Fri, Jul 5, 2019

Zelenskyy shines in Toronto, but his plans need right people and right priorities

UkraineAlert by Anders Åslund

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Political Reform Politics & Diplomacy Ukraine United States and Canada

Ukraine's President Volodymyr Zelenskyy speaks during a bilateral meeting with Canada's Prime Minister Justin Trudeau of the Ukraine Reform Conference in Toronto, Ontario, Canada, July 2, 2019. REUTERS/Chris Helgren

On July 2-4, the government of Canada hosted the third Ukraine Reform Conference in Toronto. The previous two were held in London and Copenhagen. The first day was devoted to ministerial events, while the second and third days were hosted by Ukraine House, a non-governmental organization supported by several foundations. These conferences are designed to offer support for Ukraine and its reforms, showcasing the country’s achievements while indicating priority reforms.

This was a massive international manifestation in support of Ukraine with the participation of some forty countries. Canada’s Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland were the hosts to some 500 guests. The foremost guest was newly-elected Ukrainian President Volodymyr Zelenskyy and half a dozen Ukrainian ministers participated. About ten foreign ministers attended, notably from Sweden, Finland, Latvia, Lithuania, Poland, and Hungary. The international organizations were well represented, led by IMF First Deputy Managing Director David Lipton and EU Commissioner Elzbieta Bienkowska.

Zelenskyy’s two appearances were key to the conference. On July 2, he spoke to the conference itself and on July 3 to the Economic Club of Canada, both in Ukrainian. He approached the audiences with humor, gratitude, and confidence. His main message was that he wants Ukraine to be a strong state working for everyone, not a select few. He went quickly through the main themes without unnecessary details.

The new president said that the government will have to act fast to fight corruption with the help of independent courts. The mentality of the people has to change, and the government has to listen to its citizens and reject corruption. He argued that the best way to grant people security and comfort was to move quickly toward Europe in order to join the European Union. Similarly, the Ukrainian armed forces have to adjust to NATO norms so that Ukraine can join the Alliance. For the most part, Zelenskyy stuck to mainstream talking points, but he emphasized that the Donbas and Crimea are Ukrainian territories and that Ukraine needs more than $10 billion to rebuild the Donbas. He underscored that people in the Donbas “are our people.”

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At the Economic Club, he predictably focused on economic issues and offered as liberal a message as the audience desired, while he called on the audience to invest in Ukraine. He praised the independent central bank that kept the currency stable, while he called for reform of the security services and the state administration to stop illegal corporate raiding. In particular, he wants to fight contraband. He advocated for private sales of agricultural land, deregulation, liberalization of the labor market, and privatization. He suggested three good sectors for investment: natural resources, green energy, and IT, and named three Canadian companies that had made big investments in these sectors already. He certainly knows how to sell.  

The panels and the speakers were numerous, but the consensus was striking. Ukraine has achieved macroeconomic stability with a sound national bank and a strong ministry of finance. While maintaining these achievements, the country needs to move forward with structural reforms, primarily to improve law enforcement, and reforming the prosecutor general’s office, the security services, and the judiciary. Economically, the legalization of private sales of agricultural land and privatization are vital. In order to raise its growth rate from 2-3 percent to 7 percent a year, Ukraine needs to boost its investments substantially by mobilizing domestic savings and attracting foreign investment. The audience seemed to think that this is likely to happen.

Accidentally, this conference occurred barely three weeks before the parliamentary elections, but that made little difference. The consensus among Ukrainians was unprecedented. Prime Minister Volodymyr Groisman, who was supposed to be the main spokesperson for the government, stayed home but offered a nice video address. The co-chair of the conference was First Deputy Prime Minister Stepan Kubiv, who is number two on Petro Poroshenko’s party list, but he stayed out of politics and spoke for Ukraine. So did the other five ministers in attendance, offering a surprisingly cohesive picture of the Ukrainian political establishment, although most of the ministers and MPs present are unlikely to be in the next government or parliament. Curiously, the only person from Zelenskyy’s team who spoke in public was the president himself.

This conference was a boon to the Canadian-Ukrainian community, which numbers 1.3 million and attended in strength. This predominantly West-Ukrainian society has been skeptical of the East-Ukrainian Zelenskyy, but he probably won over many with his sensible statements and candor. Optimism about Ukraine appears greater than ever.

The big question is whether Zelenskyy will be able to find the right people and choose the right policy priorities.

Anders Åslund is a senior fellow at the Atlantic Council and author of the new book “Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy.” Follow him on Twitter @anders_aslund