The geopolitical position of Ukraine at the current stage of development of international order is complicated and somewhat challenging. The country is in the zone of interest of the USA and the Russian Federation, as well as Europe. This makes it a point of contention between powerful international actors.
The first question is — why it is so difficult to find a shared vision for the solution of the conflict? In the discourse of all the sides of the conflict, we see intent on finding and realising a solution. The main problem is the lack of trust between all parties, lack of trust between Russia and western countries. Trust between the Ukrainian and western elite is higher, but also contains some elements of alertness. Trust was destroyed from all the sides, both Russian and western. The situation is complicated by misunderstandings regarding intentions and proposals.
When we are in the situation of crisis — it means a lack of trust between the parties of the conflict. The question is how we can rebuild trust and further negotiations. The discourse in official media and official government statements show the intention to continue the dialogue, but at the same time, we see that the dialogue is quite difficult.
What is it trust? — It is a opportunity to predict the behavior of the trusted partner . The previous behaviour of the partners is not a good base for trust in the situation of the current Ukrainian crisis. Even during peaceful times, each agreement passed through a long and complicated process of negotiations. For example, regular gas crisis’s between Russia and Ukraine.
At the same time, common values present an opportunity to rebuild trust. How can Russia, Ukraine and western partners understand that they have shared values? — the negotiation platforms, on the base of international institutions, such as Organization of Security and Cooperation in Europe (OSCE), etc. In this article, I aim to look at the global structure and the roots of the Ukrainian conflict, in the context of historical, socio-cultural and political aspects.
The typology of international actors and the structure of their interests
The Ukrainian case shows different examples of strategies and frames  of external politics, used by different types of international actors toward the other state. I will name three types of actors that exist (not taking into account international organizations, global terrorist networks, criminal networks, etc.). In this article, I will discuss the goals and strategies of the Nation-State, Quasi Empire, and Nationalizing State. Each of these actors has certain peculiarities in creating international politics and agenda. All of them are engaged in the Ukrainian situation.
The Nation-State model is most common in the world. It is a phenomenon of the modern period and is considered to be the only variant of state. The borders of a Nation-State are strictly defined and protected by the political regime of the country. State unity is based on a common nation (state language, citizenship). The Nation-State “looks inside” itself and tend to protect the borders and the inside unity of the country .
Then quasi-Empire elements on the post-soviet space (after the collapse of USSR) the Russian Federation still have not constructed the national state in the classical view. Or the same elements of the quasi-empire project we can observe in the behaviour of the USA. Nowadays, we cannot speak about empires in the full sense of the word, but some elements can still be found. Some previous empires are on the transition way towards Nation-State, but the empire legacy still has its’ impact .
The borders of the nation empire are not finally defined and political elites look at the opportunity to enlarge the territory or to influence somehow on the other states and communities. Before the Ukrainian crisis, such ideas were rather marginal, but the political crisis in Ukraine moved the issue into the official discourse.
This approach is typical for quasi-empire and unacceptable by the Nation-States. — Here is the first point of misunderstanding and lack of trust. Why do empire nations believe they have the right to other states? — Because it still does not have a common understanding of its nation. Usually, it is a multinational and multi-confessional state and needs institutions different from those of the Nation-State.
Nationalizing State 
The territories, which were under the empires usually, become nationalizing states. Nationalizing state is a kind of transition situation (but it can be so for a rather long period). Such states emerge after the collapse of big empires or other countries. The nationalizing state usually moves towards the Nation-State: so the task is to create a nation and to define the borders.
The nation is also in the process of creation, but usually, it is created on ethnic base. The same situation is in Ukraine now; the current political elites tend to support the idea of the Ukrainian nation (Ukrainian language, certain historical myths), at the same time most of the people who live in the East and South of the country are automatically excluded from this nation criteria. The nationalizing states usually became the sphere of interest of quasi-empires.
Society without a State
After 2014 we also can see the marginal area of Donbasss, on which some unique social and political processes are developing, described by James Scott . These societies try to escape hierarchy of any kind. Based on cultural flexibility, pragmatism and self-reliance of autonomous communities. Once this kind of society is formed — it will be a difficult task to reintegrate it back to a Nation-State.
Why is it important to know the type of actor when we speak about external politics and conflicts? The case is that the behaviour and expectations of a Nation-State will radically different from the ones of a quasi-Empire. The main aim of a Nation-State is to protect the borders, which were defined and legitimized. Quasi-Empire aims to have potential territorial or cultural growth. That is why the idea of soft power was created in the USA and is so prevalent in the Russian Federation now — these states would like to influence the territories much outside their borders. In this case, the external politics of nationalizing states are reactive — they can only react on the impulses from quasi-empires, and struggle for their national identity and diffused borders. Donbasss is in a unique situation as it is not much needed in Europe or Russia. It is more likely that we can find institutes created to avoid any form of state and obedience.
That is why Europe blames Russia for annexing new territories; at the same time, it is seen in Russia as the historically logical process of state-building. And Russia blames the EU and the USA for the violation of regional security. Both of them blame each other for making Ukraine dependent.
The Ukrainian National Identity and Europeanization
Ukraine first embraced the European path during the 2004 revolution. Institutionally, this path implies the country’s aspiration to join the EU and NATO. Recent amendments to the Ukrainian constitution legitimize this drive.
The European identity is historically a superstructure above the national identity. Ukraine’s main problem is its aim not to follow the traditional procedure and therefore try to skip the phase of forming its own national identity in its desire to join the European family.
Essentially, Ukraine is replacing the notion of Ukrainism with that of Europeanism. Democratic institutions are paramount for European countries as they are the integrating base of the rule of law that makes up the Union. However, Ukraine does not give value to the institutions’ content and operation, but to their own existence.
As for Ukraine, the very idea of Eurointegration resulted in an escalation and subsequent loss of part of the country’s territorial integrity in 2014. Historically, European institutions have only been partially effective in heterogeneous societies with contrasting socio-cultural backgrounds. For the population of eastern Ukraine, Soviet values have proven to be even more important than they are for Russian citizens. In his research on national construction in post-Soviet territories, Vladimir Lapkin determines the post-Soviet secession phenomenon, in a process backed not only by a classic nationalist impulse but also by the nostalgia of the Soviet past. Lapkin asserts: “These ‘special separatists’, unlike ‘classical separatists’ who attempt to oppose their ethnonational project to the dominating ethnic nation (or its simulacrum), promoted ideas that were absolutely impossible within the political prevailing of the imperial universality of the 1990s and 2000s. In the absence of a better example, an ‘idealised USSR’ or a ‘revived Russian state’ is often appealed.” 
Consequently, Ukraine’s European path towards the EU and NATO easily turns into a semiotic myth because it embraces the idea of a universal solution for many problems Ukraine faces today, including those concerning the economy, social sphere, territorial integrity, and government’s legitimacy. The underlying idea towards European integration and the subsequent introduction of European institutions may actually create the potential and necessary motivation for action. Perhaps, the myth existence regarding the future integration with the EU and NATO may bring about prosperity, nonetheless completely negates any initiative or attempt to actually achieve anything.
None of the presidential frontrunners deny that the drive towards Europe could be difficult or even fatal. The approach of Ukraine needing to become part of the EU and NATO due to Russian aggression is a temporary one. It only aims to secure the current regime legitimacy and will be no longer useful once Russia has begun restoring its relations with the West afterwards the enduring crisis. That is when Ukraine will once again be faced with the great problem of rebuilding its sovereignty statehood.
Russian vision of the Conflict
The global perception of the crisis in Russia is based on the post-soviet legacy. It is closely related to the process of creating a Russian identity, defining the borders and strengthening positions as a global actor.
The interest towards the situation in Ukraine is high among Russians. Therefore, the Russian population is keenly following the Ukrainian elections, given the close economic and other personal ties (likelihood of having family between the two countries). Analysis conducted by the Russian Public Opinion Research Center explored popular opinions within Russia regarding the Ukrainian elections, and the results were quite interesting. “The Russian populations’ awareness of the upcoming Ukrainian presidential elections is rather high: 79% of Russians have heard of the election campaign including 18% who are following the campaign closely”. At the same time, fears of possible manipulations are widespread among Russians, with 68% of those polled believing that the election results will be falsified by the Ukrainian authorities and thus won’t be representative of the will of the people. More than one and every ten respondents (12%) believes that while there might be certain violations, but they will not influence the overall results. Altogether, the elections do not inspire much credibility in Russian society, doubting even about their legitimacy.
If we consider general attitudes towards Ukraine in Russian society, the radical positions have not changed much. On the one hand, one of them is that Ukraine is an example of fair and transparent elections. On the other — Ukraine is a “historical fault”.
On Russia’s side, Crimea is not an issue for discussion anymore, after Russia feels it has settled questions concerning security in the Black Sea and, more broadly, security for the Russian speaking community in the region. That is why now Russia’s main goal is to move towards a peaceful resolution of the current conflict with Ukraine, excluding the Crimea issue from the future negotiation process. Based on my research and observations, I believe Russian interests in Ukraine can be summarized in three key points:
First, Russia is highly interested in the implementation of the Minsk agreements and reintegration of Donbasss in Ukraine. In this respect, the Russian Federation is concerned about the rights of the Russian-speaking population in addition to their safety, and this issue will rank high on Russia’s agenda.
Secondly, Russia aims at rebuilding its economic ties with Ukraine, since Moscow is still Kiev’s largest trade partner: according to World Bank data, in 2017 Ukrainian export to Russia was 3 943 217.84 $ (9.08%), by comparison — Poland is the second (6.28%) and import — 7 196 562.10 (14.56%), China is the third (11.41%).
Third, despite the conflict, labour migration from Ukraine to Russia remains a reality. Russia is interested in qualified workers and students coming to study. Ukraine remains the main country of origin of migrants to Russia, even if the number has decreased (137,700 in 2018 as opposed to 150,100 in 2017) and there is a trend of more Ukrainian citizens to leave Russia.
I would like to attract your attention to one citation from Russian President speech to the Federal Assembly in 2014:
“It was an event of special significance for the country and the people, because Crimea is where our people live, and the peninsula is a place of strategic importance for Russia as the spiritual source of the development of a multifaceted but solid Russian nation and a centralised Russian state. It was in Crimea, in the ancient city of Chersonesus or Korsun, as ancient Russian chroniclers called it, that Grand Prince Vladimir was baptised before bringing Christianity to Rus”.
He speaks about strategic importance, development of the Russian nation, and a centralized Russian state. And all of these things are now connected to Crimea. Each country has to have a historical heartland. For the Russian Empire, it should be the Kievskaya Rus, which is now situated in Ukraine. In fact, Russia and Ukraine struggle for the same territories to be their heartland. This citation shows us a new ideological reality in Russia.
Accordingly, Crimea became the centre of civilization for Russian identity. It is a new ideological reality of internal Russian politics, which should be considered as crucial in policymaking decisions. In this sense, we can argue that putting the Crimean issue in the negotiation agenda will lead to a more radical Russian position.
Russian and Ukrainian Struggle for History
In the current situation, we find not only the negotiation of an attempted settlement to the East Ukraine armed conflict, a new stage of information and ideological confrontation also seems to be developing a rivalry between Russia and Ukraine over the interpretation of their past. In fact, the fabric of the history of the Kievan Rus looks very much like a blanket, with each country trying to pull all of it to their side.
What we have seen so far has been sluggish but definitely intensified by the media struggle, textbooks, movies and other cultural areas for the exclusive right to interpret the same historical facts. Why can’t these two states share a common history, and why is it so important to possess a unique past?
In his address to the Federal Assembly (December 2014), President Vladimir Putin mentioned Grand Prince Vladimir of Kiev in the Crimean context, which was perceived by a large part of the society as a legitimation of the peninsula´s affiliation through the myth of restoration, the historical truth and the preservation of continuity in traditions, culture and statehood. To this end, Moscow will erect a memorial to Vladimir on Vorobyovy Hills to honour the 1000th anniversary of his death. In his turn, Ukrainian President Poroshenko released an executive order to commemorate Grand Prince Vladimir as the “founder of medieval state Rus-Ukraine,” while the Russian State Duma responded by accusing Kiev of attempting to privatize the memory of Russia’s Baptizer.
Having made history as the ruler who baptized Rus and bolstered its statehood (the key features attributed to him by history textbooks), Grand Prince Vladimir has recently emerged as a substantial stumbling obstacle of Russian and Ukrainian politicians’ mutual comprehension.
In Russia, the deep-rooted historical legitimacy and continuity of historical epochs have not practically undergone any revisions, with all projects to interpret and describe history (Sergey Solovyov, Vassily Klyuchevsky, Sergey Uvarov’s triad of Orthodoxy, Autocracy and Nationality) working to build a single, non-contradictory historical model of development. With some slight variations, this scheme was taught both in the Soviet period and following the disintegration of the USSR. Nobody questions the Kievan Rus as the source of statehood and the Moscow Princedom and later the Russian Empire as its successor.
However, the political decision to annex Crimea had been perceived ambiguously both in Russia and abroad and hence has required additional legitimization. The new mythologem is intended to smoothly integrate the current political reality into the existing legitimization model and provide it with additional fixtures.
As far as Ukraine is concerned, the legitimization of its statehood is a much more complicated affair. The executive order of the former president, Poroshenko, to honour Grand Prince Vladimir was meant as a reminder that this relevant period is an inherent part of Ukraine’s history. Within the current quagmire of problems over the legitimacy of borders, Ukrainian national identity and diminishing political support, this order was designed to preserve available structures and the legitimacy model. Because of this, the political effect appears quite questionable.
Compared to Russia, historical legitimization is a much more complicated endeavour for Ukraine. En route to statehood, Ukraine felt the impact of the powerful state and ideological machines of the neighbouring Russian and Austro-Hungarian empires. And it was Mikhail Grushevsky who launched the construction of the model for a unique Ukrainian history when Nation-States emerged after the breakup of these empires. His project primarily reflected the decline of the Austro-Hungarian Empire and was briefly implemented during the revolutionary reforms in the Russian Empire. The scheme was revived in 2004 by the instigators of the Orange Revolution and the former president, Pyotr Poroshenko.
In 1898, Mr Grushevsky released the first volume of History of Ukraine-Rus that contained a compilation of facts intended to substantiate the historical independence of the Ukrainian people by tracing an alternative succession of historical stages. He rejected the unity of eastern Slavs, drawing a line between the Ukrainian-Russian people and Great Russians. Before Mr Grushevsky, Ukrainian history had one way or another been integrated into the history of Russia and Poland, the neighbour powers which controlled Ukrainian territories. Accordingly, his innovation suggested an alternative model of historical development and a new succession in the continuity of state entities seen as the forerunners of modern Ukraine.
Mr Grushevsky discarded the Muscovite version of history, insisting that although the Kievan Rus transferred some forms of the socio-political order to the Great Russia lands, there was no full-fledged continuity between the Kievan Rus and Moscow Princedom. The Tatar invasion undermined the socio-political basis of the Kievan Rus. East of the Dnieper River, these traditions were practically ruined, with only some of them preserved on the right-hand side and advanced in the Galitsk-Volyn Princedom and later under the rule of Lithuania and Poland. The history’ version developed by Moscow was also unfit for legitimizing Ukrainian statehood because the emergence of the Ukrainians as a separate people was dated to the 14th-15th centuries, thus something absolutely unsuitable for Mr Grushevsky as the ideologue of the Ukrainian statehood.
As before, the key issue still lies in establishing the successor of the Kievan Rus. Prior to the appearance of Mr Grushevsky’s interpretation, the succession of the Kievan Rus and Tsarist Russia had been universally recognized (see V.M. Solovyov, V.O. Klyuchevsky). The incorporation of the Kievan Rus period into the historical roots of a state proceeds from the establishment of a certain state entity through a certain ethnic groups. Proponents of the unity of the three eastern Slavic peoples agree that the Kievan Rus was set up by the Slavs, who later gave rise to the Russians, Ukrainians and Byelorussians. In his History of Ukraine-Rus, Mr Grushevsky not only substantiated the autochthony of the Ukrainian ethnos’ origin but also firmly insisted that the Kievan Rus belonged to the tradition of the Ukrainian statehood.
This concept smoothly resonates again in the current official Ukrainian debate because it provides grounds for the logical construction of national identity. Ukrainians assert that Moscow was built on its own, borrowing practically nothing from the Kievan Rus under immense Tatar influence.
Although this is ancient history, the two historical paradigms are popular in modern politics, with the described myths being only a fracture of the entire mythology arsenal employed in the debate. The history of the Great Patriotic War actually plays the same role, the most cited issues being the dichotomy of the Soviet troops and collaborationists on occupied Ukraine territory, the odious Stepan Bandera, Golodomor, etc. The interpretation of concrete events and the formation of myths (as semiotic systems) helps to assign friends and foes and additionally validate political decisions.
Although Russian and Ukrainian leaders use the same historical facts surrounding the Kievan Rus, their motivation differs. While Russia wants to add additional legitimacy to its political decision over the voluntary entry of Crimea into the Russian Federation, Ukraine is trying to restore the shattering legitimacy of its state borders and the national identity of its population.
The use of historical facts is a long applied instrument for fueling an entire political context, usually with quite material consequences. In fact, turning the status of Crimea into the historical centre of Russian statehood may create a stumbling block during zero-sum international negotiations. If the partners opt for a more constructive approach to handle other issues, Crimea should be off the agenda. Ukrainian legitimacy appears more threatening. Independent for over 20 years, Kiev has failed to generate a state-wide identity and is now trying to revitalize older models, which have regrettably demonstrated their ineffectiveness after Maidan 2004. The country will face the irreparable loss of its legitimate borders and government, as well as the identity of its population.
In a situation like this, Russia and the West appear to have coinciding interests in handling the issue of Ukraine’s legitimacy because neither would like to see a Somalia-style failed state at their borders. This move should be affirmative, shedding the extremes a la “Ukraine is not a state,” etc. since this is a field for determined efforts to establish a constructive myth for a state on the verge of a breakdown.
Speaking on the possible steps towards the successful Nation-State for Ukraine:
First, Ukrainian politicians need to come up with a uniform set of values and legitimacy that would be relevant to most of the country’s population. We could hypothetically suggest the idea of the country’s independent economic development. With its favourable geography, Ukraine may well become an economic hub, a target for effective investment, and a growth point for innovative projects. For this to happen, however, the country first needs to shed its dependence on any single strong external actor, be it Russia, Europe, the U.S., or, in the longer term, China. It would be fairly possible to create effective, law-governed economic institutions without joining the EU and NATO.
Second, Ukraine needs to mould its youth in a way that would facilitate negotiating practices and an ability to achieve a compromise. No matter how skilful the Western European advisors may be, Ukraine will have a hard time introducing democratic institutions unless society revises its long-standing habits. Introducing brand new institutions is always a complicated process that involves breaking established behavioural patterns. This is primarily the mission of educational establishments. The mere drive towards Europe is not going to unite the nation in any significant way.
Ukraine should also stop picturing Russia, or any other country, as its nemesis because this only works as a short-term solution. Seeking out external enemies is only good as an interim method of legitimising a government and securing public unity. The method has a number of disadvantages. First, consolidating against an external enemy requires a particular exertion of forces; no system is capable of holding out for long under stress. Second, the external enemy’s environment may change radically. Third, a country that is defending itself expends much of its strength on defence, not on development.
Russia is a significant international actor for Ukraine, and Kyiv will need to come up with some new kind of format for relations with Moscow sooner or later. This will happen after the frozen conflict has ceased to suit the key decision-making political actors. Prior to the inevitable talks, both parties will have to establish a negotiating position. It would be wise to start the talks with the less painful issues, but searching for such issues poses a special intellectual problem for conflict mediators. It is fairly possible that one of these steps will involve establishing a dialogue along the lines of Track II expert diplomacy.
A possible conflict solution for Donbass — giving Crimea back — will entail a significant transactional cost and a very high price for Russian elites. It is impossible in the current political situation, as we see the new nation and state legitimacy model. The connection of Donbass and Crimea issues will lead to more confrontation. If we put the Crimean issue outside the agenda, we can look at the following possible variants for the regulation of the conflict.
-Donbass as separate state — the variant of Transnistria.
-Donbass as part of Ukraine. Possible only on the basis of wide autonomy. At the same time, there is needed a process of economic reconstruction, without ethnic or language issues.
-Donbass as the part of Russia, the less possible one.
The second variant is considered to be the most peaceful for the international community. Nonetheless, we still have the army of Donetsk and Lugansk which are interested in their own profit. So for Russia and Europe, it will be very important to change the official discourse and start to see not the enemies, but rather strategic partners.
First published in “Geopolitical Challenges of European Security in the South Caucasus and Ukraine 19th Workshop of the Regional Stability in the South Caucasus Study Group, 16/2019 Vienna, October, 2019”. From our partner RIAC
 Uslaner, Eric: The Moral Foundation of Trust. Cambridge University Press 2002.
 Uslaner For Nation-State see: Habermas, Yurgen: The European Nation-State And The Pressures Of Globalization. In: New Left Review. 235/1999.
 Uslaner Kaspe, Svyatoslav: Imperii I Modernizatsiya. Obshaya Model I Rossiyskaya Specifika. Moskva, 2001.
 Uslaner Brubaker, Rogers: National Minorities, Nationalizing States, and External National Homelands in the New Europe. In: Daedalus. 124/1995, pp. 107-132
 Uslaner Scott, James C.: The Art of Not Being Governed. An Anarchist History of Upland Southeast Asia. Yale University Press 2009.
 Uslaner Lapkin, Vladimir: Problems of Nation Building in Multi-ethnic Post-Soviet Societies: Ukrainian Case in Comparative Perspective. In: Polis. 4/2016, pp. 54–64.
Latvia developed new tasks for NATO soldiers
Member of the Latvian Saemas’ national association “Everything for Latvia!” and Freedom”/LNNK Jānis Dombrava stated the need to attract NATO troops to resolve the migration crisis. This is reported by la.lv. In his opinion, illegal migration from the Middle East to Europe may acquire the feature of an invasion. He believes that under the guise of refugees, foreign military and intelligence officers can enter the country. To his mind, in this case, the involvement of the alliance forces is more reasonable and effective than the actions of the European border agencies. Dombrava also noted that in the face of an increase in the flow of refugees, the government may even neglect the observance of human rights.
The Canadian-led battlegroup in Latvia at Camp Ādaži consists of approximately 1512 soldiers, as well as military equipment, including tanks and armoured fighting vehicles.
Though the main task of the battlegroup in Latvia is country’s defence in case of military aggression, Latvian officials unilaterally invented new tasks for NATO soldiers So, it is absolutely clear, that Latvian politicians are ready to allow NATO troops to resolve any problem even without legal basis. Such deification and complete trust could lead to the full substitution of NATO’s real tasks in Latvia.
It should be noted that NATO troops are very far from being ideal soldiers. Their inappropriate behaviour is very often in a centre of scandals. The recent incidents prove the existing problems within NATO contingents in the Baltic States.
They are not always ready to fulfill their tasks during military exercises and training. And in this situation Latvian politicians call to use them as border guards! It is nonsense! It seems as if it is time to narrow their tasks rather than to widen them. They are just guests for some time in the territory of the Baltic States. It could happen that they would decide who will enter Latvia and who will be forbidden to cross the border!
Changes are Possible: Which Reforms does Ukraine Need Now?
The past 16 months have tested our resilience to sudden, unexpected, and prolonged shocks. As for an individual, resilience for a country or economy is reflected in how well it has prepared for an uncertain future.
A look around the globe reveals how resilient countries have been to the COVID-19 pandemic. Some have done well, others less so. The costs of having done less well are almost always borne by the poor. It is for this reason the World Bank and the international community more broadly urge—and provide support to—countries to undertake economic and structural reforms, not just for today’s challenges but tomorrow’s.
One country where the dialogue on reform has been longstanding and intense is Ukraine. This is particularly true since the economic crisis of 2014-2015 in the wake of the Maidan Revolution, when the economy collapsed, and poverty skyrocketed. Many feared the COVID pandemic would have similar effects on the country.
The good news is that thanks to a sustained, even if often difficult, movement on reforms, Ukraine is better positioned to emerge from the pandemic than many expected. Our initial projection in the World Bank, for example, was that the economy would contract by nearly 8 percent in 2020; the actual decline was half that. Gross international reserves at end-2020 were US$10 billion higher than projected. Most important, there are far fewer poor than anticipated.
Let’s consider three reform areas which have contributed to these outcomes.
First, no area of the economy contributed more to the economic crisis of 2014-2015 than the banking sector. Powerful interests captured the largest banks, distorted the flow of capital, and strangled economic activity. Fortunately, Ukraine developed a framework to resolve and recapitalize banks and strengthen supervision. Privatbank was nationalized and is now earning profits. It is now being prepared for privatization.
Second, COVID halted and threatened to reverse a five-year trend in poverty reduction. Thanks to reforms of the social safety net, Ukraine is avoiding this reversal. A few years back, the government was spending some 4.7 percent of GDP on social programs with limited poverty impact. Nearly half these resources went to an energy subsidy that expanded to cover one-in-two of the country’s households.
Since 2018, the Government has been restructuring the system by reducing broad subsidies and targeting resources to the poor. This is working. Transfers going to the poorest one-fifth of the population are rising significantly—from just 37 percent in 2019 to 50 percent this year and are projected to reach 55 percent in 2023.
Third, the health system itself. Ukrainians live a decade less than their EU neighbors. Basic epidemiological vulnerabilities are exacerbated by a health delivery system centered around outdated hospitals and an excessive reliance on out-of-pocket spending. In 2017, Ukraine passed a landmark health financing law defining a package of primary care for all Ukrainians, free-of-charge. The law is transforming Ukraine’s constitutional commitment to free health care from an aspiration into specific critical services that are actually being delivered.
The performance of these sectors, which were on the “front line” during COVID, demonstrate the payoff of reforms. The job now is to tackle the outstanding challenges.
The first is to reduce the reach of the public sector in the economy. Ukraine has some 3,500 companies owned by the state—most of them loss-making—in sectors from machine building to hotels. Ukraine needs far fewer SOEs. Those that remain must be better managed.
Ukraine has demonstrated that progress can be made in this area. The first round of corporate governance reforms has been successfully implemented at state-owned banks. Naftogaz was unbundled in 2020. The electricity sector too is being gradually liberalized. Tariffs have increased and reforms are expected to support investment in aging electricity-producing and transmitting infrastructure. Investments in renewable energy are also surging.
But there are developments of concern, including a recent removal of the CEO of an SOE which raised concerns among Ukraine’s friends eager to see management independence of these enterprises. Management functions of SOE supervisory boards and their members need to remain free of interference.
The second challenge is to strengthen the rule of law. Over recent years, the country has established—and has committed to protect—new institutions to combat corruption. These need to be allowed to function professionally and independently. And they need to be supported by a judicial system defined by integrity and transparency. The move to re-establish an independent High Qualification Council is a welcome step in this direction.
Finally, we know change is possible because after nearly twenty years, Ukraine on July first opened its agricultural land market. Farmers are now free to sell their land which will help unleash the country’s greatest potential source of economic growth and employment.
Ukraine has demonstrated its ability to undertake tough reforms and, thanks to the COVID-19 pandemic, has seen the real-life benefits of these reforms. The World Bank looks forward to providing continued assistance as the country takes on new challenges on the way to closer European integration.
This article was first published in European Pravda via World Bank
Liberal Development at Stake as LGBT+ Flags Burn in Georgia
Protests against Georgia’s LGBT+ Pride parade turned ugly in Tbilisi on July 5 when members of the community were hunted down and attacked, around 50 journalists beaten up and the offices of various organizations vandalized. Tensions continued the following day, despite a heavy police presence.
On the face of it, the Georgian state condemned the violence. President Salome Zourabichvili was among the first with a clear statement supporting freedom of expression, members of parliament did likewise and the Ministry of Internal Affairs condemned any form of violence.
But behind the scenes, another less tolerant message had been spread before the attacks. Anxiety about this year’s events had been rising as a result of statements by the government and clergy. Prime Minister Irakli Garibashvili suggested the march “poses a threat of civil strife.” The Georgian Orthodox Church meanwhile condemned the event, saying it, “contains signs of provocation, conflicts with socially recognized moral norms and aims to legalize grave sin.”
For many, these statements signified tacit approval for the abuse of peaceful demonstrators. Meanwhile, the near-complete absence of security at the outset of the five-day event was all too obvious in Tbilisi’s streets and caused a public outcry. Many alleged the government was less focused on public safety than on upcoming elections where will need support from socially conservative voters and the powerful clergy, in a country where more than 80% of the population is tied to the Georgian Orthodox Church.
The violence brought a joint statement of condemnation from Western embassies. “Violence is simply unacceptable and cannot be excused,” it said. The Pride event was not the first and had previously been used by anti-gay groups. Violence was widespread in 2013 — and the reality of attacks against sexual minorities in Georgia remains ever-present.
In a socially conservative country such as Georgia, antagonism to all things liberal can run deep. Resistance to non-traditional sexual and religious mores divides society. This in turn causes political tension and polarization and can drown out discussion of other problems the country is marred in. It very obviously damages the country’s reputation abroad, where the treatment of minorities is considered a key marker of democratic progress and readiness for further involvement in European institutions.
That is why this violence should also be seen from a broader perspective. It is a challenge to liberal ideas and ultimately to the liberal world order.
A country can be democratic, have a multiplicity of parties, active election campaigns, and other features characteristic of rule by popular consent. But democracies can also be ruled by illiberal methods, used for the preservation of political power, the denigration of opposing political forces, and most of all the use of religious and nationalist sentiments to raise or lower tensions.
It happens across Eurasia, and Georgia is no exception. These are hybrid democracies with nominally democratic rule. Armenia, Georgia, Kyrgyzstan, and others have increasingly more in common, despite geographic distance and cultural differences.
Hungary too has been treading this path. Its recent law banning the supposed propagation of LGBT+ materials in schools must be repealed, European Commission President Ursula von der Leyen said on July 7. “This legislation uses the protection of children . . . to discriminate against people because of their sexual orientation . . . It is a disgrace,” she said.
One of the defining features of illiberalism is agility in appropriating ideas on state governance and molding them to the illiberal agenda.
It is true that a mere 30 years since the collapse of the Soviet Union is not enough to have built a truly liberal democratic state. Generations born and raised in the Soviet period or in the troubled 1990s still dominate the political landscape. This means that a different worldview still prevails. It favors democratic development but is also violently nationalistic in opposing liberal state-building.
Georgia’s growing illiberalism has to be understood in the context of the Russian gravitational pull. Blaming all the internal problems of Russia’s neighbors has become mainstream thinking among opposition politicians, NGOs, and sometimes even government figures. Exaggeration is commonplace, but when looking at the illiberal challenge from a long-term perspective, it becomes clear where Russia has succeeded in its illiberal goals. It is determined to stop Georgia from joining NATO and the EU. Partly as a result, the process drags on and this causes friction across society. Belief in the ultimate success of the liberal agenda is meanwhile undermined and alternatives are sought. Hybrid illiberal governments are the most plausible development. The next stage could well be a total abandonment of Euro-Atlantic aspirations.
Indeed what seemed irrevocable now seems probable, if not real. Pushback against Georgia’s Euro-Atlantic choice is growing stronger. Protesters in front of the parliament in central Tbilisi violently brought tore the EU flag. Twice.
The message of anti-liberal groups has also been evolving. There has been significant growth in their messaging. The anti-pride sentiment is evolving into a wider resistance to the Western way of life and Georgia’s Western foreign policy path, perhaps because it is easily attacked and misrepresented.
To deal with this, Western support is important, but much depends on Georgian governments and the population at large. A pushback against radicalism and anti-liberalism should come in the guise of time and resources for the development of stronger and currently faltering institutions. Urgency in addressing these problems has never been higher — internal and foreign challenges converge and present a fundamental challenge to what Georgia has been pursuing since the days of Eduard Shevardnadze – the Western path to development.
Author’s note: first published at cepa
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