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USUBC - Washington Watch & Update Report # 23
Analysis & Commentary - Private Observers & Writers
U.S.-Ukraine Business Council (USUBC),
Wash, D.C., Tue, Jul 25, 2017
- The Window for Reform is Closing in Ukraine – The Wall Street Journal.
Ukraine has some genuine achievements to which it can point. Some important reforms have taken place. Macroeconomic fundamentals are good; the value of the currency has stabilized. And Ukraine hasn’t lost Russia’s war against it despite the involvement of Russian forces. And yet an air of blithe self-delusion prevails among Ukraine’s business elites, diplomats and even some activists.
The optimists prefer to avoid addressing the country’s most intractable problems, from the war and failed cease-fire agreement to the fact that there has been virtually no real foreign direct investment since 2014 (when Putin invaded). Moreover, the next round of reform is likely to be especially tough, requiring a sense of compromise and political maturity that is currently absent.
Time is running short. The government that follows this one could be far worse. As parliamentarian and reformer Mustafa Nayyem likes to remind, these, for all their deficiencies, are the best president and parliament Ukraine has ever had.
Commentary: In addressing Ukraine’s desperate need for reform Melinda Harin’s op-ed presents a clear and honest view of the general situation in Ukraine, it again sounds the alarm too long ignored or marginalized by those in power. But what is missing and what is demanded is a look at the rampant corruption in Ukraine’s Ukroboronprom.
There is no question that the frequent reform target – the judicial system – is in critical need of genuine reform. But stand back and look at the total situation. Ukraine is under siege – it is engaged in a war started and pressed by Putin.
A nation at war has to defend itself, it is a battle for survival and in Ukraine’s case its military needs help, it needs better weapons, it needs ammunition. Ukraine seeks help from the West, from the United States. Military assistance has been on the top of the wish list since Putin invaded. But who does anyone willing to try to help have to deal with in Ukraine – Ukroboronprom.
And dealing with Ukroboronprom is to face Ukraine’s most ingrained corruption face-to-face. So where in all the discussions about corruption is discussion about Ukraine’s military industrial complex – Ukroboronprom? And why does Ukroboronprom’s scandalous corruption call for special attention?
Because Ukroboronprom’s corruption intersects directly with Ukraine’s fight to preserve its sovereignty, the West’s (and especially the United States’) vital interests in Ukraine’s stability, and Ukraine’s repeated requests to the West for military aid. Ukraine is under assault from Putin’s military and yet Ukroboronprom’s priority is selling weapons internationally for profit and trying to scam money out of international assistance in which it has no legitimate role.
The reality is a Presidential appointee has full control of all defense orders, all of the defense industry's financial streams inside the country and all foreign contracts, as well as the shadow segment of the arms business.
Oh, no one can deny Ukroboronprom is lavish in projecting its optimism about the performance of the country's defense industry, but that success is not being shared by the principal customer for weapons and military hardware - the Ministry of Defense of Ukraine, the defender of the country itself.
Who is it that it responsible? Who is the government official or the government officials who are minimizing the reality of Russia’s war on Ukraine and the fact that citizens of Ukraine are dying while Ukraine’s Ministry of Defense is treated as a second-class customer of Ukraine’s military industry?
Link: As for a story on corruption at Ukroboroprom one was published in the Ukrainian newspaper Zerkalo Nedeli on July 1, 2017.
(2) As Ukraine Fulfills Some European Aspirations, Obstacles Loom – The Wall Street Journal
When the leaders of Ukraine and the European Union met in Kyiv for a summit last week, both sides had something to celebrate. For President Petro Poroshenko, it was an opportunity to highlight the latest steps toward fulfilling Ukraine’s European aspirations that had been such an important feature of the Maidan revolution in 2013.
European Council President Donald Tusk presented him with a copy of the EU-Ukraine Association Agreement, which the EU finally ratified last week, three years after it was first agreed to, having nearly been derailed last year by a referendum in the Netherlands. The agreement includes a free-trade pact that already has boosted exports to the EU by 25% since being provisionally applied on Jan. 1. Since May, Ukrainians have also been able to travel to the EU without a visa. The summit also marked a victory of sorts for the EU.
To the surprise of many, the EU has managed to maintain a united front in its policy toward Ukraine and Russia throughout the recent political turmoil across the continent. It has stuck by a sanctions regime which may not have succeeded in persuading Russia to abandon its illegal annexation of Crimea or withdraw its support for separatists in the Donbas region of southeast Ukraine but at least has helped deter Russian aggression elsewhere in Europe and prevented a tide of refugees from Donbas that might have further tested European unity. In Eastern Europe in particular, where Ukraine’s war is very much regarded as Europe’s war, this is seen as an important success.
Link: Read full article →
(3) Opinion: Corrupt Ukraine is ground zero in clash between East and West, US and Russia -- Fox News
Ukraine is the central battleground between the rapidly fraying West and the brutally ascendant East. As NATO bickers over defense contributions by member states, Article 5 commitments and its renegade member Turkey, Russia is taking concerted action to secure its borders, expand its influence and weaken the bedrock alliance that has kept the peace in Europe for the past 60 years. Curing the cancer of corruption will require radical surgery and The Global Magnitsky Human Rights Accountability Act might be one of the options to punish corrupted foreign officials.
Commentary: Echoes seem routine when Ukraine is the subject. All indications are readily available to all – the people of Ukraine and the nations Ukraine solicits for help see corruption as “the” issue and “the” impediment to the type of governance and the type country the people deserve. It is the inexcusable recalcitrance of those in power and their facilitators who continue on seeing their personal financial interests as their number one priority that present the greatest roadblock to success. This Fox opinion piece, like last week’s Washington Watch see that the time has come to use the Global Magnitsky Human Rights Accountability Act to send messages to a number of the arrogant and stubborn thieves of Ukraine.
Link: Read the full story
(4) Former DNC contractor denies working with Ukrainian officials on anti-Trump research – CNN
The former Democratic National Committee contractor at the center of allegations that Democrats worked with Ukrainian officials to dig up dirt on then-presidential candidate Donald Trump told CNN that DNC officials never asked her to "go to the Ukrainian Embassy to collect information."
Commentary: This story was among many published after White House spokesman Sean Spicer repeated allegations that a Democratic operative had met with Ukrainian embassy officials during the campaign. Given the scandal-enthused environment in Washington and the media it seems this issue needs to be followed. The Trump legal/political team seems to want to keep it alive and the concern has to be to what extent, if any, the actions of one Democratic political activist might influence serious international issues regarding the United States and Ukraine.
Link: Read the full story
(5) Huge Manafort Payment Reflects Murky Ukraine Politics - The New York Times
How did an organization that reported spending of less than $15 million over two years pay Donald J. Trump’s former campaign chairman $17 million? “The Party of Regions was spending a lot of cash, to bribe voters and for illegal advertising,” Daria M. Kaleniuk, the executive director of the Anti-Corruption Action Center, said in an interview. “Manafort took the money to whitewash its reputation in the West.”
Commentary: As in just about anything Manafort has been involved in smell lasts.
Link: Read the full story
(6) Twelve Myths about Change in Ukraine – Atlantic Council
Alexander Motyl writes Most Ukrainians will tell you that “nothing has changed” since the Euromaidan Revolution. Meanwhile, most Ukrainian analysts bemoan that Ukraine’s elites are resisting change and that, unless Ukraine changes more quickly, the country will backtrack and be lost. And everyone seems to agree that no change is possible unless corruption is fully eliminated. Motyl then – issue-by-issue makes a compelling case that these views rest on simplifications, distortions, and misunderstandings. He concludes “The lessons for Ukrainians are obvious. Continue changing. Pursue democracy, rule of law, and the market. Become prosperous and strong. And pretend to listen to Westerners bearing advice and gifts.”
Commentary: There is no question Ukraine has made progress and there is no question one has to look at the whole picture when considering anything relating to Ukraine. There are no easy descriptions, there are no absolutes. And Ukraine’s survival and stability are of critical interest to the United States, the world and the citizens of Ukraine. And those citizens seem to be more united in many ways now than when 92% of them voted for independence in 1991.
The greatest concern with Motyl’s piece may be the last sentence, “…pretend to listen to Westerners bearing advice and gifts.” Ukraine continues to seek aid of all kinds from the governments and public institutions of the West, Ukraine seeks western investment – Ukraine needs to do more than pretend to listen. More specifically, Ukraine’s greedy need to find some level of self-restraint or the time may be coming when consequences shock them.
Link: Atlantic Council
(7) The American Doctor Trying to Cure Ukraine’s Corruption – The Daily Beast
When U.S. Secretary of State Rex Tillerson hurried here to Ukraine’s capital after the G-20 summit earlier this month one of his goals was to speak about the “importance of implementing anti-corruption reforms.” But he didn’t talk to American-born and American-educated Ulana Suprun, Ukraine’s health minister, who might have opened his eyes wide. She is on the warpath against a horrific corruption machine involving billion-dollar scams performed by powerful doctors and a pharmaceutical mafia.
It’s the kind of corruption that corrodes the foundations of democracy, and can destroy it in a country like this, that has known so little good governance for so very long. Suprun’s reform campaign has been one of Ukraine’s biggest hopes for success. In an exclusive interview with The Daily Beast, Suprun talked about some of the dangerous challenges she has faced while fighting for the reform.
Commentary: Critical reforms promoted by Dr. Suprun just recently failed to pass parliament. She admitted afterward they didn’t get adequate support from the powers that be. “Our team worked effectively to prepare the reform, but there was no political will to continue this at the top level.”.
(8) The European-Ukrainian Nuclear Mistake - Charged Affairs
Since the end of the Cold War, Europe has botched several major security crises, from refugees to referenda. Europe’s worst mistake was the nuclear disarmament of Ukraine 23 years ago. It continues to have lasting, negative consequences for European security. In 1991, with the dissolution of the Soviet Union, Ukraine found itself in possession of the third largest nuclear stockpile in the world. Though Ukraine did not have the weapons’ operational capability, the windfall was a mixed blessing.
By 1994, Ukraine had decided to destroy the nuclear stockpile and join the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). This move was widely supported by Western powers. The United States, United Kingdom, and Russian Federation signed the Budapest Memorandum in response to Ukraine’s decision. The Memorandum stated that the three nations would “respect the independence and sovereignty and existing borders of Ukraine” and would “refrain from the threat or use of force.”
Additionally, France and China signed separate but similar documents in support of Ukraine. It became apparent that Budapest Memorandum signers and other interested nations would not defend Ukraine’s physical sovereignty when Russian forces invaded Crimea in 2014. This led to many questions: Should Ukraine have surrendered its nuclear arsenal? Should Ukraine reacquire nuclear weapons in the face of a belligerent Russian bear? What role do the signers of the Budapest Memorandum have in the Crimean Crisis and broader war in the Donbas region?
The best the United States could muster was a strongly worded statement. With the Russian annexation of Crimea and war in the Donbas now past its three-year anniversary, it is clear the West has no intentions of resolving the issue or assisting Kiev in the short run. This bodes ill for European and Ukrainian security in the coming years. Ukrainian nuclear weapons would change that.
Commentary: The reality of the consequences of the United States refusing to accept Ukraine’s nuclear weapons and insisting that Ukraine turn them over to Russia is something that Washington and the West should be reminded they face every day. It is not enough to say international agreements are fickle (mentioned in the article). The naïve and new Ukrainian government misplaced its trust in the United States and now it is not only Ukraine but the U.S., Europe and beyond facing the ramifications of that misplaced trust. Responsibility remains – when will it be accepted?
Link: Read the full story
Link: for the point made that the U.S. refused to accept Ukraine’s weapons: Read full article →
(9) Pro-Russia rebel leader unveils plan to abolish Ukraine – Financial Times
The leader of a rebel-held breakaway region in eastern Ukraine has announced a plan to abolish the country and replace it with the new state of “Malorossiya”, in the latest blow to faltering peace talks aimed at ending a more than three-year conflict.
Link: Financial Times
(10) U.S., Russian Envoy, OSCE Dismiss Ukraine Separatists' 'Little Russia' Declaration – Radio Free Europe/Radio Liberty
U.S. State Department spokeswoman Heather Nauert called the announcement by Donetsk separatists that they would create a new state called Malorossia an "area of concern to us." But "beyond that, I don't want to dignify it with a response," she said.
Link: – Radio Free Europe/Radio Liberty
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