BERLIN — Over the past week, Russia has reinforced its military presence on the Crimean peninsula, moved military units close to the Russia-Ukraine border and announced military “readiness checks.” Most likely, this is just a ploy to unnerve the government in Kyiv and test the West’s reaction. 

But it could be something worse. If the Kremlin is weighing the costs and benefits of a military assault on Ukraine, Europe and the United States should ensure that Moscow does not miscalculate because it underestimates the costs. 

Read the rest at Politico

In a December 2020 New York Times interview, Ukrainian President Volodymyr Zelensky welcomed Joe Biden’s election as U.S. president. Zelensky observed that Biden “knows Ukraine better than the previous president” and “will really help strengthen relations, help settle the war in Donbas, and end the occupation of our territory.”[1]

While Zelensky’s comments may prove overly optimistic, there is little reason to doubt that the Biden presidency will be good for Ukraine. The incoming president knows the country, and he understands both the value of a stable and successful Ukraine for U.S. interests in Europe and the challenges posed to Ukraine and the West by Russia. That might—might, not will, but might—help break the logjam on the stalemated Donbas conflict, which Zelensky of course would welcome. Perhaps less welcome to the Ukrainian president may be Biden’s readiness to play hardball to press Kyiv to take needed but politically difficult reform and anti-corruption steps. Ukraine’s success as a liberal democracy depends not just on ending its conflict with Russia but also on combating corruption and advancing still necessary economic reforms.

U.S.-Ukraine Relations under Trump

In one sense, U.S. policy toward Ukraine during the Trump administration had its strengths. It continued political and military support for Kyiv, including the provision of lethal military assistance that the Obama administration had been unwilling to provide. It maintained and strengthened Ukraine-related sanctions on Russia. And it took further steps to bolster the U.S. and NATO military presence in central European states on Ukraine’s western border.

However, Donald Trump never seemed committed to his administration’s policy. His primary engagement on Ukraine was his bid to extort Kyiv into manufacturing derogatory information on his Democratic opponent, a bid that led to his impeachment.[2] Beyond that, Trump showed no interest in the country and consistently refused to criticize Vladimir Putin, who has inflicted more than six years of low-intensity war on Ukraine.

The Biden presidency will end this dichotomy in Washington’s approach to Kyiv. The president and his administration will align on policy. That new predictability will mean that Ukrainian officials no longer have to worry about late night presidential tweets or the subjugation of U.S. policy interests to the president’s personal political vendettas.

Two Challenges Confronting Ukraine

As Biden takes office, two principal challenges confront Ukraine. The conflict with Russia poses the first.[3] In March 2014, in the aftermath of the Maidan Revolution, Russian military forces seized Crimea. Weeks later, Russian security forces instigated a conflict in Donbas, masked poorly as a “separatist” uprising. The Kremlin provided leadership, funding, heavy weapons, ammunition, other supplies and, when necessary, regular units of the Russian army. Now in its seventh year, that conflict has claimed the lives of some 13,000 people.

While Moscow illegally annexed Crimea, it has not moved to annex Donbas. It appears instead to want to use a simmering conflict in that eastern Ukrainian region as a means to put pressure on, destabilize and disorient the government in Kyiv, with the goal of making it harder for the government to build a successful Ukrainian state and draw closer to Europe. (Moscow has interfered elsewhere in the post-Soviet space to try to maintain a Russian sphere of influence.)

Without the Kremlin’s cooperation, Kyiv on its own cannot resolve the conflict in Donbas, and Crimea poses an even harder question. However, meeting the second of the challenges facing Ukraine—implementation of reforms and anti-corruption measures needed to build a fair, robust and growing economy—lies largely within Kyiv’s purview. Unfortunately, after a good start by Zelensky and his first government, reforms have stagnated, oligarchs retain undue political and economic influence (including within Zelensky’s Servant of the People party), and the judicial branch remains wholly unreconstructed.[4] Among other things, this depresses much-needed investment in the country.

Progress Toward a Resolution in Donbas?

The Biden presidency might well play a more active role in the moribund negotiating process regarding Donbas. As co-chairs of the “Normandy process,” German Chancellor Angela Merkel and French President Emmanuel Macron have had little success of late in implementation of the 2015 Minsk agreement, which laid out a path to a settlement and restoration of full Ukrainian sovereignty over Donbas.[5] Unfortunately, it appears that the Kremlin calculates that the benefits of keeping Kyiv distracted currently outweigh the costs, including of Western sanctions.

Zelensky believes that a more active U.S. role could change that calculation and inject momentum into the process. At a minimum, the Biden presidency should appoint a special envoy to coordinate with the Germans and French, and, more broadly, with the European Union, Britain, Canada and others on Western support for Ukraine and sanctions against Russia. That position has gone unfilled since September 2019.

Whether Biden, who will face many demands on his time, will choose to engage personally is a different question. He knows Ukraine, having traveled there six times when he served as vice president. And, unlike Trump, who sought quick victories, Biden understands that solving a question like Donbas would require an investment of his time over a sustained period. It would make sense if it became clear that his engagement would shake up things in a way that would increase the prospects of a settlement and return of Donbas to Ukrainian sovereignty.

At first glance, the Kremlin might not welcome that kind of U.S. involvement, but there are good arguments for it. First of all, the United States is Ukraine’s strongest Western supporter, and Washington’s voice carries considerable weight in Kyiv. Second, Russia’s current conflict against Ukraine is not just about Donbas; it is also about Ukraine’s place in Europe, that is, where the country fits between Russia and institutions such as the European Union and NATO.[6] Addressing that question will require diplomatic finesse. Given the trans-Atlantic relationship, which will be revived under Biden, it is difficult to see such a geopolitical discussion taking place without American participation.

As for Crimea, Ukraine cannot at present muster the political, diplomatic, economic and military leverage to effect the peninsula’s return. Still, the U.S. government knows how to do non-recognition policy.[7] It did so for five decades with regard to the Baltic states’ incorporation into the Soviet Union. The Biden presidency will remain supportive of Kyiv’s claim to Crimea and not recognize its annexation by Russia—and the White House will express this view.

Domestic Reform

After an encouraging start on reform, Zelensky wavered in 2020. He has to do more, and Biden can be helpful, though in a manner the Ukrainian president may not appreciate. A big part of the problem is that Zelensky himself seems to have lost his way. Ruslan Ryaboshapka, his reformist first prosecutor general, observed that “Instead of fighting oligarchs, [Zelensky] chose to peacefully coexist with them.”[8] Biden could well prove the kind of friend that Ukraine needs now: supportive but direct with Zelensky on what must be done, and ready to push him to take politically hard measures that he might prefer to avoid.

Biden has already shown that he can do this. As vice president in the Obama administration, he had the lead on U.S. engagement with Ukraine. When necessary, he applied “tough love,” famously withholding a one-billion-dollar loan guarantee until then-President Petro Poroshenko fired a prosecutor general who was viewed widely, inside and outside of Ukraine, as corrupt.[9]

A dose of such tough love now seems necessary with Kyiv. One question concerns access to low interest credits under Ukraine’s stand-by agreement with the International Monetary Fund.[10] The IMF conditions disbursements of those credits on how Ukraine implements reform commitments that it made to secure the agreement. The Biden administration should, and almost certainly will, back the IMF in insisting that Ukraine needs to deliver on its commitments in order to secure additional disbursements.

Likewise, the Biden administration should make more bilateral U.S. assistance conditional on Ukraine tackling particular reforms. In doing so, it should consult and coordinate closely with the European Union, which has greater assistance resources available. Introducing a higher degree of conditionality to Western assistance programs could usefully ratchet up the pressure on the leadership in Kyiv to take reform steps that are in the country’s broader interest but opposed by key oligarchs or political groups who stand to lose from such reforms.

Priority should go to encouraging reform of the judicial branch, including the Constitutional Court, which has a core of judges who appear beholden to special interests. The high court reversed earlier laws requiring members of parliament and government officials to disclose their assets and could threaten other reforms.[11]

At home, the Biden administration can assist Ukraine by implementing a ban on anonymous shell companies by requiring disclosure of who actually forms companies in the United States as contained in the Corporate Transparency Act, part of the National Defense Authorization Act.[12] This will make it more difficult for corrupt Ukrainians to shelter ill-gotten gains in U.S. assets.

The Biden presidency is good news for Ukraine and those who wish to see it develop into a modern European state. It will mean more high-level but hard-nosed U.S. support. That could lead to greater progress on reform within the country. And, with some imaginative diplomacy and luck, it might even help break the logjam with Russia over resolving the fate of Donbas.

[1] Kramer, Andrew E. “With Trump Fading, Ukraine's President Looks to a Reset With the U.S.” The New York Times. The New York Times Company, December 19, 2020. https://www.nytimes.com/2020/12/19/world/europe/trump-zelensky-biden-ukr....

[2] Nichols, Tom. “Trump Is Being Impeached over an Extortion Scheme, Not a 'Policy Dispute'.” USA Today. Gannett Satellite Information Network, January 30, 2020. https://www.usatoday.com/story/opinion/2020/01/30/trump-impeachment-blac....

[3] Masters, Jonathan. “Ukraine: Conflict at the Crossroads of Europe and Russia.” Council on Foreign Relations. Council on Foreign Relations, February 5, 2020. https://www.cfr.org/backgrounder/ukraine-conflict-crossroads-europe-and-....

[4] Iliyas, Boktakoz. “Anti-Corruption Backtracking in Ukraine – Has Ze Reform Moment Passed?” Control Risks. Control Risks Group Holdings Ltd., December 17, 2020. https://www.controlrisks.com/our-thinking/insights/anti-corruption-backt....

[5] “Ukraine Walks a Tightrope to Peace in the East.” International Crisis Group, January 29, 2020. https://www.crisisgroup.org/europe-central-asia/eastern-europe/ukraine/ukraine-walks-tightrope-peace-east.; “Ukraine Ceasefire: New Minsk Agreement Key Points.” BBC News. BBC, February 12, 2015. https://www.bbc.com/news/world-europe-31436513.

[6] Tefft, John F. “ Reflections on Russia, Ukraine and the U.S. in the Post-Soviet World.” American Foreign Service Association, n.d. https://www.afsa.org/reflections-russia-ukraine-and-us-post-soviet-world.

[7] Pompeo, Michael R. “Crimea Is Ukraine.” U.S. Department of State. U.S. Department of State, February 26, 2020. https://www.state.gov/crimea-is-ukraine-3/.

[8] Kranolutska, Daryna, and Volodymyr Verbyany. “Ukraine's Leader Is Being Broken by the System He Vowed to Crush.” Bloomberg.com. Bloomberg, December 16, 2020. https://www.bloomberg.com/news/articles/2020-12-17/ukraine-s-leader-is-b....

[9] Subramanian, Courtney. “Explainer: Biden, Allies Pushed out Ukrainian Prosecutor Because He Didn't Pursue Corruption Cases.” USA Today. Gannett Satellite Information Network, October 3, 2019. https://www.usatoday.com/story/news/politics/2019/10/03/what-really-happ....

[10] “IMF Executive Board Approves 18-Month US$5 Billion Stand-By Arrangement for Ukraine.” International Monetary Fund. International Monetary Fund Communications Department, June 9, 2020. https://www.imf.org/en/News/Articles/2020/06/09/pr20239-ukraine-imf-exec....

[11] “Ukraine's Constitutional Court Attacks Anti-Corruption Laws.” The Economist. The Economist Newspaper, November 14, 2020. https://www.economist.com/europe/2020/11/14/ukraines-constitutional-cour....

[12] Pearl, Morris. “Commentary: Congress Just Passed the Most Important Anti-Corruption Reform in Decades, but Hardly Anyone Knows about It.” Fortune. Fortune Media IP, December 26, 2020. https://fortune.com/2020/12/26/ndaa-2021-shell-companies-corporate-trans....

Originally for Stanford International Policy Review

Meet our Postdoctoral Scholars 

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Each year the Center on Democracy, Development and the Rule of Law invites several pre and/or postdoctoral scholars to Stanford. Our fellows work in any of the three program areas of democracy, development, and rule of law.   Over the course of the academic year, scholars use their fellowship to complete their projects, participate in seminars, and interact with each other and the resident faculty and research staff. 

This year we are very excited to have Nathan Grubman, Salma Mousa, and Leah Rosenzweig with us at the Center. We talked to them about their research interests, what they're working on while at Stanford, and why they chose to come to CDDRL. 

Nathan Grubman
Yale University

About Nathan: 

Nathan expects to receive his PhD in political science from Yale University in December 2020. He is currently working on a book project on the question of why party systems in some new democracies tend to lack left-right cleavages that are often found in established democracies. In particular, he looks at the case of Tunisia after the 2010-11 uprising. Nathan recently presented his research in the talk "Nostalgia and Populisms in Contemporary Tunisia" for the CDDRL Seminar Series. 

Why did you choose CDDRL?

"I’ve followed CDDRL for a very long time. It has a unique mix of people who are focused on democracy and democratization in parts of the world where it doesn’t receive as much attention, and scholars focused on democracy in the US as well. I’m also really excited by some of the people at CDDRL—those who focus on the Arab world but also those who focus on Eastern Europe and democratization more generally. They can help me broaden the scope of my research."

Learn more about Nathan's research in this interview with Associate Director for Research Didi Kuo.

Salma Mousa
Stanford University 

About Salma: 

An Egyptian-Canadian raised in Saudi Arabia, the UAE, Qatar, and Canada, Salma Mousa received her PhD in Political Science from Stanford University in 2020. She is currently working on two research agendas. The first is about the tools and strategies we have for building social cohesion, primarily between migrants and host societies, but also between religious and ethnic groups in the Middle East and the US. Her second research focus is how we can best integrate refugees in the US economically and socially. She will be presenting her research for CDDRL in the upcoming talk "Building Social Cohesion through Soccer in Post-ISIS Iraq". 

Why did you choose CDDRL?

"I’ve been floating around CDDRL during my time at Stanford, including teaching for Professor Fukuyama. But for me it was a natural home given that my work is very interdisciplinary. Work on intergroup contact and prejudice reduction and integration has a lot of implications for economics, social psychology, political science, sociology, and I draw on methods and theories from all of these places. At the same time I try to make my work as policy relevant and as situated in the real world with real world interventions as much as possible. To get that interdisciplinary exposure and to have the chance to pick the brains and workshop my ideas with a group of scholars who are so policy oriented really fit my research model."

Hear more about Salma's work in this interview with Mosbacher Director of CDDRL Francis Fukuyama.

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Leah Rosenzweig
MIT

About Leah: 

Leah Rosenzweig holds a PhD in Political Science from MIT. Her current project looks at social voting in semi-authoritarian states. In places where elections aren't competitive why does anyone even vote? Her answer is that there is social pressure--not out of civic duty to the state, but rather to the local community. People see elections as a way to gain benefits and help their local communities. She tests this theory in Tanzania and Uganda. She recently presented her talk "Informing Government Response to COVID-19 in Sub-Saharan Africa" for CDDRL. 

Why did you choose CDDRL?

"CDDRL covers a lot of the same themes and topics that I’m interested in within development and democracy. But mostly I was drawn to the interdisciplinary group of scholars engaged in policy-relevant research, whether that’s other political scientists like myself, economists, legal scholars, and others. The environment of all of these really great intellectuals engaging on these topics was what attracted me to the program."

Learn more about Leah and her work in this interview.

The CDDRL Pre and Post Doctoral Fellowship Program is now accepting applications. Please visit this site to learn more about the application process, and contact kdchandl@stanford.edu with any questions. 

The New Europe Center, a Ukraine-based think tank, asked six American experts to comment on the implications of the U.S. presidential election for Ukraine.  The following is Steven Pifer's contribution.

For Americans, the November 3 presidential election will be the most significant vote in many decades.  The election also will have consequences for Ukraine:  Whether Donald Trump or Joe Biden sits in the White House at the end of the day on January 20, 2021 will matter greatly for U.S. policy toward Ukraine and Europe.

Since Ukraine regained its independence in 1991, the United States has proven a strong and supportive partner.  Presidents Clinton, Bush and Obama each saw a stable, independent, democratic Ukrainian state with a robust market economy as in the U.S. interest, including in contributing to a more stable and secure Europe.  Washington thus has provided substantial political, economic and—particularly since 2014—military support to Kyiv.  It has sanctioned Russia for its aggression in Crimea and Donbas and sought to bolster NATO in the face of a growing Kremlin challenge to Western security.

The Trump administration has largely continued these policies.  It has provided Kyiv reform and military aid, including lethal military assistance.  It has applied additional sanctions on Russia, albeit under pressure from Congress.  And it has taken steps to strengthen the U.S. military presence in NATO, at least until recently.

However, it has never been clear that Mr. Trump himself supports these policies.  His principal engagement on Ukraine was his attempted extortion of Kyiv to advance his personal political prospects, an effort that led to his impeachment.  While his administration has taken a tough line on Russia, Mr. Trump seems incapable of criticizing Vladimir Putin or Russian misdeeds.  He apparently thinks that Ukraine, not Russia, interfered in the 2016 U.S. presidential election, ignoring the conclusions of the U.S. intelligence community, the Mueller investigation and the Republican-led Senate Intelligence Committee.

Mr. Trump’s disdain for NATO has long been clear, going back to the 1980s.  In June, he decided to withdraw 10,000 U.S. troops from Germany, apparently out of pique at Chancellor Merkel’s refusal to attend a G7 summit at Camp David.  Senior Pentagon officials scrambled for weeks to offer military justifications for the drawdown, but those that they provided did not survive serious scrutiny.

If Mr. Trump is re-elected, he will not have to worry about facing the voters in another election campaign.  He will cement his control of the Republican Party, leaving Republicans in the Senate and House of Representatives less able to block his bad instincts.  What accommodations would he make with Mr. Putin?  Would he be inclined, as he suggested in 2016, to recognize Russia’s illegal annexation of Crimea and lift economic sanctions?   Would he withdraw the United States from NATO, as many former U.S. officials fear?  The Alliance’s collapse would be a huge gift to Mr. Putin and leave Ukraine in a precarious geopolitical position.

It will be different if Mr. Biden is elected (full transparency:  the author fervently hopes for this).  The United States would have a president who understands the U.S. interest in a successful Ukraine and who knows the country well from his time as vice president.  He would be the kind of friend that Ukraine needs, supportive but also ready to press the Ukrainian leadership to take necessary reform steps.  He recognizes the security challenge that Russia presents to Ukraine and the West, and he realizes the importance of a strong trans-Atlantic relationship with a robust NATO at its core.  And Mr. Biden might prove a president who could bind some of the differences that so badly divide Americans today.  An America more unified at home would be a stronger international actor.

Whether Mr. Trump or Mr. Biden wins the elections will mean very different things for U.S. policies affecting Ukraine.  That said, the American electorate will decide the next president largely on domestic issues, such as the Trump administration’s handling of COVID19 and the economy.  Ukraine has no role to play in this, and Ukrainian officials should continue to do all that they can to avoid their country becoming a political football in the U.S. campaign.

* * * * *

Steven Pifer is a William Perry Research Fellow at Stanford University’s Center for International Security and Cooperation and a former U.S. ambassador to Ukraine.

Since regaining its independence in the aftermath of the Soviet Union’s collapse nearly 30 years ago, Ukraine has sought to build links with the West. This includes ties with institutions such as NATO, with which Ukraine has established a distinctive partnership. Kyiv has been keen on deepening those ties. Its interest in becoming a NATO member has continued to grow since 2014, as it views NATO as a means to protect Ukrainian sovereignty and territorial integrity from its aggressive neighbor, Russia.

Although NATO-Ukraine cooperation has intensified, and the Alliance maintains its “open door” policy, NATO members appear reluctant to put Ukraine on a membership track. Despite the fact that Russia continues a low-intensity conflict against Ukraine—and occupies Ukrainian territory—Kyiv can expand its practical cooperation with NATO. However, in the near term, Kyiv will have to keep its expectations about membership modest.

Read the rest at Turkish Policy Quarterly

Vital Interests: Steven, thanks for talking to us about Ukraine in the Vital Interests Forum . As a former Foreign Service officer you have expertise in this region and served as its Ambassador from 1998 to 2000 - a time when Ukraine was emerging as an independent nation. For our readers who aren't necessarily knowledgeable about Ukrainian history and geopolitics, can you provide some background?

Steven Pifer: Sure. I'd say the starting point actually goes back about 1,000 years. With Ukraine and Russia you have two countries whose history, culture, language, and religion are really intertwined. They both go back to the 10th Century, they both claim Kievan Rus’ as their founding state. Really,  from 1654 until 1991, with the exception of a couple of very chaotic years after the end of World War I, Ukraine was part of the Russian empire.

When the Soviet Union broke up in 1991, the part that the Russians missed most was Ukraine. Russians referred to Ukrainians as “little Russians,” which  was never very popular with Ukrainians, but many in Russia saw the two as a single country.

I remember a conversation I had with a Russian deputy foreign minister, probably in 1994 or 1995. This was a pretty modern guy. He understood things had changed, but said to me, "Up here in my head, I understand and I acknowledge that Ukraine is an independent country. Here in my heart, it's going to take a long time." I think that reflects the attitude of a lot of Russians, most importantly Vladimir Putin.

The last time Mr. Putin was in Kviv was in July 2013. That was four months before the Maiden Revolution began. He was there to mark the 1025th anniversary of Kievan Rus’ accepting Christianity, which of course, had a huge impact on the Orthodox Church, both in Ukraine and in Russia. He gave a speech in which he said, "We are one people, we Russians and Ukrainians." That was really tone deaf; many Ukrainians heard that as denying their culture, their history, their language. 

Part of this Russian approach is emotional for Mr. Putin and Russians - they didn't want to lose Ukraine. Part is a reflection of what we've seen particularly over the last 10 to 12 years: Russia actively trying to assert a sphere of influence in the post-Soviet space. I don't believe that Vladimir Putin wants to rebuild the Soviet Union, because Russia does not want to subsidize these other countries.

What Mr. Putin does want is a sphere of influence, or as Dmitry Medvedev, who was President back in 2008, called it, "A sphere of privileged interests in the post-Soviet space.” That means countries such as Ukraine, Belarus, Moldova and others in Central Asia should defer to Moscow on issues that Moscow considers key to Russian interests. That certainly means, how close you can get to institutions such as the European Union and NATO.

The tension that you now see between Russia and Ukraine is Russia trying to assert that sphere of influence and trying to pull Ukraine back into its orbit, whereas it's clear since the Maidan Revolution that the majority of Ukrainians see their future as a fully integrated European state.

Read the rest of the interview at Fordham's Vital Interests Forum

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A Note from the Ukrainian Emerging Leaders Program

To our supportive community,

On behalf of all of us at the Ukrainian Emerging Leaders Program, we hope that you and your loved ones are remaining safe and healthy. We would like to provide you with a short update on the program.

Due to the evolving situation with COVID-19, our selected fellows in consultation with the program team have made the difficult decision to postpone the next year of the Ukrainian Emerging Leaders Program until 2021-22. The health of our fellows is most important, and recent limitations about in-person instruction would have made it impossible for our fellows to enjoy a fruitful experience this year.

That being said, we would still like to introduce you to our incoming class. We expect to be able to invite them for the 2021-22 academic year and sincerely hope you will join us in welcoming our incoming fellows at that point.

Finally, although we are deferring our fellows for a year, the Program will continue, and we hope the virtual format will provide new opportunities. We will keep you updated as to any program events we conduct over the course of this modified year.

We are very excited to have these three fellows join us as soon as it is safe and healthy to do so, and wish the circumstances would have allowed us to have them with us on campus sooner.

Sincerely,
The Ukrainian Emerging Leaders Program Team

Yulia Bezvershenko
Ministry of Education and Science 

Yulia Bezvershenko is Director General of Directorate for Science and Innovation at the Ministry of Education and Science. The Directorate was created for policy development and implementation in the research, development and innovation sector.  

Since the Revolution of Dignity, Bezvershenko has been deeply involved in the reform of science development and implementation process. Her mission is to build knowledge-based Ukraine as economy and society based on knowledge, science and innovation. She has contributed to the Law on Science, which was adopted by Parliament in 2015. In cooperation with scientists and reformers she developed and actively participated in the creation of two new institutions, the National Council on Science and Technology and the National Science Fund. Bezvershenko currently works both on implementation of the aforementioned law and on its future iterations.

Bezvershenko holds a PhD in Theoretical Physics from the Bogolyubov Institute for Theoretical Physics (National Academy of Science of Ukraine) and a Master’s degree in Public Policy and Governance from the Kyiv School of Economics. She has diverse experience in the research and development sector, having worked as a researcher at the Bogolyubov Institute as well as a senior lecturer on quantum theory at Kyiv-Mohyla Academy. Until 2019, Yulia was a Deputy Head of Young Scientists Council of National Academy of Science of Ukraine and Vice-President of NGO "Unia Scientifica" aimed to promote science and to advocate reform of science in Ukraine.

Denis Gutenko
State Fiscal Service/Ministry of Economy

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Before joining the State Fiscal Service, Gutenko had worked in the Ministry of Economy since 2015. Gutenko promoted deregulation and improvement of business climate agenda. He initiated and successfully lobbied Parliament to adopt laws on the liberalization of international trade and currency, the transparency of scrap metal exports, and the reform of a corrupt ecological tax policy. Gutenko also led the removal of administrative barriers and outdated currency restrictions, resulting in the increased flow of services and payments for Ukrainian freelancers and small and medium enterprises.

Prior to this Gutenko began his career in the private sector as a banker, auditor and agribusiness manager, experiences that sparked his interest in improving the Ukrainian state bureaucracy and fighting widespread corruption.

Gutenko’s focus while at CDDRL will be on good governance and public administration reform, both of which remain significant opportunities and challenges for Ukraine. He looks forward to being an active member of Leadership Network for Change, and to continuing to challenge himself while at Stanford.

Nariman Ustaiev
Gasprinski Institute

Nariman Ustaiev is co-founder and Director at Gasprinski Institute for Geostrategy. He is also an external advisor for the Committee on Human Rights, Deoccupation and Reintegration of Temporarily Occupied Territories in Donetsk, Luhansk Regions and Autonomous Republic of Crimea, National Minorities and Interethnic Relations of the Verkhovna Rada of Ukraine. 

His work explores the multiple dimensions of Ukraine’s foreign and security policy and their intersection with good governance based on human rights. His areas of expertise are foreign policy; political and security challenges in the Black Sea Region; and human rights and Crimean Tatar issues. 

Prior to this Nariman had worked for governmental institutions responsible for Ukraine’s security policy, namely the National Security and Defense Council, the Secretariat of the Cabinet Ministers and the State Service for the Autonomous Republic of Crimea and Sevastopol for many years. 

Nariman graduated from the Diplomatic Academy at the Ministry of Foreign Affairs of Ukraine, the Ukrainian Academy for Foreign Trade and Kyiv-Mohyla Business School. 

Volodymyr Zelensky swept to victory in Ukraine’s spring 2019 presidential election because he promised renewed reform and a real fight against corruption.

Today, the reality looks quite different.

Zelensky has fired a reformist prime minister and cabinet, replaced a prosecutor general who had begun weeding out bad eggs among prosecutors, and triggered the resignation of a National Bank of Ukraine head who had won plaudits for steering an independent course. Speculation runs rampant in Kyiv that oligarchs are reasserting control.

Ukrainians can be forgiven for thinking they have seen this movie before. They have. Ukraine’s past 30 years are filled with episodes of rising hopes turning to disappointment.  Zelensky should ask himself whether Ukraine and he personally can afford another one.

After winning the presidential election in July 1994, Leonid Kuchma appointed an economic team with strong reform credentials.  That fall, he laid out a program to accelerate the transition to a market economy, liberalize prices, cut the tax rate, and slash the government’s budget deficit.  In 1995, however, he reversed course. Lacking the critical mass of reforms that energized growth in Ukraine’s western neighbors, Ukraine’s economy weakly hobbled along.

Following his reelection in November 1999, Kuchma turned to Victor Yushchenko, a recognized reformer, to serve as prime minister.  I recall hosting a Christmas holiday party in Kyiv the evening that the Verkhovna Rada (parliament), Ukraine’s parliament, confirmed Yushchenko; my Ukrainian guests were practically giddy with optimism.  Unfortunately, those hopes turned to naught. By June 2000, the presidential administration and Yushchenko’s cabinet of ministers were at war with one another instead of working together for change. Less than a year later, the Rada voted Yushchenko out.

Yushchenko later had another turn, becoming president in January 2005 following the Orange Revolution.  Many hoped he would finally get Ukraine on track to becoming a modern European state. He appointed as his prime minister Yuliya Tymoshenko, the most effective minister in his cabinet in 2000. Unfortunately, the two never got in sync on a reform program, and new infighting broke out between the presidential administration and cabinet of ministers.  Things did not improve with new prime ministers or with Tymoshenko’s return to the job. Ukrainians became so dissatisfied with Yushchenko’s presidency that, in the January 2010 presidential election, he placed fifth, drawing a mere 5.45 percent of the vote.

In May 2014, in the aftermath of the Maidan Revolution, Petro Poroshenko won the presidential election on the first ballot, something that had not happened since 1991. He and his first prime minister, Arseniy Yatsenyuk, adopted early reforms. They cleaned up the government’s finances, introduced critical price reform at Naftogaz, put the banking sector on a solid footing, and secured a large International Monetary Fund program.  But the pace of reform slowed in early 2016 after Poroshenko fired Yatsenyuk and other pro-reform ministers. By the summer, visitors to Kyiv could hear Ukrainians voice frustration over the failure—more than two years after the Maidan—to take real steps to reduce corruption and curb the outsized political and economic influence of the oligarchs.

Poroshenko and his political team apparently missed that rising disaffection. Campaigning on an anti-corruption message, Zelensky routed Poroshenko in the April 2019 presidential run-off, winning 73.2 percent of the vote.

This latest episode of hope-to-disappointment with Zelensky comes at a difficult time for Ukraine.  Mired in a war with Russia, the Ukrainian president cannot bring peace to Donbas without Vladimir Putin’s help, but the Kremlin appears intent on continuing the conflict.

Reform and the struggle against corruption, however, are fights that Zelensky can control.  If he turns away from them, he risks losing support in the West, particularly in Europe, where calls for a return to business as usual with Moscow are growing in EU member states. Zelensky should worry that, after 30 years of failure to rein in corruption and the oligarchs, Europeans may well begin to wonder whether Ukraine’s political elite is incapable of change.  Few things would damage Ukraine more than if its friends in the West begin to question whether the country is worth the trouble—and simply give up.

If Zelensky does not worry about his country’s future, perhaps he should worry about his political prospects.  Just thirteen months after assuming office, his approval rating plummeted to 38 percent in June, a far cry from the 71 percent he enjoyed last September.  His apparent reversal on corruption and long-needed economic reforms undoubtedly contributed to that.

Zelensky can still turn things around and become the pro-reform, anti-corruption champion that he promised Ukrainian voters.  Kyiv is full of reformers who can help him. However, if he does not change course, he most likely will follow in the footsteps of Yushchenko and Poroshenko — one-term presidents turned out by an electorate badly disillusioned with their failed promises.

Originally for Kyiv Post

President Volodymyr Zelensky and his government in Ukraine face two fundamental challenges: ending the conflict with Russia and implementing domestic reform. Overcoming these challenges appeared hard enough at the start of 2020. COVID-19 is only making that more difficult.

Ukraine finds itself in the seventh year of a war imposed on it by the Kremlin. Russian troops seized Crimea in March 2014, and Russian and Russian proxy forces have sustained a conflict in the eastern Ukrainian region of Donbas, which has claimed some 13,000 lives.

While Moscow has sought to draw Ukraine back into Russia’s orbit, there is little reason to believe that it will succeed. Nothing has done more than Kremlin policy over the past six years to push Ukraine toward the West and away from Russia. Moscow thus has used the Donbas conflict to destabilise Kyiv—to make it more difficult for Ukraine to succeed and pursue its goal of integrating with Europe.

As COVID-19 hit both Ukraine and Russia in March, some (this author included) hoped it might change some of the calculations in the Kremlin. Faced with a pandemic, falling prices for its energy exports, and an economy tumbling into recession, might Moscow rethink its policy in Donbas? A settlement would ease Russia’s political isolation and lead to a lifting of Western sanctions, which some economists estimate have cut Russian gross domestic product by 1.0-1.5% per year over the past six years.

As of June, however, Moscow’s policy appears unchanged. Russian and Russian proxy forces continue low-intensity fighting in Donbas. The appointment of a new Kremlin point-person on Ukraine did not visibly affect policy, which is determined by Vladimir Putin.

German Chancellor Angela Merkel and French President Emmanuel Macron, both grappling with COVID-19 and its economic consequences, have not followed up on the December ‘Normandy format’ summit with Zelensky and Putin. As the pandemic consumes the leaders’ attention, they and others – such as senior U.S. officials – show little bandwidth or readiness to press to change the cost-benefit calculation in the Kremlin and persuade Moscow to take up a different course that might bring peace in Donbas.

Therefore there is little reason to expect a diplomatic breakthrough, a fact that Zelensky and his team increasingly seem to recognise. The Ukrainian president has raised the idea of a “Plan B” if no progress is made by the end of the year. One suggested variant for a “Plan B” would entail virtually walling off the occupied part of Donbas and pushing the entire economic and social burden on to Russia.

The sad reality is the likely near-term scenario for Donbas is continuing simmering conflict. (As for Crimea, while not a hot conflict, it will burden Ukrainian-Russian and West-Russian relations for years if not decades to come.)

COVID-19 has made matters more complex, both for Zelensky politically on the domestic front as well as sinking the economy into recession. Kyiv recognised the need for an IMF stand-by program and access to low-interest credits. The Rada (parliament) enacted legislation to lift the moratorium on the sale of agricultural land and safeguard nationalised banks from efforts by former owners to regain control—both key conditions for an IMF stand-by agreement worth up to $5 bn. On June 9, the IMF executive board approved the agreement.

While the long-needed reforms on agricultural land and banking were most welcome, it was not clear whether their adoption reflected a genuine commitment to dramatic reform or, as with past Ukrainian leaders, the need to secure IMF credits. Both Ukrainians and the country’s friends in the West are looking for signs Zelensky will carry out the transformational agenda that carried him to an electoral landslide in April 2019, particularly with respect to curbing corruption.

Zelensky attaches priority to ending the conflict and restoring Ukrainian sovereignty in Donbas. But Kyiv cannot do that by itself. Moscow gets a vote, and the vote thus far favours keeping the conflict simmering. Whether Ukraine’s Western partners can mobilise additional pressure to change the Kremlin’s cost-benefit calculation at this point appears doubtful, at least in the near term.

If stalemated by Russia on Donbas, Zelensky can still take action on anti-corruption measures and other reforms to position the Ukrainian economy for strong growth as the pandemic eases. These are measures that he and his government control. To do so would deliver on the promises made to Ukrainian voters last year and solidify his reform credentials with his Western partners. Moreover, a more robust economy would bolster Zelensky’s position vis-à-vis the Kremlin, which hopes that domestic weakness will force him to compromise key Ukrainian principles and settle the Donbas conflict on Moscow’s terms.

Originally for Europe's World

There were high hopes for Ukraine’s prospects to develop into a successful, democratic and economically prosperous state when the Soviet Union collapsed in 1991. Unfortunately, the country has experienced a series of false starts and missed opportunities over the past three decades. Volodymyr Zelenskyy became independent Ukraine’s sixth president on May 20, 2019, bringing renewed hopes for dramatic change that would enable Ukraine to realize its full potential, despite the conflict with Russia.

One year later, however, it is not clear whether his presidency will prove transformational or just another false start.

Ukraine had many attributes for success when it regained independence in 1991, including an educated work force, some of the best agricultural land on the planet, key industries, and proximity to a reforming Central Europe. It has failed to realize that success.

To be sure, democracy in the form of free, fair and competitive elections has taken hold. But reform has lagged in other areas. In 1994, President Leonid Kuchma launched a burst of economic reform, but it faded within a year. In 2000, Kuchma’s appointment of Viktor Yushchenko as prime minister raised reform expectations, but the presidential administration began undercutting Yushchenko in the summer, and he was out in 2001.

Following the 2004 Orange Revolution, Yushchenko became president and twice appointed Yuliya Tymoshenko as prime minister. She had proven the most effective minister in Yushchenko’s cabinet in 2000. However, the two never got on the same track, and Ukraine missed another opportunity.

After the 2013-14 Revolution of Dignity, President Petro Poroshenko posted a good reform record for the first two years of his presidency, but the pace fell off dramatically in 2016. His failure to deal with corruption and get the economy going resulted in his electoral rout in 2019.

Zelenskyy, a political novice, won the April 2019 run-off election with 73 percent of the vote. He took office promising the real fight against corruption that so many Ukrainians wanted. In July 2019, his political party, Servant of the People, won a majority of seats in the Ukrainian parliament. This was the first time any Ukrainian president’s party had commanded a clear majority without the need for coalition partners.

Parliament approved Zelenskyy’s choice for prime minister, Oleksiy Honcharuk, and his cabinet. Most regarded the cabinet as honest and pro-reform, albeit young and relatively inexperienced. The new cabinet set ambitious reform goals. The choice of Ruslan Ryaboshapka as prosecutor general, a position abused by previous presidents to advance political agendas, won plaudits from civil society and anti-corruption activists. Ryaboshapka immediately began cleaning house in the prosecutor general’s office.

In what was termed a “turbo regime,” parliament began churning out legislation last fall, including an end to immunity for parliamentary deputies and a law laying out a mechanism for presidential impeachment. Not all was great. Critics asserted that some laws were ill-prepared in the rush. Meanwhile, factions began to develop within the Servant of the People party that would soon undercut its majority.

A full year after Zelenskyy became president, the picture is mixed. On the plus side, Zelenskyy personally appears honest and has not profited from his office, something that cannot be said about his predecessors. The nature of his relationship with oligarch Ihor Kolomoiskiy, who owns the television channel that broadcast Zelenskyy’s comedy show, posed a major question mark last summer. Zelenskyy now seems to have answered that by breaking dramatically with Kolomoiskiy over newly-passed banking legislation.

On May 13, the Ukrainian parliament approved banking legislation which will block nationalized banks from being returned to former owners. Referred to as the “Anti-Kolomoiskiy Law,” it should frustrate the oligarch’s bid to regain control over (or compensation for) Privatbank, nationalized in 2016 after an audit revealed some $5.5 billion in missing monies. This vote came weeks after MPs passed an agricultural land reform law that will allow Ukrainians to buy farmland, ending a two decades-long moratorium on such sales.

While both laws constitute victories for Ukraine’s reform agenda, getting them through the country’s parliament took longer and proved more difficult than initially anticipated. In the end, defections within Zelenskyy’s own party meant that the Servant of the People faction could not deliver a majority by itself. Instead, the legislation needed supporting votes from two other parties.

The International Monetary Fund had made these two pieces of legislation conditions for a new program of low interest credits for Ukraine. With COVID19 sweeping into the country and playing havoc with the Ukrainian economy, Kyiv’s need for IMF credits seemed a key motivating factor for their passage. (One would like to think that Zelenskyy and his MPs would have backed these laws in any case; too many of Ukraine’s reforms over the past 25 years have come about because of the need for an IMF program and credits.)

Other actions in spring 2020 have raised questions about Zelenskyy’s commitment to reform. He fired Honcharuk and reshuffled much of the cabinet in early March, just six months after the initial appointment of the government. Ryaboshapka stepped down after a parliamentary vote of no confidence and was replaced by a Zelenskyy friend with no prosecutorial experience, raising concerns about the politicization of the prosecutor general’s office.

The new cabinet lacks the reform credentials of its predecessor, and members of the old guard have returned to positions of power. The cabinet has yet to make clear whether and how hard it will press for change.

Other reform efforts have languished. Security sector reform, which has long been called for by both Ukrainian reformers and the country’s friends in the West, has gone nowhere. The leadership of the Security Service of Ukraine appointed by Zelenskyy sees no reason for change. Little has been done with the judicial branch, where corrupt judges have a reputation for selling decisions.

Recently, developments have taken a potentially more ominous turn. As reported by Melinda Haring and Victor Tregubov, dismissed reformers have found themselves under investigation. Ryaboshapka, who reportedly lost favor with Zelenskyy’s team for not prosecuting Poroshenko, now faces criminal proceedings on unspecified charges. Maksym Nefyodov, a reformer who was fired as head of the Customs Service in April, faces a pretrial investigation. Serhiy Verlanov, dismissed as head of the Tax Service, had his apartment searched by security officials. And Artem Sytnyk, head of the National Anti-Corruption Bureau, is under attack from other government law enforcement agencies.

After just one year in office, it is too early to deliver any definitive judgments on the Zelenskyy presidency. He can still become a transformational figure, but he will have to do better. Zelenskyy should now ask himself: how many chances can Ukraine afford to pass up?

If Zelenskyy, like many of his predecessors, adopts reforms merely to meet IMF conditions, he will miss the opportunity to unleash the country’s economic potential. Investors who could help boost growth will continue to sit on the sidelines waiting for real change, as they have largely done for the past 25 years.

Investigations targeting dismissed reformers will not go down well in the West (reference former Ukrainian president Victor Yanukovych’s bogus trial and jailing of his political rival Yulia Tymoshenko). This, along with any perception of a lack of reform commitment, could help feed a sense of Ukraine fatigue in Europe, just as countries such as Hungary and Italy seek a return to business as usual with Moscow.

Zelenskyy should consider how the approval ratings of his predecessors Yushchenko and Poroshenko plummeted when they failed to meet the reform expectations that brought them to the presidency. He still has time to justify the high hopes generated in spring 2019. If, however, his election turns out to be just another false start, he will most likely become another one-term Ukrainian president.

Steven Pifer is a William Perry Research Fellow at Stanford’s Center for International Security and Cooperation and a former US ambassador to Ukraine.

Originally for Ukraine Alert