Geostrategic Media Political Commentary, Analysis, Security, Defense
By Geoffrey Berlin
Ukraine’s road to justice and economic inclusion is as complex as the path of the U.S. civil rights movement.
Last week, Ukraine’s Parliament voted to declare the work of Prime Minister Arseniy Yatsenyuk’s government to be “unsatisfactory.” It then fell short on a no-confidence vote that would have dismissed his government.
Two minority parties have now exited the governing coalition, depriving it of a majority in parliament.
In fact, this political turmoil offers Mr. Yatsenyuk an 11th-hour opportunity to salvage his country’s increasingly desperate state of affairs and get his government’s reform program back on track.
An economy on the brink
Ukraine’s economy is teetering on the brink of collapse. Following Russia’s annexation of Crimea and the Russian-backed separatist war in eastern Ukraine, where over 9,000 people have perished, the country’s GDP has declined by 29%.
Its currency, the Ukrainian hryvnia, has devalued by 220%. The average Ukrainian’s wage amounts to $220 a month.
The Ukrainian government’s commitment to proceed with reforms and to address its endemic corruption appears stalled.
This was highlighted by the resignation of economy minister Aivaras Abromavicius and his team. He accused loyalists of Ukraine’s president Petro Poroshenko of blocking reform initiatives and seeking to influence policy to further their own allies’ interests.
The country’s financial lifeline is a $17.5 billion IMF loan program that is in jeopardy. A third tranche for $1.7 billion that was due to be released last year remains on hold.
Following on Abromavisius’s resignation, IMF Managing Director Christine Lagarde stated, “Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue and be successful.”
Need for foreign investors
Without these disbursements, Ukraine’s economy would likely continue a downward spiral. Renewed exports and foreign investment are the engines that must fuel the country’s economic recovery.
Ukraine’s exports have declined by 38% over the last two years, including a 31% decline in exports to European Union countries, Ukraine’s leading export market.
Foreign direct investment is negligible. Following IMF advice, the National Bank of Ukraine has instituted foreign currency controls to prop up its reserves, including a temporary ban on converting currency to pay dividends to foreign investors.
The central bank’s governor, Valeriya Gontareva, has stated that withdrawing this ban is a top priority, but to do so foreign currency reserves must increase from $13.4 billion to $18 billion. Without the IMF loans, it is hard to see how the NBU will achieve this.
Prospective foreign investors lie in waiting. No one wants to step in and effectively provide cover for corrupt practices of government officials and their loyalists who are out to further their own interests.
On the other hand, the prospect for first-mover investors to be supportive of a reform movement that strengthens Ukraine and furthers its integration with Western economies can be rewarding.
A long march forward
Wrestling a country of 42.5 million people from under the shadow of its Soviet past is no easy task. Twenty-five years into Ukraine’s independence, it is proving to be a long march forward – a multigenerational struggle.
U.S. Congressman John Lewis writes in his memoir “Walking with the Wind” of his attitude as one of the “Big Six” leaders in America’s civil rights movement: “When I care about something, when I commit to it, I am prepared to take the long, hard road, knowing it will not happen today or tomorrow, but ultimately, eventually, it will happen…. Some battles are long and hard, and you have to have staying power.”
The civil disobedience of Ukraine’s people in the Maidan uprising of 2014 and the protests of Ukraine’s Orange Revolution in 2004-05 are akin to the civil disobedience of America’s civil rights movement.
Both have had their roots in Gandhi’s non-violent philosophy in India. Both have moved forward in fits and starts, with times of significant gains and setbacks.
Like the U.S civil rights movement
Ukraine’s movement, most unfortunately, now also shares a common history of spilled blood and fatalities.
More than one hundred civilian protesters were killed by sniper fire – the “Heavenly Hundred” – on Kiev’s central square in February 2014.
Both movements also share the responsibility of having truth and justice on their sides.
Neither movement achieves its goals with expedience. Issues of racial equality even remain today at the forefront of America’s 2016 presidential campaign.
There are, nonetheless, clearly decisive moments when progress is achieved – such as when 25-year-old John Lewis led a march across a bridge in Selma, Alabama fifty years ago.
The fury that the state police unleashed on those peaceful protesters opened the door for real legislative breakthroughs: first the U.S. Civil Rights Act, then the Voting Rights Act.
Ukraine now finds itself at such a decisive moment. Its sovereignty as a nation hangs in the balance.
Will Ukraine’s leadership now pivot toward a road of concerted reform, holding the country’s entrenched interests at bay? Or will they drift, foregoing Western financing support and intensifying a downward economic spiral?
One thing is for sure: The patience of Ukraine’s people is once again wearing thin.
