June 7, 2017
It Was a Very Good Spring for Ukraine
By Diane Francis
“It’s the Ukrainian national habit to complain, but there has been a lot of good news lately,” said Ukraine’s Deputy Minister of Trade Nataliya Mykolska in an interview while on a trade mission to Canada. “Naftogaz won the Stockholm arbitration case against Gazprom on its merits. The importance is that we can buy gas from Russia at market prices and not at their inflated prices.”
Still to be decided by arbitration is Naftogaz’s counterclaim against Gazprom, alleging overcharges of $30.3 billion.
Interestingly, this good news, and more, was circulated on the Facebook page of Vlad Rashkovan, an official with the IMF. “Stop saying that in Ukraine, nothing changes,” he wrote inviting others to join in. “Look at the results of the last two months.”
Indeed, progress is underway. Here is his shortened list of fifteen leaps forward, followed by a few others:
June 1: Canada ratified the free trade agreement with Ukraine.
May 31: The international arbitration court in Stockholm rejected Gazprom’s controversial “take or pay” claim, ruling in Naftogaz’s favor.
May 30: The Dutch senate approved ratification of the EU-Ukraine association agreement.
May 30: The state e-auction system Prozorro sold the assets of bankrupt banks for one billon hryvnia, preparing for participation in the auctions of small privatizations.
May 17: The European Union approved Ukraine’s visa-free agreement.
May 13: The Eurovision Song Contest held in Ukraine was recognized by the Eurovision board as a success.
May 3: Ukraine rose thirty points on the Global Open Data Index, besting most EU countries. The country is now ranked as the twenty-fourth most open, after Sweden, Germany, and Hong Kong.
April-May: as a part of the currency liberalization strategy, the National Bank of Ukraine canceled a series of capital controls requirements.
April 26: President Petro Poroshenko signed a law easing the merger and capitalization procedures for small banks.
April 19: The Cabinet of Ministers approved financing for dredging a new grain terminal currently built by MV-Cargo company, which is a joint venture of Cargill. The total amount of investments is $150 million, and is also financed by the EBRD and IFC.
April 14: Poroshenko signed a law on a three-year state budget process.
April 13: The Ukrainian parliament approved a law on the electricity market, which introduced a series of important reforms to liberalize the country’s energy market.
April 3: The International Monetary Fund agreed to release the next tranche of $1 billion, bringing total disbursements to $8.38 billion.
April 3: As a follow-up of a European Bank for Reconstruction and Development-funded project, a law on financial restructuring and the secretariat for financial restructuring of corporations has become operational.
April 1: The Ministry of Finance launched an automatic electronic register of VAT reimbursement.
It’s an impressive list. Here are four more:
- The new National Anticorruption Bureau of Ukraine arrested two of the country’s highest-ranking officials on corruption charges.
- The IMF advanced $1 billion to Ukraine but has tied this funding to reforms, namely the establishment of an Anti-Corruption Court and more powers for the National Anticorruption Bureau of Ukraine.
- Ryan Air is coming to Ukraine this year. This is in recognition of the country’s business and tourist importance to Europe and will add to economic growth by bringing more competition for Ukrainian consumers and visitors, and more traffic.
- Last, but not least, the Russia scandal in the United States and Russia’s meddling in the French elections dominates the world’s headlines and has destroyed Putin’s image and hopes to get sanctions scrapped or even reduced. At the same time, it has raised Ukraine’s profile and importance as the line in the sand against Putin’s attempt at world dominance.
Clearly, more people are realizing that Ukraine is strategically important as the largest country in Europe with great potential. Ukraine is the world’s fourth most educated; the third largest IT outsource nation in the world after the United States and India; an agricultural giant which is the largest exporter of sunflower oil, second largest grain exporter and third largest exporter of corn, and will be an economic powerhouse once it overthrows its corrupt elites and defeats Russia. Millions of Ukrainians who have left, and billions of dollars, will flood into the country if reformers win the federal election in 2019.
The struggle has been long and slow. But culturally Ukrainians have chosen Europe over the corrupt Soviet system. And while many of us would want change more quickly the fact is that nothing, and no one, can stop its destiny.
Diane Francis is a Senior Fellow at the Atlantic Council's Dinu Patriciu Eurasia Center, Editor at Large with the National Post in Canada, a Distinguished Professor at Ryerson University's Ted Rogers School of Management, and author of ten books.