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Ruling things in, rather than out – Odessa

June 21, 2015

When Governor Saakashvili was first appointed, the immediate issues that came to mind were “He (and whatever team he appoints around him) will have several difficult battles ahead – the most obvious being with the notoriously corrupt customs at Yushni, Illichovsk and Odessa ports. By extension, that will also bring him head to head with organised crime and the Odessa mafia, as well as some other nefarious vested interests within the ports – such as the current Mayor. There is also the small matter of Odessa traditionally being the unofficial supply route to Transnistria.”

The issues of dealing with some vested interests have been raised with “options” highlighted, albeit in a somewhat grubby way, and whilst the suggested refurbishment of the E87 seems set to miss the makeover it requires thereby upgrading it to an artery rather than a vein to Romania, Bulgaria and ultimately Turkey, a new road to Reni has been announced which would act as an artery to those same nations – something that would still offer the same possibility of a grubby little deal for certain vested interests, either by way of offshore front company or via subcontracting.

With preparatory personnel changes underway and Oblasts plans being scribbled down for new faces to implement, whilst some vested interests being given the opportunity to “come on-side”.  The prickly issues of the ports, smuggling and Transnistria remain unaddressed, as far as a achieving a little progress is concerned – at least from the priority list of initial thoughts published on the day that Governor Saakashvili was appointed.

Progress with regard to the ports, smuggling and Transnistria would be heavily dependent upon the Customs and Borders Service and State Fiscal Service cleaning up their respective acts, and those with vested interests in the ports doing the same thing.  This will take months and not days even if a suitable carrot is offered to those vested interests.

Purely using a stick to try and beat the corruption out of the ports stands as much chance of beating it further inward, than it does of driving it out.

As for the ports, it may be possible to get vested interests (local and international) “on-side” and reduce smuggling by turning them into free ports/porto franco where customs are much more “relaxed”, customs duties are wavered etc.

Unfortunately for the “separatist minded” forget the idea of political autonomy akin Hong Kong – think more of Copenhagen, Bordeaux or Bremerhaven.  With the DCFTA with the EU starting with effect of 1st January, turning the Odessa ports into international free ports/porto franco would seem entirely sensible from a national, regional and vested interests perspective.  It would sit nicely within any additional decentralised/devolved powers to be given to all regions, particularly so as the destiny of Odessa is set to remain in Ukraine by overwhelming constituency will.

That said, there have been numerous attempts and numerous discussions about do this within the corridors of power under almost every president and parliament since independence – all have which have thus far decided against.

So, to rule in, or rule out, Odessa (and several other of its ports) as a free port/porto franco?

Rule it in – it may well occur far sooner than many may think.

As for Transnistria?   Any talk of “blockading” Transnistria is complete nonsense whilst ever there are Odessa customs and borders officers willing to actively assist in breaching it.  An effective regional internal house-cleaning has to occur before tackling smuggling to and from Transnistria (and elsewhere) can be accomplished with any measurable results.

If and when it became a more realistic option months from now, then it would be a presidential decision to apply pressure to the recognised and unrecognised crossing points – for it is the president who is responsible for setting foreign policy and defence.

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