The West cheered the Ukraine up­ris­ing—un­til noth­ing changed

▶ In­ter­na­tional aid groups grow im­pa­tient with the govern­ment ▶ “Ukraine is the same klep­toc­racy as it was be­fore”

Bloomberg Businessweek (North America) - - News -

Two years have passed since a pop­u­lar up­ris­ing in Kiev top­pled a Rus­si­abacked regime in Ukraine. The glory of that peo­ple power mo­ment has faded, and Western sup­port­ers are los­ing pa­tience with the govern­ment as cor­rup­tion ham­pers ef­forts to jump­start the econ­omy. The gross do­mes­tic prod­uct of the war-plagued coun­try con­tracted 10.5 per­cent in 2015.

In­fla­tion reached 43 per­cent. On Feb. 10, In­ter­na­tional Mon­e­tary Fund Man­ag­ing Di­rec­tor Chris­tine La­garde ex­pressed con­cern “about Ukraine’s slow progress in im­prov­ing gov­er­nance and fight­ing cor­rup­tion.” She said it would be hard to keep fi­nanc­ing Ukraine in the ab­sence of real change.

On Feb. 3, 10 Western am­bas­sadors also called on Ukrainian lead­ers to “set aside their parochial dif­fer­ences” and crack down on cor­rup­tion. The state­ment was prompted by the res­ig­na­tion of re­formist Econ­omy Min­is­ter Ai­varas Abro­mavi­cius, a Lithua­nian who as­sumed Ukrainian cit­i­zen­ship to join the govern­ment in 2014. He said “ac­tions aimed at par­a­lyz­ing re­forms” trig­gered his res­ig­na­tion. He pointed a fin­ger at Ihor Kononenko, the se­nior leg­is­la­tor of Pres­i­dent Petro Poroshenko’s party in Par­lia­ment and Poroshenko’s for­mer busi­ness part­ner. Kononenko had en­gi­neered the ap­point­ment of a close as­so­ciate to the post of Abro­mavi­cius’s deputy with­out telling the min­is­ter, ac­cord­ing to text mes­sages re­leased by Abro­mavi­cius.

In­ves­tiga­tive jour­nal­ist Ser­hiy Leschenko, a Par­lia­ment mem­ber, wrote on­line that Kononenko was try­ing to get his man into the Econ­omy Min­istry so he could stop Abro­mavi­cius from re­form­ing a staterun com­pany un­of­fi­cially con­trolled by the pres­i­dent’s al­lies. In an e-mail, Kononenko said he wouldn’t com­ment pend­ing an in­ves­ti­ga­tion into Abro­mavi­cius’s al­le­ga­tions. To ad­dress voter anger, on Feb. 16, Poroshenko asked for the res­ig­na­tion of his pros­e­cu­tor-gen­eral, Vik­tor Shokin, who was widely dis­liked for fail­ing to root out cor­rup­tion.

Or­di­nary Ukraini­ans’ wrath is aimed pri­mar­ily at Prime Min­is­ter Arseniy Yat­senyuk. Eightytwo per­cent dis­ap­prove of the job he’s do­ing, ac­cord­ing to a re­cent poll by the In­ter­na­tional Repub­li­can In­sti­tute, a Wash­ing­ton non­profit.

On Feb. 16, Yat­senyuk nar­rowly sur­vived a no- con­fi­dence vote in Par­lia­ment af­ter Poroshenko called for a “full re­set” of the govern­ment. Op­po­nents blame the prime min­is­ter for ham­per­ing re­forms and ac­cuse his al­lies of cor­rup­tion. “Ukraine is the same klep­toc­racy as it was be­fore the peo­ple ousted the pre­vi­ous lead­ers,” says Ye­gor Sobolev, who heads Ukraine’s par­lia­men­tary com­mit­tee on cor­rup­tion.

Poroshenko and Yat­senyuk do have achieve­ments they can point to. Po­lice re­form is un­der way, and the govern­ment pro­cure­ment process has be­come more trans­par­ent. The new Na­tional Anti-cor­rup­tion Bureau is in­ves­ti­gat­ing high-pro­file cases, in­clud­ing Abro­mavi­cius’s ac­cu­sa­tions.

Vladislav Burda, who owns a chain of stores that sell goods for chil­dren, says the sys­tem is rife with cor­rup­tion. With­out rad­i­cal re­form and a sus­tained war on cor­rup­tion, IMF loans are use­less, he says. “Be­fore the rev­o­lu­tion, ev­ery­one used to feed one fam­ily,” he says—that of ousted Pres­i­dent Vik­tor Yanukovych. “But now there are many ac­tors ea­ger to milk busi­nesses.”

Leg­is­la­tor Sobolev says that for­mer Ge­or­gian Pres­i­dent Mikheil Saakashvili, now gov­er­nor of Ukraine’s Odessa re­gion, would be a bet­ter prime min­is­ter than Yat­senyuk. Saakashvili, who’s cred­ited with in­sti­tu­tional re­forms in Ge­or­gia, is one of Ukraine’s two most pop­u­lar politi­cians, ac­cord­ing to polls. The other is Lviv’s mayor, An­driy Sadovy, who heads the lib­eral Samopomych party, of which Sobolev is a mem­ber.

In De­cem­ber, Saakashvili ac­cused Prime Min­is­ter Yat­senyuk and his min­is­ters of block­ing re­forms. Dur­ing a meet­ing, In­te­rior Min­is­ter Arsen Avakov, a tar­get of cor­rup­tion al­le­ga­tions in the me­dia, yelled in­vec­tives at Odessa’s gov­er­nor and hurled a glass of wa­ter at him. Saakashvili’s fans in Ukraine—mainly

“Be­fore the rev­o­lu­tion, ev­ery­one used to feed one fam­ily. But now there are many ac­tors ea­ger to milk busi­nesses.” —— Vladislav Burda, re­tailer

political ac­tivists, ad­vo­cates of a freemar­ket econ­omy, and var­i­ous MPS and jour­nal­ists—are grad­u­ally co­a­lesc­ing into a political move­ment. They’re call­ing for par­lia­men­tary elec­tions as soon as pos­si­ble. �Leonid Ragozin

The bot­tom line Ukraine has im­posed some re­forms, but they aren’t deep or ef­fec­tive enough to rein­vig­o­rate the con­tract­ing econ­omy.

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