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Sergiy Taran on Ukraine's Recent Political Turmoil, Interview with Kiev's International Democracy Institute Director

ICE Graveyard 2/05/2016 Samuel Ramani
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Sergiy Taran is the Director of the Kiev-based International Democracy Institute think tank, and the head of the Board of the Center of Sociological and Political Researches "Sotsiovimir". Taran is also an activist and political scientist specializing in post-Communist Ukrainian politics. His opinions on Ukrainian politics have appeared in numerous leading Western publications like the Financial Times, BBC, and The Guardian. Taran shared his thoughts with me about the current political turmoil in Ukraine via Skype in April 2016. The transcript of our interview is below:
Arseniy Yatsenyuk recently resigned as Ukraine's Prime Minister. His resignation was widely expected due to public dissatisfaction with his anti-corruption efforts; but why do you think he decided to resign now?Sergiy Taran: Yatsenyuk had very low popular support, and the parliament decided to do something about it. The parliament decided to reshape the formation of the coalition. As a result, Yatsenyuk resigned. In my opinion, Yatsenyuk had a mixed legacy. He moved Ukraine on the path towards a balanced budget, but he had to increase taxes to do that, which made him unpopular. Improving Ukraine's fiscal position was vital for talks with the IMF to begin. Another positive contribution was stopping Ukraine's economic dependence on Russian gas. Every Ukrainian government has had to negotiate with Russia over gas prices. And these negotiations were more about politics than economics; Ukraine had to make concessions. Ukraine still buys Russian gas; but Russian gas is no longer critical.
In the process, he eliminated the corruption associated with dealing with Russia, and pivoted Ukraine towards Europe, which was necessary in a time of war with Moscow. He also succeeded in small-scale reforms, like the creation of a new police force. Under Yanukovych, the Ukrainian police was one of the least trusted institutions; now it is one of the most trusted. Ukrainian government tenders also developed an electronic procurement system; which rooted out the corruption associated with inter-personal interactions in banking. Despite these successes, Yatsenyuk did not move Ukraine towards deregulation. Excessive regulations still complicate the tax code and business registration. More progress needs to be made in liberalizing the economy; there are a lot of state enterprises, which are highly corrupt. Yatsenyuk was seen as responsible for failing to take on state businesses. He also did not communicate well with the people about reforms. The Ukrainian people did not see the reforms as tangible. Yatsenyuk failed to set optimistic, but viable targets that people could understand. He would have been more popular if he convinced the Ukrainian people that the country was progressing in the right direction.
Volodymyr Groysman was appointed as the new Prime Minister after Yatsenyuk's resignation. Do you think he will be more successful than Yatsenyuk or fall prey to the same problems that his predecessor faced? Sergiy Taran: We cannot expect a miracle from Groysman as the reforms that Ukraine needs took 7-10 years to be implemented in other parts of Eastern Europe. But I think his plans could be more successful than Yatsenyuk's. Internet registration of businesses so people can circumvent the bureaucracy associated with visiting offices is a good thing. Groysman is likely to reform the tax code and will be a better communicator than Yatsenyuk. He won't produce miracles, but he also won't repeat Yatsenyuk's mistakes.
Ukrainian President Petro Poroshenko was implicated in the Panama Papers over his creation of an offshore account. How damaging will that be to his authority as president; and do you think that he could face impeachment proceedings over these actions as some have speculated? Sergiy Taran: The offshore scandal is bad for Poroshenko but not something that can break his career. He was a businessman and he made a connection with an offshore company, because up until two years ago, Ukraine was a very bad place to do business or invest in companies. Extensive regulations in the Ukrainian economy did not attract businesspeople. So some people here can understand the rationale for his offshore company. The majority of people do not even understand how an offshore company works. Journalists, members of parliament and experts understand it; but the masses will not grasp the severity of the problem. If Poroshenko can make the relationship between business and government more transparent, he will survive the scandal.
There was a recent debate in the Atlantic Council about the possibility of Ukraine holding earlier than expected parliamentary elections. Do you think this would be a good idea or a destabilizing action?Sergiy Taran: As of now, the earliest Ukraine can viably have elections, is in one year. For fall elections to take place; the government needs to fall in the next 1 or 2 months, right after the government was appointed. That would be unrealistic. The earliest date for early elections would be spring 2017. I don't think that early elections are a good idea for the Ukrainian parliament right now, but for them to happen, it would require Groysman's government to lose public support. Right now, the Poroshenko Bloc and Yatsenyuk's Popular Front dominate the parliament. As populist and opposition forces gain momentum; that might change. But early elections will not likely have catastrophic consequences (even though I am not in favor of them).
Mikhail Saakashvili has recently gained a lot of attention due to his populist rhetoric, and there is speculation that he might run for the Ukrainian presidency. Do you think he is a viable political contender?Sergiy Taran: Saakashvili is very appealing to a group of people in Ukraine who expect quick changes. These people now vote for radical parties and they might see Saakashvili as a better alternative. By drawing on his Georgian experience, Saakashvili can also flip the coin and say he is not really a populist. Right now, he draws support extensively from progressives, staunch advocates of European integration, and human rights activists. But his reforms in Georgia required a large concentration of power, and he enacted very radical reforms without taking into account opposition rights. This can be very effective but also anti-democratic. It is unclear whether Ukraine can accept this kind of model. Most Ukrainians who support Saakashvili have little knowledge about his policies in Georgia.
Prosecutor General Viktor Shokin recently resigned, after facing widespread criticism for his reluctance to prosecute high-level criminals from the Yanukovych-era. Do you think these corrupt and human rights violating officials will be tried eventually? And how can confidence in the Ukrainian court system be restored?Sergiy Taran: The Prosecutor General's office has declined in importance. Two new institutions have been created under Poroshenko: the National Agency for the Prevention of Corruption and the Anti-Corruption Bureau. These institutions have taken on new responsibilitie that the Prosecutor-General once had, but I agree that Shokin did not make adequate reforms. The courts and prosecution office need reform as many officials in place have been in power for 15 years through the Yanukovych-era. The police reforms could be a model for the courts to replicate.
Last year, Ihor Kolomoyski retreated from direct political involvement, prompting Poroshenko to claim that he was going to crack down on Ukrainian oligarchs. How successful has his de-oligarchization policy been?Sergiy Taran: The de-oligarchization policy is moving slowly. The role of Ukrainian oligarchs in politics has declined but the people want more radical changes. The influence of Ukrainian oligarchs over the parliament explains the slow pace of reforms. If Poroshenko cracks down on oligarchs, he automatically loses 2 factions of the Ukrainian parliament. Parliament officials rising to power as a result of oligarch support will not back Poroshenko. Populist parties like Samopomich are resisting Poroshenko. Leaders like Yulia Tymoshenko are criticizing unpopular reforms and insinuating that Ukraine doesn't need to work with the IMF because they want early elections. The pro-Russian Opposition bloc is also complicating the situation. In light of this delicate political balance, Poroshenko's best way to confront oligarch influence is to liberalize the economy and break up monopolies.
Turning to foreign policy, the Dutch public overwhelmingly rejected a recent referendum over Ukraine's EU association agreement plans. Do you think this is a sign European leaders are losing patience with the slow pace of reforms under Poroshenko?Sergiy Taran: This referendum was not about Ukraine at all. It was about the special relationship between Dutch institutions and Brussels. Ukraine was the focus of a struggle between Netherlands and the EU. The turnout was only 32%. Dutch politicians are only going to approach Ukraine after a lengthy period of compromise with the EU and amongst their own political leaders. I think the referendum will not change the EU-Ukraine relationship. But it provides some lessons. First of all, it shows that Ukraine needs to more active in promoting favorable information about its policies abroad. Second, the rise of Euro-skepticism is dangerous for Ukraine and all of Europe.
Another controversial issue affecting Ukraine today is the unresolved problem of external debt. Many have speculated that this could be harmful for Ukraine's relations with the IMF, EU and Germany, in particular. How do you think Ukraine's struggles with the IMF can be resolved?Sergiy Taran: Relations between Ukraine and the IMF are going to be the same. Unfortunately, at the moment there is little that can be done to improve the situation until Ukraine's economy starts growing for 3-4 years. Once that happens, then Ukraine can revive the relationship with the IMF it had a number of years ago. I believe closer ties with the IMF can be an option for the future, but not for now. The IMF does not care too much about the debt default to Russia; it is almost treated as a kind of private debt. The IMF considers numerous extenuating political and economic arguments, which will preclude a halt in cooperation with Ukraine over the Russian debt issue.
Finally, the situation in Eastern Ukraine had shifted decidedly towards a frozen conflict and the Minsk Accords looked to be making serious progress. But there was a recent re-inflammation by Russia in Donbas. Do you think that the current relative peace is a mere lull in Russian aggression or do you think that the status quo will be maintained in the long run?Sergiy Taran: The most likely outcome for Ukraine is still a frozen conflict. Russia cannot remove its military forces from Ukraine because there would be a huge political backlash. Every other outcome would be problematic for both Russia and Ukraine.
Samuel Ramani is an MPhil student in Russian and East European Studies at St. Antony's College, University of Oxford specializing in post-1991 Russian foreign policy. He is also a journalist who contributes regularly to the Washington Post, Diplomat Magazine and Kyiv Post amongst other publications. He can be followed on Facebook at Samuel Ramani and on Twitter at samramani2.

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