Posts Tagged ‘DCFTA’

h1

The EU Summit (15th December) & Ukraine

December 14, 2016

The 15th December is the date of the last EU Summit (of European leaders) in 2016.

The agenda is going to be full and no doubt the meeting will be prickly affair.

eu

The agenda sees Ukraine as the lunchtime topic for discussion – and perhaps that is because Ukraine is probably the agenda item least likely to cause indigestion compared to all other items up for discussion.

The day covers (in no particular order) Syria, Russia, sanctions, Brexit, Ukraine, Mr Trump and refugees/migration (and by extension Turkey).  Greek issues apparently do not appear this time – there are only so many hours in a day.

With regard to Ukraine the obvious agenda issues relate to 27 of 28 Member States and the European Parliament ratifying the Association Agreement (and DCFTA) with only The Netherlands outstanding, that and the issue to be finally put to bed sometime in February/March 2017 relating to Visa-free tourism for Ukrainians (on the assumption the European Parliament votes appropriately regarding the “Visa-free suspension mechanism” issue also on 15th December).

The issue with the Dutch Association Agreement is one of optics for the domestic Dutch constituency.  In order for the Dutch to ratify the agreement and finally close the bureaucratic process they insist upon official recognition that in ratifying the EU – Ukraine Association Agreement, it is not a pathway toward EU accession for Ukraine.  Further, they require official recognition that it in no way affords EU guarantees regarding collective security guarantees or obligations to military aid.  Lastly that it does not provide an entitlement (obligation) to financially support Ukraine.

It may appear politically ugly considering that only The Netherlands remains to ratify the agreement and now seeks such official understanding to pacify its domestic electorate, but to be quite clear the EU-Ukraine Association Agreement (and DCFTA) offers none of these entitlements/EU obligations toward Ukraine anyway.

Nowhere does the Association Agreement infer, let alone state, that the Association Agreement is a stepping stone toward EU accession.  The clauses regarding defence and security offer no expectations of collective security or obligation to military assistance.  It has always been abundantly clear that any and all financial aid to Ukraine comes with conditionality relating to reform.

There is only one way for Ukraine to formally accede to the EU, and that is to first formally apply, and then go through the Acquis Communautaire 31 (minimum) – 35 (the maximum thus far) chapters therein.

There is no denying that if Ukraine complies with the Association Agreement fully and in its entirety (at best a 10 year process, probably longer at the speed Ukraine is proceeding) that for almost all Acquis chapters it will have traveled perhaps 80% – 85% of that journey in each and every chapter.  However there will be few, if any, where it will have traveled the full distance whereby that Aquis chapter will be then closed.  Ergo there would be a few more years thereafter to complete that process if embarked upon at all.

Indeed perhaps there is a need to better conceptualise the legality and spirit of both the Association Agreement and the Acquis Communautaire in fundamental terms.

The Association Agreement exists for Ukraine (at its own speed – despite some timelines in specific spheres within) to bring European values/governance/processes/standards to Ukraine from “Europe”.  Thus the Association Agreement brings a notional/perceived “Europe” to Ukraine – it does not take Ukraine to the EU.

The Acquis Communautaire is a trial undertaken by nations seeking to accede to the EU.  It is the (only) process that would therefore take Ukraine to the EU.

Thus the AA (and DCFTA) brings “Europe” to Ukraine.  The Acquis takes Ukraine to the EU.

Therefore, as politically ugly and difficult to digest for some the Dutch requirements may be, they actually make no difference to the legalities of the Association Agreement, nor the spirit in which it was negotiated and offered.

Ergo, it can be expected, despite the ugly optics, that the Dutch will get the official recognition that they seek even though some Member States will cringe whilst agreeing.  To get the Association Agreement over the finish line by officially acknowledging what is not contained in the Association Agreement will ultimately be a price paid.

Clearly from the agenda items, the Ukrainian issue is the least likely to put a Member State leader off their luncheon.  For good measure the Brexit issues are to be discussed at evening dinner – after UK Prime Minister Ms May has left the Summit and the building.

In fact Ukraine for once (in the context of AA ratification and the possible mention of Visa-free), may prove to be one of the easiest agenda items.

Advertisements
h1

The official EU overview of Ukrainian progress 2016

December 13, 2016

A very short entry to bring a reader’s attention to the official EU overview of Ukrainian progress during 2016.

eu

Predictably the issues where Ukraine invariably fails (and highlighted by the blog) is left to the concluding paragraph.

“Reform in Ukraine is a long-term process looking to bring long-term results. As outlined in this report, many important reforms are ripe to move from the legislative and institutional phase to effective implementation, which will benefit Ukraine’s citizens and contribute further to its political association and economic integration with the EU. Ukrainian civil society and other stakeholders have suggested that the EU and Ukraine should do more to communicate publicly, both in Ukraine and abroad, and explain the rationale for, and benefits of, the reforms undertaken by the government.”

If only the blog had a Dollar for every time the phrase “effective policy” and “effective implementation” had been written during the many years it has been running!

h1

The gathering reform storm of 2017 – Ukraine

October 6, 2016

Many Ukrainian eyes are focused on 2017 and what external events will mean for the nation.

How will US policy change when a new president sits in the Oval Office?  What of the elections in France and Germany?  How much of a distraction will BREXIT be when it is eventually triggered?

All good questions – and as stated a few days ago “….. unless the Ukrainian leadership really start making strides (rather than tip-toe) with real and effective reforms US patience will expire sometime in 2017, just as the European patience will.  Real support will ultimately be reduced to little more than that surrounding territorial integrity and sovereignty.”

That statement fails to include Ukraine meeting its obligations to international institutions.  There are agreements with the IMF, World Bank, EIB and EBRD that will either be met – or broken.  This in turn will have a major impact upon FDI if (or possibly when) these agreements go unfulfilled.

To keep a watchful eye upon the external, currently” friendly” influences that will effect Ukraine in 2017 is understandable, but there are some extremely prickly and difficult issues internally that have the ability to magnify or reduce the thus far (surprisingly robust) goodwill of the international community (minus Russia) which seem destined to once again radically and negatively effect Ukrainian standing among its “friends”.

strom

In short there is a reform (or distinct lack of) storm brewing that is going to hit Ukraine in early 2017 and which when it does, the feckless domestic politicians will be once again at its core.  The issues are vividly clear, yet as normal, preparation, professionalism and policy are entirely absent.

Before looking at 2017 however, 2016 has yet to run its reform course.  The next tranche of IMF money, about $1.3 billion, is due in November.  For this tranche to be forthcoming there are but a few obligations to meet.

Clearly insuring reform progression thus far does not reverse is necessary.  The irreversibility of what has been done thus far is highly questionable.  What reforms, if any, can be claimed as being irreversible and consolidated?  Some may be close, but which are truly over the line?  The NBU has done a very good job, but a change of leadership and/or policy could undo almost all that has been done.  NABU is under direct assault by the PGO and Attorney General.  The new national police for the most part is refusing to buckle to corruption despite the police service remaining only half reformed and far from ethical as an institution.  The military are now a capable fighting force, yet its leadership remains poor and con tinuing corruption is as corrosive as the war of exhaustion with Russia in the occupied east.

Nevertheless, aside from holding the reform line that has be advanced thus far,  to meet the requirements for the next IMF tranche NABU should be given the right to wire tapping.  The list of SOEs for privatisation in 2017 completed (notwithstanding the November 2016 second attempt to sell Odessa Port Side – and the equally robust attempts to prevent its sale by vested interests.)  The e-declarations of politicians and relevant public office holders are to be filed in their entirety.  A “fair” budget for 2017 is to have been submitted.

All this to be accomplished by the end of this month so the IMF can give a timely nod of approval for November’s $1.3 billion.

Thus far, “fair” or otherwise, the budget has been submitted for consultation within the Verkhovna Rada.  The outcome of those consultations and the guaranteed subsequent amendments remain to be assessed by the IMF.  The budget however, is possibly the least problematic of the IMF requirements.

An independent NABU logically should not require the SBU to carry out wiretaps on its behalf.  The more people that know that “Mr X” is subject to a wiretap, the more chance there is that “Mr X” will find out.  Having to use a third party brings with it an unnecessary potential for leaks and/or tip-offs.  It should therefore not require stating that a nefarious elite and feckless parliament do not want a self-sufficient NABU that is far more difficult to infiltrate, influence or preempt.

The e-declaration fiasco remains just that.  The  declaration system still fails to meet the legislative framework requirements.  The e-declaration legislation itself also requires some amendment – just not the amendments to remove criminal liability that so many politicians want to see.

The sheer scale of opposition to the e-declaration reform is naked to the observing eye when considering it took EU conditionality to get the e-declaration law passed initially, and then months later it requires IMF  conditionality to actually get e-declarations completed by those who are required to do so (by the end of October).

At the time of writing about 1600 e-declarations have been submitted.  Of those only one of that number is of a parliamentarian (Mikhail Gavriluk).  None of the other 400+ MPs have yet filed.  Not a single member of the Cabinet has either.  About a dozen of the 300 NABU detectives have filed, and only two of the four NAPC members charged with policing e-declarations have done so.  Even if all e-declarations are submitted by the end of October, as stated long ago, court challenges are inevitable when the system still fails to meet the legislative framework it operates within.

In March the blog forecast that by the autumn Ukraine would not need external financing (although it would continue to accept it gratefully), but that it should nevertheless earnestly complete its obligations for reasons of external confidence in the nation’s governance.  Naturally the usual issues of fecklessness loom large, for when it is clear to the political class that there is no impending and immediate fiscal doom, the will to complete prickly reform legislation evaporates – which is where Ukraine finds itself today.

Reform orientated legislation has more or less stopped and requires resuscitation.  In fact it requires steroids if Ukraine is to meets its reform obligations to the IMF (let alone others) for 2017.

There are issues with compiling a list of SOEs ready for privatisation, liquidisation or remaining State owned.  There are at least 20 outstanding audits from those commissioned.

If the next few weeks in meeting the November 2016 and the $1.3 billion IMF tranche requirements appears optimistic, then meeting the obligations for the scheduled February 2017 tranche of $2 billion is perhaps as remote as riding a unicorn naked through the centre of Kyiv without once being snapped by a smartphone.

Despite the reform orientated legislative work completed in the energy sphere, the Ukrainian energy market remains entirely impenetrable, thus looking to 2017 the privatisation of Centrenergo is perhaps the only realistic chance of breaking into this market if it be sold to a foreign investor.  As such, the sale of Odessa Port Side in November has to be seen as a fair and transparent process by all onlookers.

Whatever the case, there is no way the list of SOEs for privatising, liquidisation or remaining State owned will be completed (and made publicly accessible upon the Ministry of Economic Development) by the year end.  Even if the only list of those SOEs identified for liquidisation is completed by then, there is simply little interest within the Verkhovna Rada to kill off such entities.  Gathering 226 votes for an exercise where none have any interests close to the New Year break is somewhat unlikely.  Auditors will not be rushed either.

Likewise “supervisory boards” such as that Naftogaz currently has (and which seems to be working well) for another 10 major SOEs is very unlikely to be achieved prior to 2017 as planned.  There is really no political will to do it – and a good deal of vested interests that will obstruct it.

Thus this reform requirement will roll over into 2017.

Fecklessness, lobbying/nefarious acts, and legislative short-comings aside – now to ever-present populism.

There two obligatory reforms by year end 2016 that seem simply beyond reach, will thus roll over into 2017, and yet are still unlikely to get through the Verkhovna Rada to facilitate the $2 billion February IMF tranche – thus finally breaking the IMF agreement and dealing a critical blow to “friendly” transatlantic assistance beyond issues of Ukrainian sovereignty and territorial integrity.

The first is the long-standing issue of pension reform that almost every government has stated it will tackle – but hasn’t.  Pensions from the age of 50 are simply unsustainable, and to be blunt most people continue to work way past being 50 because the pensions do not sustain them.

It is a policy that has to be addressed, but one that when push comes to shove, and despite a decade of rhetoric regarding the necessity of raising the pension age, every Ukrainian leadership succumbs to populism.

Nevertheless it simply has to be raised.

It is foolish to believe that any attempt to raise it significantly in one go will ever get through the Verkhovna Rada.  A system, for example, of raising the retirement age by 1 year every 2 years over 20 years (or a variation therefore) may stand a chance – however slim.  A system of greater contributions equating to greater pensions may also find some traction – but enough?  The populists however (Ms Tymoshenko, Mr Lyashko etc) will always seize upon pension reform for short term politicking and pre-election electioneering rather than looking at long-term policy necessities.

There are also existing process issues relating to checking the authenticity of claimants – something aggravated by the large number of internally displaced people.

Most difficult of all however, is the issue of land reform.  Ukraine has obligated itself to creating legislation regarding agricultural land reform by the end of October 2016.  That simply is not going to happen.  As of the time of writing the blog cannot even find a draft law registered regarding the issue.

It may be that the IMF will allow this sensitive/populist issue to roll over into 2017 and allocate the November 2016 tranche if all other conditions are met.  It will not issue the $2 billion tranche in February 2017 without this issue being tackled however.

Ms Tymoshenko is already noisily calling for the current moratorium upon the sale of agricultural land to be extended to 2022.  The Radicals being equally as populist will enthusiastically support her.

The sly oligarchy or slightly less mega-rich will look to provide/create agri-loan businesses with formidable foreclosure clauses to assume agricultural land of those farmers they lend to should the sale of agricultural land be permitted.  Huge ranges of State land will be swiftly leased through cronyism prior to any right to buy.  The farmers must be given more time to save the capital to buy the land they current lease and farm.  All such reasons will be presented not to create an agricultural land market.  Those farmers that do own their land will be tricked out of it by the unscrupulous, or simply coerced into selling it for a pittance – by continuing to stop them being able to sell the land they currently own, we are saving them from themselves (rather than infringing upon their rights to sell their own property).

There will be some societal “buy in” for some of that rhetoric, but that rhetoric can perhaps be employed to create safeguards within any laws creating a land market – if anybody actually drafts a law to create a land market that will be fair, regulated, and if necessary contain legislative restraints.  (Perhaps Ms Tymoshenko would like to draft a law that explains how a land market will be created after her 2022 moratorium expires?)

If it proves simply impossible (as is likely) to find the political will not only to lift the current moratorium but also prevent its extension, then perhaps legislation creating a fair land leasing market  is an alternative?

If the land cannot be bought and sold in a (regulated) free market environment, then create a transparent free market where leases for the land can be.  Some imagination might be required, but there is surely some way to create a land market that brings about transparent and fair benefits to all and around which Ukraine and its “friends” can agree as constituting positive market driven reform.

Although it is possible to continue with examples that are going to lead to a reform storm in 2017, it is perhaps unnecessary insofar as highlighting how swiftly matters are going to come to a head and when a probable breach of IMF conditionality occurs – with undoubted repercussions with a newly installed US Administration and immediately prior to both French and German electioneering.

Indeed it may also become the catalyst for the long anticipated early Verhovna Rada elections in Ukraine (which are unlikely to bring about a reformist critical mass as current election laws stand).

* * * * *

A note to regular readers – For the next few days your author will be in Poland locked behind closed doors with a dozen sages and otherwise insightful boffins from across the region.  Although undoubtedly returning far wiser, the normal rambling and low-brow blog entries will continue upon return.

h1

BoJo in Ukraine

September 15, 2016

Having been asked many times about Brexit and the repercussions for UK-Ukrainian relations, both in person and by email, it is perhaps time to share some thoughts – and they are only thoughts.

Putting to one side any free trade agreement issues that would be upon a very long list of free trade and other agreements the UK is going to have to renegotiate, there are perhaps more immediate matters to raise.

The UK has been a robust supporter, and not without influence, within the EU when it comes to Ukraine.  Therefore the reaction of the Ukrainian leadership to both Brexit and then Theresa May becoming Prime Minister with a new cabinet and a basket full of EU problems probably went along lines thus:

Innumerable calls, letters and visits both to HM Embassy Kyiv and King Charles Street, London, will have occurred – all seeking insight into any change in the UK position toward Ukraine, a hint as to who will be handed the UK baton within the EU when it comes to leading the Ukrainian cause (probably Poland), and many questions over existing funding and also on-going bilateral programmes (whether they are hosted in Ukraine or the UK).

Needless to say there will also have been a lot of lobbying regarding insuring the Prime Minister and senior Cabinet Ministers either visit or receive their Ukrainian counterparts before those from The Kremlin.

In short, probably quite blunt requests to have London visit Kyiv, or have Kyiv visit London, before London ventures to Moscow or having Moscow arrive in London.  The usual framing and diplomatic messaging about priorities and positions matters.

Undoubtedly Ukraine’s FM Klimkin (who is a very good and capable FM) has held many telephone conversations with the UK’s FM Boris Jonhson (who thus far the FCO and 6 have managed to keep under control).  On a personal level, a reader would expect both men to get on very well – and personal relationships do count.

Innumerable verbal and written reassurances will have spewed forth from the FCO to reassure the Ukrainians.

bojo

Lo it has come to pass that Boris Johnson is in Kyiv 14th -15th September (and thus manages to escape before the Yes Conference) bringing soothing and comforting words, as well as the desired diplomatic message of “visits” delivered at his level.  “I am very glad to visit Ukraine soon after his appointment as Minister of Foreign Affairs. This visit is a clear indication of the long-term strong relationship between our two countries. Britain stands side by side with the people of Ukraine for the protection of the sovereignty and territorial integrity of the country, particularly in the Crimea. The support that the United Kingdom has to reform in Ukraine, is unchanged We are pleased to work closely with those who implement the program for the development of transparent, accountable and stable government, and strengthening the economic outlook for the whole territory of Ukraine.”

(It remains to be seen whether Theresa May will visit Moscow before Kyiv, or host/be hosted by President Poroshenko before President Putin.)

It also has to be recognised that the Ukrainians will be very aware – as HM Embassy Kyiv probably is too – that UK influence has now diminished across most (but certainly not all) policy areas.

BoJo has also announced an additional £2 million for the HALO Trust mine clearing in eastern Ukraine between now and 2018.

Thus the boxes ticked for diplomatic positioning/messaging, soothing words and gifts delivered – as a reader would expect.

But this will not be enough.  Both Ukraine and the UK will be looking for other ways to reinforce a relationship that is clearly weakened due to Brexit.  There is a requirement to find bilateral agreements that will drop anchors between the nations not only either side of Brexit, but also either side of the next Presidential election in Ukraine and also either side of the next General Election in the UK.

Medium term bilateral agreements, 5 or 7 years in duration would seem wise when so many existing agreements will end with Brexit.

There are things that the UK does do particularly well and that the Ukrainians clearly appreciate (apart from money laundering) which are obvious areas to look toward when trying to find 5 – 7 year agreements that will be useful and genuinely meaningful and that will not be complicated by Brexit issues relating to the EU Association Agreement and DCFTA, and assorted other treaties, agreements, memorandums, read missions, etc.

The first is defence/military.  The second is intelligence. Both are matters that will remain priority issues for Ukraine for the next decade at least, and both are areas where the UK is no slouch.  Announcing a bilateral 5 – 7 year defence/military agreement (whatever its limitations/parameters), and/or announcing a 5 – 7 year bilateral agreement regarding increased intelligence sharing (whatever its limitations/parameters) would be a well received gesture as far as Ukraine is concerned, and for the UK it will assist in keeping HM Embassy Kyiv relevant until Brexit is over and an entire raft of new agreements with Ukraine will be required as a result.  (Relying upon a small Chevening Alumni won’t do it, and neither will knowing where the money is hidden.)

Some bilateral medium term agreements beginning and concluding either side of Brexit and significant elections would not go amiss for either nation.

h1

The imminent changes at the top occurred – Now what?

August 29, 2016

A few days ago an entry appeared forewarning of changes at the top within the Ukrainian political and civil service elite – forecasting that Boris Lozhkin would move on from Head of the Presidential Administration (as he has been trying to do for some time, wanting to return to the business world) and that in all probability Igor Rainin would cease to act as Head of Kharkiv Regional Administration and replace Mr Lozhkin (due to Mr Rainin being the least controversial choice for those that will be remaining within the Presidential Administration – and also the easiest to replace holding an Oblast level position).

It went on further to suggest Mr Lozhkin would not be completely released from the Presidential grasp/circle but could very well be appointed head of the newly invigorated National Investment Council.

Lo, all such predictions came to pass on 29th August – with the minor deviation of Mr Lozhkin assuming the position of Secretary to the National Investment Council.  (Nevertheless, hopefully most readers would agree the predictions made were close enough for a free to read blog.)

Mr Rainin will be a competent, adequately discreet (and fairly discrete) safe pair of hands as Head of the Presidential Administration.  Shocks to the system he will not cause.

Mr Lozhkin thereby leaves the Civil Service (prior to e-declarations going live with effect from 1st September) yet remains within the Presidential grasp and therefore presidential team no matter how indirectly it may appear.  Regardless of title and position, his unofficial “shadow rank” within the elite of the Ukrainian elite firmly keeps him within the inner sanctum of trusted Presidential advisers with easy access to the body (President).

He is now therefore free to return to the business world without annoying e-declarations and other such bureaucratic requirements, whilst also promoting (and to be blunt he will be driving) the National Investment Council.

Presumably the existing Investment Support Office will be rapidly (although probably not officially) subordinated to the NIC – and by extension to Mr Lozhkin.  Reading between the lines of Prime Minister Groysman’s statement regarding Mr Lozhkin’s new position such inference can certainly be drawn.

Boz

A reader may ponder who Mr Lozhkin will attract to the newly invigorated National Investment Council as he is very well though of internally and externally of Ukraine – and it was he that invited and convinced the foreigners that formed part of the Yatseniuk Cabinet.  Ergo it would be no surprise to see some very competent people appear as leading lights within the NIC.

Clearly with Ukrainian GDP growing at about 1.5% per annum that is not enough to provide a “feel good” factor among the electorate to return President Poroshenko (and parliamentary team) to power when elections arrive.  Annual growth of approximately 5% however could well (and probably would) do so as long as elections can be kept to their projected timelines per statute and not forced to arrive early.

Although it may be wishful thinking, 2.5 years with GDP growth of 5% (or more) consecutively wins a lot of votes – especially in mercantile cities like Odessa.

Mr Lozhkin will therefore be faced with the same existing statute that prevents significant FDI that has frustrated Governor Saakashvili, whose long list of legislation that requires repealing and/or amending has seen no traction within the Verkhovna Rada.

It seems unlikely that Mr Lozhkin will succeed without forcing some (if not the majority) of the very same statutory and de-regulatory issues already raised and submitted to the Verkhovna Rada by the Odessa Governor.  The question therefore is whether Mr Lozhkin can gather Verkhovna Rada momentum swiftly in order to give himself a chance of changing the economic fortunes in time to support the president by the time elections come around?

Further where is FDI going to be most effective when it comes to national development (and no doubt also in his mind, winning the Poroshenko political entities votes)?

The days of mining and metals as economy leaders, and with both being major employers (and exporters) are on the wain.  Road and rail infrastructure projects, of which there are innumerable, are potentially significant employers.

The necessity to bring the Ukrainian Military Industrial Complex to the modern day also presents significant opportunity.

The IT industry which suffers no oligarchy market capture, and boasts a significantly high proportion of globally recognised qualified people, simply has to be left to do its innovative thing – with support where necessary/possible, but otherwise unobstructed or interfered with.

Agriculture is and will remain a major economic driver (and should any reader have $150 million(ish) for investment in a 230 hectare, high tech farming corporation – this blog is aware of one discreetly for sale “off market”).  Thus the agro-industrial complex will have to be a top priority for FDI if the sector is to become more efficient.

The Ukrainian aerospace industry appears to be doing fairly well, but can do much better with some smart investment and a “harder” sales initiative.

The continuing clean-up of the banking sector by the NBU presents an ever-improving market place for entry (and if a reader has $40 million(ish) the blog is aware of a particularly healthy bank for sale “off market”).

There is of course the impoverished yet potentially massive tourism industry (perhaps with the “added incentive” of legalised gambling returning one day).  The blog is aware of numerous experienced international gambling entities waiting to enter Ukraine – Turkey, Israel, Georgia etc have all contacted the blog regarding legislative updates and visited potential locations for casinos in the past 9 months.  FDI money for this there is – legislation prevents.  (Should a reader have $12 million(ish) the blog is aware of a small gated and profitable beach front resort for sale “off market”).

There is also the expansion of the existing pharmaceutical and chemical industry that should not be overlooked – neither should energy extraction/production/infrastructure.

(Getting out of the way of SME’s wherever possible will also bring about swift local economy benefits, but clearly this falls outside of the competence of a National Investment Council charged with finding and protecting big money investment.)

Thus it is not only going to be a question of how many $ billions Mr Lozhkin can attract (and protect) by way of FDI (and in what time scale), but also what areas are deemed a governmental priority and his ability to nudge investors that way.  Investors can be strange creatures and want to invest in areas that are not governmental priorities – unsurprisingly.  Some have no interest in PPP, others only in PPP.  Some are quite rigid in their internal governance and expectations, EBRD etc., where as others, for example “Investment Fund X”, may be far more flexible.

Having now written all this, a reader may perhaps ponder just how much time Mr Lozhkin will have to return to his own businesses, and the business world – which was the reason for his wanting to leave the Presidential Administration in the first place.

(As an aside – Teasers for the “off market” assets mentioned (and others) are available for investors subject to the usual NDA/contractual requirements.)

h1

Constitutional amendments for the judiciary pass – kicking the Rome Statute can years down the road

June 2, 2016

Many years ago, an entry appeared here regarding the lack of ratification of the Rome Statute by Ukraine, despite having been a signatory to this international instrument since January 2000.

The reason for failure to ratify since the 2000 signing was outlined as follows – “On 20th January 2000, Ukraine signed the Rome Statute and on 27th January 2007 it acceded to an agreement on the privileges and immunities of the ICC – however it has never ratified its signing of the Rome Statute in 2000 – prevented in doing so by a Ukrainian Constitutional Court ruling on 12th July 2001, that stated amendments to the Ukrainian Constitution would be required to do so.

The constitutional “issue” being the provision stating that “an International Criminal Court is complementary to national criminal jurisdictions” (paragraph 10 of the Preamble and Article 1 of the Rome Statute) as eloquently made clear by Viktor Kryzhanivskyi on 2006, the then Ukrainian Charge D’Affaires to the UN.

That being the only issue within the Rome Statute preventing Ukrainian ratification (despite mention of the loosely worded “crimes of aggression” court competence – a competence which is likely to be in part responsible for US, Chinese and Russian non-ratification.

Those few words in the Rome Statute preamble have, and currently still are, preventing Ukraine ratifying a statute it otherwise agrees with and supports – After all, when you are never likely to fall foul of this statute as a nation or national leader, supporting an international court that prosecutes those who do, is not a particularly difficult position to adopt.

Thus Ukraine remains a supporter of the ICC and continues to state it will – eventually – ratify the Rome Statute.”

That was then (February 2013) – and this is now, with a very different Ukraine finding itself in very different circumstances.

It is a nation now engaged in a (confined) military war with Russia (as well as fighting on political, diplomatic, cultural, informational and economic fronts).

ICC

Thus since that entry was written, there are certainly events (particularly in the earliest months of the conflict) that may now fall foul of any ICC involvement since hostilities began in 2014 – by both sides and by parties both de jure and de facto under governmental control at the time – not withstanding any holistic opinion.

Since that 2013 entry, Ukraine and the EU have also ratified the Association Agreement/DCFTA.  Article 8 of that ratified instrument obliges Ukraine to ratify the Rome Statute.

On 2nd June 2016, the Verkhovna Rada found 335 votes, a constitutional parliamentary majority, thus passing amendments to the Constitution of Ukraine regarding the judiciary and judicial machinery.  A step in the right direction for reform, despite several can-kicking dates for certain actions to occur.  In short the amendments to the Constitution will not go fully “live” until 2019 to allow for various stages of “transition”.  Further some statutory legislation was passed regarding implementation and timetables therefore.

Within the text that saw 335 parliamentarians finally point the judiciary in the right direction (generally and constitutionally speaking) was mention of the Rome Statute.  In short, the amendments postpone ratification of the Rome Statute, as required in the already ratified AA/DCFTA, for (another) 3 years.

Naturally a cynic will infer that such a delay is deliberately orchestrated with the singular intent that the conflict in eastern Ukraine has cooled – or perhaps even frozen – during this 3 year period.

(A reader would be perhaps wise to dismiss, if they have not already done so, the policy necrophilia related rhetoric of “full implementation of Minsk”, for “full implementation” is not going to happen – albeit part implementation there may eventually be.  A reader would also be wise to consider that Minsk is not a legally binding agreement upon anybody.  It has been ratified by nobody and thus nowhere has it been deposited as a legal instrument.  It is a framework document of no legal standing, and nothing more – albeit the only “plan” around to theoretically reach a conclusion to current events.)

It is extremely unlikely that any events prior to ratification will be/can be retrospectively subjected to ICC competence despite eventual ratification – particularly with unofficially official obstruction into certain events 3 years from now when the Rome Statute ratification can then rise up the legislative agenda once more and perhaps become a reality.

Those 3 years may also provide time for the loss, contamination, or deliberate destruction of evidence against those Kyiv may prefer not to have prosecuted – notwithstanding any Minsk framework application of mentioned amnesties should matters progress that far (which seems unlikely when all-for-all prisoner swaps and ceasefires cannot even be fulfilled).

There should be no illusions that the current Kremlin (and perhaps that which comes thereafter) will remain at war with Ukraine for many, many years to come.  Even if a lasting ceasefire comes to pass, all other non-military fronts will remain very active and hostile – and a lasting ceasefire seems far from manifesting any time soon.

It is difficult to find any plausible reasoning to delay for another 3 years any ratification of the Rome Statute other than to insure Ukraine remains outside the purview of this institution whilst hostilities continue.  The Rome Statute “can” has just been legislatively kicked into the political grass by a significantly large Verkhovna Rada parliamentary vote.

h1

Demographic voter bases (The Saakashvili target) – Ukraine

May 24, 2016

As stated in an entry some months ago when there was some doubt over the formation of a new Cabinet of Ministers materialising, Ms Tymoshenko and the political vehicle the serves her (Batkivshchyna) had already begun electioneering – with her trademark usual populist nonsense and Robert Mugabe-esque economics naturally to the fore.

That pre-election electioneering has not stopped – quite the opposite, it seems to be gathering momentum.

A reader may ponder just how such flapdoodle is financed – and will continue to be financed for months ahead – considering the amount of prime media time she is commanding (compared to others).

(A reader may also cynically ponder as to just why the media still bows to her ego and accepts her prerequisites that former investigative journalists turned MPs such as Sergei Leshchenko must have left any television studio prior to her arrival and subsequent populist monologue.)

Ms Tymoshenko is clearly aiming to gather in the pensioner vote (in the absence of the Communist Party and now defunct Party of Regions) and the agrarian vote too, in an effort to add them to her traditional and fairly solid 13% of the constituency.  (Somebody has to try and win over the old Communist voter base, so why not Ms Tymoshenko, and why not start now?)

Whilst President Poroshenko continues to broadcast the actions of Russia, as indeed he should for Russia will remain a significant threat (through its various measures) to Ukraine far, far into the future, the domestic constituency sees reform as the most necessary and top ranking issue facing Ukraine – and quite rightly.

The net result is that President Poroshenko, now perceived to control the Prime Minister and Prosecutor General (how long before the Interior Minister is replaced by a Poroshenko man?) is fully responsible for all progress and ills of the nation domestically (as well as internationally) despite constitutional responsibilities.  Thus only reforms will save President Poroshenko at the ballot box – regardless of how much he may prefer to orate of the dastardly and illegal deeds of The Kremlin.

Likewise only reforms will save his prodigy as Prime Minister and (latest) chosen man to head the PGO – and it is these people that face a far immediate and difficult political horizon when it comes to early national ballots and securing sections of the demographic voter base as a foundation.

It is perhaps interesting therefore to note the comments of Davit Sakvarelidze of 24th May in Kharkiv – for they indicate the voter base demographic that any new Saakashvili associated and/or led, party will be targeting – that of the Ukrainian SME.

It is not a demographic that will easily take to the populist nonsense of Ms Tymoshenko, nor will it feel represented by the remnants of Party Regions under the various flags these parliamentarians will be flying, for historically they are associated with big business and the oligarchy.

Samopomich still remains too provincial to capture the imagination of SMEs nationally, the Radicals have nothing to offer by way of competent policy, and thus far the Poroshenko (and to be annihilated at the next election) People’s Front coalition are perceived to have completely failed SMEs – even to the point of not providing the most basic of idiots guide to the newly opened EU market via the DCFTA..

SMEs therefore would appear to be fertile ground for a new party – and a new party supported by and/or led by Misha Saakashvili there will be in preparation for the inevitable early Verkhovna Rada elections.

sme

It seems hardly a difficult matter to create a party manifesto based upon repealing so much legislative and bureaucratic codswallop that currently suppresses and thwarts SMEs and entrepreneurs in Ukraine – even if that is all that is in a party manifesto.

Indeed any manifesto that promises nothing other than repealing current legislative nonsense may prove to be far more popular than the usual populist promises of quick (and unachievable) fixes based upon Zambian economic theory, or providing subsidies far beyond anything responsible governance would allow.

As is often the case with policy, legislation, and governance, less is more – so why not in a party manifesto?

The target for any new Saakashvili supported and/or led party would be (realistically) to achieve approximately 20% of the national vote – for no other party seems likely to reach 20% of the national vote.  That would leave them in a solid position for coalition building – or opposition.  (To be blunt it seems unlikely that any party will pass the 20% mark at the time of writing, and the last polls seen by the blog had a Misha Saakashvili anointed political entity currently only half way to that 20% nationally – prior to identifying a target demographic.)

The question to be asked therefore, now that the demographic of SMEs has been identified by Mr Sakvarelidze as the target for any Saakashvili blessed political entity, is how any such political party will frame what it will do for this vital section of the society/economy.

A humble suggestion would be to work on the “less is more” principle, publicly and repeatedly identifying what obstacles and legislation will be removed and repealed to ease the SME burden – that and to begin an education programme posthaste for SMEs regarding how to achieve market entrance to the EU as a preparatory electioneering act – which would be far more useful when it comes to potential voter traction than any voter listening to a prime time monologue delivered by Ms Tymoshenko.

%d bloggers like this: