Thu, Apr 25, 2019

10 ways the west should engage with Ukraine after 2019 elections

UkraineAlert by Chatham House

Defense Policy Disinformation Economic Sanctions Elections European Union Financial Regulation Fiscal and Structural Reform Inclusive Growth International Financial Institutions International Markets National Security NATO Partnerships Russia Security Partnerships Trade Ukraine United States and Canada

Ukraine's President-elect Volodymyr Zelenskiy (L) attends a meeting with Lithuania's Foreign Minister Linas Linkevicius in Kiev, Ukraine April 25, 2019. Press service of Volodymyr Zelenskiy/Handout via REUTERS

Five years after the annexation of Crimea and the instigation of conflict in the Donbas, the reasons for continued sanctions on Russia have not gone away. Crimea is still occupied. War grinds on in the Donbas.

Ukraine held presidential elections this spring and will hold parliamentary elections in the fall. Whatever the results, events in Ukraine are important and have far-reaching consequences. Instability in Ukraine—which is Russia’s strategic goal if it cannot control Ukraine—will have destabilizing effects in Europe, including increased migration, trade disruption, and cyberattacks.

There are at least ten important principles and policy priorities for Western governments in their engagement with Ukraine after the 2019 elections.

  1. Demonstrate unconditional commitment to Ukraine’s sovereignty and territorial integrity

Western governments need to reinforce the message that Ukraine’s territorial integrity is nonnegotiable. This will communicate the West’s red lines and deter further Russian encroachment. It will also demonstrate solidarity with Ukraine.

  1. Fine tune conditionality

Western financial support has focused on fiscal discipline. The Ukrainian population has suffered as a result. Western supporters should acknowledge these sacrifices, use more carrots and fewer sticks, and be ready to offer more if Ukraine shows signs of successful financial reform.

Western governments and international financial institutions should tighten conditionality by making new requirements more detailed and not focusing on quick wins. It is key that conditionality also protects reform achievements since the Euromaidan, such as strengthening the independence and governance of the National Bank of Ukraine, cleaning up the banking sector, and improving transparency at Naftogaz.

The IMF should be the economic policy anchor. Western governments may have to consider adopting the ‘nuclear option’ of withdrawing assistance if reforms are reversed. The IMF and the new Ukrainian leadership should scale up the current fourteen-month standby arrangement (worth $3.9 billion) by quickly agreeing on the conditionality to expand the program into a full agreement. This issue is urgent as Ukraine is facing a peak in its external debt repayment over the next three years.

  1. Maintain a coherent Western front and renew sanctions until Russia changes its behavior

Upholding sanctions against Russia over the past five years has been a significant achievement. Concern that Kremlin-friendly EU member states or the Trump administration might veto the renewal of sanctions has so far been unfounded. However, the disruptive potential of recalcitrant EU member states should not be underestimated. Given the unanimity required for the renewal of sanctions, EU member states should be aware of how frictions can weaken the West’s ability to maintain a unified front.

  1. Increase multilateral efforts in countering Russian propaganda

The EU’s East StratCom Taskforce, set up in 2015 to tackle Russian disinformation, is a low-level operation. In preparation for the European parliamentary elections in May 2019, Brussels has increased the budget (from €1.9 million in 2018 to €5 million in 2019). But this is nothing in comparison to what the Russian government spends on its disinformation (allegedly €1.1 billion). Ukraine is at the forefront of the disinformation war. Western governments should boost multilateral platforms for deconstructing Russian propaganda.

  1. Boost defense cooperation, including defense assistance to Ukraine

Following the example of the US shipment of Javelin anti-tank missile systems in

April 2018, other Western states should consider supplying lethal defensive aid to Ukraine. Supporting Ukrainian resolve to defend itself is the real deterrent against Russia, rather than sanctions.

NATO should consider opening the Enhanced Opportunities Program for Ukraine, which is currently available to Sweden, Finland, and Georgia. The crisis in the Azov Sea has demonstrated Ukraine’s need to strengthen its coastal defense. At the same time, Russia’s control over the Crimean Peninsula allows it to unlawfully expand its maritime boundaries and seize oil and gas infrastructure to access deposits that are within Ukraine’s economic zone. Against this background, NATO should consider a reinforced presence in the Black Sea.

  1. Clarify Ukraine’s perspectives on NATO/EU membership

EU membership should be on the table and achievable. This would provide the most powerful anchor for reforms in Ukraine. If Ukraine demonstrates solid progress in implementing the EU–Ukraine Association Agreement and Deep and Comprehensive Free Trade Agreement (DCFTA), other forms of deeper integration could be discussed. Policymakers should look to offer Ukraine a similar relationship to the UK’s after Brexit or the proposals being designed for Turkey.

  1. Ensure judicial reform is not botched

If Ukraine fails to build trust in the courts by renewing its corps of judges, this role could be outsourced to a special judicial body formed of international (foreign) legal professionals, similar to the Astana Financial Center Court. In this context, Western governments should take responsibility for failing to understand the scale of the changes they required of Ukraine. They should accept that while the establishment of a High Anti-Corruption Court can strengthen accountability, it is not a silver bullet. Reforms of the Prosecutor General’s Office are also likely to be problematic, in which case Ukraine should be encouraged to consider disbanding it and starting afresh.

  1. Promote electoral reform

 The current mixed electoral system in Ukraine—whereby half of MPs are elected from single-member constituencies in a first-past-the-post system and half are elected through a closed party-list proportional representation system—allows for abuse of power and corruption. An electoral system based on proportional open party lists would be a move in the right direction.

  1. Support the economy, media, and civil society

If the right accountability is in place and conditionality is met, Western

governments should consider increasing budget support to help the country balance its books and ensure continuity of reforms. This would also increase the West’s influence in the reform process. More also needs to be done to diversify ownership of the media, particularly television. Independent quality media and journalist projects must be further supported as an alternative to the current media landscape, which is mainly owned or dominated by senior figures in business or politics. Finally, it is essential that international donors and Western governments enhance their support to local and regional NGOs. The focus should be on developing human capital and investing in younger generations.

  1. Emphasize Ukraine as part of the European family

EU member states should treat Ukraine as a member of the European family, not as a distant relative. The UK should consider visa liberalization for Ukraine, as already granted by the Schengen zone. At a time when the Russian state seems to be unable to reinvent itself, Western policymakers need to craft a clearer concept of the different directions Ukraine and Russia are heading in, and the relations they wish to build with these countries accordingly. In other words, supporting Ukraine is more important than having better relations with Russia in its present state.

This report is taken from a longer paper outlining in detail Chatham House’s recommendations for Western states’ actions toward Ukraine following the elections.