A Report from the Ninth Europe-Ukraine Economic Forum, Lodz, Poland, 24-26 January, 2016. By Marie Cross, Senior Fellow. Institute for International and European Affairs (IIEA)
On behalf of the IIEA, I attended a session of the Europe – Ukraine Economic Forum in Lodz, Poland on 24-26 January, organised by the Polish Foundation for Eastern Studies. It provided a useful opportunity hear the views of senior representatives from Ukraine and Russia and from the other states in Central and Eastern Europe, who were among the 350 or so attendees. There was also a significant representation from the EU, US and Canada. The sessions were organised along four panel discussions over 2 days. I chaired a discussion panel dealing with “Ukraine’s integration with the EU-a challenge for Europe, a homework for Ukraine”.
Russia was represented by both Putin supporters and critics. Arguments were put that the Minsk 11 agreement will be very difficult to implement. President Putin is reported as seeing no carrot in it. There is a huge urgency in the need to implement reforms in Ukraine because only in doing so will President Putin be deprived of his strategy of attracting support from disaffected Ukrainians. It was argued that Putin has a different vision of reality, which does not coincide with the Western view. Dialogue is difficult because there is no common understanding.
Other views were expressed that the West had not understood the difficulties in transferring from a totalitarian system to democracy. Russia was convinced that the neighbourhood policy pursued by the EU would destroy the relationship within the group of former Soviet Republics. Another more balanced model could have been created, it was argued, such as that of the Franco – German model, which might have created a Russia – Ukraine dynamic.
On the Ukrainian side, senior officials from President Poroshenko’s office provided impressive lists of reforms underway; the decentralisation of powers to local authorities, 1400 new regulations adopted, 471 state owned enterprises privatised, 6000 more police officers, 65 banks closed- and many more. They are working hard to implement the reforms necessary for the visa liberalisation agreement with the EU, envisaged for Spring 2016.
Other speakers at a number of sessions, notably EU and western diplomats based in Kiev, were strongly critical of the pace of reforms, citing the main problems still of the old Soviet-style administration and the need for reform of the civil service. The latter was criticised on a number of occasions for its lack of professionalism and effectiveness, referred to as being a greater problem than corruption. Ukrainian officials, in response, referred to the new Civil Service Act about to be passed. Many speakers referred to the need to bring people along in implementing reforms. A number of EU representatives also referred to the powers of the oligarchs, with one alleging that 70% of the Ukrainian economy is controlled by four oligarchs. No reform is possible in these circumstances, it was alleged, and what has been stolen should be nationalised.
In the security and defence area a number of presentations made the argument that the Maidan crisis had saved us from being taken unawares. Europe needs to wake up to its own security. Many people and opinion leaders did not see what was happening before the events in Crimea. It should have come as no surprise as Russia, with its close control over internal affairs and the intensive military reform programme in 2008/2009, was testing NATO. The Yanukovitch presidency was a classic attempt to annex Ukraine without using military means. Only the emergence of Ukraine as a successful state, politically and economically, could change the situation with Russia. The most important issue is that of leadership in the West- US, Germany and Poland.
Another strand of policy thought emerged from some European participants, namely that the conflict with Russia was something that we did not want. Russia will always be there and we should work towards better relations. Russia has to be respected and we should find a way to deal peacefully with the country. A western ambassador based in Kiev praised the “huge achievement “of the Ukrainian military in opposing the Russians in the East with poor equipment and military resources neglected for decades. Ukraine is getting better at communications but he expressed concern at the sentiment against dialogue with the Russians. Europe should press the Ukrainians to get a dialogue going for after the conflict, otherwise the future will be very difficult.
A number of speakers, particularly from Central and Eastern Europe, also expressed anxiety about the EU itself, particularly in light of the huge challenges it faces at present. These issues were not considered in any depth, although on the refugee crisis, the Polish foreign minister strongly criticised those who denounced Poland for not taking in refugees, referring to the number of Ukrainians who had come to Poland. A number of speakers said that the most important threat to the EU was the rise of nationalism. On a final note, I did hear the view, supposedly held by many in Eastern Europe, that the EU is the political wing of NATO.
After hearing the many presentations, one was left with the impression that, while there is a cadre of reformers at political level in Ukraine – backed up by committed officials – who are pushing the necessary changes, the old style politics and interests are proving almost impenetrable barriers to real change. They have not yet broken the grip of those who control the levers of economic power, with their corresponding sway over the Ukrainian political system.