UkraineAlert

Energy independence is a question of national security for Ukraine, and one that we worked on assiduously in 2017. Most observers know that Naftogaz emerged victorious in an $80 billion arbitration case in Stockholm, but that’s only part of the story. Here are the big five milestones that really mattered for the energy sector last year.

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Hydrocarbon exports remain the centerpiece of Russia’s national revival strategy, despite the negative impact of developmental and investment setbacks, OPEC price dumping in traditional Russian export markets, Western sanctions, and a growing push toward energy independence in Eastern Europe. Russia continues to suffer from many of the classic symptoms of Dutch disease: a number of non-energy industries have become sclerotic and uncompetitive, the pursuit of research and development has been eclipsed by the desire to invest in familiar markets—Russia has missed both the 3D and 4D revolutions in seismic reserve detection and is now forced to play catch-up—and the country has found it increasingly difficult to attract much foreign direct investment. However, Russia has managed to avoid many of the more damaging symptoms of the resource trap, maintaining a relatively diversified economy with inflation consistently under 10 percent and a conservative fiscal and monetary policy. As President Vladimir Putin doubles down on aggressive investment in energy infrastructure, previous negative forecasting surrounding the long-term health of the Russian hydrocarbon sector is being called into question. The unpleasant reality is that Moscow will likely be able to leverage its enormous energy exports to project soft power in Europe, especially in Poland, Belarus, Ukraine, and Lithuania, for years to come.

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Ukrainians want corrupt public officials to go to jail. It didn’t happen in 2014, 2015, 2016, or 2017.

In July, a Kyiv court released Roman Tymkiv, the head of a state-owned military plant, on bail. Tymkiv was accused of embezzling $1 million by supplying the Ukrainian army with used tank engines for the price of new ones.

In May, the same court released former member of parliament Mykola Martynenko, suspected of embezzling $17 million, on bail.

In ordinary criminal cases, suspects normally go to jail for at least two months for theft that exceeds $20, but of course, Tymkiv and Martynenko walked away.

These few examples show why no high-level corrupt public officials have been put behind bars. This was the central demand of the Maidan, and it remains unfulfilled.

Throughout the year, elites claimed that Ukraine does not need an independent anti-corruption court and the old system would finally deliver. But the public and the international community weren’t convinced, especially after the effort to rebuild the Supreme Court flopped and the National Anti-Corruption Bureau of Ukraine’s (NABU) independence was attacked.

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Democracies guarantee freedom of speech for their elected politicians by granting them immunity from libel or slander for statements made inside their legislative chambers. This privilege was established centuries ago in Britain to protect the people’s representatives from the monarchy, House of Lords, and other powerful vested interests.

Ukraine, on the other hand, has perverted this principle by guaranteeing elected officials complete immunity from civil or criminal prosecutions unless a majority of its 450 deputies allow charges to be laid. The significance of this cannot be overstated. This is impunity, not parliamentary immunity, and has been a license for up 450 people and their sponsors or allies to break laws and loot the country.

Every election cycle Ukraine is for sale to the highest bidders.

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Yale University history professor Marci Shore’s new book, The Ukrainian Night: An Intimate History of Revolution (Yale University Press, 2018), captures the historic period surrounding the Maidan revolution that took place in Kyiv, Ukraine, from November 2013 to February 2014, when ordinary Ukrainians took to the streets and demanded justice and dignity.

Shore’s book couldn’t have come at a better time. Four years after the Maidan, civil society in Ukraine is exhausted, most of the reformers who served in government are long gone, and the powers that be are distracted by next year’s elections already.

“We are very tired,” leading anticorruption activist Daria Kaleniuk admitted in Washington last year. One can count the number of reformers within the Cabinet of Ministers on one hand, and there are real concerns that President Petro Poroshenko, despite putting a number of positive reforms in place, doesn’t want to go any further. He never managed to deliver the central demand of the revolution—justice—to this post-Soviet country of forty-five million. Some predict that there will be no more structural reforms this year, and any remaining momentum will be focused on relatively easy policies like education, health, and pensions, avoiding real legal reform altogether.

In this blah year, when little appears to be going in the right direction, The Ukrainian Night is a must-read for reformers, the diplomatic corps, journalists, and friends of Ukraine—if for no other reason than to remember what they sacrificed, what bound strangers together, and how far the country has come.

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For the first time since the Maidan revolution, Ukraine’s road to the transatlantic community is being actively blocked not only by Russia but by an EU and NATO member state as well: Hungary. While Prime Minister Viktor Orbán has been a vocal critic of sanctions and is one of Russian President Vladimir Putin’s strongest allies within the EU, Hungary has generally followed the NATO and EU mainstream in supporting Ukraine politically. That has changed, however, since the adoption of a controversial education act in Ukraine this autumn, which Orbán’s government objects to—but his argument seems more of a pretext to cover up the real cause.

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There are compelling grounds for fearing that Russia’s restoration work on the world-renowned Khan’s Palace in Bakhchysarai could forever destroy this vital monument of Crimean Tatar cultural heritage. While Russia denies the accusations, photos smuggled off the site are alarming, as are the construction company’s and architectural firm’s lack of experience in restoration work.

The Khan’s Palace in Bakhchysarai was placed on UNESCO’s World Heritage Tentative List in 2003, but the follow-up work for establishing its international status remains unfinished. According to Edem Dudakov, the former head of the Crimean Committee on Inter-Ethnic Relations and Deported Peoples, if the work now underway continues, the complex which includes the palace itself, a hall for receiving visitors, two mosques, a harem, and other buildings, will lose any chance of gaining UNESCO recognition in the future.

The wanton destruction of the site should be considered a major attack by an occupying force on a monument of considerable historical and cultural importance for Crimean Tatars and Ukraine.

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Bloomberg columnist Leonid Bershidsky recently claimed that “it’s not easy to find younger, more principled, genuinely European-oriented politicians in Ukraine, but they exist.”

In fact, Mr. Bershidsky, it’s really not that hard. In 2017, we profiled the promising and idealistic Olena Sotnyk and Sergiy Gusovsky, a Ukrainian MP and a member of the Kyiv city council, respectively. And there are plenty more.

For example, meet Victoria Voytsitska, a parliamentarian who more than meets Bershidsky’s definition. Voytsitska, 43, who has raven hair and glasses, is warm but tough. She has to be: she has taken on Ukraine’s oligarchs and survived at least one attack on her life.

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One should not have wild expectations for Ukraine this year. Although the country is more than a year away from the March 2019 presidential election, structural reforms won’t be a focus, international donors are getting impatient, and a large amount of debt is coming due.  

What should we expect and follow in Ukraine this year? How will the presidential campaign affect politics in 2018? Can the country repay its debt to avoid default? What might the war in the Donbas bring? We have identified the major developments we expect to shape 2018 and divided them into five categories: security, politics, foreign partners and reforms, economy, and culture, sport, and technology.

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In 2014, a 16-year-old Ukrainian, nicknamed Maley, watched the Euromaidan Revolution and Russian invasion on television and contacted his local army recruitment office to sign up. His calls went unanswered, so he took a train from the Carpathians to the front, armed with his grandfather’s hunting rifle and a brass plate bought by his mother taped to his chest as protection. He joined a volunteer militia.

“I went to save my country,” he told me in a 2015 interview from his bed in a Kyiv hospital. He was wounded after the army medic behind him stepped on a landmine and lost both her legs. “She wasn’t paying attention. I’m going back.”

If it wasn’t for Ukrainian farm boys, nurses, veterans, and grandfathers, the Russians would have swallowed half of Ukraine. In fact, this was the plan. The stage for invasion had been set by former Ukrainian President Viktor Yanukovych who consolidated his power, jailed opponents, rejected European Union membership, and gutted Ukraine’s army by selling off its best equipment. By 2014 Ukraine had only 6,000 combat-ready troops.

Unfortunately, 2018 is starting to shape up like 2013.

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