UkraineAlert

The holiday season ended abruptly on January 1 as Ukrainians learned about the murder of lawyer and human rights activist Iryna Nozdrovska. This is a gruesome start for 2018, even for a country at war. We stopped having regular New Year’s holidays years ago. Not many felt like celebrating while soldiers were dying in the fight against Russian aggression in the east.

The body of the thirty-eight-year old was found in a river on the outskirts of Kyiv, the Ukrainian capital, on the first day of 2018. She went missing on December 29 after a court hearing in the case of her sister’s 2015 murder. In 2017, Dmytro Rososhanskiy, the nephew of a local judge, was sentenced to seven years in prison for running over Nozdrovska’s sister with a car. But, pulling together resources and drawing on the influence of his family, Rososhanskiy got very close to a pardon. Nozdrovska worked hard to raise awareness of the case, and she received physical threats, but never reported them to the police.

Nozdrovska wasn’t a household name or a prominent lawyer. But her story strikes a chord with every Ukrainian. Her murder tells you everything you need to know about the unfinished business of Ukraine’s Maidan Revolution.

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On December 1, the European Union withheld payment of €600 million to Ukraine for falling short on four reforms. The deal is conditional, and this final tranche is on hold until Ukraine follows through on its commitments.

Meanwhile, one week before, at the Eastern Partnership Summit, the EU agreed to provide Moldova with €100 million in macro-financial assistance. Unfortunately, it’s all too possible that the Moldovan government will travel along the same road that Kyiv has, loudly broadcasting its intention to enact deep and comprehensive reforms while in reality avoiding any significant changes that could prove painful to entrenched stakeholders.

After all, despite incentivizing positive actions, a government that is fundamentally unwilling to change will find a way to sabotage reforms while still receiving the funds. The process may be indefinitely prolonged through a variety of excuses that will drag reforms into a new electoral cycle, and then a new government has to start over.

This process is currently occurring in Moldova.

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One of the biggest challenges facing Ukraine today is how to transform its inefficient, overcentralized, and opaque defense industry into a leading supplier of weapons and equipment for its frontline troops and an engine for economic growth and foreign currency revenues. Both of these goals are within reach, but only if Ukraine’s leaders can summon the political will to carry out necessary reforms.

Ukraine has a well-developed defense industry—it was a crucial part of the Soviet Union’s military complex—and is blessed with extraordinary human capital: world-class engineers, designers, and top-notch universities that feed qualified science and engineering graduates into the job market. Given its nearly four-year war with Russia, Ukraine’s military also has unmatched real-life experience defending against Russia’s most modern equipment, from electronic signal jammers to thermobaric flamethrowers.

Executives at major US defense corporations see enormous potential in Ukraine’s defense industry and believe relatively modest investments in technology and industrial plant could reap significant payoffs. Unfortunately, those investments have not been forthcoming for three reasons.

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As Donald J. Trump took the oath of office in January 2017, there was a tangible sense of panic in Kyiv. Most analysts were extremely gloomy about the prospects for US-Ukrainian ties, with many predicting that Ukraine would be the primary victim of the Trump administration’s ambitious foreign policy. At the time, these grim forecasts seemed entirely reasonable. The incoming US president had made no secret of his desire to repair the recent rupture in relations with Vladimir Putin that began with the war in Ukraine, while there were also widespread fears of retribution for Ukraine’s perceived backing of Trump rival Hillary Clinton. Looking back at Trump’s first year with the benefit of hindsight, these concerns now appear to have been overblown. Indeed, there is a good case for arguing that the Trump administration has actually proven among the most pro-Ukrainian in modern US history.

The White House saved its most emphatic demonstration of support for Ukraine until the final weeks of 2017.

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In September 2017, Parliamentary Speaker Andriy Parubiy branded the new political season “the autumn of reforms.” His prediction was partly right and partly wrong. Parliament did deliver on some overdue issues; however, the recent attacks on anticorruption institutions overshadowed a number of positive achievements. As Ukraine enters 2018, a year which precedes the presidential and parliamentary elections, it is important to examine the results of 2017 and identify the areas where the international community can help Ukraine’s reformers secure tangible progress. We have identified nine priority areas.

1. Set up Anticorruption Court

Ukraine fell short on anticorruption reform in 2017. The National Agency for the Prevention of Corruption (NAPC) sabotaged the verification of officials’ electronic asset declarations, parliament dismissed the chairman of its anticorruption committee for political reasons, and the National Anticorruption Bureau of Ukraine (NABU) faced numerous attacks.

Ukraine is still waiting on the establishment of the High Anticorruption Court. The president’s bill contradicts the Venice Commission’s recommendations and may hamper the court’s independence.

Setting up this institution in 2018—which remains a key condition of international assistance—should be the highest priority.

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A year ago, I expressed my hope that “2017 should be the year when Ukraine’s economy takes off.” It should have been, but it was not. In the last quarter of 2016, Ukraine’s GDP grew by 4.8 percent. Alas, in each of the ensuing four quarters, the growth rate declined and GDP grew by only 2 percent in 2017, slightly less than the cautious official projections. Ukraine is actually growing more slowly than the EU economy, and certainly slower than the global economy. Therefore, it is difficult to be optimistic about Ukraine’s economic growth in 2018.

After a combined GDP fall of 17 percent in 2014-15, which was caused by Russian aggression, a swift recovery to 6-7 percent growth should have been natural. Instead, Ukraine is competing with Moldova for the title of Europe’s poorest country. In 2007, Ukraine’s GDP per capita in current US dollars was 160 percent larger than Moldova’s. Now it is only 8 percent larger according to IMF statistics, and Moldova is growing by 4 percent a year.

The worst part is that Ukraine’s economic shortcomings in 2017 were preventable.

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Experts anticipate a new cyberattack on Ukraine’s critical infrastructure this month; they have observed increased activity from the same hackers involved in a previous cyberattack. In the last two years, cyberattacks on Ukraine’s power grid coincided with the winter holidays, a sensitive time with a high demand for critical infrastructure. A cyberattack may target civilians to sow popular discontent with the state’s inability to stave off these disruptive attacks.

Since 2014, the country has experienced far more cyberattacks than in the past, and they have grown more sophisticated. In fact, experts consider Ukraine a “testing ground” for hackers to perfect their capabilities and tactics. Often, their digital fingerprints and motives imply Russian involvement.

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2017 has been the most violent year of the conflict in eastern Ukraine since it began, according to Kurt Volker, US Special Representative for Ukraine Negotiations.

"A lot of people think that this has somehow turned into a sleepy, frozen conflict and it’s stable and now we have...a ceasefire,” Volker said on December 19 during an event on peace in the Donbas at the Atlantic Council. “That’s completely wrong. It’s a crisis.”

But negotiating an end to the conflict is difficult because of the role that Russia plays.

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The claw back of reforms in Ukraine is alarming, and the latest blow was the dismissal on December 7 of hardworking Yegor Soboliev as chairman of parliament’s anti-corruption committee.

A former investigative journalist and Maidan activist turned politician, he has been at the forefront of reforms such as electronic asset declarations for state officials, the National Anti-Corruption Bureau of Ukraine (NABU), and has singlehandedly impeded the passage of three hundred draft bills containing hidden corrupt practices.

“Soboliev proved to be one of the most effective and sincere drivers of anti-corruption reform in the parliament, he protects the independence of NABU, opposes the appointment of a loyal auditor, and advocates for the establishment of the anti-corruption court,” said the Anti-Corruption Action Center after his dismissal.

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Poland and Ukraine are frontline states for European security. That fact alone makes their mutual backsliding away from democratic reform—the indispensable precondition for their revival and security—so dangerous. The Polish government seems to want to return to its interwar model; at that time, it repressed its minorities and ultimately failed, ending up bereft of friends and allies when its crisis came. Yet its current leadership seems to have learned little from that lesson.

Polish security today depends on its membership in NATO and the EU, and those organizations’ support for it. In NATO, the United States is the leading power, and Poland’s relationship with Washington is the foundation of its security; the relationship involves billions of dollars allocated to Polish defense infrastructure, armed forces, and weapons for its defense against Russia. In the EU, Germany plays a similar role. But the Polish government seems intent on alienating precisely those states upon whose goodwill its security depends.

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