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Experts: Biden should push Ukraine to fight corruption, stimulate US investment
Kyiv Post, Kyiv, Ukraine,
Experts: Biden should push Ukraine to fight corruption, stimulate US investment By Henrietta Wolter
U.S. President Joe Biden’s administration should engage more closely with Ukraine and help it fight off corruption and Russian attacks, experts said at a March 11 webinar.
The webinar, organized by the U.S.–Ukraine Business Council (USUBC) was based on a recent paper titled “Biden and Ukraine” and co-authored by Anders Aslund, a senior fellow at the Atlantic Council’s Eurasia Center.
Read more: Experts outline Biden strategy for Ukraine
The first step for Biden should be to better acquaint himself with President Volodymyr Zelensky’s inner circle, Aslund told the USUBC.
Then, the administration should appoint an ambassador to Kyiv, outline a program to stimulate U.S. investment in Ukraine, and help Ukraine act against corrupt figures undermining its reforms.
“This will take time, then we have to see where the Ukrainian government is,” Aslund said.
Ukraine has already taken some very important steps against oligarch-allied lawmaker Oleksandr Dubinsky, pro-Kremlin opposition leader Viktor Medvechuk and Medvedchuk’s allies, Aslund noted.
In February 2021, Zelensky shut down three TV stations that broadcast pro-Kremlin propaganda. These officially belonged to Medvedchuk’s ally Taras Kozak but were reportedly under the control of Medvedchuk himself. The undertaking was well received by pro-Western observers.
On the other hand, Aslund said, Ukraine has not demonstrated clear policy coordination. “We don’t know Ukraine’s way, investors are worried,” he said.
Irina Paliashvili, president and senior counsel of the RULG-Ukrainian Legal Group, agreed that the Ukrainian government is “jumping in different directions.”
“Ukraine has constructed a very complex system against corruption… but we still don’t see results,” she said.
Aslund said that the National Anti-Corruption Bureau of Ukraine (NABU) is the country’s only functioning rule-of-law institution beside the Supreme Court. The bureau needs to regain its powers and reform all the other security services, he said.
“So far we have not seen any president in Ukraine who really was against corruption. The government is as corrupt as it wants to be,” he says.
Ukraine has recently passed a law on so-called investment nannies. Paliashvili, who supported the law, hopes that it will finally attract more foreign investors to Ukraine.
The law offers tax benefits to big investors and provides them with managers who help them communicate with state officials and navigate through the complicated Ukrainian bureaucracy.
Aslund was less enthusiastic.
“Investment nanny is a bad concept, no serious country has it,” he said. “The right concept is that the laws and institutions are working. What we need is a court reform… from the top.”
Another major issue for the Biden administration is Russia’s interference in Ukraine and how to help fight it.
One of the top priorities the Atlantic Council recommended to the U.S. government is an increase in military support for Ukraine as well as extended sanctions against Russia.
In 2014, Russian backed forces invaded eastern Ukraine and annexed Crimea. Since then, over 13,000 Ukrainians have been killed in the war in eastern Ukraine.
Armen Khachaturyan, senior partner of law firm Asters, said that sanctions are insufficient to end the war. Aslund believes that U.S. sanctions have real power.
“Russia’s economy has not grown since 2014. The western sanctions cost Russia 1-1.5 % of GDP per year. The sanctions are more effective than people believe,” Aslund said.
“The Kremlin doesn’t take the military of France and Germany seriously, but it takes the military of the U.S. seriously. More sanctions will be implemented,” he said.
Khachaturyan worries about the looming completion of Russia’s Nord Stream 2 gas pipeline to Germany. While the U.S. Congress passed a law letting it sanction any companies involved in the pipeline’s construction, including European ones, the Biden administration has yet to do so.
“Why were German companies removed from the sanction list?” Khachaturyan said.
The $11 billion pipeline, which would pass under the Baltic Sea and double the amount of natural gas transported from Russia to Germany, has been under construction since 2015, periodically interrupted by U.S. sanctions.
As it becomes operational, Nord Stream 2 could increase Europe’s dependence on Russia — at a time when Russian President Vladimir Putin is pursuing a war in eastern Ukraine and had opposition leader Aleksei Navalny arrested amid nationwide protests.
Aslund does not think that Nord Stream 2 will be completed, because the recent sanctions by the U.S. against Russia have been very damaging.
“There is only one company left in Russia that can finish the pipe,” Aslund said. “It can hardly be completed until September.”