Archive for May, 2012

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Another international PR disaster for Ukraine – Or is it?

May 23, 2012

In yet another international PR disaster, forgetting the domestic ones, it seems Volodymyr  Gerashchenko from the Ukrainian National Olympic Committee has been caught in a British media sting relating to the sale of Olympic tickets on the black market.

In a nutshell, he apparently agreed to sell about 100 Olympic tickets to a journalist posing as a ticket tout, although no tickets were actually sold and indeed no juicy details such as prices are mentioned in the article suggesting this story broke before it got to the stage of financial negotiations.

Anyway, on the face of it yet another international PR disaster for Ukraine, although not of the government’s making this time, that includes robust statements from British MPs and the Metropolitan Police investigating the allegations relating to a well placed, senior Ukrainian official and corrupt practices.

However, if the Ukrainian authorities move quickly and bring Mr Gerashchenko back to Ukraine with immediate effect whilst inquiries are underway in the UK, accompanied by the right diplomatic noises and statements relating to his removal pending the investigations, there maybe some mileage in it for the current authorities and their so-called fight against corruption with an international spin.

The question is, will the Ukrainian authorities do something that proactive?

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Are there limits to democratic legitimacy? Ukraine’s Constitutional Assembly

May 22, 2012

How far and how oblique can a democratic mandate be before it loses legitimacy?

As regular readers of this blog will know, in 2010, at the request of Arseniy Yatseniuk (leader of the opposition party Front for Change), shortly after becoming president Viktor Yanukovych created a Constitutional Assembly tasked to examine and recommend amendments to the Ukrainian Constitution.

The chairmanship of this Constitutional Assembly was given to the first president of independent Ukraine, Leonid Kravchuk, and is compromised of representatives from all political parties currently with MPs sitting in the RADA.  It is a long and labourious  task made longer and more labourious due to various opposition parties withdrawing, reentering the process cyclically in attempts to frustrate the process when they aren’t happy with the current government over other issues.  It is a joint committee lever they can pull that has some immediate effect.

Currently it is Arseniy Yatseniuk and his Front for Change party which have now withdrawn from the process.

Why?

One of the suggestions is that the Constitution be amended so that the President be elected by the members of the RADA and not by direct public voting as is currently the case.

Outrageous?  Unheard of? – Well I will return to that, but for now it is sufficient to note that currently, with 3 years before the next public presidential vote, the current president would come in 3rd behind Arseniy Yatseniuk and Yulia Tymoshenko respectively according to several public opinion polls.  However, should the ruling party retain its majority in the October elections and the constitution be amended before the next 2015 presidential election, the current incumbent would remain president in all likelihood.

As somebody who thinks another 5 years of Yanukovych or Tymoshenko would be a retrograde step for Ukraine, the fact Yatseniuk currently sits in 1st place if there was a presidential election tomorrow by public vote is quite encouraging.  It is also clear why Yatseniuk would not want any changes to the president being elected by direct public vote and has thus pulled out of the Constitutional Assembly effectively stalling its work once again.

So how oblique and how legitimate would a president be if voted into office, not by direct public vote, but by MPs who are voted into office by direct public vote?

Well, the German president isn’t directly voted into office by the public.  The German president is voted into office via the MPs of the Bundestag and an equal number of representatives from the 16 regions of Germany.  A major difference however, is that the German president has a largely ceremonial role and the governance of the country is parliamentary and not presidential – unlike Ukraine.

Are there any European systems where the presidents are not directly elected by the people but who have the power of the Ukrainian president to instigate the adoption of laws, set foreign and domestic policy, chastise directly elected MPs and be far more than ceremonial figureheads?

Well, the most powerful people in the EU are the EU commissioners and presidents who are responsible for introducing EU laws, directives, policy and bullying national elected leaders into towing the EU line.  None of these people are directly elected by the people of Europe but are appointed in a very similar fashion to that of Germany and the proposed changes for Ukraine.

Therefore, should Ukraine adopt the proposals (and I really hope it does not), it would be following a very European model – that of the European Commission – who are extremely powerful and yet never face a public vote and never hold a direct public mandate for the office they hold despite the power that comes with that office.

Now if more than half a billion people across the EU allow themselves, and their directly elected representatives, to be dictated to by the powerful and rather oblique democratic legitimacy held by those within the European Commission, (and those in the European Commission claim to have democratic legitimacy via being elected by elected representatives), should the people of Ukraine have anything to be concerned about?

After all, should Ukraine ever join the EU, its elected leaders will be lectured, bullied and coerced by those within the European Commission the people of Ukraine (or any other EU nation) never had the opportunity to vote for.  Does it therefore matter if the Ukrainian president is appointed via the same stretch of democratic legitimacy as well?

My own view? – Well that has always been that Ukraine should not join the EU (at least under the current dysfunctional, wasteful, overly bureaucratic, cumbersome and ever increasingly centralised model).  The DCFTA and AA is as far as it needs to go when it eventually gets there.  Therefore my view on the democratic legitimacy of a Ukrainian president is that it can only come via a direct public vote, as hopefully that office will never become in part (or in full) subservient to European Commissioners who legitimacy is oblique, via Ukraine actually joining the EU.

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EBRD to take on long term currency risks in Ukraine

May 21, 2012

Well here is a bit of good news for Ukrainian entrepreneurs, SME’s and big business alike.

The EBRD is going to credit Ukrainian banks in foreign currency on the proviso that the Ukrainian banks lend to Ukrainian businesses in local currency.  A case of if you don’t lend the Hyrivnia, we won’t load you up with foreign currency reserves it seems.

This declared strategy from the EBRD would seem, prima facie, very good for Ukraine.

To what end and why is the EBRD prepared to share the currency conversion risks on a 50/50 basis, when Ukraine can turn on or off the Hryvnia printing presses and drastically devalue the Hryvnia overnight?   I am already anticipating the devaluation of the Hryvnia around the turn of the year.

Maybe the EBRD gets half the spread on the currency transactions and is using those millions of $ a day in the exchange racket of Ukraine to bail out Greece?

Maybe with all those additional Euros flying about after the printing presses went into overdrive to recapitalise the EU banks, putting the excesses into the Ukrainian market and getting them out of the Eurozone monetary cycle works for those economic wonders in Brussels/Frankfurt.  Maybe it doesn’t.  Maybe if I asked 3 economists why the EBRD is doing this I will get 3 very different answers.

Bankers, economists out there – why would the EBRD be doing this (on the presumption there are no nasty little clauses in the small print)?

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Russia upping the anti (anti-Ukraine anyway)

May 20, 2012

Well what can you say. New Russian president, old Russian tactics.

Since Mr Putin has reinstalled himself in the Kremlin, and I have nothing against that per se, he probably was the most popular politician even if it is not necessarily a good thing for Russia, several interesting events have occurred in relation to Ukraine.

Russia ended its “cheese war” with Ukraine just prior to his inauguration which was seen as a generally positive move. Ukrainian cheese can now be imported into in Russia again. A welcoming carrot from the new Russian President prior to taking office it seemed. Now however, maybe it was a goodbye carrot offered by the out-going Mr Medevedev.

Why do I say that? Well since Mr Putin’s taking office (again), the only Ukrainian oil rig currently being moved around the Black Sea, was banned from Russian waters, despite in doing so it meant a far more hazardous route via Turkish waters. Not an especially nice gesture from the “new” Kremlin administration.

Ah – It’s energy politics and just Russia showing its displeasure at Ukraine finding its own (and alternative) sources of oil and gas, I hear you say. Well yes maybe so.

Only a few days ago, President Yanukovych was invited to an “informal” meeting of the CIS nations by Mr Putin. Once again the Ukrainian president pooh-poohed the idea of any form of consortium involving the Ukrainian gas transport system that did not involve the EU as well. In effect if there is to be foreign involvement and investment in the Ukrainian GTS, it is going to involve producer (Russia), transporter (Ukraine) and end user (EU). To be fair to President Yanukovych, that has been his position since taking office and it has not altered despite intense Russian pressure.

Once again at this “informal” meeting, President Yanukovych repeated the Ukrainian position, reaffirming it had not changed. Neither had Ukraine’s position relating to an EU rather than Eurasia Union direction changed either. To be quite honest, without Ukraine I fail to see just how Mr Putin’s Eurasian Union will actually become a reality in anything other than name.

So, having met with the “new” Russian President and stated once again (and it is a record that the Russians must be tired of hearing by now), the Ukrainian position on various subjects, President Yanukovych returned to Kyiv having given very little good news to Mr Putin over his major projects and ideas when it came to Ukrainian inclusion.

Rather unsurprisingly then, on Friday 18th May, Russia’s Supreme Court decided to ban all Ukrainian Associations, (a Ukrainian NGO in Russia) from lawfully existing.  Now there is one month to appeal this ruling, or should I say there is one month for Ukraine to submit to Mr Putin’s will, or Ukrainian NGOs in Russia will suffer.

This puts Kyiv in a difficult position.  It cannot simply allow Russia to close a Ukrainian NGO like the Ukrainian Association.  To do so will upset a lot of voters (who probably wouldn’t vote for the current majority anyway, but you never know) in the run up to the Ukrainian parliamentary elections in October.  The nationalists and opposition parties simply won’t allow it to go unnoticed that Ukrainian culture and Ukrainian NGOs are under severe pressure in Russia and the current government are doing nothing about it.

Also the current government do not want to appear weak.  However they also do not want to appear to bend to Mr Putin’s will.  The question Kyiv now faces is how to pacify Mr Putin without compromising Ukrainian interests abroad, in particular in a neighbouring nation.  If the price to pacify Mr Putin is simply too great, then Ukraine will have to take some retaliatory action.  Simply doing nothing is not an option given an election on the horizon.

Retaliation however, may (or may not) upset a large number of the Russian speaking Ukrainians in the East who generally vote for the current government and not the opposition.

A difficult position for Kyiv given both the domestic politics here and Ukrainian/Russian relations already mired with gas problems on numerous fronts.

This issue could well turn into a bellwether for bilateral relations in the next month.  If the Russian Supreme Court changes its decision, we have to ask why?  If it doesn’t, we have to see how Ukraine reacts and what the consequences of that retaliatory action will be.

Will Ukraine/Belarus relations suddenly take a turn for the worse when Mr Putin makes Belarus his first official visit abroad as President of Russia?  For sure Belarus has nothing left to sell/give to Russia by way of State owned infrastructure, but it does have a border and does trade with Ukraine.

Keep an eye on this story as it has the potential to be far more important that it initially seems!

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Odessa Tourism Festival 18 – 20 May – UK AWOL

May 19, 2012

OK.  Today I leave the macro-geopolitical and policy realm relating to Ukraine and the neighbourhood and go local.  Namely the Odessa Travel Festival, the bulk and most public part takes place along Deribasovskaya (which is the nominal pedestianised main street in the city centre).

As always in the warmer months, the cafes and restaurants expand from their premises and spread out over the pavements with comfy chairs, tables and parasols to give life to the mañana feel of the city when the hot summer sun begins to camp here.

Deribasovskaya

And what more a pleasant a way to pass a few hours than with a cappuccino  and a cigar watching the beautiful and not so beautiful wandering around the city centre.

What better place to place the Odessa Travel Festival on a hot and sunny day than Deribasovskaya, a street always  brimming with people with time on their hands and money in their pockets?

The point of the Odessa Travel Festival?  Well to promote both domestic and European travel, of course, but also to promote things like language schools, education abroad, and generally encourage Ukrainians (or at least those in Odessa) to think of themselves as “Europeans” and by doing so entice them along the “European path” to values, cultures and people to people contact.  (European Commissioner Stefan Fule would indeed be very pleased with such a strategy, as would the national tourist boards of those taking part.)

Opening Ceremony Odessa Travel Festival 2012

Last year more than 10,000 people from Odessa visited the festival.  Approximately 1% of the population of the entire city and therefore quite probably having a small stand for those nations seeking to attract tourists, a worthy and very minor cost.

Now Odessa is not the biggest city in Ukraine.  It is in fact only the 4th biggest.  It is though a tourist destination itself receiving just over 1 million tourists each year.  A ratio of approximately 1 tourist per year to each local,  which is none too shabby considering Odessa does so very little to advertise itself as a tourist destination (and what is does do is disjointed and really rather poor).

The city is also home to about 20 consulates and a few honorary consuls for good measure.   Sadly, the UK does not have a consulate here or indeed an Honorary Consul despite 20 other nations considering Odessa as worthy of one or the other.  An issue I will return to later in this entry.

Anyway, with nothing better than to paint the walls at home, I decided to delay that task until the weekend and wander off and see just who was taking part in this festival organised by the regional administration.

There were numerous other regional oblasts in attendance,  Lviv, Ivano-Frankivsk etc luring those from Odessa to visit them and spend money there.

Also present were stalls from Greece, with my old acquaintance Alexandros Ikonomou, Head Counselor of the Trade & Economic Department of the Greek Consulate in Odessa, managing to sneak into this photograph, looking officious as always.  (We have both attended many of the same functions, ranging from the official opening of envelopes, to the more grandiose of functions, although though quite why I am invited and attend such things remains a mystery to me.)

Germany also had a presence.

So did the Czech Republic.

And Bulgaria.

As well as Azerbaijan.

And Turkey.

Not forgetting Italy.

I could go on, but you get the drift.

Where is the UK stall?  –  There wasn’t one!  Where is the British Council encouraging the youth of Ukraine to study in the UK?  – It wasn’t there.  Who was giving advice about IELTS and UK Visas and tourism?  – There was none.  Where was the Union Jack amongst all the international flags and national nick-nacks on display?  There was none.

Why?

Do 10,000 people from Odessa manage to find and enter the British Council office on Admiralsky each year?  I doubt it!  Is part of the British Council’s mission to spread the good word about Blighty or not?  Do the people who work in the British Council and face the Ukrainian public on a daily basis have an in-depth knowledge of the UK education system or tourist industry?  I doubt it as they are Ukrainian.

To be honest, if it wasn’t for my boy having just been offered a place at Trevelyn College at Durham University this October, I wouldn’t know about the application process, IELTS courses and examinations and bureaucratic rigors involved in him studying abroad.

Why does the UK Ambassador in Kyiv regale the Ukrainian public who may read his blog with tales of how good a UK university education is, how essential the English language is, and then there is no presence from the UK at such an event which advertises the fact that education is part of the travel festival perimeters and has done so for months on the Odessa City Website?

I mean literally, the only British thing present was me!

Does the 4th biggest city in Ukraine not warrant public UK participation when the total expenditure for a stall and UK nick-nacks would cost no more than a few hundred quid for the entire 3 days?  Is it some part of the UK FCO plan to have as limited a UK presence outside Kyiv as is humanly possible?

I mean seriously?  For £100 I could have sat there for 3 days handing out horrible cheap pens that will stop working within 2 or 3 days with the Union Jack (probably the wrong way up) printed on the side.  I could have handed out UK tourist literature and spoke from tourist experience of everywhere from Edinburgh Castle to Stonehenge, from the Roman baths of Bath to Winchester Cathedral and everything in between.

I could have entertained the passing interested Ukrainians considering sending their children to the UK to study with stories from the student union bars of my youth, just how to apply, where to seek out the IELTS tests, what documentation is required to support any Visa application for the UK and a myriad of UK anecdotes and tall tales as a bonus.

All for a cost far less than an average decent bottle of red in the Ambassador’s wine cellar in Kyiv.

In fact, if asked nicely, I would probably have done it for free.  After all, if it became a regular annual event to semi-officially fly my nations flag  in foreign climes (so to speak) at Odessa’s annual tourism festival (or other things), something like a “thanks very much” letter from whoever is Foreign Secretary in 10 years time, to go with the other official commendations and gongs I have for bravery and/or cleverness under pressure, or both stupidity and recklessness on behalf of The Crown with fortunate and successful outcomes, would be a nice addition and recognition enough should I ever undertake such a role over a prolonged period for free.

Instead, I hang my head in shame that not a single representative of my nation can be bothered to turn up to a festival that not only promotes European tourism, culture and people to people contact, but also the very lucrative business of educating foreigners at UK higher education establishments in a major Ukrainian city.  That is made all the more disgraceful by the fact that the UK Embassy and Consulate in Kyiv is not the smallest UK FCO presence around the globe.

Poor show by the UK FCO and British Council all round.

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EBRD invests in Ukrainian wind

May 18, 2012

Although you won’t remember, in March 2011, I told you about Ukraine’s first wind farm.  Yes I know it was a very short post, but as it said, it was a start.

Well since then alternative energy has progressed somewhat in Ukraine.  Solar, hydroelectric bio-fuelled  CHPs and wind.  A lot of investment is going into alternative energy production, although not enough to prevent the next generation of civil nuclear power facilities being built.

In fact a lot of money is going into energy in Ukraine, be it alternative, energy efficiency, next generation nuclear, domestic oil and gas exploration and production, as well as Shell and Chevron yesterday being confirmed as tender winners for shale extraction in the west and east of Ukraine.

Of course there are environmental and ecological concerns no matter how energy is produced.  5000 exploratory wells anticipated between Shell and Chevron looking for shale gas, there is a major concern over huge areas of prime agricultural land being used for bio-fuel production at great cost to the soil,  damage to ecosystems with hydroelectric production, flora and fauna damage via huge solar farms spreading across acres of land etc.

Quite simply there is no such thing a zero impact energy production any which way it is produced.  Anybody who says otherwise is a liar.  Even the component parts used to create alternative energy systems are manufactured using conventional energy in buildings constructed by and using materials creating with, conventional energy.  They all have a massive energy legacy to repay prior to actually being beneficial to the planet.

If that sounds like I know what I am talking about it is because I do.  I am a qualified civil engineer and have written numerous ISO 14001 environmental policies, environmental risk management programmes and audit procedures.

Anyway, back to Ukrainian alternative energy, and in particular – wind.

There is no doubt that Ukraine has huge potential in alternative energy production.  Anybody who doubts that need simply follow the projects and acquisitions of DTEK, a company owned by the richest man in Ukraine, Rinat Akhmetov.  Whilst he is best known for being an oligarch whose riches comes from metal production and also being the owner of Shakhtar Donetsk FC, only the willfully blind would not have noticed his serious investments into all areas of energy production over the past 3 or 4 years.  Alternative energy is no exception when it comes to Mr Akhmetov’s energy investment portfolio.

It is therefore no surprise to find that the EBRD in conjunction with the EU’s Clean Technology Fund have decided to pour Euro 9.5 million and Euro 3.8 million respectively (Euro 13.3 million in total) into a Ukrainian/Italian company called Eco-Optima.  The loan is over a 10 year period and payable in two tranches.

Eco-Optima intend to build a wind farm in Starry Sambir (near Lviv) that will consist of 5 wind turbines with an anticipated total annual production of 25.5 GWh.  That is enough for just over 10,000 homes annual useage by my rough calculation, and also reduce carbon emissions by approximately 30,000 per year (in comparison to non-nuclear conventional energy production if we discount any energy legacy involved in production of the technology).

Maybe more encouragingly than anything I have written so far though, is that it is, to my knowledge, the first EBRD investment into Ukrainian wind – ever – which is a positive thing in and of itself!

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An appetite for evidence – Azarov offer to the EU

May 17, 2012

If you were offered access to the evidence in a case you decry publicly as flawed, would you take it?

In the numerous and robust condemnations over the case of Yulia Tymoshenko, every EU and sovereign statement has been to decry the due process of her trial leading to her conviction for misuse of office over the signing of the economically calamitous 2009 gas deal with Russia.

Fair enough and quite right.

None however, not a single politician or diplomat from the EU or the composite sovereign nations have stated she is actually innocent – a fact that has not been lost on the Ukrainian public I can assure you.

Much has been reported by the MSM from the 15th annual EU/Ukraine summit in Brussels on 15/16 May very much following the EU robust line over due process and political persecution.  What is noticeable by its absence however was the invitation of Prime Minister Azarov to any European lawyers to attend Tymoshenko’s next appeal hearing at the highest court in Ukraine.

“The process of Cassation on Tymoshenko’s cause is now beginning. We are ready to invite the representatives of legal services of the European countries to this process that they have got acquainted with the materials, studied this process and heard the arguments.”

Well blimey!  You would think that this is an invitation that any legal professional from within the EU with an interest in Ukraine could not refuse, particularly as they have almost 5 weeks to get up to speed if they start right away.  You would also think it would actually feature predominantly in the MSM and yet it gets hardly a mention despite the implications for EU/Ukrainian relations.

After all, whilst the EU rightly complains about the standard of due process, there is also a need to examine the actual guilty verdict, in and of itself, based on the evidence, in order to win over the Ukrainian public opinion that the conviction itself is erroneous.  The process maybe flawed but the result may have been right – or wrong.  To employ a rather poor analogy, is the journey more important than the destination arrived at if that destination is the right one?

The issue the EU has, is that it is failing miserably at conveying  convincingly to the general Ukrainian public, (and not a room full of politicians, lawyers and academics), that the manner of her trial is more important than the actual verdict.

If the EU takes up this offer in its entirety, it would then be in a position having gotten acquainted with the materials, studied the process and heard the arguments, to announce loudly to the world, not only was the due process faulty but that the evidence suggests she is innocent as well.  (Or maybe a more politically correct insufficient evidence to be certain of her guilt.)

A chance to bury the current authorities in a tsunami of political persecution propaganda legitimised by the EU’s own lawyers having had access to the materials and arguments and coming to an innocent verdict, and thus standing a far better chance of winning over Ukrainian public opinion that she has been wronged for political reasons alone.

The question is now whether the EU or some lawyers within the EU of senior stature (preferably with an EU mandate to examine the evidence) will take up this offer?  The answer is yes.

But does the EU have the appetite to actually examine the evidence and be forced to conclude the guilt or innocence of Ms Tymoshenko, thus supporting or deriding the Ukrainian court decision (rather than just the process)?  Will the EU lawyer simply study the process and not the evidence?

Does the EU dare to look at the evidence of prosecution and defence alike?

Will it shrink from this opportunity, despite the fact it could add tremendous ammunition to their projected free Yulia campaign within Ukraine itself?  Is the EU worried that the evidence will point to her guilt and undermine their almost  traction-less  argument over the due process issue being more important than her innocence or guilt  with hoy polloy of Ukrainian society?

Would it be so terribly bad if the evidence is assessed by the EU as is being offered, and should it comprehensively prove her guilt, for the EU to state that, whilst continuing to deride the process?  It is after all a faulty process that every Ukrainian can be subjected too and thus that point is hardly diminished – regardless of whether the EU concludes she is guilty or innocent.

Does the European Commission have the backbone to actually come to a public conclusion over her guilt or innocence and convey that to the Ukrainian public?  Probably not, and if not, then do not be surprised if Ukrainian public opinion remains with the undercurrent that she’s probably guilty whether the due process met EU norms or not!

This will be fascinating to watch both literally and by way of what the EU hopes to achieve and ultimately does or doesn’t achieve in the court of Ukrainian public opinion.

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