The window for reform is closing in Ukraine
By Melinda Haring, The Washington Post,
Mon, July 11, 2017
In the picture: Demonstrators drum on empty barrels during a protest in front of the Ukrainian parliament in Kiev on July 11, 2017, demanding the removal of immunity for deputies. The Parliament of Ukraine is considering a request from the General Prosecutor’s Office on the removal of parliamentary immunity from five parliamentarians suspected of corruption. (Photo by Sergei Supinsky/Agence France-Presse via Getty Images
Melinda Haring is the editor of the UkraineAlert blog at the Atlantic Council and a fellow at the Foreign Policy Research Institute.
Walking around Kiev on a sunny Saturday, a visitor could be forgiven for thinking all is well. Billboards advertise a website for registration of new businesses, a process that takes less than an hour. A craft brewery promises home delivery, and markets offer everything from pesto cheese to organic granola. A three-story department store that sells 150 Ukrainian brands embodies a lively fashion scene repeatedly profiled by Vogue. In short, signs of positive change abound, while the war in the east, which has taken more than 10,000 lives, is far away and practically invisible. And yet that may be precisely the problem.
Ukraine has some genuine achievements to which it can point. Some important reforms have taken place. Macroeconomic fundamentals are good; the value of the currency has stabilized. And Ukraine hasn’t lost the war despite the direct involvement of Russia, whose forces are far more powerful.
And yet an air of blithe self-delusion prevails among Ukraine’s business elites, diplomats, politicians and even some activists. The optimists prefer to avoid addressing the country’s most intractable problems, from the war and the failed cease-fire agreement to the fact that there has been virtually no real foreign direct investment since 2014. Moreover, the next round of reform is likely to be especially tough, requiring a sense of compromise and political maturity that is currently absent. It’s easier to keep repeating the government’s clever line that the country has accomplished more in the past three years than it did in its first 23 years of independence.
The sad reality is that Ukraine’s reforms have stalled, and the window of opportunity is starting to close. None of former president Viktor Yanukovych’s cronies have been prosecuted. Vested interests have blocked the process of building a clean Supreme Court from scratch. Although the National Anti-Corruption Bureau of Ukraine has succeeded in bringing charges against two notoriously corrupt officials, former parliamentarian Mykola Martynenko and former head of the State Fiscal Service Roman Nasirov, powerful forces are pushing back. The court considering Nasirov’s case refuses to examine all of the evidence. There are growing indications that the director of the anti-corruption bureau could be fired soon, and activists and parliamentarians worry that the bureau’s powers may soon be curtailed.
Ulana Suprun, the acting health minister, is courageously pushing ahead with an ambitious revamp of the dismal health system. During his year in office, Finance Minister Oleksandr Danyliuk has managed to plug holes in the budget while pressing for pension and land reform. But the few remaining reformers face a deadline. The current parliamentary session ends on July 14. Once it’s over, campaign season begins, and all bets are off.
The International Monetary Fund, which pledged $17.5 billion to right the economy, has told Ukraine that it won’t get any more assistance until it legalizes land sales, reforms its troubled pension system, creates an anti-corruption court and starts to privatize some of Ukraine’s 1,800 state-run companies. Of this formidable to-do list, only pension and health reform have a chance of passing before July 14.
Meanwhile, the government has been harassing prominent anti-corruption activists, defending an illiberal law that demands asset disclosures from investigative journalists and activists, and undermining national candidates, such as Lviv Mayor Andriy Sadovyi and former Odessa province governor Mikheil Saakashvili, who might challenge President Petro Poroshenko’s party in the 2018 parliamentary elections.
Time is running short. The government that follows this one could be far worse. As parliamentarian and reformer Mustafa Nayyem likes to remind us, these, for all their deficiencies, are the best president and parliament Ukraine has ever had.
The followers of Yulia Tymoshenko, no stranger to the West with her golden braids and fiery rhetoric, have already lined the main thoroughfare in Kiev with red and white tents. She tops polls as the most favorable national candidate, which is troubling, even if her numbers aren’t more than a modest 10 percent. Tymoshenko’s populist policies, which include opposition to sensible land, health and pension reform, could potentially undo the real progress Ukraine has made in the past three years.
Ukraine’s outspoken activists continue to shine a light on the country’s many problems, and they have played a leading role in almost every step forward in the past three years. But civil society isn’t enough.
If things continue as they are, Ukraine’s most talented will leave. More than 70 percent think the country is going in the wrong direction. The reforms that would better people’s lives materially still haven’t materialized, and some that have – such as restructuring of the natural gas market to eliminate corruption – hurt average people badly. As journalist Vitaliy Sych notes, “People are tired, their patience is running out, and many are leaving.” In 2016, nearly 1.3 million Ukrainians received temporary work permits in Poland, and another 116,000 were working there on longer-term permits. Ukrainians already make up the largest ethnic minority in the Czech Republic, and the second-largest in Italy and Portugal.
The space for meaningful change is shrinking, and fatigue and cynicism are widespread. But the country still has a chance. Kiev must push ahead now with the next round of urgently needed reforms, and the IMF should hold them to it.