July 10, 2020

UCC holds virtual forum to assess progress of Ukraine’s reforms

Panel discussion on Zoom comes a year after historic conference

OTTAWA – Nearly a year ago, more than 800 representatives of 37 countries and 10 international organizations came to Toronto to attend the third annual Ukraine Reform Conference.

Volodymyr Zelenskyy was there too, with his wife, Olena Zelenska, when Ukraine’s then-new president chose the global summit in Canada to make his first overseas trip and North American debut. The young Ukrainian leader was warmly welcomed by Canada’s youthful prime minister, Justin Trudeau, and his influential (and Ukrainian Canadian) foreign affairs minister, Chrystia Freeland, who now serves as Canada’s deputy prime minister.

It was an event – and a piece of history never to be repeated.

This year’s COVID-19 pandemic, and the accompanying national lockdowns and physical distancing requirements, ensured that the fourth conference, scheduled to take place in Lithuania, would be postponed until next summer. (Switzerland will play host to the Ukraine Reform Conference in 2022.)

But when people cannot congregate, as the COVID crisis has demonstrated, there is always Zoom, and the Ukrainian Canadian Congress – in partnership with the Canadian International Council’s South Saskatchewan Branch – used the web-conferencing platform to present a special 90-minute webinar on June 22 examining the “progress” made and the “pitfalls” experienced a year after the Toronto meeting.

Although fewer than 100 people – most from Ontario, according to an online poll – logged into the online lookback (also streamed live on the UCC’s Facebook page), the panel discussion provided a review of Ukraine’s successes and setbacks over the past year.

Taras Shevchenko, director of the Kyiv-based Center for Democracy and Rule of Law, focused on the so-called Toronto Principles set out by a group of over 100 civil-society experts in advance of the 2019 reform conference that identify various steps needed for Ukraine to achieve the goals of security and the rule of law; democracy and good governance; and prosperity and human capital development.

In his assessment, Mr. Shevchenko gave Ukraine a report card consisting of passes and failures.

One of the Toronto Principles addresses electoral reform, including a call for the introduction of a proportional electoral system with open regional lists that is featured in Ukraine’s Electoral Code that took effect on January 1. “Most of the positions provided in the Toronto Principles are already in place in the legislation,” said Mr. Shevchen­ko, who added that he was pleased with developments on decentralization and moves to enhance the independence of Ukraine’s mass media, and noted the Ukrainian Parliament’s May 20 ratification of the Council of Europe Convention on Access to Official Documents, which will provide greater transparency on government business.

However, he said he had expected further progress in the areas of anti-corruption and judicial reform, which are both addressed in the Toronto Principles.

The reform of Ukraine’s health-care system, in terms of the development of a patient-centered approach that promotes equal access and “protection from [the] financial consequences of illness” as recommended by the principles, has been stalled, according to Mr. Shevchenko.

He said that, furthermore, there has been little movement in the area of public-administration reform where the Toronto Principles’ call for “transparent competitive selection processes” within Ukraine’s civil service has yet to be implemented.

A joint statement by the governments of Canada and Ukraine, issued at the conclusion of last year’s Ukraine Reform Conference, which they co-chaired, said that Ukraine’s 2020 Public Administration Reform Action Plan “helped increase the attractiveness” of the civil service, resulting in a rise in the average number of applicants for a position from 1.7 to 24 candidates. That, the two countries said, “significantly improved competition.”

During his online presentation, Mr. Shevchenko also criticized the lack of “the strengthening” of Ukraine’s defense system.

The Toronto Principles called for the development of “defense and security capabilities based on NATO standards, particularly those pertaining to accountable governance and oversight institutions… [and] aimed at restoring the territorial integrity and sovereignty of Ukraine.”

However, Mr. Shevchenko underlined that civil society remains a “strong player in the reform process” and that its role needs to be “protected by Ukrainian legislation” and “supported by the international community.”

Oksana Markarova, who served as Ukraine’s finance minister until March 4 when the Verkhovna Rada approved the appointment of Denys Shmyhal as Ukraine’s prime minister and head of a new government, said that, at the beginning of this year, Ukraine was on a path toward strengthening its economy with expected growth of at least 3.5 percent in its gross domestic product. But the COVID-19 crisis reversed that upward curve, according to a recent World Bank Group report.

“Now everything is in decline – and is it going to be minus 5 percent or minus 10 percent of GDP?” asked Ms. Markarova rhetorically.

However, she referred to Ukraine’s successes on the road to reform despite the political challenges wrought by two elections – for president and for members of Parliament – last year. “We managed to finance the budget and keep the deficit below 2 percent,” said the former two-term finance minister.

“The [COVID] crisis does not mean we have to stop reforms. It means we have to focus on a few reforms,” Ms. Markarova continued. One, she explained, should involve bolstering the rule of law that would stimulate further foreign investments in Ukraine. Reforming the country’s health and education sectors should also be a priority, she said.

The Canada-Ukraine joint statement from last year’s Toronto summit acknowledged the Ukrainian government’s Priority Action Plan to 2020 that outlined a “step-by-step [approach] to achieve economic growth, ensure effective governance, human capital development, rule of law and [the] fight against corruption, security and defense.”

The 2019 document also credited Ukraine with achieving an increase of real GDP of 8.4 percent since 2016 “despite all the external and internal challenges” the country faced.

“Ukraine has also managed to stabilize the national currency’s exchange rate,” said the joint statement, which noted that the inflation rate in Ukraine in 2018 was less than 10 percent, or “the lowest indicator for the last five years.”

Further strides were also made regarding Ukraine’s further integration into the European Union, with over 2,000 Ukrainian technical standards harmonized with EU norms. (An agreement between Ukraine and the EU has been in force since September 1, 2017.)

“Ukrainian exports of goods and services to the EU have increased 1.5 times to $22 billion within the last three years,” said the Canadian-Ukrainian government statement.

Roman Waschuk, Canada’s former ambassador to Ukraine who served as moderator of the webinar, highlighted that the Ukrainian reform framework is intended to not only “create sufficient preconditions for individual citizens, but also [for] private-sector actors from within Ukraine and outside Ukraine to be able to do business.”

He referred to President Zelenskyy’s July 3, 2019, speech to the Economic Club in Toronto in which Ukraine’s head of state promoted investment in Ukraine – and mentioned a Canadian publicly listed company, Black Iron, Inc., which has spent a decade trying to get an iron ore mine up and running near Kryvyi Rih, the president’s hometown.

Last November, the Toronto-based company signed a memorandum of understanding with Ukraine’s Ministry of Defense to use some of the government-owned land, currently used for military training, for the $1.1-billion Shymanivske mining and processing plant. In exchange, Black Iron would provide the ministry with funding to be used to build new barracks and an ammunition-storage depot, according to Matt Simpson, the company’s chief executive officer.

He said during the UCC webinar that President Zelenskyy was personally committed to the project and that Ihor Zhovkva, deputy head of the Presidential Office of Ukraine, has assumed the role of “investment nanny” to help shepherd the mine through the government-approval channels.

However, Mr. Waschuk warned that foreign investors could also be scared off by what appears to be the politically motivated prosecution of former Ukrainian President Petro Poroshenko, who appeared in court on June 18 for a pretrial hearing on charges related to alleged abuse of office during his time in office.

The former Canadian ambassador cited comments made by Ruslan Riaboshapka, the first prosecutor general appointed by President Zelenskyy and dismissed in March after what he believed to be his refusal “to sign off on charges against Poroshenko that he dismissed as ‘trash.’ ” These were detailed in a recent UkraineAlert blog on the Atlantic Council’s website. Mr. Waschuk is quoted there as saying that the raft of charges targeting Mr. Poroshenko “reflect an unfortunate insecurity” by President Zelenskyy despite his “crushing election victory” last year “and his continuing opinion-poll dominance.”

Mr. Waschuk referenced what he said in the blog: “this insecurity has been cleverly torqued and exploited by Zelenskyy’s oligarchic electoral enabler, Ihor Kolomoisky, and Yanukovych-era legal affairs chief Andriy Portnov in order to settle old scores.”

During the UCC-led webinar, the veteran Canadian diplomat said that “payback time for them is bad news for the country as a whole.”

The virtual conference on Ukrainian reform is archived on the UCC’s website: https://ucc.ca/2020/06/11/ukraine-reform-conference-one-year-later/.