UkraineAlert

The minority of Russians who have not been zombified by official propaganda and who still have any clue about what is really going on in the world—rather than just on television—already know Russia is hurtling toward full-blown catastrophe, though the details might be up for debate. Will the collapse come next month, or more like 2024? How will it happen? A coup d’état by radical fascists, or a provincial revolt whose instigators first see Russian President Vladimir Putin as their savior but later turn against him? Or perhaps year after year of economic stagnation, resulting in complete disintegration. History shows that authoritarian systems can change without bloodshed, but only if a regime’s key players help the forces seeking to replace that regime. This is a prerequisite for non-violent reform or the transfer of power to a reformer.

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Today Ukraine received great news. Private owners of $19 billion of Ukraine's Eurobonds have agreed to a substantial debt restructuring that will give Ukraine much-needed relief. The high bond yields have been sharply reduced, the bonds' maturities have been prolonged, and the face value of the bonds has been reduced by 20 percent.

According to the International Monetary Fund (IMF), this agreement has reduced Ukraine's financing needs for the next four years by no less than $15 billion. This is a huge achievement for Ukraine's government, and Kyiv managed to accomplish this without having to impose a moratorium on debt repayment.

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This month, Russia stepped up military pressure on Ukraine, concentrating about fifty thousand troops along its border with Ukraine, using its proxy militias to shell Ukrainian government positions in the Donbas, and threatening Kyiv with "a big war."

The current escalation indicates Russian discontent with Ukraine's refusal to make unilateral concessions such as allowing the creation of a demilitarized zone in Shyrokyne near the city of Mariupol without reliable guarantees that Russian-backed separatists won't take back this area after Ukrainian forces withdraw.

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In its August 12 editorial, "Shaky Ukraine: Economics and Corruption Complicate Its War," the Pittsburgh Post-Gazette calls Ukraine a “questionable partner” because of “resistance to economic reform and use of Islamist Chechen forces.” Too bad neither charge is true.

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It appears that Russian President Vladimir Putin is losing the war in Ukraine. Gone are the talks about seizing so-called Novorossiya—the strip of land from Kharkiv to Odesa—and establishing a land bridge to occupied Crimea. Even though recent developments suggest a possible offensive to expand the territory Russia and its proxies now hold, perhaps with a push to Mariupol, the Kremlin knows that such a move would trigger tougher sanctions against Russia's already failing economy.

Putin's main problem is that he needs to keep acting. He didn't invade Ukraine because he feared for the rights of its Russian-speakers. Rather, it was a diversion from problems at home. He expected a walk in the park when he returned as president in 2012. Instead, he encountered the largest anti-government demonstrations since the fall of the Soviet Union. Nothing terrifies Putin more than popular protests. As a KGB-agent in Dresden, he saw firsthand how East Germans toppled the oppressive system he had dedicated his life to preserve. What if Ukraine's Euromaidan had inspired Russians to do likewise?

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World attention focuses on ISIS and Iran, with its half an atomic weapon. But the biggest geopolitical issue is Vladimir Putin, backed by thousands of nuclear weapons, who is gradually conquering Ukraine, a democracy with 45 million people the size of Germany and Poland combined.

In just over a year, Russia has seized 9 percent of Ukraine, killed 6,200, wounded 30,000, displaced 1.38 million people, and shot down a commercial airliner with 298 people aboard.

Even so, European and American retaliation has been soft, and ineffective. The Russians have ignored a February ceasefire agreement and captured another 28 towns and villages, 250 square kilometers, and killed 200 Ukrainians. It's also moving tanks, artillery, troops, and equipment into Ukraine by the trainload.

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With less than 80 days before election day in Ukraine, mayoral races are already heating up. Parliament approved a new election law that does two things: Ukraine will use an open-list system and the country will hold runoffs for mayors in larger cities. These two features combined with the potential decentralization reforms being debated by parliament make the October 25 local elections more important than previous ones.

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As Ukraine struggles with a collapsing economy and Russian-backed separatists in the Donbas, a third crisis threatens its long-term national stability: endemic corruption.

Ukraine ranks 142nd out of 175 countries on Transparency International's latest annual Corruption Perceptions Index. Of the fifteen former Soviet republics, only Tajikistan and Uzbekistan score lower. Official graft is widespread, but public procurement corruption tops the Kyiv government's list of challenges. In early 2014, Ukrainian Prime Minister Arseniy Yatsenyuk noted that 40 percent of the $25 billion spent annually on public procurement "stays in the corrupt pockets of the people who carry out these purchases." Under the old regime, 50 percent kickbacks in state tenders was considered normal, and a survey from Business Environment and Enterprise Performance discovered that an astounding 99 percent of firms expect to pay bribes to win government contracts.

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Recent articles in the US media suggest that the Pentagon is "rebalancing" its forces towards Europe to meet the Russian challenge. At the same time, NATO plans to halve the number of air patrols over the Baltic. Supposedly the Russian threat to Estonia, Latvia, and Lithuania has ebbed, and governments are finally stepping up to Europe's defense.

If only this were true. In fact, even though Russia hasn't yet attacked Ukraine head-on, and the time for such a full-scale offensive is slipping away—not to mention the crippling impact sanctions and falling oil prices have had on Russia's economy—the Kremlin threat has not gone away.

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Let me tell you the story of Mr. X—a student whom I had never seen in class, and who had not shown up for any of his final exams. "Oh, do not worry," his fellow students reassured me, "it has been like this year in year out." I could have easily forgotten this trivial episode had Mr. X not earned a university diploma and had someone answered my humble inquiry into how he managed to pull that off.

The day I learned about Mr. X's remarkable academic achievements, the weekly magazine Vlast Deneg named Education Minister Serhiy Kvit the most successful reformer in Ukrainian Prime Minister Arseniy Yatsenyuk's cabinet. The press praised Kvit for adopting the Higher Education Law, which broadened universities' autonomy and brought Ukraine's higher education systems in line with global academic standards. Kvit had quickly ended the corrupt state procurements of school textbooks and revoked the accreditation of 70 universities with low academic standards. Under ex-Education Minister Dmytro Tabachnyk—now a fugitive from Ukrainian justice—textbook printers allegedly paid millions of hryvnia in kickbacks, while numerous private universities easily renewed their academic licenses after paying tokens of respect to the right people.

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