The strange policy, pursued by the present occupant of the White House during the past few weeks is fairly surprising. Moreover, Joe Biden’s actions vis-à-vis Russia are downright contradictory, to say the least. Or maybe his strange initiatives are sending some ulterior message to the team around him and those who supported last fall’s very dirty elections?
On the morning of April 15, President Joe Biden signed a presidential directive introducing a new batch of anti-Russian sanctions. The move sent the Russian ruble slightly down and prompted new statements by Russian politicians about the need to brace up for an even greater break with the West, and even of switching Russian banks from the SWIFT system of international financial transactions. Moreover, competent sources say that the prospect, fraught with a severe collapse of Russia’s national currency, prevented Moscow from snapping up in 2014 the whole of what Russians call Malorossiya (Little Russia). Six years on, Russia is ready to face up to this threat now that it has its very own national payment system MIR, and its Chinese partners are ready to introduce en masse their UnionPay system. Chances are that Moscow will eventually abandon SWIFT and deprive Washington and Brussels of one of the few remaining levers of pressure on Russia.
However, just a day earlier, Biden had been negotiating, and sort of agreed about a meeting with Russia’s President Vladimir Putin within the next few weeks. Well, there are things that need to be settled on a personal level, of course. And still, “within a few weeks” means an “emergency” summit. Even the leaders of small countries do not schedule one-on-one meetings at such a short notice as bilateral summits, especially between great power leaders. It normally take a year and more to prepare. Therefore, “a few weeks” is a very inconvenient period for diplomatic protocol and security officials, advisers and the staff of heads of state.
One obvious explanation for such a rush could be the looming military standoff between Russia and Ukraine. Confused by conflicting instructions from the old and new US administrations, and forced to maneuver between his own oligarchs and the far-right forces, Ukraine’s President Zelensky is apparently unable to pursue a pragmatic policy. He cannot take a step back, Ukraine’s resources are not sufficient enough for any lengthy arms rattling along the borders of the unrecognized Donetsk and Lugansk republics, and he has very small chances of a blitzkrieg. As a result, a war can break out simply by accident or as a result of actions by some trigger-happy mid-rank commander on the ground.
However, it looks like Washington may find itself the winner no matter how the war may unfold. Kiev’s victory and the return of Donetsk and Lugansk under its control will seriously undermine Putin’s position both at home and on the international front. On the other hand, Kiev’s local defeat will give an excellent reason for slapping new sanctions on Moscow, including the Nord Stream project, which prevents the United States from selling its liquefied natural gas to Europe. Well, the hypothetical Russian offensive and the reunification of Novorossiya and Little Russia with Russia will make it possible to declare the Russian Federation an evil empire, will force the NATO allies to ramp up their defense outlays and spend money on deploying additional US military contingents on their soil. The problem for Russia is that it does not have enough resources to quickly and effectively integrate even the 4.5 million-strong Novorossiya (Odessa, Kherson and Nikolayev regions), let alone the whole of Eastern Ukraine. Meanwhile, to feed the “Kremlin monster” Ukraine and wait for it to die from indigestion would seem a simple way out for Washington. And still, Biden goes to negotiate, demonstrating his readiness for playing hardball (after all, he introduced new sanctions after agreeing to a meeting). Why?
Throughout last year, many Ukrainian and later US politicians, led by former New York mayor and Trump’s lawyer Rudolph Giuliani were trying hard to draw public attention to Hunter Biden’s allegedly corrupt business dealings in Ukraine, backed by his father, Joe Biden (in April 2014, the son of the then US Vice President, Hunter Biden joined the board of the Ukrainian energy company Burisma Holdings.
The Ukrainians, including their former Prosecutor General, provided strong enough evidence of funds withdrawn via Burisma and exorbitant salaries paid to foreign directors. President Donald Trump personally intervened in support of the investigation as it turned out that many businessmen with links to the Democratic Party had been somehow involved in murky financial dealings in Ukraine. However, the investigation was gradually rolled up. But wasn’t Burisma just the tip of the corruption iceberg? It was the Democratic US administration that removed Ukraine’s pro-Moscow President Viktor Yanukovych. Since March 2014, Kiev has been taking recommendations by US ambassadors as direct instructions. The independent policies of the two pro-Western presidents, Poroshenko and Zelenskiy, have always been a big question. Meanwhile, impoverished Ukraine is a potentially very rich region with lots of fertile land and mineral resources, but the authorities are still unable to support local businesses and agrarians, even if they wanted to. Since 2014, the country has consistently been bending under IMF demands jacking up tariffs, abandoning any protectionist measures, and losing any control over foreign investors. Therefore, it is very hard to say just how many business assets in Ukraine are actually controlled by US Democrats. And if we assume that in exchange for political support Biden and his entourage handed out lucrative contracts to local businessmen under their control, then the situation for the US leader looks absolutely critical.
Well, even if Zelensky surrenders to Russian tankmen, goes to Moscow and comes clean about Biden’s unsightly role in organizing corruption schemes, the Democratic Party’s powerful propaganda machine will still cope with that. Gone are the days when direct evidence of corruption and other crimes led to the resignation of politicians. That being said, what will Biden tell his business partners if the Russians win? Moreover, any military defeat could be the end of Ukraine as an independent state. The only alternative is direct military support for Zelensky, but this would be a shortcut to the Third World War, where there will be no winners!
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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