Recommendations from the Venice Commission
Following a visit to Ukraine in September the Venice Commission offers recommends to the Ukrainian authorities on the improvement of national legislation.
Thomas Markert, secretary of the Venice Commission of the Council of Europe, advised that the reintroduction of the mixed parliamentary election system was inappropriate, especially since the opinions of opposition parties were totally ignored. The preliminary recommendation of the Venice Commission included the introduction of open party lists and further regionalization of election system.
The authorities of Ukraine, represented by President Viktor Yanukovych, claimed that they would consider all the recommendations.
The commission is already warning Ukraine against disregarding its recommendations, mentioning that it will like result in negative consequences. These recommendations centre on revising the law of parliamentary elections as well as on bringing the laws on employment and status of judges in line with European standards.
The commission secretary believes that current court actions against opposition members might interrupt Ukraine’s European integration.
People First Comment: One of the major problems faced in any upgrade of Ukraine’s national legislation is the dichotomy between the basic principles of czarist and Soviet law and the principles of freedom and democracy. Tsarist and Soviet law were very much modeled on the Napoleonic Code, a legal system designed in the 19th century to clean up French legislation by detailing what a citizen could and could not do. In fact, however, while many of the Bolshevik principles were bound up in democratic ideals these were soon expunged by the Stalinists who saw democracy as a major threat to their power base. Thus the root of much of today’s Ukrainian legislation lies in the principles of control and are thus in direct conflict with the principles of freedom. This dichotomy cannot be solved by tinkering on the edges of the law. For Ukraine to really adopt the principles of democracy and democratic practice there needs to be a root and branch overhaul of the entire legislative base to convert it from a system of control to one that defines the parameters of freedom.
New rhetoric over economic development
The Ukrainian government has announced new plans for Ukraine’s economic development.
Vice Prime Minister Borys Kolesnikov identified three sectors with the highest potential: machinery, agriculture and tourism. However, successful development requires considerable investment.
Government officials claim that a new land reform, which is being introduced in Ukraine, will increase grain harvest from 50 to 100 tons per year. The government is also working on another law specifically designed to promote tourism by attracting liberal investors to the sector. Yanukovych recently met with western business representatives in New York and promised to create a more favourable environment for investors in Ukraine by enacting a regulatory reform that could cut red tape in the licence system by 90 percent.
Despite the professed goals of both the government and the president, Ukraine’s development ratings remain very low. The global competitiveness rating of the World Economic Forum has again put Ukraine in an unimpressive 82nd place next to Botswana (80th place), Trinidad and Tobago (81st place) and Namibia (83rd place).
Ukraine was 89th last year and 82nd the year before. Corruption, tax regulation, financing and state bureaucracy remain to be the biggest issues in Ukraine.
People First Comment: Ukraine is equal in size to Namibia, has 7 percent of the world’s arable land and more natural resources, a highly educated population that used to produce more than 40 percent of everything consumed by the former Soviet Union, yet it has the lowest GDP per capita of them all at only $6.700. This can only be attributed to the political system that links business and power and a bureaucracy that encourages and enables mass corruption. However there is one thing that Ukraine has in far high quantities than all of the above and that is millionaires and billionaires. If Ukraine’s neighbor Slovakia can generate a GDP per capita of $22,000 with far less resources, it defies thinking just how wealthy Ukraine could be if the political system worked for the good of the nation instead of for our narrow-minded and dishonest political and financial elite.
In search of alternative energy
The government of Ukraine is examining every potential opportunity to reduce its dependence on the import of energy sources – primarily Russian gas. A logical governmental policy would be the development of local gas resources which analysts claim could produce potentially 15 billion cubic meters per year within a 5-10 years timeframe. Prime Minister Mykola Azarov has informed that the government has already purchased two drilling platforms from Singapore that will be installed on the Black Sea shelf early in 2012 and commence drilling in 2013.
Another potential method for reducing the reliance on imported gas would be to lower the overall level of consumption. Yuriy Boyko, minister of energy of Ukraine has announced that in 2014 Ukraine will import only 12 billion cubic meters of gas, compared to the 27 billion cubic meters that the government plan to buy from Gazprom in 2012. At the same time Vice Prime Minister Andriy Klyuev has suggested that the introduction of energy efficient technologies would help to reduce energy consumption in industry and contribute to the development of Ukrainian economy. Hr 20 billion ($2.5 billion) from extra-budgetary resources will be allocated to this purpose next year.
At his official meeting with the US business community, Yanukovych reported the intention of the Ukrainian authorities to develop alternative energy sources in the country. He specifically listed small-scale power generation, reconstruction of existing hydro power plants, development of wind and solar power engineering among the top-priority goals. To facilitate the development in these fields the President has promised to back the necessary legislation. Yanukovych has also professed Ukraine’s potential as an energy exporter.
Let us hope however that the authorities have decided to rejuvenate national energy production in order to make Ukraine truly competitive, rather than just in response to Russian pressure.
People First Comment: At last… the penny has finally dropped. Ukraine is using too much gas that it can’t afford and buying it from a decidedly aggressive neighbor. At the height of its consumption Ukraine was using as much gas as the USA and that is simply untenable at today’s prices But let’s not be too harsh as there was a time in the Soviet era when gas cost next to nothing and as a result the vast amounts of gas thirsty industries were located next to the source of the raw materials particularly in Ukraine. Twenty plus years on much of this technology is now out of date and is being replaced and as a result gas consumption is falling. Couple this with the fact that Ukraine is scheduled, as a result of the former prime minister’s controversial contract, to pay almost $500 per thousand cubic metres in the last quarter of this year making gas imports from Russia some of the most expensive in the world and is it any real wonder that the government have reached an economic tipping point in the gas wars. Ukraine is sitting on gas reserves which have been conservatively estimated as on par with Qatar making it a potentially major international gas exporter. The only thing that has been stopping the development of these reserves has been greed, corruption and the appeasement of Mother Russia and we all know that Mother Russia cannot be appeased. However the lead time from signing the exploration contracts to actually selling gas can be 5 to 10 years therefore the government are wise to be looking at viable alternatives. It’s a pity that previous governments did not take such a long-term view as by now Ukraine could have been virtually energy self sufficient giving Ukrainian industry a massive commercial advantage. Let us hope that the current government action is intended to swell the state budget and give a massive boost to Ukrainian industry as opposed to lining select pockets.
Draft budget 2012: financing whose interests?
Verkhovna Rada recently approved the draft budget for 2012 and promised a revision by the end of November. Fedir Yaroshenko, Minister of Finance of Ukraine, presented the draft and advised that it will not cancel social benefits. Prime Minister Azarov, while commenting the draft budget, mentioned that the budget deficit had been reduced from 18 percent to 5 percent and would be further reduced to 2.5 percent in 2012. Yet the government makes no secret that the statistics of people living below the poverty line will increase from 24 percent to almost 27 percent. In addition to this the government plans to take a further $11.4 billion in loans next year, even more than this year.
Opposition members gave very negative evaluation of the budget draft. Members of ‘Batkivschyna’ political party believe it is antisocial and will cause new waves of social unrest. ‘Our Ukraine’ note the budget decrease of Hr 10 billion ($1.2 billion) conflicts with the requirement to maintain current social benefits. Opposition deputies aggressively criticise the extensive budget expenses for projects related to Euro-2012, which will cost the country billions of hryvnias. Also it has been highlighted that financing of the various security forces in 2012 will require a sum many times larger than what will be allocated to health care, infrastructure maintenance and municipal services).
Experts also point out the cutting of allocations to the needs of socially insecure people and increased financing of the state machine and officials. For sake of contrast, the highest bodies of state authority and local governments will receive 16.6 billion UAH (2.1 billion USD) in 2012. At the same time, the government plans to allocate only 13.9 billion UAH (1.7 billion USD) to all categories of social security. Courts and correctional institutions will be given about Hr 11 billion ($1.4 billion).
State officials will have around $2.6 billion ($330 million) for private health care whilst the state healthcare, which services the rest of the population, will be given Hr 2.8 billion ($400 million).
People First Comment: Healthcare for 2,500 State officials – $2.6 billion; health care for the other 45,997,500 people of Ukraine – $2.8 billion. This is perhaps one of the finest examples of the attitude of the authorities to the people of this great nation. However there is a reason for this. Many Ukrainian politicians have been in office for such a long time that most are now well past their ‘expiration date’ and many are now in need of considerable medical care. The solution is simple. Enforce the retirement age for all politicians and State officials at both national and local level. Next, perhaps Ukraine could learn from the Georgian example where the average age of a Minister is only 28 as they would need considerably less medical support. This would also have the benefit of introducing a whole new set of thinking into the process of government. Thirdly all state officials could be enrolled into a means tested state medical insurance scheme so that cover would only be provided to those who couldn’t afford it. In this way the State Official healthcare provision in the budget could be reduced to zero and the provision for the population increased to $5.4 billion without any increase in the budget. This health care budget is morally indefensible. You only have to visit a Ukrainian hospital to see the horse-trading that goes on between doctors and the families of the sick to understand that the healthcare system is both financially and morally bankrupt. The provision of health care for state officials at this level is nothing short of a public insult.
Viktor Tkachuk is chief executive officer of the People First Foundation, which seeks to strengthen Ukrainian democracy. The organization’s website is: www.peoplefirst.org.ua and the e-mail address is: [email protected]
