Ukraine-North America Dialogue, New Corruption Report Launched

Washington, D.C. — The Atlantic Council of the United States recently launched the Ukraine-North America Dialogue as well as a new report on corruption in Ukraine that will be published this autumn.  In only two months, the Ukraine-North America Dialogue has become an important forum for promoting the frank exchange of views on Ukrainian politics between policymakers and opinion leaders from both sides of the Atlantic.

The Dialogue is now an integral part of the Atlantic Council’s Program on Transatlantic Relations.  Under the guidance of vice president Fran Burwell, the Transatlantic Relations Program has already secured the participation of around 30 of Ukraine’s most influential legislators, politicians and business leaders, including members of the Party of Regions, the governing Tymoshenko Bloc and its sometime ally Our Ukraine.  With a population of 46 million, Ukraine is among the largest countries in Europe and of great strategic interest to the future of the Atlantic Community.

Atlantic Council president and CEO Frederick Kempe stressed the importance of the Council’s work on Ukraine: “Ukraine is a major European country, whose democratic evolution is an important lynchpin of European security.  At the same time, the country is plagued by a deteriorating economy, persistent regional differences that have impeded the emergence of a cohesive national identity and rampant corruption and cronyism that prevent sustainable growth.”  The Council’s efforts to address these issues are bolstered by Senior Fellow Adrian Karatnycky, who directs the Dialogue with the support of Transatlantic Relations Program assistant director Cynthia Romero.  The expertise of academic advisor Alexander Motyl, a professor at Rutgers University, also reinforces this work.

In the last two years, the Council has sponsored a number of Ukraine-focused events, including a working lunch last September with President Viktor Yushchenko for business leaders and policymakers.  The program has already conducted two briefings in Kiev — one in March with Chrystia Freeland, U.S. Managing Editor of the Financial Times, and a second in late April with President Obama’s Special Assistant for International Economic Policy, David Lipton.  Mr. Lipton, who served as Under Secretary of the Treasury in the Clinton administration, briefed Dialogue members on U.S. views of the global economic crisis and the economic challenges facing Urkaine.  The Ukraine-North America Dialogue is implemented in cooperation with the Open Ukraine Foundation, established by legislator Arseniy Yatseniuk; other key Ukrainian think tanks and funds will also participate in the new initiative.

As an adjunct to the Ukraine-North America Dialogue, the Atlantic Council will continue a major research project examining corruption in Ukraine.  The Council will support an investigation into cronyism and rent-seeking in Ukraine’s government and political system.  In particular, it will focus on the influence wielded by major industrial and financial lobbies in the Ukrainian party and legislative systems and the extent to which their influence impedes competition.  This investigation follows Corruption, Democracy and Investment in Ukraine, a 2007 report by an Atlantic Council study group that analyzed corruption and its economic and political impact on Ukraine.

The new Council study will examine the practice of doling out patronage to party-linked interest groups, which results in a monopoly or near-monopoly for these companies on government-related business in energy, power generation, steel, chemicals, banking and other key sectors of Ukraine’s economy.  Critics have pointed to the emergence of a “quasi-feudal” system in which several political parties have carved out niches for key contributors who enjoy privileged access to investment opportunities and nominally competitive tenders.  This is neither beneficial to overall economic growth nor does it contribute to the transparency required for the flow of foreign direct investment the country needs to emerge from recession.

In addition, Adrian Karatnycky and Alexander Motyl are the co-authors of a new essay entitled “The Key to Kiev: Ukraine’s Security Means Europe’s Stability” in the May-June edition of Foreign Affairs.  Both experts are widely cited in interviews for the Ukrainian press and regularly appear on Ukrainian discussion programs.  Their efforts have helped significantly to raise the profile of the Atlantic Council in Ukraine.

The Atlantic Council aims to renew the Atlantic community for 21st-century global challenges.  With a historic American leadership transition at a time of uncertainty on the international stage, U.S.-European leadership is called upon now more than ever.  While closer U.S.-European relations will not cure the world’s problems, the Atlantic Council believes that they are a pre-condition for dealing with most of them:  global financial instability, failed states, climate change, energy security, a rising Asia or a resurgent Russia.  Led by Senator Chuck Hagel, Chairman, the Atlantic Council embodies a network of world leaders and experts who aim to renew and energize the transatlantic community through non-partisan and cross-national discussions and studies.