In Ukraine, Cautious Optimism Prevails

In Ukraine, Cautious Optimism Prevails

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Two years after the Maidan revolution, Ukraine still attracts much international attention. The ongoing warfare in Eastern Ukraine and regular calls from Western governments and international organizations for the Ukrainian government to decisively push reforms keeps the country in the media spotlight. Ukraine is also an important topic in transatlantic discussions as the country’s future is a highly strategic issue for both the EU and the United States. While Ukraine’s geostrategic foreign policy direction significantly affects the US’ and the EU’s relations with Russia, its internal developments also test the West’s ability and effectiveness to support a country in its transition into a modern democratic state. Washington, Brussels, and other capitals therefore closely follow Ukraine’s domestic politics.

To gain a more nuanced understanding of Ukraine’s current challenges and opportunities, the Heinrich Böll Stiftung North America, in close partnership with the Böll office in Kyiv, organized a study tour to Ukraine in April 2016 with selected US experts on transatlantic policy from think tanks and government in Washington, DC. We met with members of civil society groups, policy-makers, public officials, and diplomats in Kyiv, Dnipropetrovsk and Odessa to discuss the political, social and economic situation in Ukraine and to reflect on opportunities for close transatlantic cooperation in assisting Ukraine. Among the key takeaways from the trip was that while frustration over stalling reform projects is growing, many citizens remain cautiously optimistic that moves toward democratic rule following the 2014 revolution will eventually lead to positive and lasting change in Ukraine.

Ukraine’s political crisis, which had been going on for weeks prior to the study tour, reached a peak when we arrived in Kyiv. In February, a vote of no-confidence against Prime Minister Arseniy Yatsenyuk had failed in Ukraine’s parliament, the Verkhovna Rada, and Aivaras Abromavičius, the reform-minded minister of economic development and trade, resigned from his post over stagnating reforms.  On April 10th, Prime Minister Yatsenyuk finally announced his resignation. Due to a cabinet reshuffle and the approval of Volodymr Groysman as the new prime minister, snap parliamentary elections that could have had uncertain outcomes were avoided.  But observers have since wondered what the cabinet reshuffle will mean for Ukraine’s future direction and for its success in meeting the reform demands from within and outside of Ukraine. The new prime minister is a close ally of President Petro Poroshenko and many Ukrainians fear that his appointment will centralize even more power in the hands of the president. On the other hand, Petro Poroshenko and his inner circle can no longer blame others for stalling reform processes but will now be assessed according to their ability and willingness to drive forward key reforms – particularly in the judiciary and the prosecutorial system – and to tackle the corruption and cronyism within the political system. An important test of Poroshenko willingness to stop the nepotism inherent in the system for years will be his appointment of a new prosecutor-general following the dismissal of the old officeholder, a man of the pre-Maidan system, in late March. Diplomats urge Petro Poroshenko, who has the right to appoint a new prosecutor-general, to select an independent professional instead of one of his political companions.

The new government’s efforts will be under the scrutiny of Western governments and international organizations but also of civil society groups and policy-makers in Ukraine. The latter include members of an inter-factional group of deputies -- often former civil society activists -- that call themselves “Euro-Optimists.”  The members of the “Euro-Optimists” that we met in Kyiv were not overly optimistic about the cabinet reshuffle, fearing that it might centralize too much power in President Poroshenko’s hands. As many of our interlocutors complained, Ukraine’s Rada is still filled with too many deputies that defend the vested interests of powerful oligarchs that have naturally limited interests in reforms that could lead to systematic changes.  Steps to break the power of the oligarchs, who often not only control parliamentarians but also judges, prosecutors, and public officials, seems to be among the most pressing but also most difficult political issues to tackle in post-Maidan Ukraine.

Besides overcoming state capture, another important challenge remains the resolution of the conflict in the East. The ongoing warfare in the Donbas region also has significant consequences on society. We saw many young soldiers in the train to Dnipropetrovsk, which ends in Krasnoarmiysk, a city close to the frontline. It is difficult to imagine that young men (and women) in a European country are still sent to fight in a war in their homeland. Yet, according to recent statistics by the OSCE Monitoring Mission to Ukraine, the number of incidents at the frontline is increasing and peaceful resolution of the conflict appears distant. The deputies of the “Euro-Optimists” are therefore not very hopeful that the Minsk process will lead to any results and oppose the implementation of the Minsk Agreement of February 2015, fearing that its decentralization components will set a precedent for other regions in Ukraine (Kharkiv, Odessa, Lviv) to ask for more autonomy. Western diplomats that we talked to, however, argue that the Minsk Agreement at least succeeded in stopping the heavy fighting of 2015 and gave the Ukrainian government some time to recover from the conflict.

Some people have lost hope in a resolution to the conflict and have chosen to settle elsewhere. The number of internally displaced persons (IDPs) in Ukraine varies among different sources (also because many IDPs never register as such), but it is likely well over 1 million. A large number of IDPs have gone to Kyiv for its better employment opportunities, but many refugees have chosen to settle further East in Dnipropetrovsk or Kharkiv.  The NGO “Dopomoga Dnipra” serves as the first point of contact for incoming IDPs in Dnipropetrovsk, a city that hosts around 75,000 IDPs, and helps them find housing and prepare official documents needed to receive social services. The NGO also offers psychological support for traumatized IDPs and language and theatre classes. Such volunteer groups are a great example of how civil society has reacted to the crisis without much help from the administration.

At the beginning of the conflict in 2014, the Ukrainian state was often overburdened with the IDP situation and had no systematic approach to deal with the humanitarian crisis. Worse, many public officials were reportedly also not very interested in dealing with the situation, leading to frustration among the population with the central government. Fortunately, the situation has relaxed a little and the number of new IDPs has decreased from 300-400 per day in 2014 to around 30 nowadays. But, two years after the beginning of the fighting in the East, not many IDPs are optimistic that they will be able to return to their homes anytime soon. Around 70% of the IDPs in Dnipropetrovsk believe they will have to stay longer there.  Much still needs to be done to accommodate the IDPs and help them integrate into their new environments. For example, many IDPs are not allowed to vote in elections as long as they do not own property in their new places of residence.

Another problem for IDPs is employment, which is difficult to attain, and not all locals welcome the competition of the new arrivals in the labor market. The NGO “Sila Maybutneho” therefore assists IDPs in developing business plans for small companies and start-ups, but also to better integrate them into community life. Also tensions among IDPs themselves are not uncommon, as some of the IDPs do not hide their sympathies for the separatists in the East. Indeed, the conflict has divided society. One of the energetic volunteers we met, herself an IDP from the Donbas region, tells us that she realized that the situation in her home town was polarizing in early 2014 when a friend brought a bouquet of blue and yellow flowers – the colors of the Ukrainian flag – to a baby shower, which were inconspicuously taken apart by the host who feared that the bouquet could cause conflict during the celebrations. By May 2014, people in Donetsk were outright afraid to show Ukrainian symbols.

The conflict in the East has also divided families. One volunteer told us that she decided to stay in Dnipropetrovsk instead of waiting for the conflict to end. But the rest of her family stayed in Donetsk to look after their property, which is understandable given the separatist authorities’ policy of confiscating property of people fleeing city in order to host newly arrived fighters. Also, as long as the Ukrainian government considers the Donbas region as part of its territory, people there are still entitled to pension payments. But as members of human rights groups point out, daily life in the Eastern region has become increasingly difficult. Basic human rights are violated, the economy is declining and the region has become a smuggling hub for drugs, weapons, and consumer goods between Ukraine and Russia. Among the problems is the challenge of controlling a border of more than 400 km, and the OSCE Monitoring Mission to Ukraine’s limited access to the area. Diplomats warn that due to the large amount of weapons available in Ukraine, new protests similar to the Maidan protests of 2014 could easily turn into a bloody conflict.

But despite remaining divisions in society, many Ukrainians argue that the Maidan protests and the following war in the East were a catalyst for the strengthening of national identity. This can be seen in Odessa in Southern Ukraine, a region that has historically strong ties to Russia. Tensions were intense there after the Maidan revolution when 48 people died in a tragic confrontation between pro- and anti-Maidan protesters on May 2, 2014. Support and identification with the Ukrainian state has since increased in Odessa. But Odessa also perfectly illustrates the daily difficulties of Ukraine’s transition into more transparent and accountable government. The political environment is still contentious as the mayor and the governor belong to two different political camps. While Odessa’s mayor is a former ally of Viktor Yanukovych, the former president who was ousted from office in 2014, the governor of the Odessa Oblast is former Georgian President Mikheil Saakashvili. The latter was appointed by President Poroshenko in May 2015 to bring an outsider who is not mired in Odessa’s nepotistic local politics to the region, but probably also to secure that the Odessa region remains under government control. Saakashvili has since started an anti-corruption campaign that attracts much media attention. Members of Saakashvili’s team, many of them foreigners, aim to create a new generation of civil servants in Odessa and a new system that is more transparent and accountable to the public. This should help create a better investment climate and promote the renovation of local and regional infrastructures. But since budgets are often shared with local municipalities, the implementation of ambitious reform projects is oftentimes sobering.

A good example of these difficulties is customs reform. Odessa has the largest and most important port in Ukraine, and also has a reputation for being mired in widespread corruption and organized crime within the customs services, the police, and the public administration. The new head of the regional customs service, an ally of Saakashvili, and her team of advisers aim to fight the corruption in the system and improve the relationship between the custom officials and businesses. The young reformers have therefore recruited new staff, increased their salaries, and plan to introduce a new automated system to manage the customs. According to their proposal, the amount of documents needed for the customs procedures should be reduced in order to make the process faster, and various agencies that are currently involved in the customs procedures should be merged into one institution in order to limit the opportunities for bribes. The problem here is that these agencies are part of the hierarchies of different ministries (for example the State Fiscal Service) in Kyiv that are not keen on losing control over their part of the customs process. In addition, the local authorities that are suspected of benefiting from the current system oppose the reform plans.

Also, support of the central government for the reform proposals in Kyiv is limited. The relations between Saakashvili, who supported the customs reformers, the central government and the presidential administration have therefore gradually soured, leading Saakashvili to accuse President Poroshenko for not doing enough to fight corruption and cronyism. Saakashvili is on the way to become a major opponent of Poroshenko and presumably also of the new Prime minister Groysman. He hardly hides his political ambitions in Ukraine beyond Odessa and rumors have spread that Saakashvili will create his own party and advocate snap elections. Also the young people that regularly meet at “Impact Hub”, a platform that serves as point of contact and resource center for various civil society groups and volunteers in and around Odessa, are ambivalent about Saakashvili’s ambitions. While some see him as an “ice-breaker” in the fight against corruption and other urgent reform areas, many are skeptical about his craving for power and fear that he might use young volunteers and civil society groups for his own political ambitions. But Saakashvili’s presence might nevertheless be useful as he regularly reminds the government in Kyiv of its commitment for profound reforms.

Indeed, many observers warn that disenchantment with government is growing again, risking a slip back to the tensions characterizing the pre-Maidan period. The international partners of Ukraine are increasingly losing their patience and expect the new government and the Parliament to take decisive steps not only to adopt but also implement reforms of the court system, the prosecutor-general offices, and the election system, among others. But it could also be argued that the West should not be too quick to give up on Ukraine as reforms are taking shape, albeit slowly, as there have been some noteworthy changes since 2014. Examples of successful changes include the reform of the patrol police in several Ukrainian cities, the introduction of a new public procurement system to increase transparency in public tenders, fiscal decentralization that should lead to increased revenues of local communities, the creation of new agencies that should avoid and root out corruption, and the restructuring of the natural gas sector that should lead to a more competitive gas market. To ensure that the new government will continue these efforts, active monitors of political processes are surely helpful. In this respect there is reason for slight optimism: Those activists that already protested in 2004/2005 tell us that many people became disillusioned about politics two years after the Orange Revolution due to constant infighting between then President Viktor Yushchenko and Prime Minister Yulia Tymoshenko. In comparison, two years after the Maidan Revolution of 2014, many Ukrainians do not want to easily give up their hope for a more democratic system in Ukraine. The Groysman government would be well-advised to take advantage of the resolve of many citizens to usher in a more democratic system and prove that the optimism, albeit cautious, shared by many Ukrainians is justified.

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