Reforming Ukraine – A lifetime struggle or still achievable quickly?

In a time of austerity and structural failings across the EU, “reform” has been the political buzz word.  More precisely the sovereign nations are carrying out a number of reforms, whilst the EU and in particular the Eurozone  is actually attempting to complete a  model that was never completed.

Ukraine is also going through a series of reforms.  In the case of Ukraine it is to move towards parity with EU norms legislatively,  to keep promises it made to PACE/Council of Europe in 1995 and never bothered to do any more about, to increase energy efficiency and resourcing to diversify dependence on Russia etc.

To be honest, a massive amount of reform is on the “to do list”, probably far more than one parliamentary tenure can cope with.  To this end, we have seen rushed and thus poor legislation fairly often (and surprisingly) vetoed by the president and send back for further work, occasionally redrafted due to protests from society as in the case of the tax code, and much of it stuck in a loop between legislative drafters and parliamentary cabinet ministers bouncing items back and forth in an bid to improve proposed legislation before it even gets to a vote in parliament.

However, as I have written here many times, no matter how good the legislation written may be, the current government, as previous governments before them, face opposition and determined obstruction when it comes to implementation of such laws within the administrative arms of the State and within the patriarchal region fiefdoms, should reforms impinge of their graft.

It is nothing new for me to write about ineffective implementation of what would be otherwise good policy and the deliberate sabotage of that policy by the administrative agencies and regional fiefdoms.

Many is the time that I have said any reform instigated top-down must have a bottom-up “buy in” from society.  As is the case with corruption, within society it is a double edged sword.  One moment an individual is paying a coercive bribe against their will (and moaning about it), and the next that very same individual is actively seeking out somebody they can bribe to in order to circumvent the system for their own ends (and bragging about it).

I have written about this unholy trinity of structure verses agency verses society many times either in part or collectively, so you are wondering way I am doing it again no doubt.

The answer to why I bring all this up again,  is that I am contemplating why some former Communist States managed to reform quickly and others did not.  That is not to say they reformed perfectly, or completely irradiated cancers in society such as corruption, but many certainly within the former Warsaw Pact nations managed to reform very quickly and extremely significantly.  Almost without exception, the FSU nations have not.  Ukraine is  included in the latter, albeit probably still amongst the best of a bad bunch when it comes to the FSU nations.

It is possibly all too easy an answer that the former Warsaw Pact nations were closer to Western Europe and therefore had to adapt more swiftly to the new reality of no overlord sat in Moscow and thus a need to make friends in the western neighbourhood immediately to survive.

No matter what the political will, business will or will of society, all 3 have to buy into reforms and concepts for them to be a success.  All must accept in the short term, extreme pain during the reform process without doing a U turn.  Easier said than done.

Why is it that the Polish (at all levels of society) accepted and suffered for a number of years greatly, the Balcerowicz Plan, and yet Ukraine, immediately next to Poland, couldn’t even scribble a plan on the back of a cigarette packet and agree it amongst the leadership, let alone with society?

Was it the fault of the Kravchuk leadership for not proposing such a plan or that of Ukrainian society for not demanding such a plan in 1991/92?

Is that the EU promised to take in Poland and the other Warsaw Pact nations in forthcoming expansion but refused to do so for Ukraine?  In effect a deal between Warsaw Pact leaderships and their societies with the Holy Grail guaranteed at the end of it?  With no such guarantees for social pain to the Ukrainian leadership, it was a pain they were not prepared to suggest and hope Ukrainian society would buy into?

Is it that the stagnation under Brezhnev within the FSU which led to chronic corruption was more deeply ingrained the closer to Moscow a society was situated?  Those on the periphery of the Warsaw Pact were less effected?  Is it that Ukraine simply wanted to remain more Russia orientated than EU orientated immediately after independence?

Is it possible to arrive at an academic model which adequately accounts for some former Communist nations reforming swiftly and significantly 20 years ago whilst others did not?

Could it be that the Warsaw Pact nations had their own pre-existing State structures, whereas the FSU nations had a centralised Soviet structure, thus forcing completely new structures to be formed upon independence and in order to do so, a centralisation of power was necessary to create them in the first place? Were the Warsaw Pact nations, in fact, at an advantage to begin with when independence came?

Is there something which should be taken into account when we consider Solidarity in Poland, or Charter 77 in Czechoslovakia, where there were organised oppositions that forced independence amongst the Communist States, whereas Ukraine had it’s independence dumped in its lap without any struggle whatsoever?

Can it be that a pre-existing  opposition makes it easier to convince society that painful reforms immediately are necessary in the short term to accomplish a medium term significant gain?  Ukraine had no real pre-existing opposition compared to Romania, Czechoslovakia or Poland when independence came, for example.

Is it simply that the Warsaw Pact nations were more necessary for the EU to influence on a geopolitical basis as they were immediately on the doorstep whereas Ukraine was further away?   Thus instability in Ukraine would have far less immediate effects on the EU than instability in those nations immediately on its borders?

Is it the much talked about “resource course” which have in effect centralised power in the FSU nations around these resources, whereas the Warsaw Pact nations are home to far less resources so it was easier to decentralise and democratise?

Whatever the answers to those questions above, the fact remains all of Ukraine’s immediate neighbours to the west managed to reform for the better (if not perfectly) in a fairly short period of time, whereas Ukraine quite simply has not moved much at all.  Maybe that is due to political parties being leader/personality-centric rather than centre-left or centre-right on the political spectrum and therefore for the most part ideology-less in Ukraine?

Only recently have all the main Ukrainian political parties and society decided upon the same direction towards the EU and put it on their agenda (albeit not necessarily to join it, but at least to be EU comparable by way of standards and law etc).

It is however, long past the point of peek political capital to make and effectively implement very painful reforms that are necessary, the timing of which was seized far more appropriately by Ukraine’s immediate western neighbours.

We are now at something of a paradox in Ukraine where the previous government had the ideological direction and will, but was so dysfunctional it couldn’t draw up the necessary legislative tools to create reformist frameworks, and yet now there is a government with the ability (and is) drawing up the necessary legislative frameworks but is repeatedly putting off its implementation.  Where it is trying to implement them, the vested interests in the administrative agencies and regional fiefdoms are seriously obstructing them.

Regardless of who is in government however, society, bottom-up, will need to buy into the reforms programme (painful or not) which as yet, it has failed to do so whole-heartedly.  Without that necessary and complete buy-in, reforming Ukraine is likely to take a generation or two.

No pain, no gain? This week in the RADA….

It looks as though there is going to be a rather painful and quite unpopular few days in the RADA this week.

Firstly, the law on pension reform will get its eventual and much delayed perusal. It will not be popular but it is much needed. It was much needed even before the IMF made pension reform a condition of its loans. To say it is/was unsustainable would simply be stating a fact.

Also up for the “once-over” is another IMF condition relating to government subsidies on the price of oil and gas. Whilst this may get passed by the RADA, the timing of implementation may not be as swift as that of pension reform. Ukraine already has an issue with inflation, both that officially stated and also the real inflation that the public face. The Prime Minister quite rightly notes that immediate increases, whilst agreeing with the IMF about the subsidies, will have a quite adverse affect on inflation which is becoming difficult to control.

Critics of the IMF would of course note a rather consistent trend relating to IMF help followed by inflation and hyper-inflation. They would also point to the fact that IMF loans, all to often is used to ultimately repay international lenders who then take their money out of a nation, ultimately destabilising that nation and causes the currency to become worthless. A subject I will leave to the economics and/or conspiracy bloggers, but something Ukraine will be quite aware of and planning to mitigate.

What can be said is that the current Ukrainian authorities are certainly using the IMF conditions to install some much needed economic discipline
and justify some very unpopular reforms within the RADA. The finger of unpopularity will be diverted as much as possible to the IMF for the pain due to the conditions it imposed.

If the current authorities can avoid the flight of investors from the country which seemingly follows the IMF involvement almost inevitably
(investors have their money back, in effect from the IMF via a national government through conditions of the loan to repay international
obligations first and foremost, and then run off to safer pastures seemingly being the model), then the government will have done well given historical precedent of the IMF.

So, we will sit back and see if the pension and utilities reforms get through and which, if either, have an identified implementation date.  One expects the pensions reform to start in a far more timely manner than that of gas subsidies.

By all means move at a glacial PACE, you know how that thrills me!

 Well dear readers, it is not very often I quote from films, but the title of this post comes from The Devil Wears Prada.

It seemed almost appropriate given the recent discussions between Ukraine and the President of PACE, Mr Mevlut Cavusoglu. Yes, I know – I’ll get my coat!

As expected whilst Ukraine has the chairmanship of PACE until 7th November, whilst Ukraine gets to point PACE in causes Ukraine favours and push the said causes, PACE also has 6 months unfettered, unobstructed and undeniable access to those at the very top of Ukraine.

There is no “Leave a message and I’ll get back to you” facility for Ukraine at the moment. (I know, I know, Rockford Files quote – No idea what is wrong with me today.)

A very useful time for PACE to continuously engage with Ukraine on matters such as human rights, freedom of speech, alleged political persecutions, reforms and all those other difficult and resisted matters (by some) withing the Ukrainian elite (from all parties).

Of course the most high profile case pending the courts is Ms Tymoshenko, ex-Prime Minister and leader of one of the now opposition parties. Vocally denounced by some of her allies within the European People’s Party (EPP) as selective prosecution, the PACE President stated “This is the result of an investigation. What is currently taking place [around the investigation into cases against the opposition] is a lawful procedure. Politicians must not influence this process.” – Quite (although politicians from all sides within and externally of Ukraine have indeed attempting to influence th process and will probably continue to do so!)

He also went on to comment on the glacial movement towards certain reforms that PACE has been pushing for long before the current administration took power. Specifically a State public television channel , something Ex-President Yushenko and ex-Prime Minister Tymoshenko refused to do, the latter probably now regretting that decision deeply.

Between you and I dear readers, the state TV channel is not so very far away from being achieved however PACE is absolutely right to apply pressure as there is a distinct lack of will to actually get it on air in certain quarters across all parties.

Other reforms that PACE have been citing for the best part of a decade relate to reforms in the Criminal Procedure Code and new laws relating to the Prosecutors and Defenders offices. Areas again, where there is significant resistance amongst law makers to make changes due to self interest.

This fact was acknowledged by the President publicly in Poland last week when he said “I understand very well that the events that are now taking place in the country and outside it, I mean different evaluations given to Ukraine, are very natural because Ukraine is going through reforms. There is fierce resistance in Ukraine both from the people carrying out the reforms and officials of different levels, who are used to living the old way. For this reason, the path now taken by Ukraine will give rise to different discussions.”

Quite true. the overt and covert last ditched feeding frenzy of the rich and powerful is obvious to anyone who cares to look, prior to the DCFTA and AA get signed with the EU and the easier times of acquiring monopoly control have passed for good.

The question is, can PACE apply sufficient pressure between now and 7th November on Ukraine to get more than glacial movement on the three issues it has highlighted via Mr Mevlut Cavusoglu?

The list of internationally pressured reforms from various sources is growing and growing (although you do have to wonder why none of them have been done before under other Ukrainian governments).

Maybe this is why there is a whole raft of changes going through the RADA which is less than perfect. Too much to do and so little time given the resistance to anything that equals a turkey voting for Christmas?