• Seven Short Term Signs of Reform to Watch in Ukraine: the reforms and anti-corruption measures that the new Ukrainian government will implement will be evaluated by the Ukrainian people, international bankers, foreign governments and historians as to their effectiveness for the years to come. However there are some leading indicators of reform that will demonstrate if they are headed in the right direction as early as summer 2015. If these reforms are felt and noticed by the Ukrainian people then we can be confident the Ukrainian government is committed to its Western course and that it has truly broken with its Soviet legacy. While the list is hardly comprehensive, it is a good start. Also, these are only leading indicators of reform and not the major reforms themselves. For example, everyone acknowledges that fixing the Kyiv-Odesa highway to make it meet European driving standards would be a needed and useful reform. However it will take lots of money and several years to complete. However eliminating bribes to greedy traffic cops along the way to Odesa is something that can be done immediately. Thus, here is a list of measures that can be implemented largely by administrative order…
1. Traffic Police Reform: using Georgia’s experience, an immediate cessation of the shakedown of drivers would go far to convince ordinary Ukrainians that the country has changed for the better. Ukraine’s traffic police are notorious for being the ‘bottom feeders’ of bribes which allow drivers to avoid real or perceived traffic violation penalties. Training professional police officers (with a large enough salary that they don’t need to have their hand out to solicit cash payments from drivers) and enforcing a zero tolerance policy for bribery would be a welcome step. Creating a bribery hotline to report cases of traffic police soliciting bribes would also be a useful and easy step to allow the authorities to investigate the tips. This hotline could be under the purview of the Prosecutor General’s Office to enhance its independence.
2. Healthcare Disability Commissions: improving the healthcare system requires much work. One place to start is to reform the so called “disability commissions” which have the authority to decide if an individual is physically able to work or not. These commissions frequently demand bribes from individuals to declare them invalids which in turn makes them eligible for cash payments, subsidized utilities and transportation, as well as other perks. Unfortunately, the frequency of bribes to commission members makes them less likely to declare those who are truly disabled as “invalids” because they have no financial gain and approving them would lower their overall bribery fee. Thus paradoxically, the needy are denied for lack of money and those with money are approved even though they are not in need. Again, creation of a bribery hotline to report cases of extortion by commission members is one way to make the process more painful for commissioners and fairer for individuals. The leads would need to be investigated by the prosecutor’s office by the institution of and having this recourse would quickly and dramatically decrease such instances of demanding bribes.
3. Cut the Rada Perks: it’s odd than in a country where the parliament members are the richest class of society, they also receive free healthcare benefits at the country’s finest medical facilities as well as virtually free vacations at the country’s nicest state owned resorts. Legislators should pay for their healthcare and pay full fare for their vacations at state facilities rather than the current system where they receive the healthcare for free (as well as for their family members) and their vacations at kopeks on the dollar at state resorts that the average Ukrainian cannot afford.
4. Boryspil Passport Control Bureaucracy: the very first impression of Ukraine that many visitors have is when they exit the airplane and enter passport control at Boryspil airport. Historically, Ukraine has given visitors a highly unfriendly welcome by being required to complete obscure forms, subjection to accusatory questioning from passport control officers, and being forced into outrageously disorganized waiting lines. Due to the war, Ukraine has tightened security at the airports and made it much more difficult for Russians to enter the country. These steps are correct and understandable. However, other countries that have faced Russian annexation and war have still managed to simplify the process. Take Georgia for example; despite the Russian annexation of South Ossetia, Abkhazia and the war in August 2008, visitors to Tbilisi airport proceed through the entire passport control and customs procedures in an average of 30 minutes or less. In late 2012, they were even presented bottles of Georgian wine and a smile from passport control officer upon their entry into the country’s main airport. Contrast the 30 minutes from touchdown of the plane until exit from the airport terminal in Tbilisi with the time required on any given day at Boryspil airport in Kyiv. The waiting time in passport control lines in Ukraine is a national disgrace. The experience of Euro 2012 –even under the Yanukovych regime- demonstrated that Ukraine is capable of operating an efficient passport control procedure without outrageously long queues. Don’t forget that Euro 2012 was conducted under a heighten security situation as well. However the current officials at passport control seem to have no desire or incentive to replicate the efficiency of their performance during Euro 2012. Instead visitors wait while customs agents take breaks and a mere 2-3 passport control officers process the passports for multiple flights arriving at almost the same time. In addition, currently at Boryspil there are passport control lines for “Ukrainian citizens” and for “All Passports” (although no one seems to pay heed to the distinctions). Creation of a separate line for US, UK, Canadian, European, Japanese and Australian citizens would be a welcome move since the citizens of these nations are not illegal immigration risks and the countries listed have provided substantial aid to Ukraine over the last year. Thus, planning ahead by Boryspil airport authorities, greeting citizens of allied countries with a courtesy welcome and more professional passport control staff could easily eliminate this problem.
5. Visas for Westerners: Since Westerners from the US, UK, Europe, Canada, Japan and Australia no risk for illegal immigration (and even if they were, Ukraine has the world’s fastest declining population so the influx of new citizens is not without need), visas for longer term stays should be made more easily obtainable. Currently these country’s citizens are fined 800 hryvnas (and delayed to potentially miss their plane) at the airport every time if the stay more than 90 days consecutively or 180 days in a year. What is needed is a streamlined procedure allowing citizens from those countries to obtain long term visas for a reasonable fee. The current arcane process of obtaining a “D” class visa encourages individuals to violate the law and pay the fine rather than register according to the law. Creation of a new long term “Westerner” visa would also be sign that Ukraine no longer wishes to” kill the golden gooses” who have supported the country through its’ darkest year.
6. Customs Control Courtesy: while everyone understands that Ukraine is in a financial crisis, ending “open season” on visitors through customs control would be another strong indication that Ukraine has truly changed. Implementation of x-ray technology to screen bags prior to them arriving on the baggage carousel would achieve the needed security controls that Ukraine (and all other countries) requires. Unfortunately, visitors to Boryspil must quickly run the gauntlet through Customs Control to avoid having greedy customs agents search their bags for any item which might be remotely questionable in an effort to extort bribes. Discretion from customs agents as well as use of technology would eliminate this irritation and demonstrate that Ukraine is moving in the right direction.
7. Business and taxes: with at least half of Ukraine’s economy in the shadows, the system must be radically changed to legalize transactions so that revenues are created for the state. Business creation and tax reporting need to simplified by the government. However the short term fix is to declare a wide scale tax amnesty with a one-time payment to the state budget based on the number of employees. However going forward, salaries must be paid officially instead of subsidizing salaries with envelopes of cash. In other words, the current practice of paying an employee a salary of 1000 hryvnas officially but giving them 2000 hryvnas more in cash, must be discontinued. If salaries are paid officially then more revenues can be collected by the state for social benefits, national defense, infrastructure, etc. Currently too many people try to benefit from a system in which they contribute virtually nothing. The first place to start by ending the practice of cash in envelopes is in the government ministries and agencies themselves. If government will lead by example, business will also follow suit. One financial success story for Ukraine in 2014 is that tax revenue collection is up five percent from last year. This success comes despite a harsh recession, the annexation of Crimea and occupation of the industrial Donbass. Why were revenues up? Because Ukrainians patriotic instincts told them that finally their taxes would go to something tangible (i.e. the soldiers) rather than in the pockets of corrupt public officials. Think about how much more the tax revenues could be increased if all salaries were paid officially –just by the government alone.
• Akhmetov, Crimea and Coal: in the last week, there has been increased speculation about oligarch Rinat Akhmetov possibly playing footsy with the Russian backed separatists in the Donbass. The seizure of Akhmetov’s humanitarian convoy’s vehicles in Dnipropetrovsk by the Dnipro-1 Battalion this week were done on the allegation that Akhmetov was supplying the Russian backed separatists with “vodka and tobacco”. This factor, combined with the ongoing saga over coal supplies raises the question of Akhmetov’s loyalties (note to reader: if anyone hasn’t figured it out, Akhmetov’s loyalties are to himself). However, an analysis of the facts though, seem to indicate that Akhmetov is not changing sides and backing the Russian separatists. Ukraine is facing a shortage of anthracite coal, a special variety that comes from Akhmetov’s mines in the occupied Donbass. Much of Ukraine’s energy complex requires this specific variety of coal. However the inventory of anthracite coal cannot be released without the consent of the Russian backed separatists. If Ukraine doesn’t get the coal it needs, then electrical blackouts are likely throughout the country after New Years. Hence, Ukraine’s bungled purchase of South Africa coal and likely purchase of Australian coal. In the meantime, Poroshenko has apparently given Akhmetov the green light to try to reacquire physical possession of his anthracite coal for sale to Ukraine’s energy complex. As a result, Akhmetov has tried to placate the Russian backed separatists in an effort to obtain his coal. While they have agreed in principle, the problem is in transportation as the railroad tracks going west have been consistently sabotaged to prevent delivery (by the Russian backed separatists). Thus, Akhemtov’s “friends” in the occupied Donbass have essentially taken his money and blamed other factors for their failure to deliver the product. Poroshenko’s green light for Akhmetov on coal comes as part of an attempted compromise on electricity for Crimea. Ukraine has the capacity to export electricity to occupied Crimea – which is facing a much more severe situation than Ukraine regarding blackouts. In the aftermath of resumed Russian gas supplies to Ukraine, a coal for electricity swap is a win-win for both countries. Given both country’s sliding currency values and economic woes, this is a practical decision that makes sense despite the political differences.
• Putin on the Ropes? As the ruble collapsed to more than 60 to the US Dollar this week (to replace Ukraine’s hryvna as the most devalued currency of the year) and oil prices continued to plunge, many Ukrainian supporters suddenly turned giddy with excitement that Putin’s plans may be unraveling. Optimistically that may be the case but Putin has made a career of the West constantly underestimating him. Over the last year, the “logical” response from Russia has been trumped by an illogical and/or surprise one. With Putin’s finances evaporating, he may yet decide to ‘double down’ and move on Mariupol and Ukraine’s southeast to create a land bridge to Crimea. In other words, he may perceive the situation is “now or never” and make his move. There is no one who can predict Putin’s moves so this episode will play out as it is destined to play out. Nonetheless, Ukrainian supporters would be wise to save popping the champagne corks till New Years. Gloating over Putin’s ‘potential’ failure (tempting though it is) is best done by making Ukraine a better place to live rather than rubbing his nose in the mess.
• Turchynov Returns to Government as NSDC Chief: President Poroshenko appointed Oleksandr Turchynov as the Head of the National Security and Defense Council this week. The post had been vacant for some time and the appointment of the former SBU Chief, Acting President and Speaker to this post is significant. First, the post is part of the president’s quota of constitutional offices that he can appoint without seeking others approval (parliament and the prime minister). Therefore it is interesting that he appointed one of the leaders of National Front which is Yatsenyuk’s party –and not someone from his own party. Second, the appointment of Turchynov to this post by Poroshenko indicates that relations between him and Yatsenyuk are better than speculated and that the government is still functioning as a single team. Cynics believe the appointment to be an attempt by Poroshenko to pry Turchynov away from Yatsenyuk and closer to himself. That may be the long term strategy but Turchynov is not a politician with a career of flip flopping. Thus, the move bodes well for national security and government unity.
Dates to Watch:
• December 26, 2014: Last Voting Session of Parliament for the Year and likely 2015 budget passage.
• January 13, 2015: First Voting Session of Parliament in 2015
• October 2015, National Local Elections: With Kyiv Mayor Vitaliy Klitchko up for re-election, he generally is in a good position to win re-election. The spring merger with the Poroshenko bloc yielded positive electoral results for his party UDAR. However now that the presidential election is over, many UDAR members have been flocking to join Poroshenko’s team and departing Klitchko’s party. Despite pronouncements by Klitchko that the party will be revitalized, UDAR now appears to be on the wane. Klitchko is still likely to remain as Kyiv mayor after next October but the party itself appears to be over. As a result, there is now a void on the center-right of the political spectrum that is waiting to be filled.
Recommended Restaurant of the Week:
This week we begin highlighting great restaurants as an additional feature of this blog. Politics and food go hand in hand. Think about Caesar and Cleopatra’s cruises down the Nile: without the goose liver pate and non-GMO fresh fruits, their romance and the destiny of empires might not have been the same. Little has changed with politics and good food today.
When I living in Arkansas in the 1990’s, Doe’s Eat Place in Little Rock (and Greenville, Mississippi) was the premier steakhouse in the capital and frequented by James Carville and other Clinton presidential advisors. Everyone was raving about the sheer size of the steaks and their quality. As a lifelong Republican, I had a tough choice to make but I opted to eat at Doe’s too despite its Democrat Party leanings. It was the right decision, as I later discovered that not only were the steaks excellent but it was a good place to observe what political opponents were doing and saying in private. Seeing the company certain legislators kept at the restaurant allowed me to corroborate intelligence from other sources. Thus, from that time forward, I elected that I would never let politics get in the way of a great meal.
Along those lines, Kyiv has some great restaurants although they are sometimes owned by notorious politicians and businessmen. Great food is great food though, and so while for the sake of disclosure I might sometimes reveal the owners of certain restaurants in this blog, my dining there is a practical statement on the quality of their food and not a political statement (or endorsement) on their politics.
The restaurants recommended in this blog are for those who love fine dining and local food. If you want a review recommending a restaurant in Athens, Greece because it serves salads with “real” feta cheese, then read www.TripAdvisor.com. However if you want recommendations on an overall fine dining experience that includes quality food, good service, and atmosphere, then you will find this blog feature useful. My intention is not to evaluate every restaurant in a comprehensive manner. My goal is only to highlight the restaurants that I enjoy and comfortably can recommend to my friends. They may be better restaurants, but these are the restaurants that I like and trust.
Stefano’s Fine Food Factory (telephone +380-44-279-1121) is located at 4 Volodymrskiy street and near the top of Andrivskiy uzviv (descent) and specializes in Italian and European food. The restaurant is divided into three main sections starting with a gourmet food store at the entrance, followed by an oyster bar in the back and a restaurant upstairs. The gourmet food stores features wines, cheeses, spices, olive oil and other fine European/Mediterranean products. The oyster bar in the back is a good place to start the evening with an aperitif before dinner. The oysters are fresh and the presentation is aesthetically pleasing. The upstairs restaurants features a huge fish tank for viewing (not eating) in the main dining room followed by two more cozy and private dining rooms in the back. In summers there is an outdoor terrace which is pleasant except for the occasional professional panhandlers who linger nearby. While Stefano’s is on the high end of prices for Kyiv restaurants, you do feel that you received value for your purchase which is not often the case in Ukraine.
One aspect that makes the restaurant stand out is the professional and attentive waiter/waitresses. They know the menu, they are responsive, helpful and well dressed even to the point of wearing white gloves –but surprisingly not pretentious. There are other fine restaurants in Kyiv but the pretense level for anyone with a net worth of under a million dollars is offensive –especially coming from a waiter who makes less money per month, than you are spending on your meal. Stefano’s stands out in that the waiters are exactly what you want in a fine restaurant: respectful and responsive.
The food quality is excellent with everything made from fresh and fine products. Rather than regale you with a regurgitation of the menu verbatim, I will simply list my favorites. The octopus carpaccio is tasty appetizer and the gratis bread and oil are nice fillers before your main course. Attention is made to the presentation of dishes as well. The buffalo mozzarella is served with basil leaves and cherry tomatoes in the form of an Italian flag and a delightful dish in and of itself. The Australian marbled steak is reasonably priced (for a steak in Kyiv) and when shaved black truffle slices are added, it makes a fantastic meal. The seafood is fresh and served by the gram so it is important to measure your portions appropriately. Unlike other Kyiv restaurants though, the waiters don’t push you to buy more than you can comfortably eat.
Thus, if you are looking for a romantic dinner venue, a charming restaurant to take a client (preferably on his/her business expense account), or an impressive place to meet a VIP, Stefano’s should be on your short list.