Archive for May, 2013

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Odessa – Poland oil pipeline extension threatened?

May 31, 2013

Could Azerbaijani inaction prevent the proposed 325 kilometer (Ukraine 125, Poland 270 kilometers respectively) Odessa-Brody-Plock oil pipeline extension?

It seems quite likely!

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European Parliament attack United Opposition composition again

May 30, 2013

Not for the first time, the European Parliament has made clear its disillusionment with the “United Opposition” of Ukraine in respect to their cooperation and coalition with the Svoboda Party.

“For me this party is the worst phenomenon, which presents an anti-Semitic position, and fights against gays and lesbians. They do this openly.

 I saw a photo of the Svoboda leader, Yatseniuk [Arseniy Yatseniuk, one of Batkivschyna leaders] and Klitschko [Vitali Klitschko, UDAR party leader] together demonstrating the unity of opposition. But I can’t imagine that people like Klitschko, who position themselves as Europeans, and Yatseniuk, would willingly shake the hand of a person who in public states that Jews are the main threat to European civilization. Sometimes, while looking for and respecting opposition, we can’t recognize it.” – Marek Siwiec MEP

This statement echoes resolutely with similar a similar statement from the Foreign Minister (in waiting) of Bulgaria, Kristian Vigenin.

However, despite the rhetoric, it is impossible to believe that the European Parliament “does not understand” why the other opposition parties are in a coalition with Svoboda – it is simply about voter numbers and defeating the Party of Regions at any elections that occur.

Nobody claims – not even the parties within the “United Opposition” – that they have any shared ideology or goal other than removing the current ruling majority and replacing it.

Quite simply it is zero sum, winner takes all, politics that is driving the “United Opposition”.  Ideology, appearances, future dynamics and functionality should it actually win – be damned.

It is of course that very mind set, should they come to power, that will lead to the collapse of such a coalition – as ideology frames policy.

Despite any secretive and grubby little deals about who will hold what political positions amongst the party leaders and their immediate entourage, Svoboda will drag both UDAR and Batkivshchyna to the right of centre politics owing to the necessity to keep power through such a coalition – and power is everything in this zero sum game.

If it were not a zero sum game, then it becomes incredibly difficult to argue (to the point where it would be hard to understand) for cooperation with Svoboda by either the “United Opposition” or UDAR based on any other premise.

Such a hard pull to the right will probably cause a winning coalition to collapse or fragment mid-term.  Alternatively such a hard pull to the right will disillusion enough voters to insure they are a single term majority if they manage to hold it together and retain power for power’s sake.

Given the history of Batkivshchyna coalitions – fragmentation and collapse seems the most likely prior to completing a full term in office.  Particularly so, when currently, the only thing united about the “United Opposition” is the use of the word “united” in the coalition title.

Nonetheless, it would be very interesting to see this unholy alliance win, and observe what sort of reception any Svoboda member would get when visiting the European Parliament.

The open hostility towards hard right nationalism within the EU political elites should not be underestimated – after all nationalism sits poles apart from the strange place the EU resides between confederation and federation as well as the core principles upon which the EU is founded – and thus Svoboda, already openly condemned twice by the European Parliament, are unlikely to get anything but a very cold reception at best – and at worst it would get no reception at all.

Knowing that to be the case, how would UDAR and Batkivshchyna deal with EU relations if in power when reliant upon Svoboda to remain so?

What cost to goodwill by retaining Svoboda as a coalition partner with the EU?

Will Svoboda be jettisoned as a partner by Batkivshchyna and UDAR if, in the unlikely event, their voting numbers are enough between them to create a majority?

For certain this is not a coalition set in stone for the coming eons.  Sooner or later it will break – and probably sooner rather than later if it comes to power – or later rather than sooner if it remains in opposition.

More immediately, how will Messrs Yatseniuk and Klitschko respond to yet another, public, European chiding over their association with Svoboda?

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Party of Regions form over substance and the “car park corruption index” – Ukraine

May 29, 2013

There is much to be said for information/experience exchange – and we all love an all-expenses paid jolly under the auspices of education – however, it is only of any use if something is learned from the interaction and then put into practice.

The EU spent Euro millions on such exchanges, round tables, meetings et al, between 2006 and 2008 alone when it came to the Ukrainian judiciary.  The result was negligible, as the State handcuffs that control appointment, dismissal and thus coercively on occasion the ultimate verdict, were simply not removed by the EU funding of EU judges telling Ukrainian judges what they already know relating to the principles of the rule of law – and the EU knew that to be the case before spending this money but felt it had to be seen to being something regarding rule of law in Ukraine.

Thus the EU was seen to be trying to do something despite knowing the outcome in advance – form over substance for the global audience.

Form over substance runs through Ukrainian society at all levels.  Recently the Ukrainian press mocked the Polish Foreign Minister for wearing a $160 watch at a meeting with Ukrainian officials, when most RADA MPs, let alone ministers, wear watches of $60,000 – $600,000 in value.

The fact that Mr Sikorski is one of the brightest, most energetic and capable of all foreign ministers currently serving in that office across the entire European continent, regardless of the value of his watch, seemingly lost on the media.

Following along the form over substance path, we now have an announcement by the Party of Regions that it is going to  fund training for local heads of government in former Communist/now EU nations.  The reason, apparently, is “because local governments need guidance in working with investors. Investment attractiveness of cities is still very low, so even if there is a wish to build engineering or automotive plants, authorities in the field are not willing to accommodate them, including due to the communications problem.”

Now why would local authorities be unwilling to accommodate foreign investors?

The answer is not “communication” as is stated,  but what is contained within that communication with regards to what the feckless and corrupt local officials expect to be offered as a backhander to “accommodate” foreign investors – and Party of Regions know it – everybody in Ukraine knows it – I know it as I have witnessed it on numerous occasions personally when “opening the right doors” for others.

Quite simply if there is something in it – personally and immediately – either directly or indirectly by insuring the use of entities to which they have an “association” – for the local officials, “accommodation” is guaranteed.  If not, “accommodation” is simply not forthcoming.  Perhaps the “communications problem” referred to by Party Regions is about how best and how diplomatically that message should be conveyed?

Anybody with a modicum of intelligence knows that whether it be national or local government, the politicians are not politicians for the generous salaries Ukraine pays them.  Most of them drive cars that would have a greater value than the legitimate sum earned through public service during a full 5 year tenure in office, or 15 years of civil service.

This brings us to the “car park corruption index”.

A quick glance at any car park at any public/civil service building across Ukraine will provide a quick rule of thumb guide to just how expensive any “accommodation” is going to be.  Most have at minimum $ hundreds of thousands worth of cars sat outside owned by people officially earning a small fraction per annum of what these cars cost to buy.  Some offices have $ millions worth of cars sat in state administration car parks.

The “cost of doing business” can be oft foretold by the quantity and quality of the cars in a regional administrative office car park.  The more expensive the cars on the car park – the greater the “cost of doing business”.

Now of course, it is possible to go circumvent a regional administration that is “not accommodating” an investor – but that means RADA politicians and/or ministers, and getting to see such people can be far more costly than “communication” with the local government officials.  Even if doors are opened by official diplomatic means initially, a “cost of doing business” will rear its head further down the line commensurate with having involved a RADA member and thus remuneration for their time.

As all the above is common knowledge, and once more we have another farce attempting to provide a facade and thin veneer of respectability and plausibility over a simply corrupt practice that will continue relating to investors (domestic or foreign).

The simplest way to arrive at regional accommodation of investors by local government is to sack any local official that refuses to accommodate them, and where possible prosecute them if there is a legal mechanism to do so – won’t happen though, because this latest PR stunt is simply yet more form and no substance.

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New domestic geographical regions for Ukraine? What determines new boundaries?

May 28, 2013

Following on from yesterday’s post relating to reforms in local governance, this article appeared in Дело with a proposal from Party of Regions MP Sergei Grinevetsky to reduce the current 24 Ukrainian regions down to 8 – quoting unnamed scientists having stated this would be the best way forwards.

(Oh yes, Ukrainian politicians are like all other politicians globally when it comes to quoting unnamed scientists and unnamed scientific papers to the media in order to add the appearance of academic support for their views.)

The proposed new regions would be:

The Autonomous Republic of Crimea – Donetsk Region (Donetsk and Luhansk) – the Carpathian Region (Lviv, Ivano Frankivsk, Chernivtsi, Transcarpathia) – Kyiv Region (Kyiv, Kirovograd, Cherkassy, Chernogov) – Podolsky Region (Vinnitsia, Khmelnytsky, Ternopil region) – Polessky region (Volyn, Rivne, Zhytomyr region) – Dnieper region (Dnipropetrovsk, Zaporizhia region) – Black Sea region (Odessa, Kherson, Mykolaiv region) – Slobozhanskiy region (Kharkiv, Sumy, Poltava region)

The rationale behind it, to provide a clear vertical to the executive (as if the current 24 regional governors don’t accomplish that) – consolidation of monetary and financial resources (bringing real concerns over the equalisation of funding between major cities in a particular region) – reducing bureaucracy and therefore corruption (although as the bureaucratic system will not change even if those who administer it sit in a different building, I’m not sure how it will reduce bureaucracy or corruption).

He claims it will also increase the optimisation of inter-regional links and strengthen them (by creating cross cutting cleavages as it is known in political science one presumes), it will miraculously reduce the number of depressed areas (because 8 regional heads are better than 24 at dealing with this issue?) thus reducing the socio-economic gaps in development.

It all appears to be purely and simply based on ease of administration, and nothing considered relating to the  opportunities the redrawing of regional geography can provide – thus it is entirely flawed from any other perspective other than making life easy for “the administration” of whomever is in power.

Now there is much to be said when it comes to political power structures and the number of geographical regions within a nation as scholars such as Lijphart, Horowitz, Lipset, Sklar and Dahl (to name but a few) have written – and there are broadly two schools of thought when it comes to breaking down regional polarising identifiers necessary for a tolerant society.  There is the Lijphart school of thought, of which I am not a fan – and there is the Horowitz school of thought, to which I am much more sympathetic.

If the Ukrainian internal geopolitical landscape is to be redrawn, there are several challenges to meet if the opportunity is to be fully grasped – and with due respect to Sergei Grinevetsky and his unnamed scientists, the proposed new regions fail to address three critical dimensions as well as they could – and probably should.

The proposed new borders do not address the political need to create new cross cutting cleavages (and thus create  more than one identity for people in the new regions founded upon their individual numerous diverse interests).  The political and ethnic orientated (and much written about) east/west divide in Ukraine is simply not addressed.  The economic geographical realities are not dispersed and inclusive enough for the same reason – and a growing and visible middle class is necessary for any democracy.  By failing to be more creative and mixing up the political, social and economic dimensions of Ukrainian life when drawing new borders, there is no initiative to generate more inclusive institutions that create compromise.

Neat lines on the map are not what is required to gain, consolidate and develop a tolerant democratic society – whether it be from the top, down – or the bottom, up.  If it is necessary to create a messy jigsaw of varied and uneven pieces to break up the current polarity where the opportunity arises – so be it.

Why not put Odessa with Vinnitsia, Mykolaiv and Kirovograd with whom it has land borders, but very different political, social and economic biases?  Why not divide Ukraine horizontally top, middle and bottom?  Or Diagonally?  Why not divide it north and south bisecting the current east/west divide?  If 8 regions is the magic number (which it isn’t) – why not 8 regions running north to south, insuring every region includes cities, urban and rural demands with both orange and blue political centres in each region, insuring everything is done in shades of purple?

Does society as a whole benefit in the long term from a blue regional administration sitting very comfortably in a blue region, or an orange administration in an orange region – or does it benefit more from either a blue or orange administration sitting far less comfortably in a purple region, whereby inclusiveness and compromise are necessary to enjoy more broad based support and get thing done that are mutually desired by all?

Why not complicate the patriarchal regional fiefdoms as much as possible given the chance?  Why not make it harder for them to function by mixing up the constituencies in which they are used to working?

Why change it at all if there is no obvious attempt to maximise the long term democratic outcome for social development and inclusiveness?

In short, in this proposal of new regional borders, there is no attempt at diversification from the current political regional tribalism – and as Sklar noted, “tribalism is a mask for class privilege“, by which he meant it is in political interests to retain areas of political tribalism to insure a politician rises to the top based upon the divisions of society, rather than any attempt at inclusiveness.

Horowitz states something similar when he states “Parties that begin merely by mirroring divisions help to deepen and extend them.”  – Where exactly, do the newly proposed borders fail to mirror the existing divisions?

I see nothing within the proposed borders that will create cross-cutting cleavages outside of the east/west divide in any significant way.  In fact the new borders proposed solidify the current regional biases rather than diversify them.

It would be interesting to know just what field the scientists to which  Sergei Grinevetsky refers come from, and perhaps more specifically what the parameters surrounding their recommendations where.  Purely economic?  Purely social?  Purely political?

Purely for administrative ease to the cost of a great opportunity seems most likely!

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A decentralising of power to local government by Yanukovych?

May 27, 2013

Now here is an interesting entry on the President of Ukraine website – a decentralising of every day democratic powers in line with the Ukrainian Law of Self Government 1997 and the European Charter of Local Self-Government (ratified by Ukraine in 1998) – which naturally enough, whilst existing on paper, have never actually been implemented by any Ukrainian government.

Needless to say, the poorly written Constitution of Ukraine indeed puts hurdles (relevant Articles within Chapters 9,10 and 11 are conflicting with Chapter 6 for example) in the way of implementation, even if there has ever been the political will to implement the laws of Ukraine relating to local self-governance or upholding its obligations under the ECLSG.

In 2004 a constitutional review highlighted the issues but nothing was done.  In 2009 a half-hearted attempt by the then government to reconcile these issues was pooh-poohed severely by Council of Europe and thus those half-baked amendments were quietly abandoned.  In March 2012, the Council of Europe supported a new draft of amendments due to be implemented between 2013 and 2015.

Thus almost 20 years after identifying legislative issues preventing a far more democratic local self-government to the degree most of the EU would recognise, very little has been achieved.  In fact nothing has been achieved other than getting an approving nod from the Council of Europe over the current proposed amendments – so it is with interest that there now seems to be some momentum, particularly in respect of Articles 118 and 119 as identified by the presidential website.

All jolly good, although Articles 118 and 119 are but the tip of the iceberg within the conflict between constitution and law surrounding Ukrainian local governance  – but – it still all seems very unclear as to what, exactly, these proposals will amount to.

Ideally, if local governance and constitutional conflict are to be addressed then it should be carried out completely rather than in-part.  The whole point would be to deliver both legal mechanism but also legal and institutional clarity – both of which are currently either lacking, blurred or conflicting.

To start with, identifying a unified concept of local authority and giving a constitutional basis for the legal protection of local government would seem a very basic but good idea.  To have effective local government there needs to be a legal financial basis that insures the State provides some form of equalisation between local governments and insuring a basis for the development of local democracy.  Some form of legally established and protected tiering of levels of government, their accountability and responsibilities and the formation of councils within communities, cities, regions etc. – A legal defining of their key functions and limitations.

I could go on and on, but to do so would probably require changes to 50% of the Constitutional Articles that deal with local self-governance – so what’s the point?

I have written that this is going to decentralise power – and that is true to a degree.  However whilst it certainly would decentralise responsibility of local issues to local regional governors it must be remembered that regional governors are actually appointed by the President after consultations with the Cabinet – they are not elected.

That said, their daily involvement with city mayors and administrations varies greatly from governor to governor, city to city and town to town and the elected mayors, local councils etc will all have far greater autonomy, responsibility and accountability if the nod from the Council of Europe is to be read as meeting an acceptable democratic normative.

Thus just how far this therefore decentralises power – rather than decentralising responsibility and accountability – is a very subjective issue given the President is still responsible for the hiring and firing of regional governors who will be responsible in controlling more liberated city halls.

However, regardless of existing laws and undertakings to European Charters – does it not serve the centre to decentralise responsibility and accountability to the periphery anyway?  After all if things go badly wrong in one region of the periphery, is it not far easier to deal with it out there and in isolation, without it necessarily infecting other peripheral regions or the centre itself, due to centralisation unnecessarily drawing itself into every scandal?

Anyway, lets see what happens in the next year or so relating to increased autonomous local self-governance, responsibility and accountability.  Social policy is bound to have a significant impact on the presidential elections in 2015, and a shift towards more accountable local self-government and autonomy is not likely to lose any votes.

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Monsanto Ukraine

May 26, 2013

Placing my cards on the table – I know nothing about agriculture.

Well almost nothing.  I know how much a new combined harvester costs in Ukraine as I lent the wife’s cousin half the cost of one, as he is a crop farmer with a lot of land just outside Nikoliev and needed a new harvester – but that really is about it – aside from an O level in biology and some general knowledge relating to an awareness that Ukraine has the most fertile soil in Europe.

As regular readers will know, I try and stay away from the main stream media stories and write about things that remain “off the radar” but really should have more coverage in my view.

Ten days ago, I almost blogged about a statement from the US Department of Agriculture (USDA) relating to Ukraine.  I was going to comment on it because it seemed so unnecessary.  The USDA stated:

“In the 2013/2014 marketing year, which begins July 1, the major grain exporters, among them Ukraine, will show double-digit growth rates in the production and export of food and feed wheat and corn.

In the production of corn (+24%, 26 million tons) Ukraine will rise by two lines – from eighth to sixth, and in the production of coarse grains (+17%, 34.5 million tons) by one line (from eighth to seventh). By the export of corn and forage Ukraine this season will join the three world leaders, surpassing Argentina and Brazil, the report says.

The USDA forecasted that global grain harvest this season promises to be much better than in the previous year, when crops were affected by drought.

The U.S. Department of Agriculture expects a growth in the production of almost all major crops by 7-13%.

Ukraine, like other post-Soviet grain exporters – Russia and Kazakhstan, will be able to boast of a much greater dynamic. The overall picture for Ukraine this year was not spoiled even by the abnormal snowfall in March – its effect was offset by favorable weather conditions for planting and expansion of arable land.

Wheat harvest in Ukraine will grow, as predicted by USDA, 40% to 22 million tons. According to this index, the country will stay in the ninth place in the world.”

“Well, and?” I thought –  Aside from competition for US farmers, possible agricultural machinery import and a bit of a lift for the Ukrainian government, the point of that statement is what?   Perhaps an indirect pointer to the $ billions China has been spending on agricultural infrastructure throughout Ukraine for the US Government?  If so why not just tell them?

Having blogged about Chinese investment in Ukrainian agricultural infrastructure a few times – and knowing nothing about agriculture other than that stated at the beginning – I let the USDA statement pass and blogged about something else that day instead – but decided to keep my eye on US agricultural interests in Ukraine for a month or so just in case it was a “feeder” for a forthcoming announcement relating to grain and crop farming with US/Ukrainian interest.

Well, I didn’t have to wait long.

Two days ago, the worrisome organisation that is US GM seed giant Monsanto announced it was going to invest $140 million in a corn seed plant in Ukraine – probably located in Vinnytsya.  It claims for non-GM seeds.

As it happens Ukrainian law forbids GM crops either being imported or grown in Ukraine – and long may that ever be the case.

The new seed plant is envisaged to be ready by August (ish) 2015, working with only conventional seeds.  All jolly good as far as FDI, employment, agricultural storage and export and economics are concerned – and just as, if not more important, Ukrainian agriculture remains GM free.

But I am troubled.

The reply of Vitaliy Fedchuk of Monsanto Ukraine, when asked whether there were expectations that the laws would change is diversionary.

“Indeed, in Ukraine only conventional seeds are allowed for production and importation, thus we will be working with conventional seeds only.”

That does not answer the question of whether Monsanto anticipates a change in the laws relating to the import of and growing of GM seeds in Ukraine.  It simply affirms the laws today.

Does the answer perhaps lay with the outcome of any presidential elections on 29th March 2015 when it comes to the willingness of any president to sign any proposed changes to the current law that may yet get proposed?

I surely hope not, as I would be delighted for Ukraine to remain GM production free – but something to keep a very watchful eye on in 2015/16.

This at a time when world-wide protests against Monsanto take place!

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Social matters – Ukraine

May 25, 2013

One of the key advantages of any political incumbent with elections on the horizon, is the ability to indirectly bribe sections of the community through social policy – slowly but surely – in the run-up to campaigning.

Now 2015 and the next presidential elections may seem far, far away – although as that is all the opposition leaders seem to talk or be bothered about, with the exception of the signing of the Association Agreement with the EU – one maybe forgiven for thinking the election is far closer than it actually is.

Thus with the opposition leadership distracted by the possibility that one day one of them may become president – it is maybe not surprising that two open goals with political points freely available seem to have passed without comment – ridiculous as that may sound to anybody expecting an opposition to hold a majority to account.

After all, they seem determined to snatch defeat from the jaws of victory at every given opportunity, as I wrote only a few days ago.

And so it has come to pass that a truly woeful piece of legislation has been tabled in relation to a new Labour Code – so woeful that the Social Policy Minister has gone out of her way to underscore just how awful it is to journalists prior to any voting.

On the same day, the Ukrainian Ombudsman for Human Rights has just highlighted that of social cases brought before Ukrainian courts, only 30% of the nations court decisions are actually carried out – meaning that 70% of court decisions relating to social matters therefore fail to protect the human rights of individuals the judgments are there to protect – And most of these cases involve the non-payment of legally guaranteed benefits by the State as the State funds are several UAH billion underfunded.

To any opposition party leaderships that were not preoccupied with egocentric pondering of just how good they would look sat in the Presidential residence, these are golden opportunities to highlight incredibly poor performance by the current majority in the social, legislative and administrative spheres – issues that would have been pounced upon by any functioning opposition leadership immediately these statements were made – in the full knowledge that in the coming 18 months, the current incumbent will begin to use social policy to bribe voters ahead of the elections.

Seriously, if the figures the Ombudsman states are correct, 2 million judgments in 2012 alone, of which 70% go unfulfilled – that is 1,400,000 voters who have failed to get justice from the State, despite court decisions going their way.  That is about 3% of the population – and 3% is a sizable constituency in the zero sum, first past the post, presidential electoral system.

Such figures simply demanded an immediate and robust response from opposition leaders themselves –  rather than any mutterings from underlings.

Maximum opposition impact in relation to these statements with both media and society alike has now passed – another missed opportunity.

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