KIEV, Ukraine, November 16, 2015 – As the situation in eastern Ukraine stabilizes with a weapons pullback by all parties underway, albeit among sporadic ceasefire violations, both Ukrainians and the international community have turned their attention back to Kiev and the dismal state of the reform process. Without the war in the east to distract attention from Ukraine’s dwindling economy and lack of progress on the corruption front, President Poroshenko now finds himself staring at a country that almost two years after the Maidan has failed to come closer to a functioning state with European ambitions.
According to the World Bank, Ukraine’s GDP is set to shrink by 12% this year, as the country continues to suffer from “an unfavorable economic environment.” Despite promises to improve the business climate, taxes are widely evaded, the shadow economy continues to grow, and red tape for businesses largely remains in place. Balazs Jarabik, an analyst at the Carnegie Endowment, claims that reducing corruption is a key condition for attracting foreign investment to the country and while Ukraine’s reforms “have broken down old hierarchies of bribery […] corruption is still rampant across society.” Similarly, Kiev is yet to appoint a special prosecutor to battle with graft, despite it being the EU’s key condition in securing a visa free regime.
Additionally, the country’s justice system is equally in tatters. After a visit to Ukraine, Christof Heyns, the United Nations special rapporteur on extrajudicial, summary or arbitrary executions, stated that the country lives in an “accountability vacuum.”
Ukraine’s delay in appointing a new anti-corruption chief is largely due to the government’s inability to establish an independent commission to take charge of the appointment procedure. Reformers are claiming that the General Prosecutor’s office is attempting to undermine corruption efforts and maintain the dysfunctional system by appointing four of its own people to the commission. In particular, the EU expressed its concern over Poroshenko’s appointment of Prosecutor General Viktor Shokin, a long time associate of the President who is accused of thwarting anti corruption efforts. Similarly, Norbert Röttgen, chairman of the German parliament’s cross-party foreign affairs committee, stated that the judiciary continued to suffer from structural issues and underlined that “no judges, let alone the Attorney General, had been replaced since the new government came to power”
Another blow was recently dealt to Ukraine’s justice system when the General Court of the EU announced it would be annulling sanctions against Andriy Portnov, advisor to former President Viktor Yanukovich, who was subject to an asset freeze in 2014. The Court stated that the Public Prosecutor’s Office of Ukraine, which had advised the EU to sanction Portnov based on a preliminary investigation, had failed to provide any evidence concerning the charges against him.
The defeat raised further questions about the EU sanctions regime and whether Ukrainian prosecutors are transparent enough and can be relied upon to provide verifiable evidence. Oleksandr Klymenko, the former Ukrainian Minister for Tax and Revenues, has also applied appealed to the EU courts after being included on the sanctions list following accusations of embezzlement. In a video, Klymenko has expressed his frustration after having “exhausted legal remedies”, and argues that there is “no hope for objectivity from Ukrainian law enforcement”. But if recent events are anything to go by, the EU’s sanctions regime will likely come under fire if Ukraine’s Prosecutor General continuously fails to provide adequate evidence of those accused, a development which is proving to be an embarrassment for the Union.
While both the EU and the US continue to support Ukraine’s development, the EU’s High Representative for Foreign Affairs and Security Policy, Federica Mogherini, recently stated that anti-corruption reform is vital in securing the confidence of the nation’s international partners, a clear indication that current efforts have not been enough to instill trust. Businesses have also expressed dissatisfaction, with many companies concerned that the will to reform may be dying down in Ukraine.
It has become clear over time that Ukraine remains plagued by Soviet style thinking, unable to rid itself of past mores and replace those sinecures that stall much needed reforms. But without undertaking these necessary changes and showing to its partners that the country and its government are serious about a European Ukraine, both the EU and US may soon find themselves wary of this so-called new generation of reformers. With no way out and no hope of instilling change on the horizon, the EU could find itself with a failing state on its border, a potentially destabilizing factor for the entire post-Soviet bloc.