of late, they seem to be standing firm to external pressures from both East and West.


A Ukrainian future – according to Chatham House

January 21, 2012

Looking to the future of Ukraine and to 2020?

Those very clever people at Chatham House (one of the few think-tanks I admire – but I would as a member) have been playing with 3 very different scenarios relating to Ukraine and its future heading towards 2020.

Those scenarios for discussion were, a fragmentation from failed authoritarian rule, national consensus leading to real reform or latterly strategic authoritarianism.  All 3 are worthy of conversation and none can be readily dismissed.

Fragmentation and failed authoritarian rule was set within the parameters of ” President Victor Yanukovych and his Party of Regions (PoR) monopolize power.  Their divisive policies and failure to restore economic growth generate significant dissatisfaction, but the opposition radicalizes and fragments, enabling Yanukovych to remain in power throughout the decade. Local needs and expectations become of paramount importance—to the detriment of national unity.”

National consensus leading to reform ” Worsening economic conditions and a poor response from the Yanukovych
administration galvanize opposition politicians, small-business owners, and young bureaucrats into action. When some oligarchs join this opposition coalition, the balance of power shifts decidedly against Yanukovych, paving the way for a pragmatic, reform-oriented leader to come to power and lead change in Ukraine.”

Lastly, strategic authoritarianism defined as “Yanukovych establishes himself at the apex of a power vertical, which he manages to maintain throughout the decade by exploiting the weakness of his opposition and meeting the expectations of his elite backers and the public for “stability” and economic growth.”


So which are most likely?  The discussion can be found here.

What do I think?  I think scenario 3 is the most likely and indeed is work in progress.  Should that fail, scenario 1 will takes its place.

Scenario 2?   That is extremely unlikely looking at the political and social landscape from within.  The reality is, even if Ms Tymoshenko was not in jail, she is far too divisive amongst other opposition figures for them to unite around, an issue quite apparent when she was Prime Minister of a coalition government that held a majority of 1.

Svodoba are simply too extreme for 90+% of Ukrainians to rally behind so a Ukrainian Reich is not going to happen for the self-proclaimed nazis.

Arseny Yatseniuk is too quiet, fails to inspire and is also going to suffer from being Jewish amongst a small but significant amount of voters.  Despite all that he is probably the only real hope for any real democratic reform amongst the current political figures.

Celebrity politicians like Klitcho have little following outside of Kyiv.  Currently non-political well known academic, journalistic or public figures leading a new party on a platform of anti-corruption (for example) coming through?  Unlikely now the two biggest parties in Ukrainian politics voted through a 5% voter threshold count in any elections.

A business/oligarchical figure breaking ranks from either the ruling or opposition ranks?  Possible but unlikely before the next parliamentary or presidential elections.

Nobody has the national recognition, history or personality to unite and lead the opposition parties against the PoR.  That is a simple fact.  Should anybody emerge who could, they will not want Ms Tymoshenko, her ego or her baggage along for the ride.  Can they win over her die hard supporters?  Probably not.

What the discussion at Chatham House fails to discuss is that aside from the extremely right wing Svoboda and the far left Communists, no other party has a clearly identifiable political ideology.  The “democratic parties” as the opposition frames itself, are no more democratic than the PoR.  5 years of experiencing them in power and 5 years of no reforms in the recognised democratic pillars of society (law, media, politics etc) are not so easily forgotten by the Ukrainian public.  In almost all areas of public life, the current opposition parties were an abject failure when in power delivering almost nothing to the public by design and only by default.

There is no political force that stands firmly on a platform of anything definable when it comes to domestic policy or domestic reform.  If it wasn’t for the reforms needed relating to the DCFTA with the EU, one wonders if any reforms would happen at all if left to the devices of parliamentarians from any party.  None in the past 10 years have proven themselves to be effective against any of the corrosive issues within Ukrainian society.

None have proven themselves able to change anything either within the personal spats  that  play out along the corridors of power in Kyiv nor have they got to grips with the patriarchal fiefdoms that are the regional administrations.

Scenario 2 therefore seems about as likely as my cat giving birth to a rhinoceros for the foreseeable future unless external circumstances conspire to form the perfect revolutionary storm.  Even if such circumstances were to form, Ukrainian society does not live in a bubble.  It has seen the results of the recent revolutions and their aftermath.  Thus far none of the recent revolutions have met the expectations of those involved.

Ukrainians are well aware of unintended consequences after revolutions.  They lived with 70 years of communism as a result last time.  If you wish to count the “orange revolution” of 2004, that proved to be equally as deflating when the results became apparent.

We are really left with scenario 1 or scenario 3.  Looking at the political actions from 2010 to present, it seems scenario 3 is work in progress and scenario 1 is a Plan B contingency.

The net result in any event, given current circumstances, is President Yanukovych until 2020.


A truly disgraceful state of affairs

January 20, 2012

There are times when things must be said robustly and this would appear to be such a situation.

Notwithstanding the human rights of Lutsenko, and erring on the side of his illness being genuine despite every formerly fit and well opposition politician currently languishing in Ukrainian State custody immediately developing severe illness problems that never bothered them previously, thus causing many to raise an eyebrow (if not outright skepticism), there is a absolute prima facie case of tampering with evidence by the prosecutor.

Not only is there a case to suggest tampering with evidence, but there is overt witness testimony to witness intimidation.

A truly disgraceful state of affairs whether Lutsenko is ultimately guilty or not.

I thoroughly commend Ms Vasylenko for her principled and courageous stand in setting the record straight publicly and in front of the court.  It is not an easy decision to put principle before career, particularly having climbed as high as she obviously has.

Granted Lutsenko is no better than any other politician, he was indeed as useless as 99% of all Ukrainian politicians and probably just as corrupt, but if he is as genuinely ill as is being reported, then he is in no way fit to stand trial.  If he is not as ill as is reported, which historically has been the precedent for Ukrainian politicians who fall out of favour undermining any blind faith in any reported illness, that does not change the evidence given by Ms Vasylenko.  A woman it seems with more “balls” than the men who work within the system!

Will she now mysteriously lose her job or will she be giving evidence against the prosecutor in the future should he be brought to account?

That is the question.


Bureaucratic streamlining ahead in Ukraine?

January 20, 2012

Is bureaucratic streamlining ahead in Ukraine?

As anybody who takes note of the myriad of international reports relating to the ability to do business will know, Ukraine consistently fails to improve.

The biggest gripes are with customs, both speed of clearance and levies, and VAT claims.  All other problems can be overcome with a steely will and unending patience.

Why is such determination necessary? – According to the Ukrainian Prime Minister, “despite decisive actions in the sphere of deregulation, so far 88 bodies have powers of control, 37 issue permission documents, 34 issue and cancel licenses, and 21 bodies have the authority to stop or suspend economic activity.

This situation is unacceptable for the government and business.”

Well, I’ll give that man one of my finest cigars, but I won’t light it for him just yet.

A truly mind-boggling bureaucratic labyrinth of unnecessary administrative control via a completely unjustifiable number of entities.  Each and every one of these 88 organs of State officiousness is of course open to corrupt “administrative fees” should you face the wrong person on the wrong day.

Mr Azarov then publicly instructed those in charge of the ministries of Trade and Economic Development as well as the Deputy Prime Minister to  “finally remove this year the distorted and pernicious system of relations between the state and businesses, which restricts economic freedoms.”

Now if that happens this year, I will not only give him one of my finest cigars, I will light it for him as well!

As ever though, ineffective implementation will be the cause of such a necessary streamlining failing and nobody will be held accountable when it does fail.

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