Monday, July 14, 2014

After the Smoke Clears, Ukraine Still Stands

Crimea is Gone, but East Ukraine Isn't
Time to go to work with what is left...

The "history challenged" Westerners had trouble digesting both the shocking Russian arrogance and the apparent Ukrainian stoicism with the "land grab," but that was then, this is now. The sanctions directed at the clutch of Russian oligarchs who still have Putin's ear are, largely, continuing. [NYTimes_Putin Sees_Cost_of_Ukraine_Saber_Rattling] The implied threat is that these sanctions will continue until the Russian Federation relents and returns Crimea, but that -- at this point, at least -- looks as if it may or may not happen.

MeanMesa is of the opinion that the sanctions actually worked pretty well to "decelerate" the Russians' expansionist obsession for the time being. Crimea represented territory in which the Russian military investment was staggering. The carefully crafted nationalistic pride of "ownership" of the peninsula to the Russians might have been fairly wispy, domestic Putin-esque propaganda, but the material value was further enhanced by its access to the Black Sea and, hence, the Mediterranean for both military and Trade Union shipping access to the European markets.

The election of Petro Poroshenko to formally replace the previous Moscow shill, Yanukovych, reveals a strong public intention of "solving" the predictable economic problems perpetually inevitable in the old Soviet-style industries in the East. Of course, it turns out that the economic ossification of those old Soviet factories may have been one part of the problem, but the old Soviet style workers' mind set in those factories was quite another.

One early victim of the Russian coup attempt in the East was any remnant of lingering trust those workers might readily yield to the Kiev government. As mentioned, the propaganda effort launched by Moscow throughout the whole conflict was fairly effective at re-igniting old, Soviet era factory worker mistrust -- it centered primarily on portraying the Kiev government as nothing more than artificial puppets under the thrall of "EU Nazis." 

Although this may appear somewhat puzzling to anyone still trying to ferret out any substance from the US domestic media, the sentiment held by these Eastern workers remains a pivotal issue in what happens in Ukraine next. Westerners seem strangely loathe to comprehend that even when given all its "warts and wrinkles," the Soviet model imposed on Ukraine during the imperial U.S.S.R. days actually looked pretty good after what the country had been through in WWII and before.

Seeing Poroshenko From My US Living Room
What should we think? What can we expect?

Americans are understandably suspicious of extremely rich men walking into powerful positions as Ukraine President Poroshenko has done. Similar stories written through far too many pages of history and located in far too many countries around the globe have often signaled a nation's descent into autocracy -- no matter about the trappings of democracy which might accompany such events.

The US experience with "rich" and "poor" Presidents doesn't make predictions any easier. For example, one of the wealthiest, FDR, was one of the most liberal, while another wealthy choice, George W. Bush, was on the very fringe of extreme irrational "conservatism" -- plus being dangerously incompetent.

When the atmosphere surrounding such political ascents is one of strife, violence, fear and uncertainty, it seems the likelihood of such "bad endings" seems to be even further enhanced.

However, MeanMesa -- without any more information beyond what is openly available from reasonably credible sources -- is quite comfortable with the choice made by the Ukrainian voters. There is a reassuring feeling that this is, in fact, the man Ukraine has been waiting for and the man that Ukraine has been needing all along. The "Chocolate King" title helps, too. It "softens" the suspicion -- any business man who sells confections successfully just about has to be in tune with his customers, and if he becomes President, it's a trait which should probably extend to a good relationship with the citizens of the nation.

Poroshenko is a known quantity after his record of previous service [Minister of Trade and Economic Development, Minister of Foreign Affairs, National Security and Defense Council], and interestingly, much of this service was under his predecessor, Viktor Yanukovych. This is an important point.

Yes, Yanukovych's desperate actions toward the end of his term as President were despicable, and there is no alternate description of what transpired inside Ukraine other than that of a civil revolution, but an un-examined presumption that the entire fabric of the nation suddenly changed would be in error. It is better and more accurate to think of Ukraine's transformation essentially as a very substantial political one which became violent largely in response to the surreptitious insinuation of extra-national influence -- in particular, Russian Federation influence orchestrated by Vladimir Putin.

Ukraine was not left fumbling, confused with the task of founding of a completely new, "revolutionary government" in a violently born "revolutionary nation." The names, faces and loyalties of those in power changed, as did the "priorities" teased out by the Russians, but the "soul" of Ukraine continued to breathe throughout the conflict and after calm began to return -- perhaps breathing even more vibrantly as a result of it. The brave citizens who fought on the streets of Kiev wanted change but essentially a changed, repaired and redirected traditional Ukraine -- not something else.

That is the challenge facing Ukraine. The "heavy lifting" will test Poroshenko.

MeanMesa's Economic "Suggestion"
It always feels good to counsel a billionaire on money matters...

The near future for Ukraine will almost inevitably include an influx of "economic development" money. Naturally, there will strings attached -- IMF strings, EU strings and probably even US strings. Generally speaking, the IMF will want new or renovated industrial manufacturing and the like; the EU, still stinging from being duped by the violent bursting of the Bush W. "bubble," will be interested in austerity; and the US will probably not be particularly adept at deciding what it's promoting thanks to the permanent political mayhem afoot in the Washington "crap shoot."

Looking briefly at the record of "assistance" from these potential "sponsors" is worthwhile. The IMF's thinly disguised, ideological "economic stabilization policy" looted its way through South American states [and others] inflicting serious, long lasting economic turmoil with only the most meager results. EU austerity faced similar outcomes. It looked fairly rational at the outset, but the political ideologists got to it, turning the task of facing and solving economic challenges into philosophical, social judgement calls which conveniently inflamed their respective domestic political base, but did little to resolve any of the real problems.

US aid has only infrequently been "cut from the cloth" of high ideals. By the time such programs emerge from the Congress, every business interest with a stake in the game has quietly lobbied for a list of advantages, each of which has -- strictly through happy coincidence, of course -- almost immediately diverted the resulting "economic growth" in the receiving state directly back to US banks and corporations. The longer term outcomes are generally suffocating.

Both MeanMesa and the Ukrainians know how the Russian Federation's "development aid" works.

So what can be done? This part of the post promised "suggestions." Here they come

1. Insist that a major part of "economic development" loans be directed to infrastructure. Infrastructure will create Ukrainian jobs almost instantly, and countries with top notch infrastructure typically gain economic strength over time. Naturally, infrastructure can be chosen with the intention of promoting economic growth on a rather short term basis. Harbors, highways, bridges and the like assist business growth. They lower costs and spread opportunity throughout the regions which might have been "left behind" otherwise.

2. Think constantly of a Ukrainian demand economy. Yes, the immediate question is based on the lack of discretionary income in the Ukrainian economy. And yes, everyone on that list of possible sponsors will be chirping in chorus about "global trade," distant markets, free trade agreements and so on, but these approaches have produced very checkered results. There is a troubling cloud of deception accompanying the money in just about every case.

On the other hand, Ukraine needs all sorts of things inside Ukraine, among them weatherized housing, alternate energy generation, modernized nuclear plants and other innovative energy tracks to permanently dislodge the dependence on Russian natural gas. The national economic growth from such policies will not be immediate, but it will be stable and durable for years in the future. With these things accomplished, job growth and "economic development" will follow steadily and almost automatically.

The value of economic autonomy will, given time, out pace the artificial promises of faster growth associated with aid and loans "directed" to areas specified by the lenders.

3. Develop the work force of Ukraine in ways consistent with gradually improving employment opportunities. In New Mexico our state spends tens of millions of dollars in "job training programs" with outcomes so depressing that the Governor's office won't even release the data. There aren't many jobs to begin with, but the "training" largely prepares previously unemployed New Mexicans for jobs that don't exist here -- jobs that have never existed here and probably will never exist here.

Ukraine's economic future will be founded on thoughtfully exploiting Ukraine's natural assets, not on imposed "development plans" for fickle products being produced for fickle foreign markets. 

MeanMesa's "Suggestion" for Social Stability
National Reconciliation

Two unavoidable models of nations which have passed through extreme cultural violence in recent history paint a compelling argument for serious, long term national reconciliation as a formal government policy. The alternative is to linger for years amid bitter hatred, dreams of revenge, a population divided by cross purpose and the ensuing political paralysis and economic stagnation.

The models are Rwanda and Iraq. In one case, Rwanda, national reconciliation became official policy. In the other, Iraq, the bitter division was allowed to fester, over time becoming even worse.

MeanMesa was alive and watching while the Rwanda nightmare unfolded. [Peace Pledge Union- UK Rwanda Genocide] Even while the rivers were still blocked with corpses, the question had already placed itself "front and center." What can possibly happen when this finally ends? How can a country inhabited by such violently opposing ethnic populations ever possibly put itself together again after this?

The Rwandan national reconciliation policy was designed for Rwanda, [Justice-Reconciliation (Rwanda Government) and Rwanda Truth Commission (TRIAL)] but it holds evidence of a basic structure which could be modified and employed elsewhere -- such as in Ukraine. Rwanda did put itself together again. Not perfectly, of course, but together.

The Iraq model saw ethnic division transformed into a steady state of institutional, infuriating sectarian division. The predictable results are in the news paper headlines today. [theguardian: ISIS and War in Iraq] Ukraine may not be bordered by the confused violence of the Syrian civil war, but it is bordered -- possibly just as potentially dangerous -- by the Russian Federation, emphasizing a similar critical priority for a peaceful, unified future.

At the time of this post East Ukraine remains full of Ukrainians filled with fear and bitterness, partially incited by the Russian propaganda, partially left over from the momentum of the "separateness" already present years back and partially as an aftermath of the violence. Whether individual parts of these concerns are real or imagined, each of them injects itself into Ukraine's future in a very material way.

Confronted with this unfortunate reality, the alternatives mentioned above become more than academic musings. Ukraine can choose to remain, like Iraq, in a "devil may care" aftermath of everything that has transpired there, but any gradual acceptance of that as a durable condition would be sheer denial on a national scale.

The situation is not now -- and probably can't be in the foreseeable future -- a case justifying policy based on "just calm down," and "everything will work itself out given time." Any "winner takes all" interpretation of what has happened in the country offers roughly the same positive prospects as an abandoned Pinto with a trunk full of wet dynamite. All might seem, day to day, somewhat settled and promising, but then comes the spark.

Kiev's task of aggressively addressing the fears of Eastern Ukrainians is not an idealistic Parliamentary indulgence, either. That theme should be incorporated in just about every piece of legislation being debated, and those debates must also be populated by enough voices to very credibly represent Eastern Ukrainian interests. For example, the highways of the ambitious infrastructure plans proposed above must not, so to speak, simply stop at the West bank of the Dnieper River. Instead, they should begin, at least symbolically, with bridges over that river to reconnect Ukraine in a very visible, very material way.

The Rwanda model prosecuted and adjudicated all crimes on both sides committed during its conflict to the satisfaction, roughly, of all the parties. It was an immense task with thousands of "moving parts." If something similar is to occur in Ukraine, it will probably have even more "moving parts," but it will be no less necessary, and it will hold the same promise. Like Rwanda's experience, such a process in Ukraine will not simply unfold on its own steam. The Rwandan government accepted full, active responsibility for both the scope of the process and its grave importance.

Statesmanship, Experience, Competence
 and Leadership
Dealing with what's on Poroshenko's desk - on day one

Ushering such a proposal for national justice and reconciliation through the Ukrainian Parliament will be no easy task. It will be even more demanding in the aftermath of the violence between the parties and the precarious state of Ukraine's economy, yet challenges are the ones the day brings, and not the ones we might prefer.

File:Petro Porochenko au Conseil de l’Europe Strasbourg 26 juin 2014 04.jpg
Ukraine President Poroshenko [WIKI]
President Obama once noted that "The easy stuff never gets to my desk." Along the same lines, MeanMesa can't actually spot very much "easy stuff" likely to be floating through the Bankova to President Poroshenko's desk. His first term appears much more likely to be similar to Hercules' assignment to clean the Augean stables.

President Poroshenko's first term mission as Ukraine President will include a lot of things, but a few of the major items emerge clearly right away. Looking over the list, we see an impressive challenge.

The predictable flow of international money must be targeted at the right things while avoiding the apparently inevitable pit falls. The Ukraine national economy needs serious work -- hopefully with the goal of a durable, autonomous outcome where plenty of jobs and opportunities are purposefully directed to the citizens in the nation itself in addition to increases to international trading.

International assistance is fine, but a quiet goal should remain an autonomous demand economy where products and commodities can be both produced and consumed by Ukrainians.

Infrastructure and education are quite legitimate purchases for "economic development" money.

The reconciliation idea must be fleshed out and prioritized, even amid all the other issues demanding attention. The sooner the rancor and resentment of Ukraine's recent violence are addressed, the sooner everything else can start moving forward.

The Russians embellished the lingering fear and mistrust in the East, but Kiev, adequately energized and directed, can overwhelm the allure of any offers the Russians can make. In time, relations between Ukraine and the Russian Federation must be rehabilitated for the benefit of both but, certainly, on terms which can honestly serve the interests of both parties.

MeanMesa's compliments to President Poroshenko.

Ukraine's Flag Speaks to Ukraine's promise - Blue Sky and Golden Wheat [image source]

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