Categories
Uncategorized

WHAT THE WEST GOT WRONG: REFLECTIONS OF AMBASSADOR ROMAN WASCHUK

This guest post by Roman Waschuk, Former Ambassador of Canada to Ukraine (2014-2019) and Serbia, Montenegro, North Macedonia (2011-2014), comprises a version of the remarks made during HURI’s Opening Lecture, “What the West Got Wrong: Re-examining Western Support for Reforms in Ukraine, 2014-2019,” which streamed on YouTube on September 16, 2020. The recording remains available for viewing on our channel. Ukraine, a country that has experienced three revolutions in three decades (Euromaidan in 2013-14, Orange Revolution in 2004, student revolt in 1990), is clearly still not…

Ambassador Roman Waschuk

Jan 29, 2021

Harvard University

This guest post by Roman Waschuk, Former Ambassador of Canada to Ukraine (2014-2019) and Serbia, Montenegro, North Macedonia (2011-2014), comprises a version of the remarks made during HURI’s Opening Lecture, “What the West Got Wrong: Re-examining Western Support for Reforms in Ukraine, 2014-2019,” which streamed on YouTube on September 16, 2020. The recording remains available for viewing on our channel.

 

Ukraine, a country that has experienced three revolutions in three decades (Euromaidan in 2013-14, Orange Revolution in 2004, student revolt in 1990), is clearly still not at peace with itself.

 

Upon my arrival in Kyiv as Ambassador in October 2014, my Spanish counterpart suggested a driver for this turmoil: Ukraine has one of the world’s highest rates of tertiary education (83% participation in 2014) combined with low official salaries and miserable Corruption Perception Index scores (142nd of 198 countries in 2014, scoring 26/100). In short: overeducated, underpaid, and profoundly mistrustful of the state. In the hopeful atmosphere of the time, my colleague saw this as the impetus for an enlightened plurality to fix the ills of the state and distribute the benefits fairly. But these data points also held the potential for a highly skilled preservation of vested interests that was rhetorically derided but practically accepted within an omnipresent coping culture.

 

For the positive side of the reform story, I recommend to readers the study Reforms in Ukraine After Revolution of Dignity: What Was Done, Why Not More and What To Do Next, edited by former Slovak Finance Minister Ivan Miklos and the Ukrainian economist and erstwhile Deputy Economics Minister Pavlo Kukhta. 

 

While my overview of what went wrong is essentially the evil twin to their more comprehensive study, I’d nonetheless like to acknowledge some of their key findings as a baseline: 

 

Ukraine went through a bruising post-revolutionary/wartime recession in 2014-15, largely caused by the unwinding of Yanukovych-era imbalances; this was followed by four years of unbroken if mostly unspectacular economic growth which meant that by 2019, Ukraine’s per capita GDP at constant price purchasing power parity had recovered to and slightly exceeded the 2014 peak before the shock. Macroeconomic stability was secured, with inflation wrestled down to low single digits, unseen since independence. Oligarchic control of the economy was narrowed from a third to a fifth or less, as non-crony sectors of the economy grew faster post-crisis than their crony counterparts. Three

of the biggest corruption sinkholes were plugged: natural gas trading via Naftogaz corporate reform, bad banks via the National Bank’s liquidation of bogus pocket banks, and government procurement by the introduction of the world-beating ProZorro online bidding system.

 

The international community was broadly and sometimes deeply involved in the shaping of policy:

•at the macro level through IFI (international financial institutions) conditionality (especially International Monetary Fund programs, which became baroquely detailed in their requirements) and the provisions of the EU Association Agreement and the DCFTA (Deep and Comprehensive Free Trade Areas), which were provisionally applied in November 2014.

•at the micro level through bodies such as Miklos’ SAGSUR (Strategic Advisory Group in Support of Ukrainian Reform—funded initially by George Soros and then picked up by the EU and EBRD (European Bank for Reconstruction and Development)—and a plethora of national advisory schemes. 

•through a sort of diplomatic Directoire—the G7 Ambassadors’ Reform Support Group—announced at the 2015 Schloss Elmau Summit. (I have to admit to initial skepticism about the concept, fearing that it would just be a recurring talkfest with colleagues. But effective cajoling by the curmudgeonly yet persuasive German Ambassador at the time, Christof Weil, was followed by an explanation I heard in Brussels from a senior official connected into the Kanzleramt in Berlin: this was to be a lower-key version of the Greek bailout Troika, keeping the Ukrainian authorities’ feet to the fire of fiscal prudence and governance progress. By the time I came to chair the group in 2018, we had become a peculiar amalgam of ginger group, sounding board, advisory panel, and collective Twitter oracle.)

 

We were the local incarnation of the top slice of the oft-evoked Ukrainian reform sandwich: local civil society mobilizing from below, foreign donors pushing from above, with the Ukrainian authorities and vested interests pressed in the middle to do the right thing. The problem was that, by mid-2019, this sandwich had gone stale and was turned down by nearly 3/4 of Ukrainian voters. This year, in 2020, we are seeing the revenge of the bologna, with vested interests bringing back pre-2014 players, and calls for emancipation from both “external management” and meddlesome civil society activists.

 

The fact is, we foreigners were far from being as influential as we ourselves—and those counting on our support—might have wished, or as our detractors feared. Ukrainians themselves are the authors of most of their own successes and failures. With that final caveat, let’s run through some of the mistakes that people in my line of work made in trying to help.

 

What the West Got Wrong: 10 Mistakes

 

Buying into maximalism

 

Though I myself did not live through the Euromaidan and Revolution, I followed the ebb and flow vicariously from Belgrade. During a week-long temporary duty assignment in March, and then upon permanent arrival in Kyiv in October, I could still see and feel the imprint of solidarity, heroism, and the resulting exalted hopes for the future. When I would ask colleagues who had been through Maidan whether we might not be encouraging unrealistically high expectations for transformation, they would respond: “But the demonstrators sacrificed so much, including their lives, and deserve no less; they promised it to themselves and to us—and we will hold them to it.” To be sure, these were expectations driven first and foremost by Ukrainian activists—but my colleagues and I signed up for the most far-reaching version. And when reality inevitably failed to live up to these high standards, the activists whom we subsidized were first to tag every failure or even compromise as “zrada” (betrayal), spreading debilitating despair where perhaps simple disappointment would have been more appropriate.

 

Adopting the “two wars” fallacy 

 

“Ukraine is fighting two wars, one against Russia and the other against corruption; one is just as important as the other.” No. Defense of the state against external aggression is primordial. Failing at that task makes any discussion of internal governance improvements moot. I’ve spent too much time listening to grandparents discussing years spent in prisoner of war and displaced persons camps, and hearing of relatives deported to Siberia, to believe that imperfect public tender arrangements are the same as tanks crashing through your neighborhood. That said, there is no doubt that the internal integrity and coherence of a state affects its defense and development capabilities, and that statements of equivalence were intended to validate and leverage the positions of reformers against vested interests. But the unintended consequence was to make Ukraine’s defense and possibly its sovereignty—or at least Western support for it—contingent on a governance purity test in a way that no one would apply to, say, Morocco or Tuvalu. 

 

Over-emphasizing anti-corruption

 

There was a general over-emphasis on anti-corruption measures, rather than first and foremost fostering rule of law. Again, the imbalance was in response to expectations – on the part of activists as well as much of the Ukrainian public –  that all corrupt and generally “bad” people in the country should be brought to account, relitigating the entire period since independence, if necessary. Unfortunately, while a whole international cottage industry has sprung up providing legal frameworks and independent anti-corruption agency designs, these entities rarely work as planned, especially in environments where corruption is not a discrete sectoral problem (e.g. narcotics trafficking and police integrity in New South Wales, cleaned up by a special commission), but a dominant parallel informal operating system for much of governance (as in Ukraine during the Yanukovych period). Far from being even-handedly technocratic, as security sector reform project managers would like to believe, anti-corruption is inherently political and—if pursued truly vigorously—threatening to almost the entire political class. In a past bureaucratic life, I assessed and bankrolled an

ambitious effort in our own hemisphere: CICIG (International Commission Against Impunity in Guatemala), a hybrid UN/local prosecution agency in Guatemala. Headed by Spanish and Colombian prosecutors, CICIG launched cases across the political spectrum, including against the entourage of Jimmy Morales, a comedian with no previous experience who had been elected president in 2015 on an anti-corruption platform, but quickly found common ground with vested interests. And so, last September, after ten years of making Guatemalan elites uncomfortable, the US/EU/Canadian-financed CICIG was expelled, amid a consensus endorsed by the outgoing President Morales and both main candidates vying to replace him. The travails of Artem Sytnyk and NABU (National Anti-Corruption Bureau) are looking more and more like a Ukrainian remake of this Central American telenovela. 

 

Broader rule-of-law reforms don’t get hearts racing the way anti-corruption accountability or vengeance does. Indeed, they are now generally written off as yet another eyeroll-inducing set of failures—both of will and of implementation. I’d contend that there were notable successes, including the new patrol police, which continues to have a distinctly positive ethos, and the remarkable yet unsung extension of free legal aid to 8 million low-income and vulnerable Ukrainians through the opening of 500 points of service offering representation in both civil and criminal cases. 

 

But I think it is particularly instructive to look at the new Supreme Court and its formation amid the interplay of European norm-setters, Ukrainian vested interests, and civil society activists as an example of how the quest for perfection can obscure—and risk reversing—the merely good or improved. To recap: the four-level court system designed and staffed by Yanukovych-era legal affairs chief Andriy Portnov was reduced to three levels; the old Supreme Court was dissolved (and immediately appealed its dissolution as unconstitutional); the Council of Europe insisted that judges themselves and the legal community play a preponderant role in renewal, in accordance with the principle of an independent judiciary; a US/EU/Canada-subsidized hyper-transparent selection and training process was run; in a world-first, civil society was given an advisory role in assessing every candidate on integrity issues. The outcomes: a court with about 80% straight arrow judges, headed by a female Chief Justice, Valentyna Danishevska, with a long track record in Western-supported judicial reform, and a respectable record of court rulings in its first two years of operation, including controversial cases such as the nationalization of Privatbank, owned by oligarch Ihor Kolomoisky.

 

But that’s not what anyone inside or outside Ukraine has heard. For many of the hundreds of Ukrainian judges, lawyers, and legal scholars who didn’t make it through the open-selection process, their rejection was proof of a fixed and illegitimate process which they’d like to reopen. For civil society activists whose concerns about 20% of the judges were overruled by the Higher Qualification Commission of Judges (on the formal grounds that allegations would not stand up to administrative court scrutiny), these decisions amounted to a humiliating rejection of their contribution to the process, which they then also denounced as illegitimate. The upshot: I found myself sitting in a Rada meeting room in October 2019 along with representatives of the EU and Germany

questioning the assumptions behind a draft bill to slash the new Supreme Court in half and reselect its membership. Sitting across from us on the government side were several newly elected politicians who had been unsuccessful judicial applicants (including current Prosecutor General Iryna Venediktova, then still Chair of the Rada Legal Affairs Committee). Sitting to the left of us at the end of the table were anti-corruption and judicial reform activists eager for vindication of their concerns. At the end of the meeting, I warned some of the activists that they were being used as pawns in a bigger game of rolling the courts back to 2013. Nearly a year later, I now see some of those organizations and activists bemoaning broken promises and the return of the old guard. Owing to arcane Constitutional Court decisions, the new Supreme Court has so far survived—though we know from wiretaps that it is hated with a vengeance by the mid-level old boy network of judges which President Poroshenko, with his choice of top-down reform and interest group trade-offs, never decisively tackled. Neither, alas, has his successor.

 

Misperceiving the marginalized

 

With attention focused on the armed conflict in and displacement from Ukraine’s south and east, the priorities of Kyiv-centric reformers, and our own international organization and national mandates to focus on women, Roma, LGBT, the disabled—all important and worthy matters—we Westerners largely overlooked the unemployed and socio-economically déclassés in “Middle/Fly-Over/Train-Thru Ukraine.” Whereas our efforts often targeted groups numbering in the hundreds and thousands, the economically disenfranchised numbered in the millions. Ultimately, the misperceived middle voted in two ways—first with their feet, in seeking jobs abroad (at considerable and disruptive short-term social cost), and then at the ballot box, voting out the people who had been taking our advice and implementing IMF conditionalities. 

 

I recall getting a debrief in the summer of 2018 from a group of Canadian women who had done a Kyiv-to-the-Carpathians walkathon, going village-to-village through Right-Bank Ukraine. Despite its geographical centrality, the heartland had, economically, become the periphery. The sense of abandonment and anger they described in small towns and villages surrounded by and disconnected from industrial-scale export-oriented megafarms was a portent of the electoral backlash to come.

 

Leaning on “stick figure messaging”

 

Infographics without heart, so to speak, convey data and figures but lack a true human understanding or connection. Reflecting on this year’s US elections, Time Magazine’s national correspondent Charlotte Alter observed that the politically articulate and obsessive (and, in our case, that would include ambassadors and project managers) think voter logic is like: A therefore B, therefore C, and therefore D. She argued that, in reality, ordinary voter logic is more like: A therefore Purple, therefore Banana, and therefore 18. 

 

An example from another context: In Serbia, the EU would spend hundreds of millions of Euros on worthy under-the-hood projects such as redoing storm sewers; Russia would show up with a team of divers at an emotionally fraught moment in river flooding and

promise to add a few more frescoes to St. Sava Cathedral. Russia would be perceived as doing the most to help, while contributing a hundred times less in monetary terms. 

 

Russia was no competitor for sympathies in Ukraine after 2014, but I tried to get out to the regions to show the human face of our contribution. I urged our project partners to get away from abstractions and use examples (historical, cultural, literary) that would resonate emotionally with Ukrainians. (For example, a project aimed at conflict-affected youth produced a book of Ukrainian women’s profiles in courage and creativity, aiming to empower girls.)

 

While Ukrainian public radio has improved news reporting, tackled issues, and gained listeners, public TV has failed to launch as an audience alternative to oligarchic media. Hromadske (“Community”) vs Suspilne (“Public”) TV split resources and left donors (not to mention viewers) perplexed. The initial hipster in-group focus of Suspilne’s programming led to a ratings disaster (dropping to 1-2% as a new public broadcaster, down from the 4% it enjoyed as the old-school, state-owned channel UT-1). Earnest “radio with pictures” on Hromadske appealed to donors, but not to viewers, who fled—I found myself as one of 63 people watching live on YouTube, as compared to the tens of thousands of live viewers during its Maidan heyday. Overall, platforms enabling substantive, positive, or at least objective and non-corrosive discussion of reforms failed to break through to audiences, which stayed tuned to the performative shout-fests that passed for political talk shows on the oligarchic channels.

 

The one emotionally charged form of programming which we, representatives of Western donor organizations, did support was investigative journalism. At one point in 2016, there were three weekly anti-corruption shows, two subsidized directly or indirectly by the USA and one funded by Canada. However, the sheer quantity of exposés led to unintended consequences: (1) a numbing of the audience to the never-ending stream of allegations, most of them concerning post-Maidan authorities; coupled with (2) a sense that, because it was being talked about non-stop, corruption was worse than ever, and could only be solved by yet another round of “throwing out the bums.” 

 

Overburdening an underpowered administration

 

Inundating an underpowered administration with too many priorities, accountability frameworks, and visitors prevented them from getting things done. With a tidal wave of technical assistance rolling into Ukraine in 2014-15, donors were confronted with an extreme version of a typical aid dilemma: talking about, formulating, delivering, and monitoring assistance takes up an inordinate amount of attention and time of the very people you’re trying to prop up. 

 

In a situation where change was being driven by a new minister and a few workaholic deputies, sitting atop a dazed and unmotivated workforce, every moment these people spent with us diplomats and our parade of delegations and consultants was time they were not devoting to horizontal coordination, regional outreach, or even explaining plans to their own staff. Some of the smarter ministers started pushing back on us, but with

continued funding often depending on us feeling validated about our contributions, this was risky. 

 

A panoply of donor coordination groups and attempts at basket funds were inspired by the OECD Paris Principles and Accra Agenda, and a few ministries such as Agriculture under Minister Oleksiy Pavlenko and National Reforms Council under Dmytro Shymkiv sought to implement local ownership of aid priorities and alignment with Ukraine’s own plans. The EU, through its Support Group on Ukraine, brought coherence to discussions of Association Agreement and DCFTA issues, as well as allocation of its own assistance. But overall, the reporting and visibility pressures of our respective national headquarters manifested as significant overhead costs on overtaxed Ukrainian reformers. 

 

Delaying action with excessive caution

 

Another human capacity pain point: Too much caution, when timeliness is of the essence. In a post-revolutionary situation, the reform window will not be open forever. 

 

One of the first meetings I attended upon arriving in Kyiv in October 2014 was with Dmytro Shymkiv, the former Microsoft Ukraine CEO who had become President Poroshenko’s point man on reforms. He told donors that he urgently needed salary top-up funding to recruit and retain mid-level people who can actually make changes happen. In our Canadian case, we were fortunate that we had just approved EDGE, a very flexible expert deployment project that could fund advisors, and more importantly, reform implementation teams, for 6-12 month periods. Our fastest reaction time for senior advisors was six days from request to arrival (financed in December 2014); the average for setting up teams on issues such as VAT returns or E-Health design was 1-2 months. But the really big players—the EU and EBRD (European Bank for Reconstruction and Development)—took three years to build their Ukraine Reform Architecture, rolling out Support Teams across ministries in early 2018. Naturally, this initiative was more comprehensive in scope than our own, took account of broader civil service dynamics, and had longer time horizons. But their bright young recruits arrived in the final year of the presidential term, with the window closing on strategic change and tactical electoral considerations coming to the fore. Now, two years later, many of them are looking for new jobs, as ministers appointed in the spring of 2020 take a “not invented here” approach, and have started repopulating the strategic directorates with their own trusted cadres—or seeking to liquidate the directorates outright as interlopers in the post-Soviet bureaucratic ecosystem.  

 

Over-engineering solutions

 

In another unintended consequence of profuse technical assistance, we imposed innovatively complex solutions that were largely untested or never scaled up in our own countries. 

 

Exhibit A: E-Declarations for politicians and government officials, which were expected to be a silver bullet in preventing corruption. When I asked World Bank officials shortly

before launch how many people they initially thought should be covered by this mechanism, the answer I got was “about 300 systemically important decision-makers.” How then, I asked, had we ended up with 1.2 million Ukrainians—from the President to village council members and low-level bureaucrats—in the system?  Well, the authorities wanted to be seen as transparent, civil society kept pushing for extending the scope, the technology was improving, and possibly, there were some saboteurs who may have just wanted to overwhelm the system. 

 

In any event, verification has become well-nigh impossible—there is a 230-page EU/Danish-sponsored report on business processes pointing out that Ukrainian investigators would have to work fifty times faster than their Romanian counterparts to check even the top 10% of declarations. The system also breeds resentment on the part of most of the million plus forced to fill out the detailed, cumbersome forms, which are then posted for any random web surfer to examine. As a result, there was a vindictive parliamentary majority for inflicting the same reporting requirements on anti-corruption NGOs, and little to no sympathy for our diplomatic argument that applying the declarations to international board members of Ukrainian state enterprises would scare off qualified experts. Sauce for the goose, we were told, should be sauce for the gander. 

 

The widespread accessibility of personal data has also exposed a dark side of transparency: in the spirit of Anne Applebaum’s observation that “the new information world has no hierarchies,” media spin has been applied to blow up minor transgressions (an unreported mother-in-law’s parking garage or moving into a rented house prior to the lease date) to be the equal of, or even to obscure, multi-billion dollar bank fraud. 

 

Trusting in the efficacy of “Deliverology”

 

Deliverology is an approach to implementing reforms that relies on measurable, quantifiable outcomes rolled out from the national to the local level. Shared by PM Groysman, the Ukrainian version of the system was predicated largely on the appeal of financial decentralization and local results. The hope was that, in seeing a road paved or daycare renovated in their town, people would see that the national-level project was working for them. And, indeed, driving around Ukraine, I felt fewer potholes and saw new roundabouts and sidewalks being put in by proactive mayors. Municipal satisfaction surveys we sponsored showed that residents of most regional centers and Donbas hub Mariupol felt services and local well-being were improving. But all of this was ascribed politically to municipal leaders, with no credit to the national level (which had, after all, transferred the funding). On the contrary, the same respondents who saw local improvements felt that Ukraine as a whole was in steep decline. A combination of Ukrainians’ innate mistrust of distant authority, a local version of the “blame Brussels” dynamic, oligarchic media negativity, Russian info ops via social media, and civil society’s insistence that politicians claiming credit for any accomplishment was just “cheap PR” all combined by early 2019 to generate a miasma of social despair and a majority conviction that any option was better than the status quo.

 

Fixating on moral hazard

A disproportionate donor/lender obsession with moral hazard, exemplified especially by the IMF and its insistence on hiking the household consumer price of natural gas to European market levels, even at the cost of sinking the broader reform agenda. Ukraine had actually gone to market rates in 2016 sooner than demanded by the Fund, but then, as elections neared in 2018, balked at further increases driven by rising international prices. The IMF, and with it the conditionality-bound rest of the Western community, was having none of it. This had a psychological component—the IMF team dealing with Ukraine had accumulated two decades of experience in Kyiv of promises not being fulfilled and were understandably fed up. There was also the macroeconomist’s lack of appreciation for politics—one IMF representative told me, “If this government doesn’t do what we want, then the next one will.” (Not really, as it turns out.) And there was the belief that widespread direct-to-consumer subsidies to compensate for the high gas price would be appreciated by the public, and not (as actually happened) resented as a mark of pauperization (“We used to be able to afford utilities, but now are reduced to applying for hand-outs.”)   

 

Lessons learned: Best practices for the future

 

What, then are the lessons I would draw if called upon to deal with an analogous  post-revolutionary or post-electoral situation in a country with high human capital, lower middle income levels, and an acute security threat from a dominant neighbor (such as, say, in Belarus or Moldova)? I would advise an ambassador or representative in a similar role to:

1.Prioritize aid for what is most important for national resilience, based on a realist(ic) framework of threats and opportunities, and work with local stakeholders to adjust your own level of ambition (if not necessarily theirs).

2.Do not do unto others what you would not try on yourself. Your partner country is not a laboratory for ideal-world experimentation. Enemies of change who know their system far better than you do revel in the dilatory power of complexity; don’t add to it unnecessarily.

3.Never assume that deposed elites are permanently vanquished, and that progress formalized in results-based management frameworks is inevitable. Overpromising and under-delivering (both on the part of national governments and international partners) feeds revanchism. If transitional austerity is unavoidable, allow for some timely reallocation of tangible benefits for the broad public to buffer the shock.

4.Give your technocratic stick figures the spark of life—not by superficial measures like adding a vyshyvanka, but by infusing your governance concepts with relatable local context that people can take to heart. 

5.Be wary of subsidizing the left hand to demolish what the right hand is building. Support for independent media should not be a license for inquisition or vendettas, especially in the absence of effective libel laws.

 

Is any of this a guarantee that blinding arrogance on the part of political leadership, persistent cronyism, or hostile information wars and subversion won’t frustrate your best reform support efforts? No. But you’ll be better able to give Ukraine or any other partner country a fighting chance at success.

Roman Waschuk joined the Canadian Foreign Service in 1987, serving abroad in Moscow, Kyiv, and Berlin, and at HQ in policy planning and post-conflict stabilization/reconstruction units. He was Ambassador in Belgrade (2011-14, with concurrent accreditation to Montenegro and North Macedonia) and in Kyiv (2014-2019). He retired from the Foreign Service in December 2019.