On 24-25 December, when the world was awaiting Christmas, Ukrainian MPs endured a law-making 20-hour marathon. After passing some crucial changes to tax and procurement legislation on Thursday, the Rada adopted the 2016 state budget in the waking hours on Friday. Despite last-minute vote and a rather brief in-house discussion, a sigh of relief is in order: this budget package is much better than a lack thereof.
Adoption of a budget in the last days of December has become a Ukrainian political tradition of sorts. Many MPs usually have their suitcases packed, awaiting their winter vacations overseas, with only one box to tick. The urgency in past years stemmed largely from the inability to adopt local budgets without the state budget. This is less of a problem this year, as new legislation allowed for local budgets to be passed even without the central one.
This year, the IMF program has been looming large over discussions of the budgetary process. Mindful of some infantile MPs calling on postponing the review of the budget till January, ambassadors of key Western partners even had to remind the Ukrainian parliament of the need to pass an IMF-compliant budget before year’s end. These warnings seem to have been heeded: the Rada has passed the budgetary package that is in line with the IMF requirements.
Local Officials Crack Down on Peaceful Protests in Dnipropetrovsk (Eastern Ukraine) on 26 January 2014
- The peaceful anti-government protest in front of the regional administration in Dnipropetrovsk was attacked by concerted forces of police and paid gangs of about 200 thugs;
- The authorities used a group of 50 provocateurs to simulate storming of the regional administration, only to use it as a pretext for a bloody crack-down on peaceful protestors nearby;
- There are clues that the criminals were hired and transported to Dnipropetrovsk by the people close to Oleksandr Vilkul, then-deputy Prime Minister of Ukraine and formerly a regional chief;
- These clashes were observed and allegedly “supervised” by Yevgen Udod, the head of Dnipropetrovsk regional council. Possible variants of spelling his name: Evgeniy / Ievgen / Yevhen Udod.
For the past two weeks, Ukraine has been swamped in a torrent of news stories unveiling the magnitude of the country’s police brutality and impunity. Policemen in Kyiv were accused of beating a student to death. Raisa Radchenko, an elderly civil rights campaigner in Zaporizhya, was incarcerated in a mental institution against her will, and only recently released under pressure from human rights groups. Stories like these make the headlines of Ukrainian news on a daily basis. Increasingly, these police abuses unleash a wave of resistance from the civil society, similar to protests in Turkey and Bulgaria, yet on a much limited scale. This movement has, however, received very little attention in European Union countries, both in EU foreign policy circles and general public alike.
At the end of June news broke out that a 29-year-old woman had been severely beaten up and raped by three men, two of them policemen, in a Southern town of Vradiyivka. Amid the foot-dragging of law-enforcing authorities, a crowd of over 1000 townsmen besieged the local police station demanding to hand over the accused policemen. Under pressure from the protesters, the latter were arrested and some low-ranking officials sacked.
The events in Vradiyivka had ripple effects across the country, as they were followed by protests in a dozen Ukrainian towns. Read More…
Authoritarian regimes need natural resources: they are often both a means and a goal of an uncontested rule. Most post-Soviet authoritarian regimes (Russia, Azerbaijan) rely on oil and gas as major energy commodities. Yet not every country happens to be bountifully endowed with these resources. This is when the aspiring autocrats have to improvise and look for (not so alternative) resources to sustain their rule. Ukraine, a country owned by a dozen of oligarchs and clumsily governed by an intimate group of the President’s confidants termed ‘The Family‘, appears to be a curious case of just such a ‘non-oil’ model.
In the past three years, a circle of family members and confidants to President Viktor Yanukovich has emerged as a major pillar of the ever-changing Ukrainian political system. This clan is said to be lumped around President Yanukovich’s elder son, Alexandr, whose business appetites are no longer limited to the internal market only. However, the sources of financing that members of the Family enjoy have remained rather murky to the public until recently.
The suspicious increase in Alexandr Yanukovich’s profits, which coincided with his father’s years in office, earned him a place in the Ukrainian Forbes list of millionaires. The young prodigy “businessman” derives his riches from two major sources: tender purchases, and coal production and export. Ukraine’s murky state tender procedures are one of the key ingredients of the astonishing business prowess exhibited by the President’s elder son. According to Forbes Ukraine (Russian), his companies have received state contacts worth over 5 billion hrivnya (about 500 mln euro) in 2012.
Coal export is another controversial source of the Family’s rapid enrichment. In 2012, Sergiy Leshchenko, a leading investigative journalist, wrote (Ukrainian) that the prince-ling is connected to a company called Mako Trading S.A., which was established in Switzerland in 2011 to export hard and coaking coal from Ukraine to the European market. Importantly, the Family’s business entities do not own large coal-extracting capacities in Ukraine, and only claimed that they ‘source’ the resources in the internal market. However, the internal Ukrainian market is dominated by DTEK, the major coal producing and exporting company owned by Rinat Akhmetov, President Yanukovich’s close ally and filthy-rich sponsor. It would seem that the partnership expanded into business as well as politics.
However, nothing is as simple as it seems in Ukraine. Last week, Korrespondent, a Ukrainian quality weekly, published a large investigative article (in Russian) about the proliferation of illegal coal pits in the Eastern regions of Ukraine. According to the weekly, the abhorring conditions in these primitive, pre-industrial pits pose serious risk to employees’ life and might cause environmental damage, therefore they would be immediately shut down if it came to proper law-enforcement. Despite their illegal status, these pits are ‘protected’ by local authorities and the police, allegedly with the acquiescence (or the direct command) of the government in Kiev. Coal volumes extracted from these pits are then shipped to state-owned facilities and “laundered” as legitimate products for export.
Now this is where dirty internal business schemes and corruption in Ukraine spill over into the international context. Fueled by the recent spike in the European Union’s demand for coal as an energy source (see, for instance, the Economist Intelligence Unit report), supplies of Ukrainian coal to the EU were unexpectedly welcome. Given this “window of opportunity”, the Ukraine’s ruling family appears to be desperately trying to extract easy profits in the EU, even by resorting to shady activities in its Eastern Ukrainian backyard.
Such a motive of unfettered greed might eventually be the most pertinent reason why Yanukovich’s family is still interested in the EU-Ukraine Association Agreement, which included enhanced free trade provisions. What they obviously do not take into account yet is the collateral damage of labour and environmental commitments that are included in the Agreement. The EU would be wise to think about imposing those commitments on energy resources imported from Ukraine, even if the Association Agreement is not signed this November in Vilnius.
The aftermath of the parliamentary elections showcased the “relapse” of authoritarianism in Kiev. If the EU wants to support democracy in its troublesome Eastern neighbour, it will have to make amends to its policies.
Disclosure: Ievgen Vorobiov is a Ukrainian national, who studied International Politics in Maastricht (The Netherlands) and works in Brussels (Belgium).
For the past 20 years, the politics in Ukraine have resembled the movements of a pendulum. The device would swing from authoritarianism to democracy, and back. It appeared to shift slowly between Russia and the West in its foreign policy cycle, yet never to get stuck in any of those poles. The parliamentary elections on 28 October have marked the counter-democratic phase of the pendulum lifecycle, thus posing an uneasy dilemma for the EU and the US. Read More…