Kyiv is famous for its golden Septembers, clear, cool days, where the sun shines brightly on the city’s many golden cupolas. The weather did not disappoint Ukrainian businessman Victor Pinchuk and the distinguished crowd at his 12th Yalta European Strategy Summit (YES) on September 10-12 in Kyiv. The summit was an impressive mix of glitz and substance. The glitz came in the form of unremarkable talks by former UK Prime Minister Tony Blair and former Israel President Shimon Peres, a video message from former US President Bill Clinton, a speech in favor of gay rights by Elton John (no songs, unfortunately) and an entertaining—and to some, over the top—Skype interview with Republican presidential candidate Donald Trump.
The substance came in a series of remarkable speeches, talks, and panels. Ukrainian President Petro Poroshenko reiterated his commitment to restoring Ukraine’s sovereignty and territorial integrity in the Donbas and Crimea, his intention to meet the country’s Minsk obligations, including by passing controversial constitutional reform, and to major reform. Prime Minister Arseniy Yatsenyuk gave a no-holds-barred interview with British journalist Steven Sackur who pushed him hard on the government’s reform record and his expectations for military aid from the United States.
The buzz before the summit began was Odesa Governor Mikheil Saakashvili’s criticism of Yatsenyuk for obstructing his efforts to reform the notoriously corrupt customs operations in Odesa. While the two did not face off, Sackur brought up Saakashvili’s charge. Yatsenuk skillfully sidestepped the question claiming that his aim was to reform the entire customs service.
Participation on the Ukrainian side was extraordinary. In addition to the President and Prime Minister, the talks were enhanced by the participation of Rada Speaker Volodymyr Groysman, Kyiv Mayor Vitali Klitschko, the young reform ministers, many senior Ukrainian politicians, and young reformers from the Rada. The roster of distinguished foreign guests was equally impressive—former Treasury Secretary Larry Summers, former Deputy Secretary of State Strobe Talbtott, former CIA Director General David Petraeus, General Stan McChrystal, former NATO Secretaries General Fogh Rasmussen and Javier Solana, former President of Latvia Vaira Vike-Freiberga, former President of Poland Aleksander Kwaśniewski, former Chancellor of Austria Wolfgang Schussel, former IMF Chief Dominique Strauss Kahn, public intellectual Bernard-Henri Levy, as well as top experts on Ukraine and Russia.
Buzz Going into YES
When the summit began on September 10, there had been nearly no shelling in eastern Ukraine for 24 hours; this quiet has lasted to this day. Most analysts interpreted the ceasefire as a temporary pause to reduce criticism when Russian President Vladimir Putin addresses the United Nations in New York at the end of the month.
A second important background factor were recent polls showing strong public perceptions that nothing has changed since Poroshenko took office in June 2014. Poroshenko’s popularity has dropped sharply and Yatsenyuk’s has virtually collapsed. Interestingly, this view was not shared by most of those at the conference.
The Meat of the Conference
Ukraine’s formidable challenges—Moscow’s hybrid war in the Donbas, the economy, and the reform agenda—shaped the two-and-a-half days of intense discussion.
A common theme was the need for stronger measures in support of Ukraine. General Petraeus called for substantial military aid, including lethal anti-armor systems and counter-battery radar for missiles. In an exchange with Strobe Talbott, Ruslan Grinberg of the Russian Academy of Sciences, who said that he was no fan of Putin, noted that it was hard for him as a Russian to accept the independence of Ukraine, which prompted ex-Latvian President Vike-Freiberga to dismiss his national feelings as a justification for aggression.
While Ukraine’s economy still faces grave difficulties, the discussion was brightened by the recently concluded debt deal that reduces Ukraine’s principal repayment by 20 percent. In addition, experts are now projecting that the economy will only decline by 7 percent in the third quarter and will not decline at all in the fourth quarter. If those projections prove true, the economy will decline by 10 percent this year, a dreadful result, but much better than anticipated. Given Ukraine’s still difficult straits, Larry Summers called on the West to give the country an additional $5-10 billion—and much more in the future, if necessary—calling it an important “security investment.” The West must back Kyiv as it enters into negotiations this fall with Moscow on the repayment of $3 billion in loans, Summers said.
Finance Minister Natalie Jaresko, Economics Minister Aivaras Abromavičius, and Naftogaz Chief Andriy Kobalyev pointed to the significant, if incomplete, success in their areas. They brought up reforms in gas pricing, in reducing government regulations, tax reforms, and the clean-up of police in Kyiv and other cities.
Under the Minsk II ceasefire agreement, Ukraine must pass constitutional amendments on decentralization that give special status to the Donetsk and Luhansk People’s Republics. As this bill passed its first reading in the Rada on August 31, clashes, including a grenade attack on parliament itself, resulted in one death, dozens of injured police, and hundreds of casualties. The government will have a hard time passing it a second time with a two-thirds majority. Poroshenko’s support for the legislation was seconded by Yatsenyuk, who noted that Ukraine had no choice but to pass it. While there was not much debate on the controversial amendments during the official program, many Rada members expressed their unhappiness with the requirement to me privately. Some said that they would oppose it; others that they would hold their noses and vote for it.
Things Are Looking Up
Even most young Rada members, who were complaining last winter about slow or non-existent progress, were largely positive on government efforts in some areas. They pointed to the problem of rising populism as an impediment to reform. The absence of serious efforts to reform the courts and the procurator-general’s office was a recurring theme at the conference.
The YES conference provides a clear reflection of the current state of the country. Last year’s conference was somber in light of the crushing defeat that regular Russian troops had just inflicted on Ukraine’s military. This year the summit was at least partly upbeat, reflecting the stubborn defense that Ukrainian troops have managed in the east over the past year, the renewal of sanctions on Russia, the sharp reduction of Ukrainian dependence on Russian gas supplies, the debt rescheduling agreement, the progress on reform, and the bottoming out of economic decline.
John E. Herbst is Director of the Atlantic Council’s Dinu Patriciu Eurasia Center. He served as US Ambassador to Ukraine from 2003-2006.
Image: Prime Minister Arseniy Yatsenyuk speaks at the Yalta European Strategy Summit in Kyiv on September 12. The buzz before the summit began was Odesa Governor Mikheil Saakashvili’s criticism of Yatsenyuk for obstructing his efforts to reform the notoriously corrupt customs operations in Odesa. While the two did not face off at the summit, Yatsenuk skillfully sidestepped the issue claiming that his aim was to reform the entire customs service. Credit: YES/Sergei Illin, Aleksandr Indychii, Aleksandr Pilyugin and Valentіna Tsymbaliuk