Christian Caryl

The Other War in Ukraine

The biggest threat to Ukraine isn’t Vladimir Putin: it’s a deeply entrenched culture of corruption. Can the new government cope?

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What’s the best way to save Ukraine? “By reforming the country,” says Sergii Leshchenko, a freshman member of the Ukrainian parliament. The war against Russian aggression isn’t the only front in his country’s struggle for survival right now. Leshchenko says that he’s even more worried about the fight against Ukraine’s long-established culture of sleaze — a disease that has crippled governance and stunted development. Battling corruption, he says, “is a bigger challenge” than the war in the East.

He knows of what he speaks. Last month, Leshchenko — a leading Ukrainian investigative journalist (and a Democracy Lab contributor) — won election to his country’s national legislature, where he’s now a member of a key committee that’s trying to clean up how the country is run. He was in Washington this week, along with fellow parliamentarian Hanna Hopko (one of FP’s 2014 global thinkers) and activist Oleksandr Solontay, to accept an award and attend an event commemorating the anniversary of the start of the EuroMaidan protests, which ended, three months later, with the overthrow of President Viktor Yanukovych.

Leshchenko told me that he and fellow lawmakers are working to establish an anti-corruption bureau with broad powers to investigate and arrest senior politicians who are caught abusing the public trust. They’re setting up a system for the broad disclosure of the assets of public officials. And they’re also forging ahead with plans for European-style public financing of political campaigns — in an attempt to curtail the huge political influence of the oligarchs, the powerful business tycoons who still dominate Ukrainian politics.

The problem, Leshchenko admits, is that serious and systemic reform — of the judiciary, the police, the military — “will take years.” But that’s time his country doesn’t have. Just this week, the International Monetary Fund revealed a huge gap between promised emergency financing for Kiev and its likely needs. One reason: the loss of important industrial regions to separatist control in the East and the collapse of Russian export markets are exacerbating Ukraine’s economic meltdown. The amount of the shortfall is a staggering $15 billion. If the money can’t be found, the government in Kiev faces a choice between imposing harsh cuts on public spending — or defaulting on its sovereign debt payments, which would turn it into a financial pariah for years to come.

But the countries of the West aren’t in the mood to kick in more cash. They’re worried that Kiev still hasn’t done enough to show that it’s prepared to tackle its own problems. After October’s parliamentary election, it took the winning parties over a month to form a government, and the new Cabinet is only just getting around to formulating plans for much-needed reforms.

There are some grounds for hope. Prime Minister Arseniy Yatsenyuk has just announced a series of dramatic measures to reduce the number of public employees and slash red tape. He’s vowed to cut public spending by a whopping 10 percent. Perhaps most importantly, he’s promising to reform the bloated energy sector, where the lack of decisive change has maintained Ukraine’s fatal dependence on natural gas imported from Moscow. In the past, the lucrative Russian-Ukrainian natural gas trade offered great opportunities for well-connected officials to skim off huge profits in shady deals behind the scenes. Draining this swamp would go a long way to restoring Ukraine’s public finances as well as its international credibility. Yet somehow Kiev has to solve this problem even as it struggles to pay for gas from its big neighbor to the East.

A major problem, says Leshchenko, is that the oligarchs continue to hold sway — even now, nine months after the downfall of Yanukovych, the leader who exemplified the worst extremes of the oligarchic system. Rinat Akhmetov, Ukraine’s richest man, still wields considerable influence through his industrial interests and his proxies in the Opposition Bloc (leftovers from Yanukovych’s Party of Regions). Another billionaire, Petro Poroshenko (aka “the Chocolate King”), now runs the entire country. Will he be willing to tolerate curbs on the power of businessmen?

One of the trickiest tycoons on the scene these days is Igor Kolomoisky, who assumed a post as governor of the strategically important central province of Dnipropetrovsk in the spring. Kolomoisky, who was the only regional leader to participate in the negotiations that led to the current coalition government, exercises additional power through his ownership of one of Ukraine’s most widely watched private TV channels. The oligarch even created a personal militia that he’s sent into battle against pro-Russian separatists. (Leshchenko says that Kolomoisky has deployed this private army in a takeover of a key oil refinery in Odessa — a vivid illustration of just how ruthlessly Ukrainian oligarchs mingle their political and business interests.)

So yes, full-scale reform will take time. But Yatsenyuk’s latest initiative, and the efforts of the young Euromaidan veterans who are now getting down to work in Parliament, offer important grounds for hope, and the West should respond favorably. There are many ways to help. A few days ago, 50 experts from an assortment of European Union countries started work on a broad program to improve the rule of law in Ukraine, offering on-the-spot advice on reforming the judiciary and law enforcement.

Perhaps most intriguingly, NATO has just announced that it’s setting up five trust funds to implement reform within the Ukrainian military. Instead of simply transferring money to the existing military establishment (which has a long history of malfeasance), the trust fund structure will allow donors to push for change while maintaining control over the resources involved.

Perhaps that’s an approach that’s worth applying to the broader assistance program. Ukrainian reformers like Leshchenko and Hopko say that the international community should appoint an independent monitor to track precisely how the Ukrainians are spending aid from the West — the more intrusively, say reformers, the better. Direct oversight of this kind would be an excellent confidence-building measure. Reluctant American and European politicians can be persuaded to help far more easily if they know the money’s actually being spent the way it’s supposed to.

But the West needs to act. And it can only do so if leaders in Washington, Brussels, London, and Berlin understand that the most important front in this struggle isn’t the military conflict in eastern Ukraine but the reform effort in Kiev. Pro-democracy campaigner Oleksandr Solontay, speaking at one of the events in Washington this week, put it nicely. Russian President Vladimir Putin, he said, knows that his ability to overwhelm all of Ukraine by force is limited, so his best bet for getting is way in the country is “by preventing reforms from happening.” Geoffrey Pyatt, the U.S. ambassador in Kiev, noted earlier this month that “business as usual” in Ukraine “is a bigger threat than Russian tanks.”

If the Ukrainians can actually show progress in their efforts to reform, then they deserve our generous support — the sooner, the better.


 Twitter: @ccaryl

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