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#5 (111) May 2017 How the years of war changed IMF’s David Lipton on The definition and potential life in Donbas cooperation with Ukraine of Ukraine's middle class THE FIRST LESSONS OF DECENTRALISATION WWW.UKRAINIANWEEK.COM Featuring selected content from The Economist FOR FREE DISTRIBUTION CONTENTS | 3 BRIEFING ECONOMICS 5 Willingness vs capacity: 26 David Lipton: “Ukraine can’t pause or Why those in power go backwards” are losing people’s trust IMF First Deputy Managing Director 7 Volodymyr Vasylenko on details of cooperation with Ukraine on language laws in Ukraine and next key reforms 30 The mythical steel collapse: An POLITICS economic war of pro-Russian oligarchs 8 The trail of Odesa: against Ukraine in revenge for the Where is the investigation ORDiLO blockade of the Trade Unions fire 34 Between the rich and the poor: What of May 2, 2014 halts the development of Ukraine’s 10 The good, the bad and the ugly: middle class How life has changed 36 A helpless giant: Who qualifies as in three years in occupied middle class in Ukraine and liberated Donbas SOCIETY 13 Raynell Andreychuk: “Ukrainians have started 40 The eco-explosion in Donbas: What to work more consistently on the the war is doing to the environment issues that could lead them to NATO” in what was once Ukraine’s most Co-Head of Ukraine-NATO industrialised region Interparliamentary Council NEIGHBOURS on cooperation between the Alliance 42 Guillaume Scheurer: “When there is a and Ukraine feeling of separation between those 16 Defensive treatment: governing and those governed, it’s Identifying and overcoming corruption wrong” in Ukraine’s defence industry The Ambassador of Switzerland to Ukraine and Moldova on political FOCUS culture in his country, work in Ukraine 18 Haste in the village: How successful 46 Michael Binyon on the decline of the is the amalgamation of communities left in Europe across Ukraine? 48 A tradition traduced: How neglect 21 Danubian Principalities: The progress for the U.S. State Department affects and problems of decentralisation in American diplomacy Odesa Oblast CULTRE & ARTS 24 Self-government on the front line: 50 Silent films, wine & books: How the liberated parts of Donbas set The Ukrainian Week offers a selection up their territorial communities of events to attend in May E-mail [email protected] www.ukrainianweek.com Tel. (044) 351-13-00 The Ukrainian Week #5 (111) May 2017 Office address Kyiv, Ukraine, 36A, vul. Bohdana Khmelnytskoho, apt. 3 Founder ECEM Media GmbH. Publisher ECEM Media GmbH Print run 15 000. Free distribution Address Austria, Am Gestade,1, 1010 Vienna Our partner State registration certificate КВ № 19823-9623ПР 19.03.2013 Chief Editor Dmytro Krapyvenko Editors Anna Korbut, Lidia Wolanskyj #5 (111) May 2017 | THE UKRAINIAN WEEK THE UKRAINIAN WEEK | #5 (111) May 2017 BRIEFING Willingness vs capacity Andriy Holub oliticians have become tangled in their own intrigues, reforms are not taking place, and the state lacks a development strategy. It would be hard to find a more banal statement in journalist’s reports than this. This thesis has almost always reflected the political situation and typified Pthose in power. And now it’s become a cliché. On the other hand, it’s quite difficult to explain this in conversations with foreigners and political spin-doctors—or their clients— are also unwilling to understand this, while they speak wistfully about “the third Maidan” just about every week. Ukrainians have become used to the fact that their govern- ment doesn’t do what is necessary and the reasons for this are also very well understood by them. Just listen to any expert in the social nets: “They’re all the same and they can’t seem to steal enough.” What’s a lot more important for ordinary Ukrainians is the answer to a very different question: UNIAN PHOTO: “Could they, if they really wanted to?” In other words, they see the people in power as falling into two #5 (111) May 2017 | THE UKRAINIAN WEEK 6 | BRIEFING | categories—“those who don’t want to and can’t” and progressed since the appointment of Groysman. The “those who can but don’t want to.” The first lot can be dis- VoxUkraine portal and a number of other organizations missed out of hand, but the second one can be held to launched an Index of Reform Progress that is updated account and forced to perform. every two weeks. These experts evaluate not only the Examples are easy enough to find. Incapacity was work of the Cabinet but also of other government agen- what Viktor Yushchenko was mostly blamed for. And the cies. Still, in the time that Groysman has been in office, inability to leave Russia behind was the beginning of the not once has the Index, based on a scale of -5 to +5, even end of Viktor Yanukovych. reached the +2 that the authors consider the minimum The president and national deputies elected since the acceptable level—let alone higher. Prior to Groysman it Euromaidan have passed the midpoint of their terms of might have been rare, but it did occasionally get there. office. During this time, one political group has done a Groysman seems to be trying to maintain a certain great deal to concentrate almost all the levers of power in comfortable space and not to risk anything. That makes its own hands. Petro Poroshenko depends on the legisla- the Government’s opportunities less obvious than those tive coalition in which his faction is the largest, while the of other government agencies. For now, the Government Cabinet of Ministers recently celebrated the first anni- is dealing with the consequences of the Donbas blockade. versary of his ally, Volodymyr Groysman, in office as PM. Power and Coal Minister Ihor Nasalyk has promised to However, not only has this group gathered all the power stop the import of anthracite from Russia after signing a into its hands, but also all the opportunities. The question delivery contract with the US. Of course, talks about im- comes down to whether this control is nominal or real. porting American coal and re-equipping Ukraine’s TESs or The situation in the Verkhovna Rada is illustrative. cogeneration plants have been going on since the very start On paper, there is a parliamentary coalition that, in ad- of the occupation of Donbas. Nevertheless, the real, rather dition, has reserves in the form of many deputy groups than merely formal, blockade of ORDiLO, as the occupied that are linked to one oligarch or another. However, the territories are called, seems to have taken Ukraine by sur- Rada has proved in recent months to be completely inca- prise. As of April 19, five of the country’s six coal-fired TESs pacitated. Initially there was the drawn-out drama with have been shut down temporarily in order to economize on appointing an auditor for NABU that ended in a draw: anthracite. Scheduled to be reviewed in the Rada shortly, the coalition was unable to get its person in, but it also the reform of the healthcare sector is likely to become a real did not let any outsider get the appointment. This failure measure of the current Government’s capacities. can, of course, be blamed on the lack of desire on the part Another lever of the current Administration is the of deputies, who refused to take public responsibility for law enforcement agencies, where also many questions a pathetic situation. remain unanswered. It’s not so much a matter of the government’s desire to really eliminate corruption and reform the system, but about the minimum necessary to A YEAR AGO, PREMIER GROYSMAN PROMISED survive: the capacity to combat those elements that are TO SHOW EVERYONE HOW TO RUN A COUNTRY a direct threat to national security—and therefore to the government itself. At the moment, civic activists continue PROPERLY. AND MADE A KEY DECISION ESTABLISHING to independently expose separatists and Russian agents MARKET PRICES FOR NATURAL GAS. AFTER THIS, HE who are sometimes even benefiting from public funding, NEVER MADE ANOTHER EQUALLY SIGNIFICANT DECISION e.g., the story with the community council attached to the Defense Ministry. Meanwhile, judges keep releasing Berkut officers suspected of crimes against the Maidan After this, other events took place that are also hard to protesters, who then show up in Russia. describe as anything else but incapacity. The Rada failed Without resorting to conspiracy theories, it’s hard to to pass a bill on the Constitutional Court. Deputies also imagine just how the flight of rank-and-file Berkut to Rus- turned down changes to the “Savchenko law” in second sia might benefit the Poroshenko Administration. But it reading. This might all have been irrelevant except for one does raise questions about its capability to prevent such important point: judiciary reform is the key component incidents in the future. Instead of systematic work, the of the president’s rhetoric these days. Indeed, it would be law enforcement agencies often restrict themselves to eye- very hard to find any fans of the current system among vot- catching statements or completely incomprehensible deci- ers. The inadequacy of the “Savchenko law” was explained sions that turn them into laughing stocks. For instance, on away by the rising tide of crime and the press joined the April 19, the Cabinet of Minister—obviously reflecting the chorus in criticizing this bill. After all this, Speaker Andriy wishes of the new leadership of the police force—made al- Parubiy dismissed the legislature for a month, until May terations to police uniforms that affected those at the rank 16, although he clarified it by saying this was not a recess of general: they were given back the right to wear stripes but a time for “working in committees and constituencies.” and to decorate their collars, ties, epaulettes and caps with A year ago, Premier Groysman promised to show ornaments in the form of “oak leaf and kalyna branches,” everyone how to run a country properly.