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USUBC - Washington Watch - Report 19
U.S.-Ukraine Business Council (USUBC),
Wash, D.C., Tue, April 4, 2017
(1) International Monetary Fund (IMF) Executive Board Approves
Additional US$1.00 Billion Disbursement for Ukraine- April 3, 2017
WASHINGTON - The Executive Board of the International Monetary Fund (IMF) today completed the third review of Ukraine’s economic program under the Extended Fund Facility (EFF). The completion of this review enables the disbursement of SDR 734.05 million (about US$1.00 billion), which would bring total disbursements under the arrangement to SDR 6,178.26 million (about US$8.38 billion).
A. Completion of review enables the disbursement of about US$1 billion
B. The Ukrainian economy is showing welcome signs of recovery
C. Structural reforms need to be accelerated
sanctions on Russia until Crimea is returned - CNN
BRUSSELS - Secretary of State Rex Tillerson said Friday that US sanctions against Russia will remain in place until Moscow "reverses the actions" it has taken in Ukraine. The comments are notable given President Trump's at-times reluctance to criticize Russia over its actions in Crimea, though he did declare last month that the territory was “taken” by Russia.
"American and NATO support for Ukraine remains steadfast. As we have repeated at every ministerial and summit since Russia launched its campaign of aggression against Ukraine, NATO allies stand firm in our support of Ukraine's sovereignty and territorial integrity," Tillerson said at a NATO meeting at the organization's headquarters in Brussels. "We do not, and will not, accept Russian efforts to change the borders of territory of Ukraine." He added, "We will continue to hold Russia accountable to its Minsk commitments. The United States sanctions will remain until Moscow reverses the actions that triggered our sanctions."
СOMMENTARY: You might recall that this news – Secretary Tillerson’s declaration in Brussels – headlined Washington Watch #18 last Friday as the Secretary spoke as that issue was being prepared. But it still seems critical to wait for “action” by the President. Tillerson’s hard-line stance was not the first time a U.S. diplomat has insisted that Russia reverse course in Ukraine before sanctions are lifted. U.N. ambassador Nikki Haley has said the same thing. Numerous Trump Cabinet members have said Russia is America’s biggest threat. What remains is evidence on what the President’s action regarding Ukraine and Russia will be.
Strong statements from past administrations have not always been implemented. During the Obama years almost the entire Administration agreed with continuous Congressional expressions of support for giving Ukraine lethal defensive weapons, but decisions were made in the Oval Office and the President did not want to provide such weapons. "The buck [or in this case the weapons] stopped there.Again it would appear Congress and this Administration agree about Ukraine but everyone is watching the Oval Office.
The Russian foreign ministry gave a cynical shoulder shrug to the Secretary of State saying, “We want to see the U.S. foreign policy, not just quotes.” such statements came from experience during the Obama Administration.
(3) Ukrainian corruption cast nuclear pall over Europe - The Washington Times
[Op-Ed article walks, talks, acts and smells like long-running quotes and propaganda directly from Russia]
WASHINGTON - The Washington Times op-ed argues that Ukraine’s handling of its nuclear power stations is totally mishandled and corrupt, so-much so that “the future of Europe is at stake.”
COMMENTARY: Nobody following Ukraine and governance in Ukraine would belittle the idea that there is some level of corruption in any department, agency, bureau or office of government. But when the helicopter pilot turned freelance writer starts off his op-ed claiming as fact that Chornobyl is Ukraine’s number one tourist destination it is easy to discount the major hysterics that follow.
Then you get to his discussion of Westinghouse’s nuclear fuel and you look for the quotation marks – the language is right out of Putin’s propaganda machine. The Kremlin has been playing that fake narrative for a long time trying to interrupt the West supplying nuclear fuel to Ukraine. The exact text about Westinghouse nuclear fuel has been spounted by the Russians for several years and has been proven to be totally false. Interesting is that it has now found its way into the Washington Times – curious and troubling. [Westinghouse is a long-time member of the U.S.-Ukraine Business Council.]
(4) Preparation of Policy Recommendations for the Legislative
and Executive Branches of the United States Government
WASHINGTON - The U.S.-Ukraine Foundation (USUF) has begun a series of policy roundtables – “Building Consensus for Priorities in U.S. Assistance for Ukraine.” Using subject area experts a series of Roundtables on selected subjects will develop consensus recommendations to present to the United States Government regarding assistance to Ukraine.
Over the next 4-6 weeks all of the roundtables will have met and developed specific recommendations. The first two roundtables, those on Energy and Economy and on National Security met last week in Wasington and the National Security Panel has finalized its recommendations. The Energy and Economy Panel will be finalizing its recommendations.
Roundtable I: Economy and Energy
After setting the stage for the discussion by Moderator Ambassador Roman Popadiuk (Morgan Lewis) and opening remarks by Nadia McConnell (US-Ukraine Foundation) and Ambassador
Valeriy Chaly, the Roundtable was divided into three sessions:
View From Ukraine; Chief Investment Advisor to the Prime Minister of Ukraine)
Donor Perspective – Ambassador Cliff Bond (Assistance Coordinator, State Department), Michele Small (EBRD), Roman Kachur (World Bank) and Boris Chumak (Department of Commerce.
Perspective on Reforms/Corruption from Ukraine – By Skype, Taras Shevchenko
Discussion and Recommendations – Ed Chow (CSIS), Anders Aslund (Atlantic Council), Irina Paliashvili (RULG-Ukrainian Legal Group), Ambassador Temuri Yakobashvili (PASS-USA), Zoe Ripecky (Razom), Morgan Williams (USUBC), and David Mohler, former Duke Energy executive, former deputy assistant secretary for fossil energy at the Department of Energy
Roundtable II: National Security
After setting the stage for discussion by Chairman Ambassador John Herbst (Atlantic Council) and opening remarks by Nadia McConnell (US-Ukraine Foundation) the Roundtable began its discussion of an initial set of topics provided by Dr. Phillip Karber (Potomac Foundation) and Ambassador Herbst.
COMMENTARY: In part this initiative has been undertaken because of expressions of confusion offered at times by U.S. officials who are given so many different priorities by visiting members of the Rada and others. The U.S.-Ukraine Foundation has developed this type of consensus among experts to present to the American Government before. Most notably at the time of Putin’s invasion of Crimea the Foundation, with its Friends of Ukraine Network (which is made up of the former American ambassadors to Ukraine and other experts including among others Ed Chow, David Kramer, Orest Deychakiwsky, Anders Aslund. Gathered to consider an American response.
A committee was created and an extensive list of recommended sanctions were developed and presented to the appropriate staff in the White House and to Congress. The case was made that if these sanctions – all of these sanctions -- were imposed immediately they would make it very difficult for the Kremlin to sustain its actions in Crimea or undertake additional aggression. Unfortunately it was over three and a half months before any of these sanctions were imposed and the entire list has never been imposed.
The participants in the subject area roundtables here begin with the Friends of Ukraine and included a significantly expanded number of experts familiar with the situation in Ukraine. As the recommendations of each panel are finalized they will be published by the Foundation and in Washington Watch.
(5) U.S. Senator John McCain - Ukraine’s Friend Of The Week - Order of Yaroslav the Wise Kyiv Post, By Euan MacDonald, Brian Bonner.
This feature each week in the Kyiv Post separates Ukraine’s friends from its enemies The Order of Yaroslav the Wise has been given since 1995 for distinguished service to the nation. It is named after the Kyivan Rus leader from 1019-1054, when the medieval empire reached its zenith. The Order of Lenin was the highest decoration bestowed by the Soviet Union, whose demise Russian President Vladimir Putin mourns. It is named after Vladimir Lenin, whose corpse still rots on the Kremlin’s Red Square, 100 years after the October Revolution he led.
COMMENTARY - "With U. S. Sen John McCain in office, Ukraine can rest a little easier. While the Republican of Arizona didn’t say anything particularly notable on Russia’s war against Ukraine this week, his strong stance – and those of other members of Congress of both parties – are starting to show results.
"The U. S. House of Representatives this week (week of March 6th) authorized $150 million in lethal weapons aid to Ukraine, on top of the $200 million authorized by Congress last year but unspent as ex-U.S. President Barack Obama blocked weapons aid to Ukraine. McCain is expected to lead a similar effort in the U. S. Senate.
"About Obama, McCain recently tweeted that the former president was “too soft” on Russia. “Let’s take a different course together: give defensive lethal assistance to Ukraine and keep sanctions on Russia,” McCain wrote. The trick will be to get U. S. President Donald J. Trump to change course, dropping his soft stand on Russia. Already the bipartisan majority in Congress appears to be having some effect, with the Trump administration last month saying the the president expects Russia to return Crimea to Ukraine and end the war in Ukraine’s eastern Donbas.
"McCain also has had some memorable taunts of Russian dictator Vladimir Putin, saying he looked into his eyes and didn’t see his soul (as ex-U.S. President George W. Bush once said). Rather, McCain said, he saw three letters: “KGB” after Putin’s background in the Soviet Union. He also has taunted Putin’s leadership, calling Russia in 2014 “a gas station masquerading as a country.”
"As long as McCain is around, Ukraine will have a powerful voice in the corridors of U. S. Congress." [Euan MacDonald, Brian Bonner, Kyiv Post, Kyiv, Ukraine, March 10, 2017]
(6) Ukraine Is in the Middle of a Counterrevolution Again.
Is Anyone Paying Attention? – Blog, Atlantic Council
WASHINGTON - Maxim Eristavi writes, that dispite the mainstream narrative (which would have you believe no one is trying to address corruption in Ukraine), when it comes to reforms in post-revolutionary Ukraine, the record has been anything but black and white. And, if you need a consensus on the most outstanding achievements, most Ukraine watchers would probably agree on four: the establishment of market prices on gas, a globally hailed e-procurement system, the creation of the National Anti-Corruption Bureau of Ukraine, and the launch of an electronic declaration system that discloses the assets of public officials. Then he argues the last two are now at the epicentre of the biggest attempt to rollback reforms since the Maidan Revolution.
After discussing the entrenched elites’ current efforts to discredit the National Anti-Corruption Bureau once it indicted Roman Nasirov he addresses efforts to curtail civil society. The Rada has passed and the President has signed a law that will force Ukrainian nongovernment organizations and their sub-contractors as well as journalists who write about corruption to declare their assets the same way officials do. Poroshenko signed the controversial amendment amid growing calls from civil society and foreign allies to veto it. And, in a rare move, even the EU Commissioner for Neighbourhood Policy criticized the law. Like Russia’s foreign agent laws, the move puts severe operational restrictions on Ukraine’s vibrant civil society.
Eristavi readily admits enhanced transparency for NGOs is a must but this effort, disguised as reform is intended to choke the lifeblood out of those individuals and organizations serving as the critical watchdogs on governmental and oligarchical excess.
COMMENTARY: Admitting there are dangers in using generalities the case is that after over 25 years of independence would one can call a serious effort at reforms only really began in the last three years. But powerful interests that used national independence for gross personal enrichment have not and will not loosen their grip on control easily. Whether it was civil society’s Mothers of Afghan Soldiers facing down the mighty Red Army’s intention to parade down Khreshchatyk street well before independence, or other successful demands of civil society right up to the Revolution of Dignity every national advancement in Ukraine has come from a demanding and “revolutionary” civil society.
And the greedy elites have not and will not back down without pressure. The people of Ukraine have proved and are proving in their blood against Putin’s war, and in the streets against governmental corruption and the oligarchs who back that corruption that they will not be denied. It is for the United States and the West to support the people of Ukraine in their cause – it is a cause for freedom and liberty that extends far beyond Ukraine’s borders.
(7) Watching the Watchdogs: Why Ukraine’s NGOs
Should Disclose Assets, Too – Blog, Atlantic Council
WASHINGTON - Adrian Karatnycky, also of the Atlantic Council takes the opposite view. “A huge kerfuffle has erupted in Ukraine over amendments to a law on income and asset transparency that will require employees of some nongovernmental organizations and investigative journalists who focus on corruption to post detailed income declarations publicly in electronic form…. The legislation amends a law passed in March 2016 that mandated public income and asset declarations for several hundred thousand government employees. That original legislation created what is perhaps the world’s most comprehensive system of electronic income declarations.”
Karatnycky adds, “Angered by the intrusive nature of the initial transparency legislation that anticorruption NGOs lobbied for, legislators have struck back. Nongovernmental organizations in Ukraine receive most of their funding from foreign governments and often engage in lobbying and direct pressure on their government, which is legitimate but should be fully transparent.” Only toward the end does he note the legislation, “… contains popular provisions exempting junior officers, sergeants, and rank-and-file combatants from the e-declaration system.”
To support his argument for the onerous demands on NGOs and journalists he cites United Kingdom and American disclosure laws.
COMMENTARY: Reform of public sector institutions is always a tricky undertaking as there inevitably are unintended consequences. And that is in countries not facing a legacy of decades of designed corruption. In a place like Ukraine where Soviet governance perfected systemic corruption the best designed and initiated efforts will require generations of serious and well thought out and implemented laws. The initial disclosure law here, no matter how well intentioned, went far beyond anything one could reasonably expect to advance the cause of better government.
Demanding information beyond the necessary it would more than likely simply provide fodder for seedy tabloid stories of the kind found reported in the west by dumpster-diving “journalists.” Karatnycky is accurate that outraged “legislators have struck back.” It is not in Ukraine’s interests to praise destructive excesses. The original law needs limitation and the disclosures to be asked of NGOs and journalists need to be based on public need and not revenge.
(8) Top U.S. Military Commander in Europe Calls For Lethal
Weaponry For Ukraine – Radio Free Europe/Radio Liberty:
The top U.S. military commander in Europe again backed sending more advanced weaponry to Ukraine to help it in its fight against Russia and Russian-backed separatists.
Link: Radio Free Europe/Radio Liberty
(9) Is Russia Gettting Ready to Invade Ukraine Again - Atlantic Council Blog
Stephen Blank asks: It is possible that Putin feels pressed to strike sooner rather than later, especially if he wants to create a cause that justifies large-scale mobilization in advance of the 2018 elections, where he will emphasize Russia’s superpower status. It is likely that a period of maximum danger to Ukraine, Belarus, or the Caucasus is approaching.
COMMENTARY: Experience teaches that the United States and the West must anticipate Putin’s moves carefully. There is never justification to relax as he is always looking to press his advantage to Ukraine’s detriment and to the disadvantage of NATO and international stability.
(10) Russia Pushing U.S. European Command Back to a
Warfighting Focus – United States Naval Institute:
Army General Curtis Scaparotti told the House Armed Services Committee that since Russia seized Crimea and began to destabilize the Ukrainian government in 2014 and menace its neighbors with actions short of war, the United States has “…returned to our historic role as a warfighting command.” Scaparrotti, is Commander U.S. European Command and NATO Supreme Allied Commander Europe. In addition to modernizing its conventional and nuclear forces, he cited a change in Russian doctrine on the threatened use of tactical nuclear weapons to have its way in a crisis. “I would characterize it as very alarming.”
In modernizing its conventional forces, Moscow is learning important lessons on capabilities under combat conditions. While Ukrainian “forces are getting better” in holding Moscow-backed separatists in check in the eastern part of the country, “it’s a Russian proving ground.” He said the Russians “are providing their newest equipment [like advanced unmanned aerial vehicles] to test it” there.
Link: USNI News
COMMENTARY: The Foreign Policy Initiative has published quotes from General Scaparotti’s testimony which are worth noting:
The Russian Threat and U.S. Strategy
“A resurgent Russia has turned from partner to antagonist. Countries along Russia’s periphery, especially Ukraine and Georgia, are under threat from Moscow’s malign influence and military aggression.”
“Moscow intends to reemerge as a global power, and views international norms such as the rule of law, democracy, and human rights as components of a system designed to suppress Russia.”
“What we need to do is we need to demonstrate strength. We need to be strong, that is what Russia respects. They are opportunistic, where they see weakness they will take advantage of it when it's in their interest.”
“We must bring the information aspects of our national power more fully to bear on Russia, both to amplify our narrative and to draw attention to Russia’s manipulative, coercive, and malign activities.”
The Kremlin’s Actions
“In Ukraine, Russia’s willingness to foment a bloody conflict into its third year through the use of proxy forces in the Donbas and elsewhere is deeply troubling to our allies and partners, particularly Russia's closest neighbors.”
“Russia is taking steps to influence the internal politics of European countries, just as it tried to do in the United States, in an attempt to create disunity and weakness within Europe and undermine the transatlantic relationship.”
“In 2016, Russia overtly interfered in the political processes of both Bosnia-Herzegovina and Montenegro.”
“In the High North, Russia is reasserting its military prowess and positioning itself for strategic advantage in the Arctic.”
“Russia is adjusting its doctrine, modernizing its weapons, reorganizing the disposition of its forces, professionalizing its armed services, and upgrading capabilities in all warfighting domains.”
“Russia has repeatedly violated international agreements and treaties that underpin European peace and stability, including the Treaty on Intermediate-Range Nuclear Forces (INF) and the Treaty on Conventional Armed Forces in Europe (CFE).”
“In the context of Putin’s highly centralized decision-making structure, Moscow’s provocative rhetoric and nuclear threats increase the likelihood of misunderstanding and miscalculation.”
“Russia does respect NATO. It’s one of the reasons that they’re trying to undermine NATO and fracture it.”
“Our enduring strength remains NATO, the most successful alliance in history.”
“The transatlantic alliance gives us an unmatched advantage over our adversaries—a united, capable, warfighting alliance resolved in its purpose and strengthened by shared values that have been forged in battle.”
“Canada, Germany, the United Kingdom, and the United States have begun deploying multinational battalion task forces to Latvia, Lithuania, Estonia, and Poland, respectively, on a rotational basis.”
“Allies’ defense expenditures increased in 2015 for the first time since 2009 and grew at a real rate of 3.8% in 2016, with 22 member nations increasing defense spending. Allies are showing demonstrable progress toward their commitment to contribute 2% of their GDP by 2024.”
Strengthening the U.S. Presence in Europe
“I’m suggesting an additional division because what I need is I need armored and mech brigades. The two I have there today are, you know, a cavalry, light cav as well as an airborne entry brigade combat team.”
“I need intelligence surveillance and reconnaissance in greater numbers than I have now because to deter properly, I have to be able to have a good baseline of Russia.”
“In terms of the rotational brigade; I would prefer to have an enduring armed force in Europe. … I'd prefer to have an enduring one because of the force then becomes accustomed to the environment. It forms relationships with our allies, they become well known over the period of time of several years that our service members are then stationed there. And have a greater appreciation for the problem set.”
“Thanks in large measure to ERI [i.e. European Reassurance Initiative], over the last 12 months EUCOM has made demonstrable progress. U.S. tanks have returned to European soil. U.S. F-15s and F-22s have demonstrated air dominance throughout the theater. U.S. naval forces have sailed throughout European waters. EUCOM has operationalized its Joint Cyber Center. With the approval of former Secretary Carter, EUCOM delivered the first new operational plan for the defense of Europe in over 25 years.”
“The strategic rebalance to Asia and the Pacific, combined with budget limitations in the Budget Control Act of 2011, have contributed to substantial posture reductions across our land and air domains.”
“Between 2010 and 2013, two fighter squadrons and a two-star numbered air force headquarters were inactivated, along with associated critical enablers and staff personnel. In addition, the last two heavy Brigade Combat Teams (BCT), a two-star division headquarters, and a three-star corps headquarters were removed from Europe, leaving only one Stryker and one airborne brigade.”
“I personally believe that we need to consider lethal defensive weapons for Ukraine. They're fighting a very lethal, tough enemy, it's a Russian proxy, really, and – and the Russians provide some of their newest equipment there in order to test it.”
“I've been to Ukraine twice now…I would say first of all I'm very impressed with their military and its discipline.”
“Recently, in eastern Ukraine, Russia has controlled the battle tempo and is again ratcheting up the number of daily violations of the cease fire.”
“Russian-led separatist forces continue to commit the majority of ceasefire violations despite attempts by the OSCE to broker a lasting ceasefire along the Line of Contact.”
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