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Petro Poroshenko and the chocolate factory: Ukraine’s golden ticket?

In 2014, it appeared Ukraine’s population had found the golden ticket to Willy Wonka’s Chocolate Factory – only with Willy Wonka being the newly elected President Petro Poroshenko and the Chocolate Factory being not only his Roshen brand, but Ukraine itself.

The window of opportunity was wide open, and many reforms were put on the table. The drive of the government, with the support and advocacy from civil society, brought some incredible results. Ukraine did not declare default, contrary to everyone’s expectations, in February 2015, actually achieving a massive macroeconomic stabilisation “close to a miracle”, making the European Commission’s bailout plan unnecessary.

Some noticeable steps have been taken in various reform fields from the military to the banking system, to public administration, to decentralisation. Corruption, one of the country’s biggest problems, has been tackled by establishing anti-corruption institutions and e-declaration systems, making Ukraine in a way “both the most corrupt and at the same time the most transparent country in Europe”.[1]

With encouragement and conditionalities from the EU and IMF, Ukraine was on the steep, but right path to success. Privatisation, judicial reform, pension and healthcare, seemed to be heading in the right direction particularly after the initiation of the visa-free regime with the EU back in June coupled with the full implementation of the Association Agreement in September.

The reform process appears to be slowing down.

However, considering the frailty of the coalitions in the Verkhovna Rada, and the approaching parliamentary and presidential elections, the reform process appears to be slowing down.

Corruption remains the most deeply rooted problem the country faces, and despite the establishment of an unprecedented open competition to fill vacancies on the Supreme Court, most Ukrainians feel that their country is not heading in the right direction.

Anti-government protests demanding Poroshenko’s resignation have begun in Kyiv in October. The protesters have been fuelled by a former ally of the President, Mikhail Saakashvili, who returned to Ukraine after accusing Poroshenko of obstructing reforms and resigning from his position of governor of Odessa earlier this year. Saakashvili advocates for electoral reforms, the creation of anti-corruption courts, and the abolition of parliamentary immunity.

The Chocolate King is not faring well with numbers – his rate of approval, according to the latest poll by the Razumkov Center, is at 24, 8%. The truth is, people’s perception that the reform process is stalling is translating into a political risk. While Ukraine’s active civil society, one of the main advocates for change in the country, insists on more radical reforms, the majority of the population has difficulty dealing with the pace of reforms as it is.

The decision of the government to cut gas subsidies for homes and enterprises that had been in place since Soviet times led to a one-third drop in energy consumption and zero dependency on Russia and also led to increasing citizens’ dissatisfaction when people saw their energy bills double.

The government pursues reforms that activists and Western donors push for, but, as the short-term costs overshadow the long-term benefits among the public opinion, those actions erode support for a reformist government, even if they are in the long term interest of Ukraine itself.

Political opponents exploit the dissatisfaction to attack the government by calling for early elections, but a sudden change in Ukrainian leadership would only stall the progress made so far.

Even with all its weakness and slow pace, the post-Majdan government is the most reform-oriented that Ukraine has ever had. 

Moreover, one should not forget, that contrary to the Western habit of referring to the situation in Donbass as a “frozen conflict”, Ukraine is fighting a real war on the eastern border with Russia. A war that so far resulted in 10,090 deaths and 1.7 million internally displaced people.

Even though a “win the war by reform” approach is largely acceptable and cheered by the EU, “It’s very difficult to do everything simultaneously” stated Ukraine’s Vice Prime Minister for European Integration, Ivanna Klympush, in her recent visit to Brussels.

Even with all its weakness and slow pace, the post-Majdan government is the most reform-oriented that Ukraine has ever had. The range and number of the reforms implemented is unprecedented in the history of the country. If positive changes are not acknowledged, the loud criticism by populists will devalue all efforts and bring the state of “Ukraine fatigue” to the EU and its Member States.

This is particularly alarming in the wake of the 5th Eastern Partnership Summit taking place on 24 November in Brussels. Even though the Summit is meant to be forward-looking in bringing tangible and positive results in the four priority areas established at the Riga Summit in 2015 – stronger economy, governance, connectivity and society – there is very little doubt that the final declaration of the Brussels Summit will not explicitly include a membership perspective for Ukraine, as the reference to the EU membership aspiration of the country is opposed by some Member States.

In order to avoid an “EU fatigue” in Eastern Europe, the Union, however, has to demonstrate its commitment towards its neighbours and rethink its so-far limited offer. The most obvious way to ease tensions in Ukraine would be to increase political, economic, and material support for Kyiv. A “Marshall Plan for Ukraine” proposed by Lithuania with the aim of boosting the economic recovery with the infusion of funds linked to the revitalisation of structural reforms is a step in the right direction.

On the other hand, to keep his “Chocolate Factory” on the path to European integration- Petro Poroshenko has to do his homework. Internal political struggles and pre-election tensions must not overshadow the reform process. The Presidential administration and the government have to renew their commitment to reforms, Ukraine’s golden ticket to the EU, to demonstrate to their citizens to deserve an opportunity for another mandate in 2019.

Photo by Thomas Hafeneth on Unsplash
 

[1] Anders Åslund, Ukraine: What Went Wrong and How to Fix It, Peterson Institute for International Economics, 2015.