Biden Is Right to Be Scared of Ukraine
U.S. Vice President Joe Biden's visit to Kiev today was timed to coincide with the first anniversary of the Maidan protests that eventually toppled Ukraine's corrupt regime. Still, Biden decided against attending a ceremony commemorating victims of the unrest, the so-called "Heavenly Hundred." His Secret Service escort said it would be too risky. That's a metaphor for what's going on in Ukraine today: The country is in chaos a year after its people decided to win freedom from oppressive corruption and stifling Russian influence.
Ukrainian President Petro Poroshenko attended the ceremony anyway, only to be heckled by the victims' relatives. He had promised to declare the dead protesters national heroes and and pay pensions to their surviving relatives, but failed to deliver. An investigation of the death of more than 100 people in late February went nowhere, and no one was punished. Former President Viktor Yanukovych, along with his closest aides and some odious businessmen who got rich during his rule, escaped. Most went to Russia, and little of their plundered wealth has been found, let alone recovered.
For Ukrainians, the Maidan anniversary is a day of both sadness and pride. They argue hotly about whether life has gotten better. In an interesting Facebook thread, two prominent Kiev journalists, Darina Marchak and Oksana Mitnitska, disagree on the general mood of Ukrainian business: Marchak maintains that legitimate entrepreneurs are relieved, encouraged and ready to capitalize on the high tide of patriotism; Mitnitska sees hopelessness, closing stores and restaurants, a rise in emigration.
Both are right to some degree. Despite a 46 percent currency devaluation this year, the loss of Crimea, military defeats in the country's industrial east, about thousands of violent deaths, the never-ending wrangling of clueless politicians and the continuing depredations of a hidebound bureaucracy, I have yet to meet a Ukrainian who misses the Yanukovych regime, though they undoubtedly exist somewhere. It's hard to recall a single redeeming feature of that three-year period of boredom and despair. "If the question is whether you want to live minus a few limbs or die, the answer is obvious," the pessimist Mitnitska wrote.
Still, Kiev's main square, where the protests unfolded last winter, is not safe enough for Biden. Poroshenko had to promise financial aid to the grieving families before he beat a retreat. Whether Ukraine itself will get funding from its Western donors depends on whether it's going to get serious about economic reforms, Biden told the Ukrainian president, stressing the need for the country to form a new government "within days, not weeks."
The four pro-Western parties that got into the Ukrainian parliament in the Oct. 26 election did their best to please Biden: As he landed in Kiev, they signed off on a lengthy coalition agreement, a necessary step for forming a cabinet. The reform program it outlines, however, betrays a lack of understanding of what is required to fix Ukraine's moribund economy. The VoxUkraine expert group, which includes some of the country's top economists, said in a recent analysis of the document that only the national security, law enforcement and energy parts were well thought-out and market-oriented, while the rest of the program was either empty rhetoric or evidence of the drafters' Soviet training. The agreement, for example, stops short of calling for a free land market and has the government deciding which sectors of the economy to develop.
"On the whole, the ideology of the draft coalition agreement is rooted in the command economy and far removed from free-market principles, which partially explains the insignificance of progress in Ukrainian reforms," the economists wrote.
An International Monetary Fund mission has been working in Kiev since Nov. 11, assessing the country's progress to decide whether to release the next tranche of the $17 billion bailout agreed earlier this year. It will end its work on Nov. 25, and it's unclear whether the new government will be in place by then. Still, that is not the biggest uncertainty facing both Kiev and its Western allies.
The fighting in the east has recently flared up, and if the Russian-backed rebels or even Russian troops go on the offensive, the Ukrainian government will again have a pretext for concentrating on security rather than on building a new, European country in the areas where no fighting is going on. The biggest challenge for Kiev now is to stay focused on that, not on holding onto bits of the eastern territories.
One assumes Poroshenko and Prime Minister Arseniy Yatsenyuk must have talked to Biden about U.S. help in arming Ukraine against Russian interference -- something that my colleague Marc Champion eloquently explained is a bad idea. They may even have made some progress: After talks with Biden, Foreign Minister Pavlo Klimkin talked of "lots of agreements that it's not accepted practice to discuss at press conferences." That kind of aid, however, can only give false hopes to Ukrainian politicians and their voters. Ukraine will never be fit to fight the Russian military with any amount of Western support short of NATO boots on the ground.
The West must concentrate its efforts on rebuilding the peaceful part of Ukraine -- still a country of 40 million, whose vast territory, even without Crimea and the two easternmost regions, makes it the second biggest in Europe after France. The Ukrainian government needs a lot of external expertise and money for that. If Ukraine ever hopes to recover the lost areas, it must first become economically viable and a good country to live in. Concentrating on war will not make Ukrainians regret what they did last winter -- but it's not going to make them happier about it, either, or make the squares safer for visiting politicians.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Leonid Bershidsky at firstname.lastname@example.org
To contact the editor on this story:
Tobin Harshaw at email@example.com