You're reading: Odesa is frontier for Ukraine reform drive

ODESA, Ukraine – Eighteen months after the EuroMaidan Revolution, Ukraine has largely failed to reform its dysfunctional law enforcement system and overregulated economy, with a few exceptions.

One of them looms large: Odesa Oblast, where ex-Georgian President Mikheil Saakashvili took over as governor on May 30.

This summer
alone, Saakashvili has quickly made sweeping changes and attracted
Western-educated professionals to join his reform drive. Critics dismiss Saakashvili’s
appointment as a cosmetic diversion by President Petro Poroshenko to mask the
failure of nationwide reform.

Yet
Saakashvili’s team members argue that, if successful, their changes may inspire
a radical transformation of Ukraine towards democracy and a vibrant free-market
economy.

The moment
of truth may come in September, when the team will introduce in parliament the
Odesa reform package. The legislation includes deregulation, cutting the number
of designated land uses to two-three from 10, making customs clearance faster
and more transparent, abolishing licenses in some industries and lifting the
moratorium on the sale of agricultural land.

Ukraine’s
future may depend on whether the president, Cabinet and parliament approve the
Odesa team’s efforts and replicate them nationwide. Indeed, critics even argue
that yet another revolution is inevitable unless Ukrainian authorities finally
transform the country’s bloated Soviet-style bureaucracy as soon as possible.

 

Odesa Governor Mikheil Saakashvili, Georgia’s ex-president, sings Ukraine’s national anthem on Aug. 5 in Odesa.

Odesa Governor Mikheil Saakashvili, Georgia’s ex-president, sings Ukraine’s national anthem on Aug. 5 in Odesa.

 

“In
September we have a meeting with all authorities,” Sasha Borovik, a
Western-educated adviser to Saakashvili, said in an interview with the Kyiv
Post. “As a society, we must say that this is our last chance to change
something. Those who don’t accept this package are anti-reformers.”

Yulia Marushevska,
a EuroMaidan Revolution activist who is currently a deputy governor, told the
Kyiv Post that Odesa’s example may inspire people all over Ukraine and persuade
them that reforms are possible. “I don’t think enough reforms are being carried
out on the national level,” she said. “For us, it’s a chance to do at least
something at least somewhere, but on the national level more can be done in a
more aggressive way.”

The
regional government has hired Western-educated Ukrainians and members of
Saakashvili’s Georgian team of reformers. It also employs experts and
volunteers, including ones from Odesa Oblast, Russia and the team recruited by
Borovik during his work at the Economy Ministry. Borovik was slated to become
first deputy economy minister in March but quit after disagreements with Prime
Minister Arseniy Yatsenyuk, whom he accused of stalling reforms.

Most of the
new people at the administration, including Borovik, Marushevska and Maria
Gaidar, formerly a Russian opposition activist, are currently working free of
charge.

The
regional administration has also fired most of the 27 district heads in Odesa
Oblast and is selecting new ones based on professional qualifications. One of
the requirements for choosing district heads was fluent English for working
with foreign investors.

“We spoke
to people in English during telephone interviews,” Borovik said. “We started
speaking in English, and if a person didn’t respond, this meant he lied on his
resume.”

They were
also required to have a good education. “We’re looking for people with a global
outlook and people who know the advantages of the region and can promote it,”
Marushevska said.

People with
lots of experience in the Ukrainian government were rejected. “It’s more of a
downside for us than an upside,” Marushevska said. She also rejected candidates
who were lobbyists of specific political clans and people with major business
interests in a specific district.

One
obstacle is lack of money.

One way to
raise funding for the construction of a highway between Odesa and Reni on the
Romanian border is to boost revenues by making customs payments transparent and
corruption-free, the Saakashvili team believes. Earlier this month, Saakashvili
said the Cabinet of Ministers was sabotaging the highway’s construction by
preventing Odesa Oblast from getting money from its increasing customs
revenues.

Another
method is privatization of all small and mid-sized state firms in Odesa Oblast,
Borovik said. If the central government transfers them to the Odesa regional
government, it will be able to raise funds to fund road construction, he added.

 

Odesa Oblast Governor Mikheil Saakashvili has drawn heavily on Western-educated professionals and others from his time as president in Georgia.

Odesa Oblast Governor Mikheil Saakashvili has drawn heavily on Western-educated professionals and others from his time as president in Georgia.

 

Foreign
governments and non-governmental organizations are also providing funds for the
planned changes. Specifically, they finance human resource services, legal fees
and faster registration procedures, Marushevska said.

However,
Ukrainian law bans government officials from getting wages funded with foreign
money. Marushevska believes Ukraine should repeal this legislation since their
meager salaries only encourage corruption.

“We must
destroy this vicious circle,” she said. “People who allocate millions get
€16,000 per month in Germany but here they earn $150.”

Yet the
main obstacle is bureaucratic resistance that has prevented Ukraine from
creating a functioning law enforcement system and economy since independence.

“Is it
because the prime minister doesn’t want this, the relevant minister is a
coward, parliament is lazy or biased or because there are frauds in power or
parties without platforms?” Borovik said. “This can be called sabotage or
resistance or inertia or a lack of ideas or laziness.”

Borovik
also criticized his former boss, Aivaras Abromavicius, for failing to reform
the economy. “Abromavicius is a conformist,” Borovik said. “He’s not a
reformer. If he’s told to do something, he’ll do it, if he’s not, he won’t.”

Oleg
Shymanskyi, a spokesman for Abromavicius, could not immediately comment by
phone.

Members of
Saakashvili’s team say that, similarly to the Cabinet, the regional elites,
mostly former allies of ousted President Viktor Yanukovych, are not actively
sabotaging but not helping either.

 

In just two and a half months as Odesa Oblast governor, Mikheil Saakashvili initiated sweeping changes that he hopes will inspire the rest of Ukraine.

 

In just two and a half months as Odesa Oblast governor, Mikheil Saakashvili initiated sweeping changes that he hopes will inspire the rest of Ukraine.

Odesa’s
political scene is dominated by two ex-Yanukovych associates, Mayor Hennady
Trukhanov and lawmaker Serhiy Kivalov. “Kivalov is keeping a low profile,”
Borovik said.

Marushevska
said regional heavyweights have a “wait-and-see policy.”

Kyiv Post staff writer Oleg Sukhov can be reached at [email protected].