KYIV BLOG: Ukraine’s partners allow it to backslide

KYIV BLOG: Ukraine’s partners allow it to backslide
EU president Jean-Claude Juncker
By Ben Aris in Berlin July 18, 2017

Ukraine’s international partners that have been propping up the war-torn, crisis-ridden country for most of the last three years are now allowing it to backslide on its reform promises. 

There seems to be a political trade-off between keeping the current regime in office as part of the West’s clash with Russia on the one hand, and the desire to make a genuine transformation on the other. Several key milestones have been removed in the last months, while some very dubious decision by the government that fly in the face of the country’s transformation have simply been ignored.

There are three key reforms on the docket at the moment on which further International Monetary Fund (IMF) funding depends: a pension reform bill, the creation of a land market and setting up an anti-corruption court.

The pension reform passed its first reading this week, which was welcomed by everyone, and should have its second and third readings in the autumn as the Rada is about to break up for the holidays.

Land reform is going less well. An initial draft received only five out of 450 votes in the parliament, and has been sent back to the drawing board. This is an extremely controversial law but one that could transform the country overnight as agriculture is to Ukraine what oil is to Russia.

However, early this month the IMF apparently indicated that Ukraine didn't have to push this reform through any more. According to a July 4 Facebook post by Oleksiy Mushak, a member of the presidential parliamentary faction, the IMF withdrew its demand for Kyiv to liberalise the land market in order to receive further disbursements under its $17.5bn programme. This was thanks to President Petro Poroshenko’s "miracles of diplomacy" during his June visit to the US, Mushak claimed. Adoption of land reforms will now almost certainly be put off until after the 2019 presidential elections.

Finally, the demand for an independent anti-corruption court was lifted by European Commission President Jean-Claude Juncker on June 13. The government in Kyiv was never keen on the idea of an anti-corruption court in the first place, but it was Juncker who pulled the rug out, according to comments reported on July 12 after his meeting with Poroshenko.

"We agreed to establish a special anti-corruption chamber [of the Ukrainian Supreme Court] designed to struggle against corruption and we do not insist on the establishment of a separate anti-corruption court," Poroshenko’s media office quoted Juncker as saying.

It is not clear if this move had been agreed with the IMF, for which the anti-corruption court remains one of its key demands. According to the lender's agreement with Ukraine, Kyiv should have secured the passage of legislation necessary for creating a new anti-corruption court by mid-June, which would allow it to go into operation next year.

The announcement from Poroshenko’s office outraged not only civil society in Ukraine, but also the National Anti-Corruption Bureau of Ukraine (NABU), which would have made use of the court. NABU was the body that brought the charges against the head of the State Fiscal Service Roman Nasirov; the struggle to prevent Nasirov being released without charges underlined the desperate need for some sort of independent judicial body.

NABU was incensed and said in a statement published on July 13 that there is no alternative to the court. "Probably Juncker's statement is the result of [Kyiv's] deliberate misinformation with regard to European partners," the agency said in a statement. The anti-corruption NGO Transparency International also came out with a statement that has "categorically" condemned the idea to create anti-corruption chambers within the existing courts rather than creating a specialised, independent court.

Protesters vs. politicians 

In just the last week protestors have gathered in front of the parliament building to heckle lawmakers and ensure they vote to remove immunity from five MPs who have been accused of corruption, a crime that would fall under both NABU’s and the mooted court’s purview.

This is the second time in recent months that the public felt the need to go onto the streets as they were afraid the government was not going to do its job. In March hundreds of protestors surrounded a Kyiv court house to prevent Nasirov, who was accused of large scale corruption, from being released without charges being brought. The protestors kept him locked up in the court room all weekend until the judges came to work on Monday and signed the relevant documents.

Nasirov was the first big fish to be indicted on corruption charges and so far, despite the western rhetoric, no senior politician has been jailed. However, Nasirov’s wife found $3mn from somewhere and bailed him out. Moreover, evidence provided by the UK (Nasirov also holds a British passport) was rejected as admissible by a local court. The chances of Nasirov having to face trial are diminishing rapidly.

Indeed, MPs have openly rallied around colleagues accused of corruption and some even turned up to the court house where Nasirov was being held to show solidarity. Moreover, in a story that was badly underreported by the western press, the government has openly tried to ram through a new auditor for NABU in a transparent attempt to muzzle the organisation. The candidate proposed by a government faction is legally unqualified for the post since he has no international experience.

At the same time the government is turning on the very civil society that put it in office. In March, Ukraine’s e-declaration laws, designed to increase transparency and reduce corruption amongst state officials, were altered to include NGOs in way that drew comparisons with Russia’s anti-NGO laws.

The changes, which the government now seems to be backing away from, were so egregious that the British ambassador felt compelled to criticise them and USAID, the US’s leading international aid organisation, broke off relations with Ukraine as it would fall under the law too.

Ukraine’s backers and donors are already worried about the development. “E-declarations for senior public servants is a strong step forward for reform in Ukraine. [However,] members of civil society play vital role for transparency; targeting them is a step backwards,” the US embassy in Kyiv wrote on Twitter on March 23.

Indeed, the European ambassadors in Kyiv have felt it necessary to make baldly critical joint statements on several occasions following one dodgy proposal or another. The list of examples is growing longer and it has come to a point where civil rights leaders have started to accuse the government of putting at least some of the former authoritarian levels of control back in place.

None of this seems to worry Juncker, although it clearly worries the IMF, which released another $1bn tranche of its $17.5bn aid package this year, but is highly unlikely to release any more and has effectively frozen the programme. Due to the lack of progress, IMF tranches are becoming more and more infrequent. But even the IMF has loosened the noose over land reform.

Our guys in the East

Reading between the lines, it is become clear that the EU, the IMF and obviously the US state department are backing Poroshenko and are worried that he may be ousted in the 2019 elections. So they are cutting him some political slack in an effort to allow him a win in the elections.

The West has established a long tradition in Eastern Europe of backing candidates they perceive as “our guys” that is driven more by geo-politics than democracy. They backed Viktor Yushchenko, who turned out to be a failure as president, after the Orange Revolution. They backed Viktor Yanukovych as “a man the US can do business with”, according to US embassy cables leaked by Wikileaks. Despite Yanukovych acquiring a “pro-Russia” label in the meantime, he was the one that actually negotiated the Association Agreement and Deep and Comprehensive Free Trade Area (DCFTA) with the EU, which he only refused to sign at the 11th hour during an EU summit in Vilnius. And the west backed Boris Yeltsin in 1996 when he went into a reelection campaign with about a 4% popularity rating, facing almost certain defeat at the hands of the leader of the Russian Communist party Gennady Zyuganov.

All these leaders have gone wrong to some extent. Yushchenko just failed to make a difference. Yanukovych was one of the most spectacular kleptomaniacs of modern times. Yeltsin allowed the oligarchs to run wild and produced President Vladimir Putin. And will it be any different with Poroshenko?

The point is that interfering with election processes, even if it is designed to “promote democratic ideals” actually distorts the process. The game changes from appealing to the people to “playing the game”. 

Real democracy is a messy process and throws up wild cards, such as the US is experiencing with Trump at the moment, but no one in Europe would have thought for a minute of “backing” Clinton or interfering in any way as they trust the US democratic process. However, this is standard US foreign policy practice outside the Western world; the Washington Post recently reported that the US interfered with 72 national elections during the Cold War. And it seems the Kremlin has cynically inflicted the current chaos on the US by taking a leaf out of the US’s own playbook and backing Trump.

The only way to build a true democracy is to let it run its course, as then the politicians have no choice but to learn to appeal to their own people and have to own their own mistakes.