UkraineAlert

One could be forgiven for mistaking thirty-six-year-old Yuriy Fylyuk as just another of the bearded foodie entrepreneurs who dominate Ukraine’s culinary scene. But the soft spoken Fylyuk is far more.  

Yevhen Hlibovytsky, high priest of Ukraine’s civil society and partner at the Pro.mova consulting firm, has yanked me out of Kyiv to see what he describes as the most impressive civil society project in the country—in Ivano-Frankivsk, a town of 230,000 in western Ukraine. The details are scant, but anytime Hlibovytsky offers to take you on a road trip, the answer is, “Absolutely.”  

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It was June 5 and Ukraine’s ebullient and energetic finance minister was under tremendous strain. The Economist had just reported that forty-three-year-old Oleksandr Danyliuk was about to be sacked after speaking out too many times about corruption at the highest levels. He’d made too many enemies, including the president and prime minister.  

But Danyliuk is an optimist who brims with good humor even when he’s under fire. Speaking with him in his office in Kyiv, I asked if he was worried. “I’m going to stay,” he said decisively.  

I asked jokingly, “What’s your theme song? ‘I Will Survive’?”

Too negative, he said. Without skipping a beat, he suggested with a laugh, “We Are the Champions.”

The next day, Danyliuk was indeed fired. But that light-hearted exchange captures the ex-minister well. He wants Ukraine to thrive, and he thinks he knows how to get there.

Now Danyliuk is out of government and can speak freely.

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On March 31, Ukraine will hold the first round of its presidential election. This is a tremendous opportunity to restart Ukraine’s reforms. The election debate needs to focus on the most important issue, namely the enforcement of property rights.

Five years after the Revolution of Dignity and Russia’s invasion, Ukraine’s situation remains precarious. The rule of law has not been established. Scandalously, a Kyiv court just reinstated the former chairman of the State Fiscal Service in spite of major accusations of defrauding the state of $70 million, illustrating the persistent dysfunction of the judicial system. Similarly, the reform of the prosecution has failed, and the security services remain untouched.

The successful reforms have largely been economic. Inflation and the exchange rate have stabilized. Energy subsidies have been cut, bringing the budget close to balance. The payroll tax has been halved, which has reduced the shadow economy. The ProZorro electronic system has cleaned up much of public procurement. Corporate governance has improved in several big state companies and decentralization reform has endowed municipalities with new initiative.

Yet economic growth lingers at 3 percent when it should be at least 7 percent for a relatively poor country with open access to wealthy Europe.

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It’s Christmas Eve in Kyiv, and Ukraine just won a major victory in its long struggle for independence from Moscow.

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Russian President Vladimir Putin will go down in history as having “lost Ukraine” for good. Putin has experienced two “geopolitical tragedies” with the disintegration of the USSR in 1991 and disintegration of the Russian world in 2018.

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Six weeks ago, Russia attacked Ukraine in the Straits of Kerch and it made international news. US President Donald Trump canceled a high-level meeting with Russian President Vladimir Putin in response. Other governments denounced the Kremlin’s actions. Then the news faded. Right now, the weak Western response means that Putin has gained a tactical advantage, which makes it more likely that Moscow will escalate further in the future.

It would be easy to dismiss the latest flare-up as Ukraine’s problem, but that would be foolish.

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Energy politics are critical in Russia’s long war on the West and Ukraine. Indeed, energy functions as a Swiss army knife for Moscow, cutting simultaneously in several directions. Energy provides the basis for the revenue stream that enables all government operations, comprises a ready source of constant corruption of European elites and institutions, and furnishes an unending source of leverage and corruption over European governments and politics.

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On New Year’s Eve, Ukraine’s top comedian Volodymyr Zelenskiy announced that he will run for president.  

The timing of the announcement was curious: Zelenskiy’s short spot aired before President Petro Poroshenko’s annual address on the second most popular TV channel “1+1,” which belongs to Ihor Kolomoisky. The order caused many to speculate that the Ukrainian oligarch Kolomoisky is backing the forty-year-old comedian.

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The experience of the past four years shows that in Ukraine, it is far easier and more effective to shrink the space for corrupt practices than to deter corruption by punishing guilty individuals. To this extent, Ukraine’s anti-corruption reforms have been working.

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Ukraine is back on the front pages of the world’s top newspapers. Twice in the past three weeks Ukraine featured on the cover photo of the Financial Times. The headlines read: "US Backs Kyiv in Naval Clash with Kremlin" and "Kyiv Splits from Russian Church." The news headings highlight the U-turn that Ukrainians have made shifting away from Russia and turning to the West ever since the 2013-2014 Revolution of Dignity.

The same shift is also happening in business.  

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