The moment of Truth

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Ukraine has a historic chance to transform, if it survives the war on the Eastern front

Прошлую неделю я провел на конференции в Берлине, в которой участвовали 21 конгрессмен, 16 человек от Палаты Представителей и 5 человек от Сената. Там также были 4 россиянина. Так получилось, что я был единственным человеком от Украины. Конференцию организовывал американский аспеновский институт. Целью дебатов было помочь американским конгрессменам выработать внешнюю политику в отношении России. Формат - неформальный, без галстуков, конгрессмены почти все с женами. 

Каждого из 8 докладчиков -  а я был одним из них, еще четверо были россиянами, трое американцами - перед приездом организаторы попросили прислать эссе на тему своего доклада. Поскольку я его нигде не публиковал, я решил опубликовать его здесь. Правда, извините, переводить на русский не буду.  

Я не хотел жаловаться, что-то просить или напрямую во всем обвинять Россию. Я хотел просто показать, через что прошли украинцы за последние 15 месяцев, на какие жертвы они пошли, чтобы изменить свою страну.

Большинство эссе были академичными, мое было более личностным. Судя по всему, оно многих тронуло. Ко мне подходили конгрессмены, их жены - все простые и доступные люди - знакомились, жали руку и говорили, что они постараются сделать для украинцев все, что могут. 

Завтра или на днях расскажу о содержании дебатов, которые зачастую превращались в эмоциональные споры. 80% было об Украине. Одна из главных тем - предоставление Украине летального оружия. В Украине неплохо бы всем понимать, как их страна выглядит за рубежом, поэтому я на днях перескажу суть. А пока эссе. Тут многое рассчитано на американскую аудиторию, которая знает о последних событиях меньше, чем украинцы, иногда понимает их по-своему. 


The Moment of Truth

Ukraine has a historic chance to transform, if it survives the war on the Eastern front

Lives of many Ukrainians switched into emergency mode on Dec.1, 2013. That day special police units beat up students who protested in the Maidan, Kiev’s main square against ex-President Viktor Yanukovych’s decision not to sign an association agreement with the EU. Ukrainian television channels aired footage of police brutally beating up young girls and boys who were peacefully protesting on Maidan. The students were bleeding and shouting, some of them managed to escape only when they got inside the nearby churches. The next day a crowd of 100,000 outraged Ukrainians poured into Kiev’s streets.

I was one of them. Two weeks before the protests erupted I was forced to leave Ukraine’s largest weekly magazine Korrespondent when a businessman loyal to Yanukovych purchased the magazine and introduced censorship. I had headed the magazine for 10 years. It gained political weight when we investigated Yanukovych’s real sources of income and ran a photo essay of his mansion shot from the air.

The protest was no longer about European integration—it was about justice and dignity. People demanded an apology and a punishment for those responsible for beating the protesters.

If Yanukovych apologized and fired an Interior minister, or even asked an Interior Minister to publicly recognize a mistake and axe somebody below, a big part of the protest would have been over. But Yanukovych responded with repressions turning a spontaneous protest into a marathon stand-off. Parliament dominated by a pro-Yanukovych majority, passed laws that were later labeled as dictatorial. The new legislation introduced jail terms for protesting near government buildings, gathering in convoys of more than five cars, investigating government and police officials for any wrongdoing and “disseminating slander”. By the latter, the MPs, of course, meant any criticism of Yanukovych and his government. If enforced, the laws would effectively make protests illegal, ban freedom of speech and legalize corruption.

I immediately figured, if we allow this to happen, we will turn into a bad version of Belarus for decades. There would be no elections in Ukraine, no economic competition, not even personal freedoms. We wouldn’t even get what I call a “freedoms in exchange for food” pact - relatively high social standards that the Belarusians and Russians enjoy. The so-called “Family”, Yanukovych’s inner circle, was looting the economy and wasn’t willing to share.

Most protesters also understood it was an existential fight and wouldn’t leave the square, despite life threats and negative temperatures.

Then the protests turned violent.

Yanukovych’s people flooded the city with armed thugs brought from all over Ukraine to intimidate the protesters. Some of the activists, like my former business editor Igor Lutsenko, went missing. Lutsenko was kidnapped, taken to the woods and tortured. But he survived. He appeared on TV a few days afterwards in a wheelchair. A man who was kidnapped with him was later found dead. Many others were targeted too. Nobody knew who was going to be next. One night 20 activists went missing. The next morning my wife and I decided it was probably time to leave the city. After leaving the magazine, I became active in protests. I put together a joint video address of prominent journalists to the nation. No TV channel would air that, so we broadcast it on news sites and YouTube. I did an opinion piece for Bloomberg calling for the global business community to pressure Yanukovych’s business allies, who at the time enjoyed a relatively good reputation in the West. I was also active in Facebook with 20 thousand subscribers and eventually started getting threats. But we decided to stay—it was difficult to leave home with two small children for long.

Protesters captured about a dozen government buildings, erected barricades throughout the city center and attacked police with stones and Molotov cocktails. Accidentally, we learned that our 19-year-old daughter, a student, was filling up Molotov cocktails on Maidan when snipers already worked on the roofs. We were terrified and banned her from leaving home.

A few days afterwards what was already called a Revolution of Dignity culminated in an ugly way. Special troops shot dead about 100 people right in the center of the capital, Yanukovych fled Kiev. Parliament cancelled the dictatorial laws. The next morning Yanukovych’s mansion the size of Hyde Park in London, a symbol of corruption, opened its doors to general public.

The trouble seemed to be over. But it had just began.

A few weeks afterward Russia annexed Crimea and riots began in Eastern Ukraine. Armed people started capturing government buildings in Donetsk and Luhansk, some of them Russians, some of them locals. What was happening in Kiev was grim but was clear. The developments in the Crimea and Eastern Ukraine were beyond my understanding. Who were these people? Where did they get grenade launchers and Kalashnikov guns in such quantities? And what are they protesting against? Human rights, economic development and honest government? The most shocking thing was that a large part of the population, especially in Crimea, supported the rebels.

We suddenly realized that Russian propaganda, which looked ridiculous from Kiev was extremely effective in the Russian-speaking areas of Ukraine and Russia itself. What we thought was a Revolution of Dignity was presented on Russian TV as an illegal rebellion of neo-Nazis financed and managed by Americans. An anti-criminal revolution was shown as an aggressive offensive on anything that is Russian—culture, language, identity. The technique was simple: Russian media focused on a small radical wing of the revolution—it constituted less than 5%, the rest were young professionals, students, retirees—and blew it out of proportion mixing it with fakes and lies.

Viewers were hammered with literally non-stop images of radical youth accompanied with emotional commentary and historical parallels with the Second World War. Lack of facts was compensated with fakes. A woman from Donetsk region cried and told a horrifying story how her child was crucified by the Ukrainian fascists. It was later proven to be a fake. Men claimed they were brutally beaten for using the Russian language in southern Ukraine. They were later proven to be dressed actors who claimed the same in different parts of Ukraine depending on a channel. Dmitry Yarosh, the head of Ukraine’s right-wing political party Right Sector, was shown on Russian TV as winning Ukraine’s presidential elections with 32% to create an impression nationalists are grabbing the power in Kiev. He actually got less than 1%. It can be checked on the site of Ukraine’s Central Election Commission or any Western or Ukrainian news site. In another astounding TV report, a local resident in Donbass claimed Ukrainian soldiers told him they were promised a piece of land and two slaves each for their military campaign. The report was backed up with images of dead bodies.

You would think such a primitive technology wouldn’t work in the 21st century when people have internet. But it did. No wonder a lot of residents in Crimea and Russia started treating the Ukrainian revolution and Ukrainians themselves with suspicion, to say the least.

In a recent poll by the Moscow-based Levada Center polling agency, Russians included what they previously referred to as brotherly Ukraine into the top three most hostile nations to Russia, along with the US and Latvia. Ukrainians replaced Georgia and Estonia in this honorary title.

Ukrainians’ attitude towards Russians has also deteriorated. Comments under most articles on news sites have turned into verbal fights and an exchange of insults by Russians and Ukrainians. The number of Ukrainians willing to live in the same state with Russians fell to a record low of 5% by October last year, even in the East of the country the figure halved from 26% to 13% over just five months.

Relations have deteriorated on the human level as well. My wife’s sister lives in Moscow for many years, she is a Russian citizen. We find it difficult to communicate with her family and decided we should all take a pause. It is difficult to speak with people who are convinced the black color is white and vice versa.

Generally, most Ukrainians have been on a major emotional and financial stretch over the last year. First, many have either participated in the war in the Eastern part of the country or lost a relative or a friend. My classmate, an owner of a private clinic and a father of the three, now commands a platoon. He is a volunteer. My former nation editor has just been called to the army and is training now. Over the last year almost everyone I know acquired a habit of checking sites even at night to find out news from the front. It is also a major topic of conversation.

Second, all the Ukrainians have seen their income plummet as the exchange rate of the local currency, the hryvna, fell from 8 to almost 30 to a dollar over the last year. Those who were making $3,000 are now making $1,000, those who were making $1,000 are now making $300. Even though a lot of businessmen and office workers have become volunteers or contributed financially to support the Army, doubling the defense budget even by official estimates.

War sent the Ukrainian economy into a free fall with an estimated GDP contraction of 7.5% last year. Investors shunned the country at war, local businesses stagnated.

Financial woes came on top of the government’s attempts to reform the economy which often means raising prices. For example, tariffs for electricity will go up 40% next month while heating will become 66% more expensive by the end of the year. Gas tariff hikes will also grow 5 times over the next two years. The hikes are needed to make gas and electricity a commercial, rather than political commodity. Raising the tariffs is also part of the Ukrainian government’s commitment to the International Monetary Fund whose funding it badly needs to cover holes in the budget.

Ukraine is now waging two wars: one with pro-Russian rebels and Russian troops in the East, another—at home trying to reform its obsolete economy. The government was slow to reform in the first six months after the revolution. Part of the reason was the war that drew a lot of resources, part was domestic politics—new parliament needed to be elected that would replace the caretaker government with the new one. That happened in December last year. Now Ukraine has the most professional and most determined government since it became independent in 1991. That is not only my estimate but also that of foreign economists such American Anders Aslund and Leszek Balcerowicz, an architect of Polish reforms in the 1990s. Most of the new ministers came from private business and investment banking. Foreigners were also widely invited, a lot of them former members of Mikhail Saakashvili’s team in Georgia. If it can be an indicator of pro-Western sentiment, 18 out of 20 ministers in the government now speak English. There were only two such people in Yanukovych’s government.

In addition, they all have a strong incentive to reform—a lack of alternative. If they don’t, Ukraine’s economy will collapse in a year or two. That will include privatizing loss-making state companies, cutting red tape and easing the tax burden as well as putting corrupt people in jail.

Ukraine has now a historic chance to transform into a vast European nation with competitive economy and rule of law. If it can only survive on the Eastern front—its people have been in emergency mode for the last 15 months.

Украина 2020. Экономика

Не пропустите! Уже завтра, 18 октября, состоится лекция НВ «Экономика 2020». Новый курс или старые реформы? Приватизация или откаты? Доллар по 8 или 50? Рост или дефолт? Спикеры: Андрей Коболев, Виктор Пинзеник, Оксана Маркарова, Ольга Гуцал.

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