Seeing More of the Big Picture in Ukraine

Uncle Volodya says, “Disaster is not necessary; the better world could be achieved through reason and common sense and a sense of fellowship — but most of the present human world is dead set against us.”

They whisper still, the injured stones, the blunted mountains weep
As he died to make men holy, let us die to make things cheap
And say the Mea Culpa, which you’ve gradually forgot
Year by year
Month by month
Day by day
Thought by thought

-Leonard Cohen, from “Steer Your Way”

A comment on the previous post reminded me of how informative it can be, particularly in the (mine)field of geopolitical analysis, to go back a year or two from the present, following a significant event, and enjoy the confident predictions of kingmakers and hacks – which could now not be much further from the situation which actually prevails.

In that spirit, let’s roll the counters back to September 18, 2013 – almost exactly three years ago.  Just before, of course, the glorious Maidan which freed Ukrainians from the oppressive yoke of Russia. At that moment in history, western analysts were trembling with eagerness to vilify Yanukovych, but were still hopeful that he would stick his head out of his shell long enough to sign the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union. Washington maintains a kind of ongoing paternal affection for revolution – which is always less painful and noisy when it’s a continent or two away – but is practical enough to accept an easy victory if that’s the way it plays out.

It didn’t play out like that, of course, and an American-backed coup ensued in which Yanukovych offered to give the revolutionary political figures everything they had asked for – early elections, a provisional coalition government with the egghead among the revolutionaries as Prime Minister, the works. They were a little taken aback at how easy it was, and then decided it wasn’t enough – Yanukovych must  be holding back something if he gave in that easily, and therefore he must be tricking them, since the script called for the dictator-president to cower in fear and to be flung into the street in disgrace. So they went ahead with the traditional revolution, gaining nothing at all thereby except the ushering-in of a self-appointed revolutionary junta, and the empowerment of fervent fascist nationalists who had previously had to keep their admiration for the Nazis on the down-low.

It is worth mentioning here – because whenever it is brought up, the response ranges from amnesia to outright denial it ever happened – that the pre-revolutionary government went into it with its eyes wide open and a good working awareness of the probable consequences. Yanukovych and Azarov, at least, were briefed that cutting off trade with Russia, which Brussels and Washington insisted upon, would likely be disastrous for the Ukrainian economy. Deputy Prime Minister Yuriy Boiko announced that Ukraine was not blowing off the deal entirely; it was just suspending it until the state could be sure that increased trade with Europe would compensate for the loss of the Russian market. Before that, Yanukovych and Azarov tried energetically to broker a triumvirate coalition of Ukraine, Russia and the EU, to sort out the trade issues that Brussels insisted made such an arrangement impossible. Not to put too fine a point on it, Russia and Ukraine proposed a tripartite forum which would see Ukraine as a bridge between the Eurasian Economic Union and the European Union. Brussels emphatically rejected it, confident that it could pry Ukraine away from Russia, because the initiative was always strategic rather than economic.

The government of the day in Ukraine saw fairly clearly what was likely going to happen – and so did we, didn’t we? Yes, we did, as detailed here. We pointed out that nearly half those Ukrainians who answered a survey that they wanted Ukraine to join the EU did so because it would strengthen and grow the Ukrainian economy, but that it was difficult to see how that would come about considering 60% of Ukraine’s trade was with the former Soviet market, and highlighted the unlikelihood that Europe was going to pick up 60%-plus of Ukraine’s trade, resulting in prosperity. We pointed out that only half as many people who responded to the survey that Ukraine’s relations with Russia were characterized as ‘friendly’ said the same of relations with the EU. So, you could kind of see how (a) a failure to see rapid economic benefits as a result of signing the agreement, coupled with (b) the opposite effect, a precipitate drop in trade, plus (c) severing of relations with a country nearly a quarter of Ukrainians considered a friend, in exchange for a necrophiliac relationship with a trade union few cared much for except for the usual percentage of lapdog dissidents, was very likely to result in widespread dissatisfaction and an explosive situation. Did it? It sure did.

Anyway, as much fun as tooting our own horn is, that’s not exactly what I wanted to talk about. I want to review, in exquisite detail, the panorama of failure that is Radio Free Europe/Radio Liberty’s (RFE/RL) feelgood graphic presentation for the rubes and dimwits on how association with the EU was going to be better than sex in warm chocolate for Ukraine. And that forecast has turned out to be about as accurate as a prediction that Justin Bieber would be nominated UN Secretary-General by popular acclaim.

But let’s not leave it at that. Because you know that if those who forecast disaster for Ukraine – based on, I think, the ability to read and to add – had somehow been wrong, and Ukraine had sprinted into double-digit economic growth and taken over the role of driving engine of the European economy, we would never have been allowed to forget it. Turnabout, then, being fair play…

1. The cream-skimming oligarchy, accustomed to riding to wealth on the backs of its panting workforce, will be out – swept away by a new era of small-business confidence.  Did that happen? Hardly. The President Ukraine eventually elected was fingered for starting up a new offshore shell corporation even as his troops were being driven into a disastrous encirclement at Ilovaisk. The same old oligarchs continue to control more than 70% of Ukraine’s GDP. The Anti-Corruption Committee appointed by Poroshenko, unsurprisingly, declined to investigate him for corruption. Now more than two years into his presidency, Poroshenko still has not sold his assets as he promised to do if elected, and his businesses continue to fatten his personal bottom line in direct contravention of Ukrainian law and the Constitution. Never a peep of protest about that, though, from Poroshenko’s International Advisory Council, which includes former British Prime Minister Tony Blair, former Australian Prime Minister Tony Abbott, former Polish Foreign Minister Radoslaw Sikorski, former Swedish Prime Minister Carl Bildt, former Georgian President Mikheil Saakashvili and make-believe-economist wooden-head Anders Aslund. This council continues to advise the President of what remains the most corrupt country in Europe.

2. The boss at the company where you work will have to learn different ways to lead, because screaming and ranting are not acceptable in Europe. In many European countries, the boss is just a senior worker who you can call by his first name.  This sort of rolls into the first point, but it seems sort of self-evident that if Ukrainian companies do not do more business with Europe and replace their lost Russian markets, and the same oligarchs still own the same companies, little will change about employee-employer dynamics. According to Eurostat, Ukraine’s trade with the EU was down sharply in 2015 in both imports and exports. A decrease in imports is not particularly surprising – Ukraine is living on handouts from the international community while it continues to pour funding into its armed forces so that it can pursue the game of civil war, and hasn’t any money. Not to mention thousands of Ukrainian working stiffs are employed by Roshen, owned by the President, so I wouldn’t be trying out, “Morning, Petro – how’s it hanging?” on my tongue any time soon if I were you. The new Prime Minister, Vladimir Groysman, is unlikely to be ‘Vova’ to very many workers, either. He’s quite wealthy in his own right, at least part of that wealth shunted from EU development funds to his father’s cement and asphalt company. However, as an unnamed Ukrainian politician is said to have quipped to a Ukrainskaya Pravda reporter when Groysman received his new appointment, “Do you know what the difference is between Groysman and Yatsenyuk? When Volodymir [Groysman] will start stealing, he will steal off the profit. Yatsenyuk was doing it off the loss.” It’s good to see Ukrainians haven’t lost their sense of humour.

3. As the standard of living improves in Ukraine, people will begin to trust each other. In Yanukovych’s Ukraine, people tended to trust only their own small circle, but in the New Ukraine, the doormat will be changed from “Beat It, Shyster!” to “Come On In, Friend!” I’ll let Thomas C. Theiner take over on the subject of trust in Ukraine, post-Maidan. A committed Atlanticist neoconservative and former cheerleader for Ukraine, Theiner lived in Kiev for 5 years, and has the advantage of personal knowledge. In his assessment, if you are the type who likes to throw away money, go to Vegas instead of Kiev – that way, at least there’s a chance you’ll see a return. Thomas?

“Even today, it’s impossible for a foreign businessman to start a company in Ukraine without being harassed for bribes. If you pay, they just demand more; if you don’t pay, you won’t succeed at all. The only way out is to hire a local to help you navigate the bureaucracy and grease the correct wheels. But whomever you hire will charge a 400-500 percent premium. Hiring a foreign law company with offices in Kyiv, which charges Western prices, is the only alternative.”

Expectations of a dramatic change were not realized, and the changing of the guard only brought in different crooks. No significant progress has been made on corruption. If your company is successful without the correct palms being greased, an expedient will be found for getting you out of town for a few days. When you come back, the company will be under new ownership, and like George Thorogood in “Move it on Over”, your key won’t fit no more. Move over, little dog, a big ol’ dog’s movin’ in. All puffickly legal, as well, by Ukrainian courts.

4. Without gross, horrible, corrupt Yanukovych in charge, trust in the police will rise and pretty soon they will be rescuing kitties from trees instead of taking bribes and roughing people up. Just last month, at least three police officers in  western Ukraine beat Oleksandr Tsukerman and shot him dead in front of his relatives, including his mother. Around 200 local residents gathered in front of the police station, and uniformed officers had to keep them back when the detained police officers who are accused of the crime were brought out. In case you were thinking the dead man was a violent criminal who somehow invited his own death, the Ukrainian Police Chief ordered the entire station disbanded. A group of people in the same region were beating up passers-by right in front of the police, and officers involved in a wrongful death and four officers who raped a woman and fractured her skull were not dismissed from their jobs. Call me a pessimist, but that doesn’t sound encouraging to me.

5. The difference in social status between the very wealthy and the middle class will gradually disappear, and rich people will no longer be VIP’s. It’s pretty easy to show this one up for the epic piece of optimistic stupidity it was. The President of Ukraine is also an active businessman and multimillionaire, while per-capita GDP adjusted for purchasing power, for the ordinary folk, has collapsed and the unemployment rate is leaping upward in great jagged peaks. Yet according to the State Statistics of Ukraine, wage growth has been  steady and touched a record high in July 2016. A month later, a Ukrainian miner on live TV set himself afire at a press conference to protest wage arrears. This desperate protest is alleged to have taken place after industrial action and hunger strikes failed to move the government. How can these two realities co-exist? I guess it’s easy for wages to be at a record high if you don’t…you know…pay them.

6. Women’s rights; in the European Parliament, a third of the members are women. In the Verkhovna Rada under jerky Yanukovych, only 10% were women. Well, folks, the glorious Maidan was not for nothing. The current Rada is 12.02% women – only 87.98% are men. The gain is mostly illusory, as only 416 seats of the Rada’s statutory 450 are occupied due to the banning of certain political parties. But a third of 416 would be 138 women rather than the current 50, so women’s rights groups should not relax just yet, as some work obviously remains to be done.

7. In Yanukovych’s Russia-friendly Ukraine, intolerance was the rule and blacks and homosexuals mostly stayed hidden. Most Ukrainians would not vote for a Jewish presidential candidate, and even fewer for a black one. How things have changed! Now Nazi symbology in public is commonplace in Ukraine, whilst the government ostentatiously banned Communist symbology and recognized Nazi-era collaborators as Freedom Fighters. As best I recall, the Nazis were not known for their tolerance. How many Ukrainians in the new Europe-ready Ukraine would vote for a black or a gay presidential candidate? A Gay Pride march in Kiev scheduled for 2014 was canceled when authorities refused to police the event and said they could not guarantee the participants’ safety from homophobic violence. At another attempt in 2015, international supporters from Canada had to cross three lines of police to get to the meeting point, and were given a list of things to not do: Don’t wear bright colours. Don’t kiss or hold hands. Don’t speak to the police unless spoken to. The bus company which was approached by Kiev Pride to take the marchers to and from the march allegedly refused, saying, “We’ll take the diplomats, we’ll take the journalists, but we’re not taking any faggots.” Clearly, tolerance not only has not improved, but is in full retreat and is not a priority for the new government.

8. Life expectancy. In 2010, the year Yanukovych was elected president, it was 70.2 years. In 2016, it’s 69.6. I’m having a hard time seeing that as an improvement.

9. Health. Sports clubs encourage a healthier lifestyle. Most of Ukraine’s sports clubs and facilities were inherited from the Soviet Union.  A search for “Poroshenko opens new sports club” yielded nothing much except the news – I guess I shouldn’t be surprised – that he owns one: (search for “Poroshenko’s allies show up on website listing tax-haven firms”) Fifth Element, at 29A Electrykiv St. in Kiev. That’s also the registered address of Intraco Management, owned by deputy head of Roshen Sergey Zaitsev. Intraco Management showed up in Mossack-Fonseca’s records, which came to be better known as the Panama Papers. Meanwhile, health care in Ukraine remains deplorable and there has been no noticeable improvement.

In fact, although you can find the occasional bright spot if your business is finding bright spots and spinning them into a tapestry of success, Ukraine is a nation in free-fall. The currency is trading at 26.33 UAH to the US greenback, slowly edging up to that truly scary record spike of 33.5 to the dollar in February of last year. Pre-Maidan, the rate was about 7 hryvnia to the dollar. When Poroshenko assumed his present office, it was 12 to the dollar. The president’s approval rating has corkscrewed down to around 10%. Believe it or not – and I frankly find it incomprehensible there can  be an electorate anywhere, whose fingers must be nothing but scar tissue now from being burnt so many times, that so adamantly will not change its ways – the current leader in the polls is… Yulia Tymoshenko. Yes, indeed; if anything can save the floundering country, it’s another stinking-rich oligarch. Yulia Tymoshenko, multi-millionaire. Ukrainian family living wage, 9,950 UAH per month, about $383.00 USD. Per month. And the reduced price for gas for households was canceled in May, as an anti-corruption measure.

By the benchmarks set in the happy-time graphic, Ukraine is failing catastrophically in every metric, gasping for breath like a fish on the kitchen floor with someone standing on it. There is zero chance of any kind of peace deal this year, since Poroshenko arbitrarily decided to reverse the agreed-upon terms and announce no moves toward autonomy for the east could take place until Russia returned control of the border to Ukraine – causing Russia to withdraw from the Normandy format, since negotiations with such a fucking blockhead are a complete waste of everyone’s time.

To be completely fair to RFE/RL, they did not originate the graphic; that came from the highly-imaginative Institute of World Politics in Ukraine. But it fits perfectly with RFE/RL’s style; it’s hard for a one-time CIA-funded leopard to change its spots, and many of its columnists seem to rely far more on imagination themselves when they are writing their material. So they can own it.