Posts Tagged ‘UK’

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Opposition Block on the western media offensive?

September 25, 2016

A recent article in The Guardian written by Vadim Novinsky has ruffled some feathers, not necessarily among the Ukrainian ruling elite, but among the Ukraine watchers, academics, diplomatic corps,  think-tanks et al.

Anders Umland making the comment “This is the second dubious publication by a former Yanukovych man in a major Western outlet after a recent article of Liovochkin in POLITICO.  Critique of corruption and bigotry in Ukraine is necessary.  But super rich former members of an oligarchic kleptocratic authoritarian regime like Novinsky or Liovochkin are the last to have a right to do so.  Why do you not publish an article about the lack of democracy in Africa written by Mugabe, The Guardian POLITICO Magazine?  Or are you against democracy in Africa?”

A statement that in sum highlights that objectivity is giving all a fair hearing. It does not equate to false moral equivalence.

Firstly, while no comment will be made about the authorship of the Sergei Liovochkin piece in POLITICO, most assuredly Vadim Novinsky did not write the piece for The Guardian, albeit he is the named author.

The Guardian piece was ghost written and published under Vadim Novinsky’s name.  It was written by Oleg Voloshin, a former Ministry of Foreign Affairs employee who is clearly willing to employ the literary skills and disciplines of diplomatic training and experience for the Novinsky coin and/or Opposition Block coin.

So be it.  There is a market for well thought out, deftly framed, ghost written public communication,  particularly by those exceptionally sullied by past and current deeds – such as Messrs Novinsky and Liovochkin.

A reader may ponder perhaps why the articles were not placed under Yuri Boiko’s name being the official head of the Opposition Block faction.

Equally worthy of consideration is that aside from the diplomats, academics, pro-Kremlin politicians, and assorted variously flavoured think tanks, it really doesn’t make much difference if Mr Voloshin or Mr Novinsky, or Mr Liovochkin, (or Mr Boiko) are named as author for the article published in The Guardian – none of the British public have any clue whatsoever who any of these men are, or indeed what the Opposition Block is made of, stands for, or would do if returned power.  The British public had little interest in Ukraine pre-Brexit and have even less post-Brexit.

The UK public could not tell you what interests the UK has in Ukraine, what public money is spent on here, how much, (and whether it is bilateral or via the soon to be exited EU), or for why.

Between the football season starting, Brexit, and whichever celebrity has been caught in a photograph doing something “risky” or “silly”, there is little interest in Ukraine among the UK hoi polloi.  Therefore the audience for these articles is not the average UK citizen (or indeed the average English speaking citizen).

Nevertheless these articles, appearing within a week of each other, are simply not “noise” but “signal”.  More of the same seems certain to appear.  The question is what do they signal?

influence

Having discounted them as being simply the usual disinformation, misinformation, half truth, half story propaganda noise – are they part of an influence operation??  If so, are they part of an Opposition Block influence operation, or that of The Kremlin – for neither article mentions Russia whatsoever (perhaps wisely considering it has just had its equivalent to its MH17 moment when bombing the UN convoy in Syria a few days ago).  Neither do the ties to Moscow that both (named) authors possess become apparent.  Nevertheless with the deliberate omission of mentioning Russia, neither article do the Kremlin narrative any harm (unsurprisingly).

To be blunt, although it does the Kremlin narrative no harm, and it may well be something The Kremlin co-opts along the way, it seems much more probable that it is an Oppo Block inspired attempt at an influence operation..

If that is true however, to what end?

If it is an Oppo Block influence op, then why isn’t it Yuri Boiko’s name on The Guardian piece rather than Mr Novinsky?  Surely the officially recognised leader would be the name to promote?

Mr Liovochkin rightly complaining in POLITICO about the criminality surrounding the Inter incident is understandable as a co-owner (even if more than a little hypocritical for a man that was Head of the Presidential Administration of Viktor Yanukovych when journalists were regularly beaten (and worse) around Ukraine).

(An outline of the criminal incident and also dubious internal workings of Inter has previously been written.)

Neither article however, places much emphasis upon the Oppo Block, and neither “author” really claim to be writing on behalf of the party.

As recently stated, Mykola Skoryk of the Oppo Block is likely to see his parliamentary immunity removed next week – perhaps somewhat ironically in connection with the beating of journalists and demonstrators in Odessa on 19th February 2014.

After Mr Skoryk, Mr Novinsky, the “author” of the Guardian piece is quite likely to soon top the parliamentary immunity stripping list having been accused of assaulting and threatening the head of the Ukrainian Orthodox Church Kyiv Patriarch.  Mr Novinsky is a firm adherent of the Moscow Patriarchy and finds the Ukrainian Patriarchy bid for autocephaly nothing short of scandalous (not to mention it would seriously reduce Moscow’s influence through “the church” and cost the Moscow Patriarchy a lot of  Ukrainian souls, earthly riches and property).  Indeed he partly funded a Moscow Patriarchy “Peace March” that was widely perceived by the Ukrainian constituency as a Kremlin influence operation – which it was.

(Few will doubt both Germany and France being subject to Kremlin influence operations in 2017.)

Rumour also circulates that Mr Novinsky may be stripped of the Ukrainian citizenship granted to him by former President Yanukovych (for (dubious) services to Ukraine), leaving him to rely upon his natural Russian citizenship and a hope that he will not be swiftly persona non grata (PNG) from Ukraine thereafter.

Mr Liovochkin is unlikely to face the same chances of prison (or being found guilty in absentia) or ejected from the country, but perhaps will see if not Inter taken off air soon, then broadcasting licence problems when it is due for renewal – an unquestionable disaster for the Oppo Block that projects its propaganda from the Inter platform.

Therefore if the UK (and English speaking) hoi polloi are not the target audience in this influence operation, it has not yet been co-opted by The Kremlin, and the article content doesn’t really promote Oppo Block positions,  then the journalists, diplomats, academics, think tanks, and political class that will take notice must be the target.

The articles therefore can possibly be considered as preparatory media plants that pre-frame “persecution” in relation to the foreseen events specifically surrounding these two men/”authors”.  He/she that frames first and robustly often wins the argument.

It is clear that these articles are not (coincidental) random noise generated by the Oppo Block to simply undermine the current authorities (despite some valid points albeit deliberately lacking more holistic optics) or to promote the “party position”.

Will this influence operation be sufficient to dissuade the above predicted domestic action against them in Ukraine (probably not), or alternatively generate “international concern” when their “persecution” begins and the “persecuted” claim “told you so”?

(They will be able to join the likes of Messrs Martynenko (formerly People’s Front) and  Onyshchenko (Ms Tymoshenko’s financial sponsor) on the self-proclaimed “unfairly persecuted list” – hopefully to be joined by others such as the ever-more nefarious Messrs Nasirov, Pashinsky and Kononenko one day soon.)

Perhaps the question for the immediate future is where the next article of similar theme will be published, or whether the Ukrainian authorities strike first.

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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.

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Vodafone & MTS Ukraine

October 17, 2015

During the hottest days of the summer, your author received an email from the Foreign Office.  Something that is not at all unusual it has to be said.  More often than not (although certainly not always) such emails relate to meetings with wandering attachés that have found, or will find themselves in Odessa, and an invitation to “chat”.

This email was one of the few that didn’t meet that criteria.  It was, at the time, of a confidential nature – because it said so.

Would your author meet with two executives from Vodafone in Odessa?

Thus some weeks following receipt of the email the meeting took place on a hot Tuesday evening.  The subject:  Vodafone, its existing relationship with MTS, and a proposal made by MTS Ukraine to rebrand.  The big question was whether it would be a good idea to allow MTS Ukraine to rebrand itself under Vodafone as it had porposed  – or not?

Unsurprisingly, and which was already widely known before this meeting, MTS Ukraine was seeking to distance itself from MTS in Russia – presumably for Ukrainian domestic consumption purposes.

However, there are a lot of questions to be asked and answered before getting anywhere near a final answer to the big question – and it is was the myriad of other questions and answers that would formulate a positive or negative outcome for MTS Ukraine as far as a Vodafone decision went.  It was for these questions your author’s answers were sought.  They were perhaps very pertinent questions considering the relationship development under discussion, which to many would seem the equivalent to being “half pregnant” as an eventual outcome in the event of a positive decision by Vodafone.

Several hours of discussion followed of which absolutely nothing will be repeated – confidentiality is confidentiality.

It was very clear that a great deal of due diligence had already been done.  It was also clear that the two executives were going to see a lot of people of influence whilst in Ukraine too, and would be asking some very pointed questions.  Vodafone at the time of our meeting were far from committed to accommodating the MTS Ukraine requests.

Whatever one may think of the Vodafone brand, the due diligence that was already evident, and the desire to dig far deeper “in country” was impressive.  Likewise the organisational abilities of the FCO in door-opening and meeting facilitation appeared seamless.

Vodafone

The outcome of it all is that on 16th October, Vodafone and MTS Ukraine announced what is being labeled as a “strategic partnership” under which MTS Ukraine will now sail onward under the Vodafone brand which will begin to appear over the next 3 months.

Thus now this decision has been made, and made public, the fact your author met confidentially with Vodafone executives several months ago is also no longer confidential – albeit the questions asked and the answers given will remain so.

Whatever the final contract may say, and no doubt the lawyers will have worked very carefully upon the devil in a deal such as this one, clearly there are some implications for MTS Ukraine, and Ukraine.

The risks and benefits for Vodafone are not really the subject of this entry – but it is important to touch upon a few issues that will effect MTS Ukraine, and the potential effect upon Ukraine more generally.

Naturally MTS Ukraine will become branded as Vodafone, and as such will hope to distance itself from MTS Russia by way of public perception – or perhaps by public deception depending upon your point of view and a limited ability to look a little deeper, or not.

There are undoubtedly major consequences for the corporate governance within what was MTS Ukraine but will now be branded Vodafone.

In order to use that branding, the Ukrainian company will have to adhere strictly to Vodafone corporate governance – which is to say more than a little stringent, with clear and unambiguous procedures for everything from interaction with journalists and holding press conferences, to relationships with security agencies, corruption (including the full weight of the UK Bribery Act), equal opportunity, grievance procedures, intellectual property rights et al.

In short, when assuming the Vodafone brand, then assume the Vodafone mandatory corporate governance which is unwavering in every nation where the Vodafone brand operates.  Not only will the Ukrainian entity be obliged to assume it, it will be expected to employ it and enforce it – or be prepared to lose the branding rights and also end up in a very expensive London court.  It is beyond doubt that any signed contracts will be extremely explicit over such matters.

It is here that the repercussions for Ukraine as a nation, and its economy, may resonate.

For many years, and has been mentioned in the blog on numerous occasions, intellectual property rights rank very highly within the US Embassy Kyiv when it comes to Ukrainian failures in the economic and legal spheres.  From a US point of view, Ukrainian failure to enforce and protect intellectual property rights is a major repressive factor that actively repels FDI and corporate entry.

Thus Vodafone having gone to great lengths with its due diligence (to the point of even talking to your author) and having allowed MTS Ukraine to rebrand as Vodafone therefore putting Vodafone intellectual property rights by way of its corporate branding (and all that entails) squarely into the Ukrainian fray, sends a particularly strong and positive message to the numerous US corporations that are in consistent contact with the US Embassy Kyiv.

Now it may be argued, as is clear from the official Vodafone statement, that Vodafone are putting little cash or hard assets at risk in Ukraine under this “strategic partnership” – at least so far – but for corporations like Vodafone risking cash and hard assets is usually deemed far less important than risking damage to “the brand” globally.

The internal reverberations of this rebranding/strategic partnership within the Ukrainian entity will be tangible and long felt amongst the corporate management.  That may also be true externally for any pre-existing agreements with the security services, with existing supply chains, with Government Ukraine and now also Government UK.

It may ultimately make only a little difference to end user experiences as far as 3G coverage, bundles and tariffs are concerned (at least for now), and it may fail entirely to separate the public association between MTS Russia and the new rebrand of what was MTS Ukraine, which was undoubtedly a major driver for the MTS Ukraine approach to Vodafone – but it seems fairly likely to change the perceptions of those outside Ukraine looking in, both by way of feeling able to impose “best practice” corporate governance upon existing Ukrainian entities, and also with regard to the timing of any market entry they may have been considering.

(It is necessary to point out that any benefits to Vodafone, – or not – have been deliberately ignored in this entry, for this is not a “telecoms blog”, nor a “big business blog” – it is a blog about Ukraine.)

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Promoting the UK in Odessa

September 4, 2015

This afternoon some time was spent with the new Political Attaché to UK Embassy Kyiv.  If there is ever an interesting time to be given such an appointment, and a need to climb a very steep learning curve very quickly in an ever changing environment, being dropped into Ukraine now is probably one of the most challenging – certainly within the European continent.

Indeed, the UK Embassy Kyiv has increased its modest staffing – modestly.  No longer in London is there a single person charged with looking at matters Ukrainian – there is now a team.

Whilst Ukraine is certainly not the atop of the UK foreign policy agenda – until “EU renegotiations” and the “in/out” referendum of the EU has passed and been taken off the table, that will clearly dominate UK foreign policy.  There is also ISIS and the refugee issues to consider.  Thus Ukraine probably sits third or perhaps fourth on the UK foreign policy agenda.

Of all the issues discussed, past, present and future with regard to the politics of Odessa (and to a lesser degree Ukraine) – a very good question was asked.

If there was a message to Whitehall about how better to project the UK and its influence in Odessa, what would it be?

Uk-Ukraine-flags

To answer that question, it is first necessary to recognise what Odessa is.

First and foremost it is a cosmopolitan and mercantile city.

That is the foundation for understanding the city.  Without first recognising the fact that it is a cosmopolitan and mercantile city above all other factors, is to fail to understand Odessa.  Race, religion, politics et al are secondary.

Indeed there are perhaps two truisms often heard in Odessa to seriously consider.

The first is that “Ukraine is Ukraine, but Odessa is Odessa.”

The second is that “I can show you where all my money came from – just don’t ask about the first million.”

Odessa is often described as politically apathetic – by those who do not sit around the kitchen tables of Odessa.  Yet it is true that politics is certainly secondary to what drives and sits highest within the psyche of Odessa.  Its cosmopolitan merchantability.

Odessa is a rich city with a large, stable and established middle class.  It is possible to count more new BMWs, Mercedes, Porsche, Lexus, Bentley’s, etc in 30 minutes in Odessa, than you can count in the vast majority of British cities in a week.

If there was ever a way to insure Odessa remained (at least conditionally) loyal to Kyiv, sanctions upon Crimea and the Crimean ports insured that conditionality, or at least went a long way in doing so.   That, and to be blunt, the fact that Odessa has always enjoyed giving “the finger to the man” and giving “the finger” to Kyiv prima facie seemed far easier (having done it for the past two decades) than to The Kremlin which may be perceived to have a far more robust grip on its provinces than Kyiv.

In short the loyalty of Odessa to Kyiv is conditional upon whoever is in charge in Kyiv not interfering too greatly in the cosmopolitan mercantile beat of the city – unless that interference improves the opportunities for those two core and interwoven themes.  This has been, and will remain the case, regardless of who is in power.

There are of course many other factors as to why Kyiv was chosen over the Kremlin, but be in no doubt that the perceived fumbling hand of Kyiv was preferred over the perceived iron hand of The Kremlin when it came to preserving the cosmopolitan mercantile Odessa so dear to all in Odessa regardless of political preferences.  The thought of sanctions as Crimea was subjected to would be unthinkable.

The two main “takeaways” from all the words above for Whitehall are therefore trade and culture.

(Likewise for Kyiv to retain and improve upon the conditional support of Odessa politically, these two issue should be core to any plan it may have toward the Oblast and the city.)

The UK, aside from a very meek and quiet British Council at Bolshoi Fantan 5, has absolutely no official representation in Odessa – despite almost 30 (some Honorary) consuls being in the city.

However, there is not the UK presence in Odessa to warrant an official/diplomatic presence.  There are about 85 permanently resident British citizens, and less than £1 billion in UK interests (and a lot of that is UK registered companies owned by Ukrainian citizens).  Honorary Consuls are either in or out of fashion with the UK.  They are currently out of fashion – thus when the local diplomatic community gather and chit-chat, the UK misses out upon who has heard what about whom etc.  This in part leads to a lack of understanding of Odessa and what goes on behind the curtain.

To be entirely blunt, the reason why this blog has certain IPs reading it daily, and why so many diplomats make time for face to face conversations (not withstanding emails) is that it acts as an English language source of information.  Their time is not given due to your author’s good looks, wit, charm and personality – it is given for what your author knows, who your author knows and what can be discovered if necessary.  The blog and its author form part of the diplomatic network of  sources in the city for numerous nations and entities.

So, in light of the fact that there is no, and will be no official UK presence in Odessa, how to project the UK’s influence?

Despite the modest increase in UK Embassy staff, there are not the staff numbers to assign a UK diplomat to Odessa Oblast in order to attend the “official opening of an official envelope” every time an “official envelope” is opened and the diplomatic community are invited to attend.

Even then, being seen by a close circle of people, often behind the curtain, does not necessarily equate to being seen to be seen and projecting influence within the local constituency.

There is of course “e-diplomacy” and a good concept it is – but it is important to recognise the limits of e-diplomacy and social media in general.  (Recent and on-going academic research into the role of social media and EuroMaidan suggests a far more limited mobilisation role than many many think.)

Thus, however and whatever those in Whitehall consider the best possible way to project UK influence into Odessa, it should seriously consider the limitations of e-diplomacy and social media.  The answer lies withing understanding the cultural cosmopolitan mercantile nature of the city and manipulating/leveraging/employing those core themes.

The UK therefore, being if nothing else a mercantile nation with a culture and institutions held in high esteem (wrongly perceived or otherwise) by many in Odessa, has a solid shared platform from which it can project.

Therefore it is perhaps time to toss some less than erudite, low budget thoughts out there that can be particular to the UK, rather than EU labeled.

There are plenty of affluent middle class parents in Odessa that would happily pay to send their children to UK universities.  Specifically Russell Group universities (of which your author went to one).  Unfortunately if the Russell Group look at official economic statistics, rather than at the real wealth on display every minute of every day in Odessa, targeting Ukraine (and by extension Odessa) will not be high upon their agenda.

This, it has to be said is a perception that Whitehall can do something to change – for Whitehall is very well aware of the affluence upon display in the major cities of Ukraine.  UK diplomats in Ukraine are not blind, and hopefully their messaging back to Whitehall underlines the difference between official “wealth” statistics and what is visible every day.

It should be noted that Poland is significantly increasing its scholarships with Ukraine and Odessa – the reason being Poland is worried about the continued “Soviet style” of education and the effect on Ukrainian youth.

Further Whitehall can get behind, and perhaps assist, the fledgling romances amongst academia between the UK and Ukraine, both complimentary to existing UK and EU programmes, but also the bespoke, such as that beginning to evlove between Kings College London, Kyiv National Economics University and Odessa Mechnikov University (a relationship that remains grant-less/fundingless).

Not only do such things increase revenues for the UK education system in the immediate term, but it creates an alumni legacy that will eventually climb the corporate and governmental ladders in Ukraine – and that can only assist the UK in the future.

There is then the mercantile nature of Odessa and the UK.

There is a good deal of trade in Odessa that contractually nominates the courts of Stockholm or London as courts of arbitration.  Thus despite the perception of lawlessness and corporate risk, the bigger deals and dealers in Odessa already contractually nominate the London courts as the place of arbitration.  That is not likely to change, for the London (and Stockholm) courts are deemed to be free of bias and/or influence.  Contractually stipulating London as the court of arbitration will not phase the merchants/business people of Odessa.  Many would prefer to avoid the Ukrainian courts wherever possible.

The UK Bribery Act is also a useful tool if dropped into negotiation conversation to keep matters on the straight and narrow when the full extent of its reach explained and possible Visa complications it may create for any applicant (even if the UK is perhaps not as diligent as it could be when enforcing the Act).

Trade perhaps should be left to another entry in and of itself when 1st January gets closer and the EU-Ukraine DCFTA enters into force.

Odessa is also a very humorous city, it has a vibrant creative class and has had successive local administrations that have understood the need to put on events to satisfy those societal needs.

One thing that Odessa often does is “Day’s of (insert nation)” where the nation in question is promoted.  (A recent “hit” with the local population was the “Day of Vietnam”).  Vietnam did its best to sell itself by way of trade, tourism and culture to the local constituency, and the local constituency obliged.

Poland and Greece seem to have them quite frequently – certainly annually.

There has never been a “Day of the UK” in Odessa.

With some thought and planning, preferably in the warmer months, it would perhaps be possible to combine a Russell Group, UKTI, British Council, Ukraine-British Chamber of Commerce, “Day of the UK” in Odessa.

If there was a way to entice a free performance similar to the “Last Night” – which is by its nature “interactive” and would appeal due to that peculiarity, for an audience sat upon the Potemkin Stairs – the construction of which was supervised by a British engineer called Upton whilst on the run from the UK wanted on forgery charges – it would be a “Day of” that would remain firmly in the minds of the local constituency far longer than most others – and that is in some way UK projection into Odessa that may lead to traction where there is currently almost none.

Indeed, as “The Proms” was meant to bring classical music to the masses in the UK (and swiftly became a popular institution), perhaps some clever thinking along such lines in bringing the UK to the masses in Odessa would be worth the time.  Especially if it is “interactive” in style like the “Last Night”.

Whatever the case, however the answer to the question manifests itself within Whitehall, to effectively project the UK specifically within Odessa, the answer can only be based upon, or perhaps around, a cultural, cosmopolitan, mercantile foundation – for that is what makes the Odessa heart beat.

Whitehall would be wise to forget any other platforms based upon its limited budgets, modest diplomatic staffing in Kyiv, and in the absence of a permanent official presence in Odessa.

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A transition bank that fails due to transition? – FDI bureaucracy

July 19, 2015

On Monday 20th July Kyivska Rus” Bank, insolvent since March 2015 must be liquidated – except that need not have been the case – and indeed may at the 11th hour prove not to be the case, although the clock is almost entirely run down.

It need not be the case, as since April 2015, a large private UK investor with a global investment portfolio and exposure in the Ukrainian market since 2007, has sought to purchase a transition bank – that bank being Kyivska Rus” Bank.  The transition bank was to, and perhaps may yet, invest in agriculture, construction and energy businesses in Ukraine.

Aside from saving the nation UAH 2 billion in losses – the State would otherwise have to pay about UAH 1 billion by way of depositor guarantees and assume the loss of a UAH 450 refinancing loan provided – those liabilities which would be assumed by the new owners.  The UK investors will also put $100 million into the bank activities, and thus into the aforementioned Ukrainian markets that it has identified as of interest.

That matters have reached 48 hours before liquidation of  Kyivska Rus” Bank , and the issue has still not been settled despite interest in the purchase 4 months ago, is simply due to the usual unhelpful Ukrainian bureaucracy.

To be specific, the NBU (necessarily) changed its rules after documents were submitted, and the Anti-monopoly which has a role in the process, saw its head replaced (perhaps less necessarily).

Thus new documents were required to meet new rules and a new anti-monopoly review conducted in line with new rules and under new leadership.

To aggravate matters further, the creation of transition banks – or not – seemingly lacks a certain amount of compatibility amongst Ukrainian statute, unsurprisingly given the calibre of those that create statute in Ukraine.

The Depositor Guarantee Fund requires an investor to have the NBU approval to purchase the bank before it is tuned into a transition bank.  At odds with this, the Law of Ukraine (On Banks and Banking Activity) requires this after the bank has been created.

Needless to say, that whilst this bureaucratic disaster is not going to turn away a UK private investor that has been in the Ukrainian market for 8 years, it is certainly going to delay the investment that was going to come via the transition bank – for if  Kyivska Rus” Bank is liquidated on 20th, the another suitable banking entity has to be identified with debts that the investor deems acceptable to assume.

Trans

It is difficult to see how the Ukrainian economy would not benefit from a few well funded international transition banks.

By Tuesday morning, we will know whether a combination of finding wiggle room in the text of the relevant statues, and a super-fast tracking of effort by the NBU and Anti-Monopoly Committee will have saved the investment day and sent the right message to the private FDI community – or not.

Can it be that a transition bank that is/was to have $100 million to invest into the Ukrainian economy, will fail to materialise due to a Ukrainian bureaucratic transition?

Something to watch for on Monday that probably won’t make the headlines.

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The Open Government Partnership (and stuff) – Ukraine

June 23, 2015

It has been some time since anything appeared here that is insightful and clear-eyed – or even particularly thoughtful.  Perhaps that is due to turning out daily entries for free when your author has a spare 20 minutes during the day.  Indeed anything approaching insightful and/or clear-eyed seems to be written for, and published by, other people on a paid basis.

Thus dear readers, you are left with free, less than erudite, and poorly structured rambling – You get what you pay for – or don’t pay for.

Yesterday the UK Embassy Kyiv launched a call for project proposals that generally sit under the umbrella of the “Open Government Partnership“.  As broadly as it can be termed, these project proposals to be funded by the UK, encompass the forthcoming local elections, protection of human rights and government transparency.

Of particular focus with regard to Odessa, the call for projects specifically mentions the Oblast in relation to the forthcoming local elections – and quite rightly, as it remains one of the most institutionally corrupt Oblasts in the country.  Under the newly passed (at its first reading) electoral laws (and undoubtedly it will pass its second reading unless there is an intervention to prevent such nonsense becoming statute) the ability to rig, corrupt, pervert, manipulate and generally deprive democracy of genuine outcomes, remains high.

Quite what the Venice Commission will make of the law remains to be seen – but that there will be “recommendations” seems absolutely guaranteed.  The new law may be an improvement on the existing law (or not), but it is far from being anything like a good law that would prevent any power vertical or other odious interests from being nefariously imposed at a local level.  Alternatively there is the possibility to produce clearly distabalising electoral outcomes by similar external engineering too.

Indeed, decentralisation/devolution of powers when they come do not remove the possibility of a power vertical, and the new election laws do not prevent a nefariously imposed/manipulated power vertical from being formed from the very bottom up should there be a desire to do so.  All that would change is the structure of the power vertical, as the organagram goes through a shape-shifting metamorphosis.  In short a more Kafkaesque metamorphosis around power at the heart of The State.

Efforts to prevent this unholy metamorphosis (regardless of who does the engineering) therefore fall within the parameters of the Open Government Partnership, under the broad banners of preventing and combating corruption, improving the quality of administrative services, and fostering the activities of civil society institutions.

Whether enough attention is paid to what impact civil society actually has is a different question.  To quote from a very courteous email from a respected Ukrainian civil society actor that recently spent several hours with your author “Our meeting left me with even more questions about what do we do as a civil society in Ukraine.”

Returning to the Open Government Partnership linked above, it is notable that there is but a single point from 23 that is the primary responsibility of the regions.  All else is led by, and dependent upon, the centre.  That singular point, is point 10:

10. Developing, with the involvement of members of the public, anti-corruption regional programmes.  The programmes to approved by Oblast/city councils and Kyiv City Council, partnering with the all-Ukrainian NGO “All-Ukrainian Special Board to Combat Corruption and Organised Crime”, other civil society institutions and international organisations (by consent).

The advantage to regional solutions is that they tend to target regional issues, regional trends and regional priorities, as opposed to broad (usually half-hearted) attempts to behead the corrupt national hydra that has for so long been central to undermining Ukrainian governance.

Thus perhaps, knowing full well that top-down attempts (or perhaps centre-out) will remain half-hearted and mindful of vested interests, bottom-up (or perhaps periphery-in) policies may meet with a little more success if they are targeted, aggressive, and have traction within the local community.  That requires a change in societal attitude toward the acceptance of corruption as a fact of everyday life within their local and regional State institutions.

So let’s look at Odessa.  Why not make it the home of anti-corruption pilot projects?  The goal should be that the Oblast becomes the anti-corruption capital of Ukraine after all.

What can be done for £10,000 or less?

It depends on what you want to achieve.  Something extremely focused with a concentration of participants, or something Oblast wide that is open to total inclusiveness?

To take the first option, it is possible to list a dozen or more specific issues, or future moments on the immediate Odessa time line where this money can be spent and have something of an impact.  In short, far too many to list.

Taking the second option of maximum inclusiveness, then we are talking about easy access platforms and connectivity, with common goals and the requirement for little leadership.  Something that can produce Oblast wide data driven by the constituency itself, that can then be used for more refined targeting.

A societal pride has to develop, and an admiration given, to those who say “No” when attempts are made to solicit bribes.  As Odessa collectively nodded its tacit approval and chortled around the collective kitchen table at corrupt officials being physically thrown into rubbish bins, it can also collectively laud those who publicly say “No”.  What is required is a public platform to show societal support for those that say “No” and monitor the local authorities response and actions towards those that did say “No”.

If India can achieve a website that lists attempts to solicit bribes, laud those that don’t pay bribes, and identify “hot-spots”, incidents, and particularly odious offices of institutional corruption, thus forming an accessible database for all, then  so can Odessa..  The costs of the Indian website falls within the UK project funding levels.

Particularly pronounced “hot-spots” can therefore be both avoided by society where possible, and also fall under increased official scrutiny.

In cases where legal action is taken and successful prosecution or plea bargains entered into, what prevents a “corruption prevention bonus” being paid to the whistle-blower?  Some form of community action trust reward?

There are several options to pursue with maximum participation/inclusiveness proposals.

But what can and should be done for free/anyway to combat regional corruption?

Is there anything to be gained or lost by having a regional anti-corruption bureau?  Can, or should, that which is based in Kyiv, be relied upon to tackle the regional hierarchy deemed “too small” or “less of a priority” to fit inside the national bureau remit?

What of “secret shoppers” or “Lay visitors”?  Is there a role for such citizens in policing the institutions and/or administrations?

What of regional differed prosecution agreements for early self-reporting within business and/or institutions?  Should there not be scope for a little leniency for those that notify law enforcement of something nefarious within their structure at the first possible opportunity?

Should not a monetary/value limit be placed upon official “gifts” to Oblast and regional institutional officials be publicly declared.  (The only gift every retained by your author was a rather nice Parker fountain pen emblazoned with the Raytheon logo in the late 1980’s – all else was either refused, given to others, or given to charity.)

A clear definition of what constitutes “corporate entertainment” and a value/monetary figure should be enshrined into Oblast and regional institutional policy.  Paying the restaurant bill, or a night at the jazz festival is one thing, but a harem full of nubile Ukrainian ladies, or holidays abroad in lieu of cash bribes has to be officially deemed as too extravagant, and thus unacceptable.

Is there an ISO or EU anti-corruption standard/compliance certification?  If so, should Odessa Oblast Administration not strive to achieve such certification?  If such standards exist, there will be best practice models to follow, benchmarks to meet, and audits to pass.  Would holding such certification (if it exists) not encourage FDI?

What about audits?  Whilst the move to e-governance (if not necessarily e-democracy) in Odessa is on-going, should the Oblast not commit itself to not only State audits but also external audits?  It could, for example and for the sake of randomness, open its books annually to whichever nation currently holds the rotating EU Presidency.  Would a clean bill of health from another national audit office again not encourage FDI?

Should the Oblast not publicly announce the parameters of a standard corruption risk review model for any tenders it places?  It takes little effort to then hold any successful bidder up to the publicly available risk review model.  We are all capable of being quality assurance and compliance officers given sufficient transparency.

With any EU/US/externally funded local/regional project, would it not be wise for the Oblast to proactively invite their project managers to fully participate, and be based in Odessa for the project duration?  Whether they accept such invitations is up to those partners, but should not such invitations be a standard part of any negotiations – offered rather than extracted?

If “third parties” are involved with any Oblast or regional institutions, should their contract not place a heavy emphasis upon due diligence and anti-corruption?  A claw-back clause in any contract should nefariousness come to light as standard?  If the Oblast cannot rely on a corrupt criminal justice system, then perhaps there is more chance of lessening corruption with a few clauses that would allow civil proceedings too.  (If necessary, nominate courts in London, Stockholm, (where ever) in contract and tenders, as having jurisdiction over any arbitration too.)

Whilst it must be appreciated that institutional design can and does accommodate corruption, and that the Odessa Administration cannot necessarily redesign all that is necessary with regional offices of State institutions in this regard, it can redesign itself internally to reduce the opportunities for graft.  When will an organagram of who is who and who is accountable for what be publicly and easily accessible?

Odessa is home to UN, OSCE and several EU missions, some of which come into very close contact with corrupt practices as part of their remit.  Some, such as EUBAM, have very clever and very experienced leaderships who have very good ideas about how to help tackle corruption locally.  Perhaps a little more time listening to their words of wisdom rather than simply reading their reports would be in order.

The issue with much of the above, even given political and societal will, is how to effectively combine value driven and compliance driven models – How does a  £10,000 proposal fit with existing or envisaged Oblast efforts?  Should it dovetail or be part of a bigger collaborative effort, or stand alone and risk being ignored/useless/or previously considered and dismissed as an option in the grander scheme of things?  Perhaps it needs to go where no proposals have gone before?

All that has been written above is also the tip of a very large corruption iceberg – it would be impractical to list all the issues and all the possible remedies – but they are all issues amongst many that can be addressed at costs below the project financing limits of the UK Embassy Kyiv, ranging from entirely gratis, to approaching the £10,000 limit.

Not being an NGO, NFP, or any other type of civil society actor (a free to read blog, written by an individual simply doesn’t cut the bureaucratic mustard as being classified as a civil society actor, and therefore by default results in being excluded from funding sadly) it remains to be seen if the very clever projects subsequently submitted and duly funded will come close to, or incorporate, some of the issues above.

Perhaps some of the thoughts above will be entertained by the Oblast leadership directly. – Who knows?

Corruption there will always be, no differently to any other nation – it is managing that corruption and reducing it from its currently chronic levels that Odessa (and Ukraine) has to wholeheartedly try to do.  Perhaps periphery-in rather than centre-out will have a greater effect.  When all is said and done, nobody has the monopoly on good ideas.

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Blair to join International Advisory Council on Reforms Ukraine?

June 18, 2015

It appears that President Poroshenko has asked Tony Blair to join the International Advisory Council on Reforms for Ukraine – a body headed by President Poroshenko.

Fair enough – but what does Tony Blair bring to the table other than being an internationally (in)famous name?

His track record for bringing about meaningful reform in the UK during his 10 years as Prime Minister is hardly overflowing with highlights.  Indeed, “reform” should probably read “deform”.

It is to be hoped he has no input into economic reforms.  The UK is still recovering from his premiership.

What of Mr Blair’s “relaxed” attitude toward politics and public administration?  Ukraine should switch to “sofa government” and minutes of meeting be deemed somewhat unnecessary?

Whilst there is certainly a need to move away from the Soviet legacy rubber stamping or dictatorial/politburo-esq televised admonishments of subordinates, a chat on the sofa setting policy with few or any records is hardly a way to insure accountability and transparency – both of which are vital to Ukrainian reform from top to bottom of the State institutions, and both of which suffered in the UK under Tony Blair.

Regardless of what a reader may think about his personal drive behind taking the UK into the Iraq War debacle, in the process he clearly lied misled parliament in his “justifications” for doing so, upon the basis of a dossier of evidence that was “improved” to make his case.  A man with such moral fibre and ethical standards is therefore best placed to advise on the reform a Rada that is already somewhat lacking in morality and ethics?

Should Mr Blair, who politically neutered the BBC (and its then Director General) over the aforementioned Iraq dossier scandal, have any input in reforming the Ukrainian media space, and in particular politically neutral public broadcasting which is needed in Ukraine?

No Ukrainian President or Cabinet of Ministers past or present requires Mr Blair’s advice when it comes to “cash for honours”.

Domestically when it came to meaningful positive reforms in the UK, Mr Blair’s cup does not overfloweth, even with a decade in the Prime Minister’s chair.

Internationally, since leaving political office, Mr Blair’s reform résumé is hardly any better.  What has he reformed with any degree of success?  Does failed but exceptionally well paid attempts to reform and rehabilitate the image of Central Asian dictators count as a positive or a negative when transforming the issue of human rights in Ukraine?

Indeed, having mentioned Mr Blair’s fees, which are astronomical, even if he be a reformer of outstanding ability and historically known for his reformation accomplishments (which he isn’t), would he be worth what he will cost?  As he doesn’t do charity gigs without outrageous fees, his joining something like the International Advisory Council on Reforms for Ukraine costs how much?

Regardless, whatever he would cost would undoubtedly be money far better spent by the Ukrainian government hiring Washington DC and Brussels lobbyists to fight their corner – and also scupper those that lobby against it.  That would bring far greater returns than anything Mr Blair may espouse as “wisdom” for the Ukrainian taxpayers coin.

If there is a need for a UK input into the International Advisory Council on Reforms for Ukraine there are far better alternatives.  The serious UK choices would be those such as Sir Gus O’Donnell and Sir Christopher Mayer who are but two absolutely top quality civil servants (now retired) able to advise not only upon reforms, but also their implementation, monitoring and measurement from an institutional perspective – and at fees significantly less than Mr Blair demands.

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Perhaps this simply comes down to the fact that President Poroshenko wants an internationally “star riddled” reformist advisory component for little other reason than appearances – an elite, famous, but otherwise hollow entity.  Let us be honest, robust and good reformist advice is on “continual send” from the major western nations via diplomatic personnel, and has been consistently given since “The Family” fled Ukraine in February 2014.  Mr Blair will have nothing particularly new or innovative to say that others haven’t already said.

That said, Mr Blair having left the role of Middle East Peace Envoy, will now want to return to the international political stage in another role, as polishing the image of murderous Central Asian dictators pays well but simply doesn’t have cut and thrust of political policy making, nor the positive media spin.  Perhaps he simply asked President Poroshenko for a job.  After all, Misha Saakashvili has been granted a new political lease of life by Ukraine, so why not Tony Blair?

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