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Posted on Sustainabilitank.info on January 29th, 2015
by Pincas Jawetz (pj@sustainabilitank.info)

From the Offices of George Soros:

Dear Friends and Colleagues:

Yesterday, the New York Times carried an op-ed by George Soros and Bernard-Henri Lévy on the remarkable experiment underway in Ukraine. They write, “Maidan’s supporters have moved from opposition to nation building” — launching radical reforms and taking on entrenched state bureaucracy and the business oligarchy. If these reforms are to succeed, the new Ukraine first must survive its ongoing conflict with Russia. To do so, it urgently needs financial assistance from the West.

In today’s New York Times, columnist Thomas Friedman quoted George’s view that, “there is a new Ukraine that is determined to be different from the old Ukraine. … What makes it unique is that it is not only willing to fight but engage in executing a set of radical reforms. It is up against the old Ukraine that has not disappeared … and up against a very determined design by President Putin to destabilize it and destroy it. But it is determined to assert the independence and European orientation of the new Ukraine.”

All best,

Michael Vachon

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Save the New Ukraine
New York Times
George Soros and Bernard-Henri Lévy

A NEW Ukraine was born a year ago in the pro-European protests that helped to drive President Viktor F. Yanukovych from power. And today, the spirit that inspired hundreds of thousands to gather in the Maidan, Kiev’s Independence Square, is stronger than ever, even as it is under direct military assault from Russian forces supporting separatists in eastern Ukraine.

The new Ukraine seeks to become the opposite of the old Ukraine, which was demoralized and riddled with corruption. The transformation has been a rare experiment in participatory democracy; a noble adventure of a people who have rallied to open their nation to modernity, democracy and Europe. And this is just the beginning.

This experiment is remarkable for finding expression not only in defending Ukraine’s territorial integrity from the separatists, but also in constructive work. Maidan’s supporters have moved from opposition to nation building.

Many of those in government and Parliament are volunteers who have given up well-paying jobs to serve their country. Natalie Jaresko, a former investment banker, now works for a few hundred dollars a month as the new finance minister. Volunteers are helping Ukraine’s one million internally displaced people as well as working as advisers to ministers and in local government.

The new Ukraine, however, faces a potent challenge from the old Ukraine. The old Ukraine is solidly entrenched in a state bureaucracy that has worked hand in hand with a business oligarchy. And the reformers are also up against the manifest hostility of Russia’s president, Vladimir V. Putin, who wants at all costs to destabilize Ukraine.

One drawback is that the new Ukraine is a well-kept secret, not just from the rest of the world but also from the Ukrainian public. Radical reforms have been hatched but not yet implemented.

It is instructive to compare Ukraine today with Georgia in 2004. When he became president that year, Mikheil Saakashvili immediately replaced the hated traffic police and removed the roadblocks used to extort bribes from drivers. The public recognized straight away that things had changed for the better.

Unfortunately, Ukraine has not yet found a similar demonstration project. Kiev’s police force is to be restructured, but if you need a driver’s license, you must still pay the same bribe as before.

Mr. Saakashvili was a revolutionary leader who first stamped out corruption but eventually turned it into a state monopoly. By contrast, Ukraine is a participatory democracy that does not rely on a single leader but on checks and balances. Democracies move slowly, but that may prove an advantage in the long run.

The big question is, will there be a long run? Although Russia is in a deepening financial crisis, Mr. Putin appears to have decided that he can destroy the new Ukraine before it can fully establish itself and before an economic downturn destroys his own popularity.

The Russian president is stepping up the military and financial pressure on Ukraine. Over the weekend, the city of Mariupol came under attack from forces that NATO said were backed by Russian troops, undermining the pretense that the separatists are acting on their own.

Ukraine will defend itself militarily, but it urgently needs financial assistance. The immediate need is for $15 billion. But to ensure Ukraine’s survival and encourage private investment, Western powers need to make a political commitment to provide additional sums, depending on the extent of the Russian assault and the success of Ukraine’s reforms.

The reformers, who want to avoid the leakages that were characteristic of the old Ukraine, have expressed their wish to be held accountable for all expenditures. They are passing extensive legislation but also want the International Monetary Fund to go on exercising oversight.

Unfortunately, just as democracies are slow to move, an association of democracies like the European Union is even slower. Mr. Putin is exploiting this.

It is not only the future of Ukraine that’s at stake, but that of the European Union itself. The loss of Ukraine would be an enormous blow; it would empower a Russian alternative to the European Union based on the rule of force rather than the rule of law. But if Europe delivered the financial assistance that Ukraine needs, Mr. Putin would eventually be forced to abandon his aggression. At the moment, he can argue that Russia’s economic troubles are caused by Western hostility, and the Russian public finds his argument convincing.

If, however, Europe is generous with its financial assistance, a stable and prosperous Ukraine will provide an example that makes clear that the blame for Russia’s financial troubles lies with Mr. Putin. The Russian public might then force him to emulate the new Ukraine. Europe’s reward would be a new Russia that has turned from a potent strategic threat into a potential strategic partner. Those are the stakes.

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