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Ukraine Confidence Building Initiative Ii Semi-Annual Report, Apr 2017-Sep 2017

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Ukraine Confidence Building Initiative Ii Semi-Annual Report, Apr 2017-Sep 2017 UKRAINE CONFIDENCE BUILDING INITIATIVE II SEMI-ANNUAL REPORT APRIL 2017 – SEPTEMBER 2017 SWIFT IV IQC AID-OAA-I-14-00006 TASK ORDER AID-OAA-TO-17-00009 NOVEMBER 2017 This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. CONTENTS ACRONYMS .................................................................................................................................. ii PROGRAM DESCRIPTION .......................................................................................................... 1 UCBI Program Areas .................................................................................................................. 1 UKRAINE NATIONAL AND REGIONAL COUNTRY CONTEXT .......................................... 3 GRANTS SUMMARY ................................................................................................................... 5 ACTIVITY HIGHLIGHTS ............................................................................................................ 6 Objective 1: Increase acceptance of the Ukrainian civic identity based on common values ..... 6 Objective 2. Broaden participation in Ukraine’s reform process ............................................... 8 Objective 3. Build trust and acceptance of objective pro-reform information ........................... 9 PROGRAM EVALUATION ........................................................................................................ 10 i UKRAINE CONFIDENCE BUILDING INITIATIVE II SEMI-ANNUAL REPORT, APR 2017-SEP 2017 ACRONYMS ASC Administrative Service Center DDGS Direct Distribution of Goods and Services EU European Union IDP Internally Displaced Person IRI International Republican Institute IT Information Technology M&E Monitoring and Evaluation NGO Non-Governmental Organization OTI Office of Transition Initiatives SCORE Social Cohesion and Reconciliation Index SeeD Centre for Sustainable Peace and Democratic Development SME Small and Medium-sized Entrepreneurs SRS Strategic Review Session STTA Short-Term Technical Assistance UCBI II Ukraine Confidence Building Initiative II USAID United States Agency for International Development ii UKRAINE CONFIDENCE BUILDING INITIATIVE II SEMI-ANNUAL REPORT, APR 2017-SEP 2017 PROGRAM DESCRIPTION In April 2017, USAID’s Office of Transition Initiatives (OTI) launched the second phase of the Ukraine Confidence Building Initiative (UCBI II) project focusing on Ukraine's historic democratic transition. While the government has implemented some national level reforms since 2014, threats such as political and social division, an unstable economy and malign Russian influence continue to effect national unity and successful implementation of further reform. The UCBI project was established to complement USAID’s ongoing efforts to support a successful democratic transition and promote national cohesion in the wake of the conflict in the East. The goal of UCBI II is to contribute to efforts that ensure eastern Ukraine has greater confidence in Ukraine’s democratic reform process and European integration. UCBI II assistance comes in the form of small, in-kind grants (goods, services, and technical support) and fixed amount awards to a range of partners, including national and local civilian government entities, civil society organizations, and community leaders. UCBI II provides targeted assistance in order to: ● Increase acceptance of a Ukrainian civic identity based on common values; ● Broaden participation in Ukraine’s reform process; and ● Build trust and acceptance of objective pro-reform information. UCBI Program Areas As a result of a Strategic Review Session (SRS) conducted by the project team in August 2017, UCBI II updated and streamlined its strategic framework in order to incorporate lessons learned by the project to date and remain responsive to evolving contextual needs. During the reporting period, the revised framework served as basis for program level analysis, monitoring, and evaluation. The framework prioritizes the following program areas: 1 UKRAINE CONFIDENCE BUILDING INITIATIVE II SEMI-ANNUAL REPORT, APR 2017-SEP 2017 During the period of April 2017 – September 2017, UCBI II deepened its geographic focus in Donbas (Donetsk and Luhansk oblasts) and occasionally supported activities in the neighboring Khakivska, Zaporozka, and Dnipropetrovska Oblasts. 2 UKRAINE CONFIDENCE BUILDING INITIATIVE II SEMI-ANNUAL REPORT, APR 2017-SEP 2017 UKRAINE NATIONAL AND REGIONAL COUNTRY CONTEXT National The summer of 2017 marked three years of a slower than anticipated reform process initiated by the 2014 Maidan revolution (also referred to as the Revolution of Dignity) and the occupation of parts of Donbas and Crimea by Russian-backed forces. While the war continues, 2017 also marks the first time in over two years that Ukrainians are showing some signs of optimism on a national level. Modest economic gains and key reforms, such as the introduction of visa-free travel to Europe, have resulted in the first increase in national mood in the last year according to polls by the International Republican Institute (IRI) and others. However, this optimism is not shared in the East, including the non-government-controlled portions of Donetsk and Luhansk. Ukrainians in these regions continue to be the most skeptical about the national government and reform process, most pessimistic about the economy, and most influenced by malign Russian influence. Populist politics are resonating across the country and could continue to sow mistrust and skepticism of the reform process. A few specific national-level updates of note are as follows: EU visa-free travel for Ukraine comes into force On June 11, 2017 the decision of the Council of the European Union (EU) to introduce a visa-free regime for short trips by Ukrainian citizens to 30 countries of the EU and the Schengen zone came into force. The law also extends to citizens of Ukraine living in occupied Crimea and the non- government-controlled territories of Luhansk and Donetsk, so long as they have biometric passports issued by the Government of Ukraine. The launch of the visa-free regime is an important step bringing Ukraine and the EU closer together. EU Association Agreement ratified In July 2017, the EU ratification of the Association Agreement was completed, and it entered into force on September 1. The agreement is an important step towards deepening the EU’s relationship with Ukraine and promotes deeper political ties, stronger economic links, and respect for common values. The President of Ukraine issued a decree on the blocking of Russian internet resources The President’s move to restrict access to online services and websites operated by Russian holdings Mail.ru and Yandex created controversy among Ukrainian netizens. The restrictions extend to social networks Vkontakte and Odnoklassniki, postal services mail.ru and Yandex, movie portal Kinopoisk, and antivirus software by Kaspersky Lab and Dr.Web. Moreover, the decree imposes sanctions on 1C accounting software, which currently occupies an astonishing 98% of the Ukrainian market. Although contentious to many, the government’s decision to ban Russian internet resources is a response to Russia's aggressive information campaign and potential risks to user data safety. Users wishing to bypass the ban could use VPN services or other anonymizers and the Ukrainian authorities have already stated that they are not planning to prosecute people for such actions. The ban also presents an economic opportunity for the Ukrainian information technology (IT) industry, as it works to find substitutes for the banned platforms. Immediately following the ban, western social networks, such as Facebook, saw a significant increase in usage. However, that is not the case in the eastern and southern regions of the country 3 UKRAINE CONFIDENCE BUILDING INITIATIVE II SEMI-ANNUAL REPORT, APR 2017-SEP 2017 where up to three quarters of people relied on Russian social media outlets. Some studies suggest that perhaps as many as half of former users are non-longer connected to social media. Donetsk and Luhansk Oblasts A few specific local-level updates of note are as follows: Ukrainian media broadcasting strengthened in the occupied areas of Donbas On June 2, 2017, the first Ukrainian Radio station started its broadcast to the separatist-held territories of Donetsk and Luhansk regions from the government-controlled town of Chasov Yar. Television towers were also erected along the line of contact this summer, hoping to reach the underserved audience in occupied Donbas, and special “blocking” technology was installed by the military aiming to disrupt Russian and separatist radio and television signals. UCBI II’s media consumption research finds that the audience for terrestrial broadcast is small and has shrunk since last year, to perhaps 20 percent of the audience. Most viewers in the heavily urbanized Donetsk and Luhansk rely on satellite and cable to access television and many are tuning into Ukrainian television stations. Brand new state-funded program for small and medium-sized entrepreneurs (SMEs) launched in Donbas Donetsk Oblast State Administration launched a $5 million financial grant program this summer to support SMEs in government-controlled Donetsk. The maximum individual
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