Archive for the ‘consultancy’ Category

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Politically expedient legislation – Poroshenko

March 26, 2016

After two days in locked in a room with incredibly wise intellectuals, practitioners, assorted spooks past (and probably some present), numerous ambassadors, policy, and strategy wonks, plus other assorted aficionados, (thus this blog rightly assuming the mantle of retard in residence), it is with reluctance entries once again appear – for it means this gathering and meeting of enlightened and erudite minds is over (at least when it comes to being physically present in the same room).

It is also begrudgingly noted that as early as March 2016 the highlight of the conference/forum season in Odessa and Ukraine has already past.  There will surely not be a gathering of such global expertise, the orating (and debating) of such insightful commentary, nor quality recommendations for the rest of the year in Ukraine.

Thus before getting onto the subject of this entry, a public thanks to those that sponsored, organised and attended the Odessa Security Forum.

Particularly for the sponsors, a shameless plug in exchange for sincere gratitude.  Thanks to NATO,  The Black Sea Trust, Pridunavie, the John F Kennedy School of Government, Harvard University, and Ukraine Today.

It was a good to see some old friends again, and also to make new and most valued acquaintances – some of whom with the passage of time will undoubtedly progress to the category of old friends.

This entry will not go into the substance of this two day event – though other entries subsequent may raise some of the issues discussed (Chatham House Rule applies if and when that occurs).

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Humble tribute made, and genuine gratitude expressed after being seen as worthy of having an invitation, it is time for a return to the grubby politics, strategies and internal disputes that provide the tainted hue of much of the Ukrainian political class.

On 16th February the Verkhovna Rada passed law 3700.  The law was rightly decried as being an absolute affront to democracy and will undoubtedly be challenged in the Constitutional Court if not amended, or preferably repealed in its entirety.

In short, law 3700 allows political parties to remove from their party lists (not single mandate, first past the post seats) those candidates they no longer want after an election and after the Central Election Committee has recognised them.

Thus a party who placed candidates on the proportional representation party list may remove those upon it after an election has occurred and been recognised officially.

It therefore follows that should an individual (or many individuals) vote for Party X because Candidate Y was number 27 on the party list, following CEC recognition, the party can simply strike off Candidate Y and replace them before they assume their democratic mandate.

To go to the extremes, in theory, a party can stuff the top half of its party list with reformers that have traction with the public, fill the bottom half with odious hangovers from post-Soviet oligarchical politics, have the CEC recognise the result, and then strike down the reformers en masse leaving the seats to be filled by the loathsome – lawfully.

The law is clearly undemocratic, and hands power to the party leadership to simply select their chosen (and far too oft nefarious) men/women to fill the seats won under the proportional representation system.  The invitation for internal party corruption and buying/selling of seats due to the arbitrary selection by party leaders is as plain as it is grotesque.

On 25th February, further sullying and already dubious commitment to reforms, President Poroshenko signed these poisoned prose into law – once again to rightful squeals and loud public laments from the reform orientated democracy advocates.

The questions are therefore why would President Poroshenko sign into law such a blatantly offensive and odious text when his reform credentials are now deeply suspect within the national constituency (and to be blunt the international community too)?  He has stated numerous times that there will be no early Verkhovna Rada elections this year, so why not send it back to the Verkhovna Rada with “Must try harder” scrawled across it?  Is there not ample time to produce something that holds democratic integrity if such a law is necessary whatsoever?  He must surely be aware that this law will be rigorously challenged and also adversely effect his steadily decreasing popularity.

The answer is that the law, whilst remaining the law, provides President Poroshenko with the (perhaps temporary) ability to correct a problem within the exiting party list from the last elections of 2014.

It seems likely that there will be some changes both within the Cabinet of Ministers and the Presidential Administration during the on-going negotiations over a reshuffle.  It is quite possible that any outcome will bring about the requirement to bring into parliament the next name (or perhaps several names) on the 2014 party list of Block Poroshenko.

Unfortunately for President Poroshenko the very next name on the list is Andrei Bogdan.

Mr Bogdan is the current lawyer and friend of Gennady Korban.  Mr Korban is currently in and out of prison pending trial for numerous serious allegations.  Some would say that he is indeed getting his richly deserved comeuppance for an entirely dubious history.  Some will state that as he is close to Ihor Kolomoisky, he is but a pawn in a game being played between Messrs Kolomoisky and Poroshenko.  It is also rumoured that Mr Bogdan is now also a member of another political party.

Either way, and any which way a reader may perceive it, there is no way as Mr Korban’s lawyer and chum, Andrei Bogdan can remain comfortably atop the party list waiting to enter the Verkhovna Rada under the presidential flag at a time of internal political flux and Verkhovna Rada reshuffling.  Hence the cynical may conclude that this clearly undemocratic and potentially corruption enhancing law was both passed and signed into statute within a fortnight to provide a lawful path to undo a previous political error.

Lo, it will come as no surprise that within one month of this law entering into force, on 26th March 2016, the “presidential party” has purged itself of those it no longer wants waiting upon its 2014 party list having now gained the approval and recognition of the CEC (under the chairmanship of Mr Okhendovsky) to remove them.

The very first name on that list of those struck off being that of Andrei Bogdan – (There were 12 others – Malovatskoho, Malashenkovoyi, Ryabykina, Vovk, Friedman, Raupova, Ilyashenka, Tarasovtsya, Revenko, Byedovoho, Leshyka and Velimovskoho).

The immediate issue relating to the required denial of Andrei Bogdan entering the Verkhovna Rada should any reshuffle present the opportunity is now resolved.  (Not withstanding another 12 on the party list too).

The law may or may not get struck down in the future, but certainly not before any early Verkhovna Rada elections that may occur during the Spring of 2017.  Those elections will require new party lists which will certainly not feature Mr Bogdan on anything associated directly with President Poroshenko’s official party – or indirectly and unofficially supported Bankova project/technical parties.

Whether this offensive legislation will survive and for how long remains to be seen, for it can also be interpreted as a very crude method of buying Verkhovna Rada proportionally represented party seats when the leadership can pick and choose who fills them post election and CEC recognition.  Perhaps it was never designed to last, then again, perhaps it was.

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Poroshenko decrees the creation of yet another reform advisory body

December 17, 2015

On 13th February 2015, President Poroshenko signed a decree creating the International Reform Council, appointing Mikhail Saakashvili as its head.

On 16th December 2015, President Poroshenko signed a decree abolishing the International Reform Council – thus clearly now Governor Saakashvili is no longer head of a body that does not exist – quite possibly as a result of the events of the last Reform Council meeting and the inglorious acts of Minister of Interior Avakov and the less than careful words of Prime Minister Yatseniuk toward Governor Saakashvili who clearly managed to “press their buttons” during the meeting.

In dissolving the International Reform Council by decree, President Poroshenko also created a new body that will be known as the International Advisory Council.  The body is an advisory council to the Head of State that will facilitate the implementation of reforms in Ukraine to international best practices.  In other words, it will do exactly what the no defunct International Reform Council did.

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The new Advisory Council is not headed by Governor Saakashvili as was its predecessor – neither is he to be part of it.

Chairman of the Board is President Poroshenko.  His deputy will be Boris Lozhkin who currently leads the Presidential Administration.

Those invited to compose the Advisory Council are  Carl Bildt, Tony Blair, Elmar Brok, Mikulas Dzurinda, Tony Abbott, Aleksander Kwasniewski, Bernard-Henri Levy, Anders Åslund, Anders Fogh Rasmussen and Stefan Fule.

Whether or not these individuals have accepted such invitations is not entirely clear.  Certainly if Bernard-Henri Levy had accepted the role already, this blog would probably know by now.  Almost certainly in fact.  (Mr Levy was quietly offered a significant role within the Ministry of Culture by President Poroshenko previously but did not take up the offer.)

Thus, at the time of writing, who if any of these people have accepted positions on the latest “reform” body is unknown – though several were invited to be part of the now dissolved body created in February 2015, and perhaps will simply shuffle across without too many pointed questions as to why officially created bodies are created, dissolved, and recreated under a different name but doing exactly the same thing – rather than simply changing personnel where appropriate/necessary.

The newly created International Advisory Board, for readers information, is entitled to relevant and/or necessary documents and materials from central and local executive bodies, and State institutions, organisations and enterprises.  The Advisory Board may create working groups and/or expert committees – implying direct communication with the bodies from which it may draw (or perhaps drag) information from.

The creation of this new body simply cannot be seen as reform progress.

President Poroshenko cannot claim that he has not received sound and solid international advise on international reform best practice on a continuous basis from all manner of experts.  By now, after so much advise and for so long, there are no excuses over “what” and the “how”.  (The “who” is him, the “when” is now, and the “why” is because the nation demands it.)

What this new – and let’s be blunt it is simply “another” – reform body does is create a new forum with (some) new people to enable talk rather than be forced to walk when it comes to reform.

It is a case of being seen to be doing something (with enlightened people) when deliberately doing nothing for as long as possible.

It is a body to create more talking that has the power to instigate, for example an (or numerous) inter-departmental committee (or whatever), to ask for papers, to hold meetings, to propose, to discuss, to report back, to revise, to redraft – in order to hold more meetings, make more proposals, have more discussions, report back once more, revise the revisions and redraft yet again – the usual governmental stalling processes via the misuse of bureaucratic functions and obstructionism under the guise of creating a body to make whatever it takes to look to be doing something without actually doing anything – like reforming.

As US Ambassador Geoff Pyatt clearly stated after the faux “unity statement” (for there is anything but unity) following the Saakashvili/Avakov incident:

And the Ambassador is absolutely right – More reform, less politics.

The President does not need this newly created body for reform advise or the effective implementation of reforms to best international practice – one word from him to any western embassy and entire specialist subject teams of experts would arrive in Kyiv within 24 hours if it meant a reform would materialise – indeed there are entire international specialist advisory teams already in Ukraine.

The President actually needs the newly created International Advisory Committee to do the opposite, he needs it to instigate an inter-departmental committee (or whatever), to ask for papers, to hold meetings, to propose, to discuss, to report back, to revise, to redraft, in order to hold more meetings, make more proposals, have more discussions, report back once more, revise the revisions and redraft yet again – ad infinitum for as long as the many prickly and painful decisions can be delayed.

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Rolling the dice – or not – Gambling in Ukraine (Again)

December 14, 2015

In August an entry appeared relating to the almost certain legal return of gambling to Ukraine.

For those readers unaware, gambling was made illegal under Prime Minister Tymoshenko in 2009 following a fire at a Dnepropetrovsk gambling den that resulted in the deaths of 9 people.  Indeed some readers may consider a complete national ban on gambling as a result of that incident something of an overreaction – but Ms Tymoshenko was Prime Minister at the time and as with all populists (of which she is the personification of the definition), overreaction rather than proportionality – for example an investigation, the firing of police chiefs and fire safety inspectors, licensing officials etc – was the result.

Needless to say gambling across the nation continued – though thereafter illegitimately.

There is now something of a crackdown on illicit gambling dens by the Ministry of Interior.

Over the past ten days it claims to have raided and closed 130 gambling establishments – or 13 per day.

This is of course the tip of the iceberg nationally, and indeed the Ministry of Interior has stated throughout 2016 the anti-gambling operation will continue with local police chiefs to face disciplinary action and/or dismissal for turning a blind eye (or in many cases protecting) these illicit businesses.

The law is the law of course, and the police are there to enforce it – however the more cynical will note that the Ministry of Finance on 1st December submitted a Draft Bill to the Verkhovna Rada on the legalisation of gambling once again.  Some will therefore perhaps ponder whether this crack down is a clearing of the unlicensed decks prior to legalisation and licensing.

The problem – or one of a very long list of problems – with the newly proposed gambling law, is that it in no way encourages – or even allows – the illicit gambling establishments to go legitimate.

Your author, to be blunt, knows nothing about gambling.  Whether gambling is legalised in Ukraine once more – or not – is therefore personally irrelevant to a point.  The relevant point being, that if it is to be legalised once more, then the legislation should be good, well thought out, enforceable, and promoting international best practice.  To be equally as blunt, the Ministry of Finance Draft Bill fails spectacularly to do anything of the sort.  It is flawed from beginning to end, and this despite months and months of attempted international best practice input from the international gaming industry that has seemingly been completely and utterly ignored.

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Having admitted complete ignorance of gambling, it is perhaps wise to defer to a friend of this blog that was (and remains) part of the lobby and would-be advisory group that attempted (and clearly failed) to guide the Ministry of Finance.

A few key points (27 in all – and ignoring the minor points) regarding the significant flaws within the proposed MinFin gambling disaster pending Verkhovna Rada deliberation:

“1) The International Gaming community has not been consulted in forming the draft law. Hence the draft law is not to international standards. Briefing notes were sent to those responsible for drafting the law but they do not appear to have been taken into account.
2) The law has been written without the benefit of gambling expertise; without knowledge of how the gambling industry truly works. It is inflexible to technological changes in future.
3) The law is isolated. It has no reference to a Governmental policy on gambling so cannot be assessed as to whether it fulfills those policy targets.
4) Similarly it has no outputs. It does not state what is expected once enacted. Yet, if one reads the law and applies it in the context of prevailing conditions it quite clearly favours vested interests.
5) It is exclusive. It tries to tackle problem gambling on the street by excluding anyone not comfortable with walking into a four / five star hotel. This “James Bond” model is naive. Using some of the license fees to set up gambling education and clinics would be more pragmatic. Failure to earmark funding for education and the treatment of problem gambling at this stage with robust proposals means that such measures will never take place. It requires a mature market to self-regulate and that does not exist in Ukraine.
6) Most countries require hotels as part of a casino development to encourage tourism, to offer tourism facilities not available in the specific locale. But this draft law is the opposite. It has no economic regeneration /tourism at it’s hub. 
7) On the contrary, it is only favouring three hotel owners in Kyiv: Premier Palace, Hilton and the owner of two venues (Fairmont and Intercontinental) but who fortuitously who also runs Borispil ? another designated casino venue. Why is the requirement not extended to all hotels regardless of star rating? Why a room requirement? Why hotels at all as most modern casinos operate as part of an entertainment and leisure complex?
 From an economic standpoint most hotels in Ukraine were not built to take into account having casinos so the space available in most is between 2-3000 sqm. This by modern casino standards is small and raises the issue of whether these casinos will be truly viable as a business just for gambling or instead used to launder money. 
9) Consider the following information published publicly by the United Kingdom Gambling Commission last week:   As at 31st March 2015 in the UK there were: 146 casinos operating with max 20 machines. 2 casinos operating max 150 machines. 20,990,000 visits total.   5,569 tables total, 2,822 machines total.  Casino table win was £992,250,000. Gaming Machine win was £168,800,000.  Gaming Duty Paid in 2014/15 was £317,554,000. Average casino (from 148) has 141,824 visitors to its 37.6 tables and 19 machines and makes £6,704,392 in Table win and £1,140,540 in Machine Win = £7,844,932 Avg.  GGY per CasinoNB Each casino paid on average of £2,145,635 in Gaming Duty making an average NGR of £5,699,297 – out of this has to come building & staff costs, marketing etc. so probably a profit of around £1m.  The licensing cost average was £23,112 per casino per year and this was used to fund the Gambling Commission itself.  The UK is not Ukraine but perhaps someone could apply that same data and principles here and conclude that classic over-assumptions of tax revenue are being made. Licensing fees are flat whereas tax increases with success.
10) No other law anywhere in the world requires table and slot machine minimums – rather the opposite – they try and enforce maximums (see above). Some casinos are fully electronic – it is not government’s role to dictate technological advances and cultural shift.
11) Similarly it is not the role of government to specify minimum staff requirements. Casinos provide trained staff for offering exceptional service and encourage repeat business – not to fill quotas. 
12) Taxation is not mentioned. Neither gaming tax, nor corporation tax, so what model is being followed? The government seems to be relying on a regular annual windfall though licensing fees. This is short-sighted as the fees are high and will not encourage growth – quite the opposite. Grant 200 licenses to online operators at 150,000 Euros each and compare that to one / two paying 1.5 million Euros. It’s a tenfold difference on fees alone. The licensing is being used as privilege.
13) No international operator will want to come into the casino market if there is no independent regulator who will tackle illegal gambling and provide a reassurance of legacy. Similarly how can an online operator be expected to pay 1.5 million Euros for a license if nobody is shutting down the unlicensed operators? (Many of whom are international) 
14) Not appointing an independent regulator will lead to corruption.
15) No independent regulator will lead to rules being interpreted rather than enforced.
16) No independent regulator means no transparency
17) No independent regulator means being shunned by peers in Europe where gambling is a well-regulated industry.
18) What do the IMF think of this as a vehicle for obtaining tax revenue in a fair, balanced and transparent manner free from corruption?
19) The investment seems to be one way – There is no mechanism for repatriation of investment dividend abroad. 
20) We recommend that licensing fees are used to finance an independent regulator; keep taxes fair and use these as the economic driver. Such a system is internationally recognized. Licensing as the driver is part of the corruption problems endemic in Ukraine.
21) With no reassurance of enforcement against illegal operators it paves the way for existing sports betting companies operating in a grey market to take total market share. As both parties have lobbied hard and with inclusion on the RADA committees this is no surprise but is hardly a fair and transparent system.
22) Online. The requirement for servers to be based in Ukraine shows that whoever wrote the law does not understand how the online industry operates. It is naive to think that the requirement for servers being based here will somehow enable them to be seized if enforcement is required. Most PC terminals in Western businesses located in Ukraine are dumb – all data is offshore or in a data cloud. However, if this is for corporate tax reasons this should be stated.
23) Lotteries. It’s brave to suggest a single lottery operator when Government officials have spent so much effort making the current lottery provider a monopoly. Suffice to say that the law will not prevent problem gambling by only allowing casinos in 4/5 star hotels if it then allows VLTs in lottery locations. The law has mixed two different offerings whereas it is usually one or the other. Walk into a lottery venue at the moment in any of the major cities in Ukraine and you will be hard pressed to differentiate it as a slot hall. Yet the government does not want slot halls. This area is being ignored and will lead to severe criticism by community and the church. 
24) What happened to horse racing? And Bingo? And Fantasy Sports? And AWPs 25?  Can a land-based poker license be given without a license in another category?
26) A multitude of technical questions are unanswered – each of which has a bearing on responsible gambling and tax revenue. Examples just casino-related include: How big is the casino within the hotel? Does it include the hotel rooms? Can I gamble on an iPad/ iwatch? Does an electronic roulette game classified as a table? How many terminals can be connected? What is the roulette spin time? Is TITO allowed? Can I use FOBTs? 
27) There are other flaws in the draft law but in the overall scale of the industry they are not worth annotating here. A well-written law to international standards would have provided a level playing field promoting a vibrant and positive gambling industry. The independent regulator would then have cast regulations to make the industry transparent, clear and operating within defined rules. Finally, in the briefing note to government on 16th October 2015 we made some recommendations – all of which have been ignored – and which now lead to the draft now presented.”

Ergo, after yesterday’s entry lauding of particular quality legislation being passed (lauded because it is all too rare), today under the legislative spotlight there is a return to the usual way below par, ill conceived, poorly crafted nonsense that is sadly expected from the Ukrainian establishment when it ignores international best practice, expert assistance, and otherwise external input.

Clearly this gambling law has been drafted by somebody who knows nothing whatsoever about gambling and is looking (somewhat hopefully) only at potential licensing revenue within the Ministry of Finance.  In fact a holistic approach to the entire gambling subject across numerous ministries would seem to be entirely absent (infrastructure, tourism, sport, policing etc).  Something of a major fail for Natalie Jaresko as Finance Minister, who if not responsible for writing it, is responsible for its submission by MinFin.

Empirically some may suggest there is something of a legislative trend.  If there is external conditionality (and finance) relating to legislation (and undoubted external input) then decent and/or good legislation emerges – if not, the usual poorly crafted legislative excrement is forthcoming from the Ukrainian elite.

Whatever the case, as the above expert/professional comments infer, the current and 2016 Ministry of Interior operation against illicit gambling is in need of a rethink – for it will not be able to conclude at the end of 2016 as envisaged when the newly proposed MinFin Draft Bill on gambling in no way assists in legalising the currently illicit – even if these establishments wanted to go legitimate.

It may be wise if somebody within MinFin pull the submitted Draft Bill and put in some serious effort at meeting international best practice perhaps – instead of reinforcing the perception that unless there is external conditionality upon proposed legislation, the Ukrainian elite is incapable and/or unwilling to pursue best international practice for the sake of the nation.

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A legislative moment worth genuinely lauding and basking within – Civil Service Ukraine

December 13, 2015

For as many as the years this blog has been running, the Ukrainian civil service has frequently appeared as a source of disillusionment and frustration.  The reasons for this have been many, but primarily relate to two distinct causes – the first legislatively, and the second functionally (as has oft been stated here, effective civil servants have public service within their DNA and are a specific breed).

Indeed, an entry from 5th July once again laid out some very basic requirements entirely absent from the Ukrainian civil service – “It is, when all is said and done, the nervous system of the nation. It is what makes things happen – or not.

Through civil service departments, agencies and public sector bodies, the civil service acts as the delivery service of current policy. Presidents, Prime Ministers, Cabinet Ministers and governments will come and go – but the civil service, a-political and independent of government, remains a consistent functionary.

The civil service is responsible for delivering governmental projects, be they large or small, complex or simple (hopefully) on time and on budget.

Despite the numerous ministries in which the civil service perform, perhaps the simplest way to segregate them is those tasked with issues at home, and those tasked with issues abroad.

The civil servants closer to Ministers are there to give advice and have, theoretically (and often do) influence on policy. Whether that advice is based upon a broad or narrow view, or somewhat questionable evidence occasionally, is something that perhaps should be pondered a little more than it is.

However, together with political independence whilst delivering government policy of the day, one, if not the major benefit of a civil service is its a-political longevity and thus internal stability – and it is here that Ukraine has major issues to resolve.

As such, existing Ukrainian reform by way of reducing civil service staffing numbers and ejecting the most corrupt is at best, still only partial reform. Political interference and excessive unwarranted meddling continues unabated.”

So it has come to pass, as mentioned a few days ago, that the new civil service law finally came up for the Verkhovna Rada vote – “The long awaited and repeatedly delayed (because it is rather good) Bill upon civil service reform and very importantly, its independence from the political class, was subjected to attempts to politicise it – this despite the Bill having been subject to thorough civil society, professional and requested European help in its drafting. Indeed the Europeans stated they would fund the civil service reform based upon such legislation being adopted.

Quite frankly, should the Bill be successfully tinkered with and unnecessarily politcised, which would be to the distinct ire of the Europeans, they should flatly and simply refuse to fund civil service reform under a belatedly politically sabotaged law.”

Fortunately, and thanks to a good deal of pressure from civil society and the diplomatic corps, no last minute political sabotage was allowed to occur and a good Bill went to the Verkhovna Rada and ultimately become law.

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In fact, all things considered, the adopted civil service law – for as long as it survives any belated political sabotage by way of “amendments” – is probably the most important law passed throughout 2015 in Ukraine.

The law goes a very long way to properly addressing all of the problematic issues raised in the aforementioned quote of the 5th July entry.  That in turn has a direct effect upon the effective implementation of each and every policy and legislative decision that the civil service under a new and independent structure will be tasked to deliver – and it is for this reason that this legislative success is probably the most important law adopted in 2015.  It it to be both lauded and basked in (for as long as it remains unadulterated).

It now falls to civil society and the diplomatic corps to defend this law from politically sabotaging “amendments”, but it also now falls of the Europeans that stated they would fund the civil service reform to do so effectively not only financially, but with no small amount of leadership and determination when it comes to making the law work as it is intended.

As synonymous as Canadian Ambassador Waschuk and US Ambassador Pyatt are with rule of law reform in Ukraine – neither missing a single opportunity to both raise and pressure the issue (and why not when their nations are spearheading those reforms) – the EU Ambassador and each and every Ambassador of each and every EU nation must take ownership of the equally important civil service reform agenda, with all consistently praising (and by inference defending) the law in its current form, and also pushing it to the same level of domestic political and public consciousness as that which the US and Canadian diplomatic tag-team unfailing have done.

Should all be reasonably successful, it is also a matter of finding those with public service in their DNA to head and manage a reformed and independent Ukrainian civil service capable of effectively delivering policy of the day.

Undoubtedly there will be many a fine candidate from within civil society that has advised upon, shepherded and defended this law until its adoption, and will continue to defend it in its current form.  There are also existing solid and reliable public servants – some of whom have very recently found themselves twiddling their thumbs.  For example, is there a better candidate (should he be interested) than the long serving (until a few days ago) former Ukrainian Ambassador to the UN, Yuri Sergeyev?  A formidable, a-political, solid, reliable, and public serving (rather than political poodle) head of the Ukrainian Civil Service he would undoubtedly be.

Whatever the case, the hard legislative work has been done (less defending what has been achieved).  The harder implementation work now begins – where determined and unrelenting internal and external leadership will be undoubtedly required.

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A strange week – a bit of policy and early elections

November 7, 2015

It has been a strange week for the author of this blog.  So unusually there will be a small mention of those personal events which will then lead to a bit of policy – as both are actually connected, albeit tenuously.

Firstly, “those people” behind two MPs (national not local administration) have sought council (such as it is) with your author over policy in preparation for early Verkhovna Rada elections which are heavily rumoured for the Spring 2016 (and thus before 1st July when the far more transparency promoting “On amendments to some legislative acts of Ukraine concerning prevention and counteraction to political corruption” take effect – one last national hurrah for the usual corrupt political practices perhaps, and hence the otherwise inexplicable delay in these amendments taking effect).  Yet it is far from a certainty that early Verkhovna Rada elections there will be.

Nevertheless, that both are lining up their political ducks for a slow burning campaign to begin immediately after the New Year would suggest they feel it likely enough to attempt to steal the march on others.

PigTo be entirely blunt, with regard to one of the MPs, although “his people” are all OK people, it would be like putting policy lipstick on a political personality pig.  Perhaps less so for the other individual, despite on occasion displaying some very boar-like tendencies.

The thing about policy is that there are really only three types – Effective, ineffective and counterproductive (regardless of the policy content).

Of course, policy has to be sold to the voting constituents as a policy belonging to “MP X” or “Party Y” if it is to become part of the foundation to any slow-burning and unofficial political campaigning before the official electoral starters gun is fired (and therefore has to be seen to be “standard politicking” thus remaining within the electoral rules – until, per tradition, everybody breaks them en masse and fragrantly once official campaigning starts).

In short, to lay claim to a policy and frame it under whatever personal branding now(ish) provides for the first framing of policy.  And he/she that frames first and frames well, normally wins the policy argument.

So what should an MP wanting local constituency support, but a parliamentary seat nationally (and therefore seen as too distant to change things locally) look for in a policy?  Perhaps one that if ineffectively implemented nationally, could still be effectively implemented locally – particularly so as “decentralisation” could provide for local successes in policy, despite general national failures.

There are perhaps many policy areas to choose from that could fit – and whilst they can be clearly ambitious, they should also be measurable and consideration given to time both in implementation, delivery, and when anticipated results are tangibly expected – how else to conduct a policy review otherwise?

If the politicians in question are already somewhat “tarnished”, or “underachieving” or otherwise “lacking credibility” after years of abusing both political system and the voting constituency (notwithstanding ignoring the rule of law when expedient), then a policy that covers the widest demographic helps improve electoral chances (depending upon their perceived level of democratic and political debauchery – some MPs are hopefully beyond helping when laid before the alter of public opinion).

Nevertheless, policy is policy regardless of the political mouthpiece.  Message and not messenger.  In a nation devoid of ideology within political parties there is perhaps no need for concern over ideological framing – especially so if the orator/promoter of policy has been in several political parties during a political career – as many have in Ukraine.

In such a mercantile city and oblast as Odessa, the regional economy would seem a reasonable policy topic that could either enhance national policy or be somewhat resilient to it.

Yet economics is not an exact science and also economics is a word that makes many people stop listening.  Therefore any such policy would have to be framed around the improvement in the quality of life.  Everybody wants an improvement in their quality of life.

How will the policy change lives?  There is a need to create jobs, generate business competitiveness, and advance sustainable development.  How will the policy overcome development obstacles in certain parts of Odessa Oblast, that are not faced by the others?

Should one of the aims to be increase Oblast cohesion, or leave every Mayor and regional Chairperson to do their own thing under “decentralisation”?  Any such policy should be about growth across all districts to improve opportunity and quality of life – not just about regional fiscal redistribution.

How to make the most of every Kopeek when every Kopeek is not only scarce but prone to be spent unwisely (if not stolen)?  How to formulate a policy that will encourage additional private domestic, and external investment?  Tangible results are expected from such a policy after all.

How effective (regardless of how prickly) will the interaction and common purpose be between MPs, Governer, Oblast Chairperson and City Mayors?

How to finance new initiatives?  When selling any such policy is it wise to talk in numbers?  If so which numbers?  Is it easier to sell reducing budget headers by 1.2% of the regional budget for X, 1.5% for Y and 1.3% from budget Z in order to create a “Seed Fund” for SMEs of 5% of the regional budget or as a UAH/$ figure?  Should any such Oblast fund then be allocated in the form of grants, or perhaps as low-cost loans given the inaccessibility of affordable banking?  Can it be leveraged with the EBRD, or WB etc?  Who should administer it?  What of transparency and the need for independence when issuing such loans or grants to SMEs?  What becomes of the grant and loan money for SMEs now?  Where does it go?  Dose anybody know?

Is it possible to incentivise a small community that gives a collective yawn when energy efficiency is mentioned, by stating if in 3 months “x amount” of energy be saved, equaling UAH/$ Y, such energy savings will deliver the much sought school crossing point?  In doing so how does that fit with any national energy efficiency policy?

How to increasingly simplify local processes and yet increase public accountability and public auditing?

What about the administrative capacity and quality?  In achieving results and value for money, good project management, financial management and public administration training are essential lest they become a policy bottleneck (or node for corruption).

(This same week your author was asked to consider joining “the Board” of a NGO – a NGO that deals with all within the paragraph immediately above.)

Having stated all the above to “the people” around these MPs, and asked the same questions as those above, it will be interesting to see whether council is sought over the possible answers (for these are not new issues and have therefore been addressed by others before) and a slow-burning “policy campaign” (and a “policy campaign” would be a first for politics in Odessa) will be unofficially launched immediately after the New Year – or not.

Cynically, one has to suspect that the delay until 1st July 2016 regarding the activation of the “On amendments to some legislative acts of Ukraine concerning prevention and counteraction to political corruption” is a very deliberate move to facilitate the same old dirty political machinery in any early Verkhovna Rada elections.  It may yet be that these 2 MPs will simply default to tried and tested odious and nefarious methods rather than try something new – like policy in their campaigning.  It is though perhaps a sign of political progress that policy is even being considered for an electoral campaign!

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The Venice Commission on Constitutional/Judicial reforms – Ukraine

July 26, 2015

Probably one of the most underrated acts of the current president, cabinet of ministers, and sitting Rada, was the accommodation of almost all Venice Commission “recommendations” with regard to the constitutional amendments that facilitate “decentralisation“.

Time will now tell whether the Constitutional Court will have issues with the proposed “decentralisation” amendments, and if they deem all satisfactory, whether the 300 (plus) votes required for a constitution changing majority can be reached within the Rada ranks when the matter is placed before them once more, as stated here previously.

However, the constructive attitude of the Ukrainian political class was not unnoticed.

“I very much welcome that the Constitutional Commission of Ukraine approved on Friday draft amendments to the Constitution regarding decentralisation. The text approved integrates most of the recommendations made by the Venice Commission and I would like to thank the President of the Constitutional Commission and Speaker of the Verkhovna Rada, Mr Volodymyr Groysman, for the excellent co-operation with the Venice Commission and congratulate him on the results of this co-operation.

Decentralisation is one of the key reforms required for the democratic development of the country in line with the aspirations of the people expressed during the revolution of dignity. The speedy adoption of the text by the Verkhovna Rada is now very important with a view to the local elections, which will take place in October, and the continuing negotiations in the framework of the Minsk process.

The Venice Commission stands ready to provide its assistance for further reforms, in particular the constitutional amendments concerning the judiciary.” – Gianni Buquicchio

Very good – or at least good, for whilst the Venice Commission may well have known the detail of proposed constitutional amendments designed to achieve “decentralisation”, the constituents of Ukraine were almost entirely in the dark, notwithstanding very broad brush-stroke remarks in the media that could have meant almost anything.

2751_venice_commisionSadly, the same blanket lack of knowledge relating to proposed constitutional amendments in the public realm exists when it comes to providing a pathway for judicial and prosecutors reforms.

However, the Venice Commission has released some preliminary opinions upon the matter, per the proposed constitutional amendments it has been sent.  Thus there is some insight into the proposed constitutional changes.

The major issues can be summarised as follows:

“The proposed amendments are a generally positive text which deserves to be supported. The amendments are well drafted.  Their adoption would be an important step forward towards the establishment of a truly independent judicial system in Ukraine.  The Venice Commission welcomes in particular:

– The removal of the power of the Verkhovna Rada to appoint the judges;
– The abolition of probationary periods for junior judges;
– The abolition of the “breach of oath” as a ground for dismissal of the judges;
– The reform of the Public Prosecutor’s Office, the guarantees for its independence (notably the removal of the power of the Verkhovna Rada to express no confidence in the Prosecutor General) and the removal of its non-prosecutorial supervisory powers.

The text, however, still presents some shortcomings, especially with respect to the powers of the main State organs in this field.  If not corrected, these shortcomings might create a new danger of politicisation of the judiciary and perpetuate the problems of the current system.  In this respect, the Venice Commission formulates the following main recommendations:
– While the ceremonial role of the President to appoint judges seems well justified, this is not the case for his power to dismiss judges, which should be removed from the text;
– In addition, not only the President, but also the Verkhovna Rada should have a role in the election/ appointment of a limited number of members of the High Judicial Council.”

Do read the entire text of the Venice Commission preliminary “opinion”.  There is some nuanced wordsmithery in connection to a number of much smaller issues – but issues nonetheless – that should also be accommodated by the Ukrainian leadership.

Hopefully the same political will found to accommodate the Venice Commission recommendations for the “decentralisation” amendments, will again be found with regard to the Venice Commission recommendations (both major and minor) to come relating to the judiciary and prosecutors.

Unfortunately, it seems unlikely that the Ukrainian leadership will enlighten the electorate with details of proposed constitutional amendments (and their ramifications), and thus only the reasonably constant monitoring of the Venice Commission website is likely to provide clues to the detailed proposals made.

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Igor Shevchenko joins the Saakashvili team in Odessa

July 20, 2015

On 2nd July, the Rada voted with 235 votes in favour, to dismiss then Ministry of Ecology & Natural Resources of Ukraine, Igor Shevchenko.

Upon his dismissal Mr Shevchenko stated that he was considering running for Mayor in the local elections, due in late October, in either Kyiv or Odessa.

Although somewhat fanciful perhaps, it was a statement of a clear intent to remain actively in Ukrainian politics.

Igor Shevchenko

Yesterday, 19th July, Mr Shevchenko announced that he was to join the team of Governor Saakashvili in Odessa as a “freelance advisor”.

If nothing else, it is in keeping with Governor Saakashvili’s recruitment drive for western educated, reform minded personnel to be sat around the Governor’s policy top table.  Mr Shevchenko becomes the second Harvard graduate to be appointed to the team in a matter of days following the announcement of the appointment of Maria Gaidar as Deputy Governor.

His role will apparently be to “promote the rapid implementation of a number of specific investment projects that have already started or are planned to be implemented in the Odessa region, attracting new investors and the organization of new investment projects, assistance to Odessa Business in collaboration with the central government in Kiev, and assistance in solving their problems at the national level”.

Part trouble-shooter, part lobbyist – but not part of the official Odessa Oblast Administration executive organagram (unless in brackets somewhere).

The obvious question therefore, as Mr Shevchenko clearly meets the Saakashvili tick-box of western educated and previous holder of (senior) governmental position, is why he is employed as a “freelance advisor” and not in a permanent Oblast executive role?

With Governor Saakashvili increasing coming to ever-more public loggerheads with Dnepropetrovsk MP Boris Filatov, is perhaps directly employing an ex-minister that fell out with a populist like Oleh Lyashko and The Radical Party, deemed unnecessarily risky for PR purposes?

Is it (unlikely as it seems) the decision of Mr Shevchenko to begin to ingratiate himself into the Oblast psyche in preparation for a run for Mayor, without taking a position he would therefore have to resign from if successful, and/or being able to distance himself from any Oblast/Saakashvili faux pas that may come to pass prior to any run for office?

Perhaps Mr Shevchenko can best serve the Governor (and hopefully Odessa) in the “advisory role” in and around the Kyiv circuit specifically without any permanent role in the Oblast.  With his connections within and without Ukraine, Mr Shevchenko is perhaps best suited for “shuffling around behind the curtain” amongst the Kyiv (and Davos) clique?

Maybe the rumours of nefariousness that were circulated regarding the actions of Mr Shevchenko when Ecology Minister have some merit, and thus “advisor” is as close as Governor Saakashvili will allow Mr Shevchenko to get – an insurance policy against anything substantive hitting the media, whilst simultaneously making the most of a Harvard educated Ukrainian who knows a little about governance?

Certainly the western educated, government experienced, Saakashvili run Oblast “policy top table” is not yet completely assembled with chairs for the right candidates vacant.

It is thus interesting as to why Mr Shevchenko is to be employed in the role he has been given.  Perhaps it doesn’t matter, as long as Mr Shevchenko ably fulfills the role he has taken on.

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