Time for a second transformation

           This article emphasizes Russia’s need to create a better business climate in order to grow its economy and to bolster its credit ranking. Currently Russia ranks the 120^th easiest country to do business in according to the World Bank. Furthermore, Russia is the world’s largest exporter of energy, a resource that is falling in demand. Recently, President Putin has proclaimed that he intends to reduce Russia’s reliance on its oil and gas revenue and boost investment to 25% of the gross domestic product by 2015. Additionally, he intends to improve the countries ranking ease of doing business ranking to 20^th. A paradox to this ambitious goal is that it requires a reducing state interference in private enterprises, while government spending and regulations have typically been a source of providing votes. Most economists advocate that it is imperative for Russia to move away from its reliance on natural resources because a further drop in the price of oil would drop Russia’s credit ranking and have a significant impact on its economy.

            The impact of further decline in the price of oil may potentially have a catastrophic impact on Russia as well as many nations that are heavily reliant on oil. How catastrophic the impact will be depends on the foresight of leaders and their ability to take preventive steps to protect their people and economy. Russia’s current economic stability is almost entirely a product of high oil prices around the world. Putin was able to utilize “petro dollars” to bring some sense of order to the nation and provide much-needed public service. The president was also able to seize an almost authoritarian power through this stability. His general rhetoric seemed to be I have provided prosperity and thus I will hold the power. This sentiment has begun to stir up some resentment and public protests throughout the nation as was evidenced during the past election. The popularity rating of Putin’s United Russia party has continued to slide. Valdimir Milov, an opposition leader, has suggested the party in in need of a “physiological rehabilitation” for it to continue to thrive. While there may be sentiment against Putin, his greatest advantage is that that no single candidate that can legitimately challenge his power.

            Putin takes much of the praise for Russia’s economic revitalization post Yelstin, but increased criticism will ensue if he cannot figure out a way to reduce reliance on oil. The occasional public protests that we see today will potentially turn into hordes of angry mobs if the economic situation worsens. There are signs that Russia is making small steps towards improving its fiscal outlook buy minimal reductions in its budget. However, just as in any democracy, leaders focus on short term benefits that will help them to be reelected. Today’s Russia is a radical transformation from fifteen years ago but it is time for a second transformation if the nation intends to be a competitive global player.       

Sandy Shore http://www.usnews.com/news/business/articles/2012/10/19/oil-prices-flat-ahead-of-eu-summit-conclusion

http://www.economist.com/news/europe/21564889-lost-elections-and-another-arrest-give-opposition-more-problems

Anna Kasyan http://www.forbes.ru/sobytiya/175100-vybory-na-kotorye-ne-puskayut-hakery-kak-oppozitsiya-vybiraet-liderov

Mikhail Korchemkinhttp://www.forbes.ru/ekonomika-column/kompanii/67935-gazprom-i-standard-oil-naidite-otlichiya

Aydar Buribayev http://www.forbes.ru/sobytiya/vlast/161122-kak-finansiruyutsya-rossiiskie-vybory-rassledovanie-forbes

The Status of Human Rights in Ukraine

Ghandi believed that “a nation’s greatness is measured by how it treats its weakest members.”  If this gauge is correct, then priorities to ameliorate the conditions of the vulnerable including children, the elderly, the sick, and the needy should be the forefront of state policy.  Fortunately, Ukraine has implemented many reforms in the past 20 years to spread equality to each citizen. However, the problems faced by Ukrainians with special needs can be quite enigmatic.  Despite the progress made to public policy guidelines, there are still problems with implementation and services to avail all Ukrainian citizens with equal access and opportunities.  One of the biggest challenges in Ukraine is the pervasive negative perception of people with disabilities.

The success of the 155 Ukrainian athletes sent to the Paralympic games in London this year showed hope for the public attitude towards the special needs population.  Ranking fourth in national metals, the athletes returned home honored as heroes to a military guard and orchestra.  Aspiring to “inspire and motivate people with special needs in search of work and to convince employers of their potential,” these athletes outperformed all other previous Ukrainian teams.  Their victory provides optimism as they prove that people, with physical limitations are active; “they don’t simply sit at home, but can succeed at something in this life.”   Cvitlana, a woman with special needs from Kyiv, is convinced that the success of these athletes will change the attitude of Ukrainian society and affect the movements advocating for their rights as individuals.

Yet, the movement for people with special needs is only a small reflection of the encompassing campaign for human rights in Ukraine.  Since 2010, the U.S. State Department report concerning human rights has identified Ukraine as democratic, but fails in meeting the western expectations for human rights.  It lists cases of violence and discrimination against women, children, homosexuals, Roma, Crimean Tatars, and others.  Recently, Ukraine was ranked fifth for the number of complaints to the European Court of Human Rights.  Making headlines most recently and contradicting “the obligations of Ukraine, to take part in the European and international agreements on the protection of human rights" is the Ukrainian proposed law against Homosexuality.  Despite the prohibition against discrimination, this law would make it a criminal offense to propagate information in support of gay rights.  Although Ukraine has made many improvements in establishing democratic principles and ensuring equality, its failure to reaffirm fundamental human rights to all citizens has hindered development.  According to the Universal Declaration of Human Rights, promoting human rights facilitates “social progress and better standards of life.”   Therefore, defending human rights should be a priority of any democratic government.

In reality, the Ukrainian Paralympians return home, is a return to a “place of constant struggle” to live within the barriers of society that discriminates, according to Valeriy Sushkevych - head of the National Sports Committee for the Disabled, “in social adaptation as well as in chances for education and jobs.”  He advocates as a lawmaker in the Verkhovna Rada “to see a fair and respectful attitude of society and state towards …Paralympians and all of the other disabled people here.”   Ideology has not moved as fast as the Ukrainian Paralympic successes and stigmas still exist that impede everyday life for these citizens.  Any human rights’ violation disables the targeted population -whether special needs, homosexuals, women, or children - and impedes their opportunity for success.

By analyzing Ukrainian advancement in one sphere of the human rights initiative, it is possible to track the overall commitment and concern of ordinary citizens and government in overcoming social attitudes of apathy and neglect.  An increased awareness and desire to advocate for one population will enable the advancement of other maligned and marginalized citizens. 

Articles:

Shevchenko and Grytsenko .  “Triumph of Ukraine’s strong-willed champions.”  KyivPost.  Sept. 13, 2012. 

http://www.kyivpost.com/guide/all/triumph-of-ukraines-strong-willed-champions-312937.html

“Форум ВВС: як Паралімпіада змінила ставлення до людей з обмеженими можливостями?”  (Forum BBC:  How Paralympics changed the attitude towards people with special needs).  Aug. 29, 2012.

http://www.bbc.co.uk/ukrainian/multimedia/2012/08/120827_global_disability_forum.shtml

Kravesh and Lacey.  “Українська паралімпійська революція”  (Ukrainian Paralympics Revolution). BBC Україна.  Aug. 23, 2012.

http://www.bbc.co.uk/ukrainian/sport/2012/08/120806_paralympics_ukraine_revolution_ak.shtml

“Україна демократична, але має проблеми з правами людини – звіт Держдепартаменту” (Ukraine is democratic, but has problems with human rights – State Report).  RadioSvoboa.  March 11, 2010.

http://www.radiosvoboda.org/content/news/1981331.html

“Україна – п’ята за кількістю скарг до Європейського суду з прав людини”  (Ukraine – Fifth for the amount of complaints to the European Court of Human Rights). RadioSvoboa.  October 12, 2012. 

http://www.radiosvoboda.org/content/article/24737040.html

“В Украине запретили дискриминацию” (In Ukraine – discrimination is prohibited).  Donbass.  Oct. 4, 2012

http://donbass.ua/news/ukraine/2012/10/04/v-ukraine-zapretili-diskriminaciju.html

“Закон про гомосексуалізм суперечить зобов’язанням України щодо захисту прав людини” (Law on homosexuality contradicts Ukraine's obligations to protect human rights).  Zerkalo Nedilya.  Oct. 3, 2012. 

2012 the year of the election; the year of Europeanization.

As elections are approaching, the media is filled with political ads of promises.  However, in Ukraine, the Party of Regions has introduced a simple idea in their campaign ads that seems natural to (and the desire of) most Ukrainians.  Found on the party website, the phrase “Ukraine – a Rich European Country of Successful People” is part of 20 slides describing the success of the past regime and is not even being contested by other parties.  By exploiting this phrase, Yanukovich is almost taking credit for “Europeanizing” Ukraine within his presidency during the past four years.

However, Ukraine is still far from meeting the expectations of their Western neighbors.  So how is this label justified and from where does it receive its inspiration? 

After a decade of attempting to adhere to the ambiguities of European expectations, Ukraine is establishing their own guidelines for advancement.  Since 1991, the Western world has expressed its support and desire for Ukrainian efforts of democratization.  Progress, however, eventually stagnated as the support waned to mere words from the west though still demanding difficult developments; Ukraine reciprocated with its own artificial effort and hollow promises.  Recent Ukrainian success has motivated a push for autonomy.

Ukraine has realized its own importance and is aware of the contributions it may make by untangling itself from the outside pressures imposed as it attempts to associate and align their interests to one entity.  Ukraine has uncomfortably tried to please both sides with one foot stretched West and the other East.  Ukraine may now take the best from both worlds by standing firmly for its own interests.

One source for this movement is the European ideology that accession would bring benefit only to Ukraine and failed to recognize how Ukraine could contribute.  Ukraine was literally stuck between the peripheries seen as dependent by both her neighbors.  While seeking the interests of other nations, Ukraine neglected its own national interests.  Rory Finnin explained: “Pick up an article about Ukraine, and you are likely to find reference to a Ukrainian politician or civic figure as 'pro-EU' or 'pro-Russia' - but never 'pro-Ukraine'.”  Yanukovich, whose motives are hopefully pure, is determining Ukrainian aspirations.  Desiring to increase her importance and influence, Ukraine is beginning to find her own identity.  Ukraine will attempt to discover her potential to create one of the strongest economies in the Post-Soviet countries.

Although Ukraine would gain much from adopting European standards, accepting accountability for their own growth is to a Ukrainian advantage.  Solzhenitsyn explained that a society cannot simply be molded to follow the Western way of life. “[I]t would mean an improvement in certain aspects, but also a change for the worse on some particularly significant points.”  A country in transition may find a few useful characteristics to implement during the process of progression, but will not be able to perfectly mirror the model.  In fact Solzhenitsyn boldly states “the Western way of life is less and less likely to become the leading model.”   Ukraine will have to prioritize and identify how it will move forward.  Thus, Ukraine is emerging independently from the tug-of-war between East and West.  Ukraine will be able to seek her own interests and fulfill her own identity moving forward according to an autonomous desire.

Victoria Mukha’s summarizes her hope for Ukraine: “For its part, Ukraine must do all it can to meet the challenges of transition and become a valued and constructive player. Ultimately, our fate depends on us. If we take advantage of our opportunities, we will benefit greatly – and so will others.”  Ukraine, geopolitically, is in a great position; If it chooses to act responsibly, and in the interests of its people it will surpass the bonuses of ascending into the European Union.

Sources:

Donskis, Leonidas.  “Do Ukraine and the EU Need Each Other?”  The Ukrainian Week.  April 26, 2012.

“Ukraine and the West: Viktor’s Dilemma: A Country Caught Precariously Between East and West.”  The Economist.  Sep 24th 2011.  Kiev and Yalta

http://www.economist.com/node/21530172

Finnin, Rory.  “Ukraine: Europe's Terra Malecognita.”  The Huffington Post.  June 07, 2012. Blog.

http://www.huffingtonpost.co.uk/dr-rory-finnin/ukraine-europes-terra-malecognita_b_1653469.html?utm_hp_ref=fb&src=sp&comm_ref=false

Kuzio, Taras and Moroney, Jennifer.  “Ukraine and the West: Moving From Stability to Strategic Engagement.”   European Security.  2001.  Frank Cass, London.  10 (2).  p.  111-126.

http://www.taraskuzio.net/International%20Relations_files/international-ukraine_west.pdf

Mukha, Victoria.  “Globalization: The of Ukraine.”  Fellows Articles: The John Smith Memoial Trust.  2005. 

http://www.johnsmithmemorialtrust.org/web/site/Articles&News/FellowsArticles/Mukha.asp

Solzhentsyn, Alekandr.  “A World Split Apart.”  Commencement Address, Harvard.  June 8, 1978.

http://www.partyofregions.org.ua/program_ru/index.html

Stimulating growth and prosperity by changing perceptions and realities.

            The Lithuanian government intends to file a $1.9 billion claim against Gazprom, alleging that the gas company has unfairly been charging an inflated rate. The claim incorporates all overpaid costs since 2004, when Gazprom acquired a major interest in Lietuvos Dujos, Lithuania’s largest gas importer. Lithuania imports all its natural gas from Russia, and it has paid up to $490, per 1,000 cubic meters of gas, far greater than other European nations. The claim alleges that Gazprom uses unfair methods of calculating gas costs. Consequential, Lithuanian consumers have seen their energy bills grow exponentially. This comes a month after the European Commission launched a probe to examine similar allegations. The Permanent Court of Arbitration conducted under the 1976 UNCITRAL Arbitration Rules will decide the claim. Both nations are bound to the ruling by the Agreement Between the Government of the Russian Federation and the Government of the Republic of Lithuania on the Promotion and Reciprocal Protection of Investment of 29 June 1999.

            Claims similar to these are nothing new and perpetuate a negative perception about both the way Russian companies do business and doing business in Russia. At a time when Russia’s economy is experiencing stagnation in growth, it is imperative that its leadership work to recreate its image and invite foreign investment. A significant reason for this decline is the waning in its oil productive and reduced demand for its oil. There seem to be two paths Russia can take. One in which it continues “us against the world” mentalities and plays by its own rules, relying on its vast energy reserves. Conversely, the Federation may, and seems to be, diversifying its economy and improving the investment climate for foreigners and locals alike.     

            Russia has notoriously been regarded as a difficult place to do business, ranking 120^th according to the World Bank. Corruption and lack of uniformity in the enforcement of its laws deserve much of the blame. These issues have resulted in a lack of productive in Russian labor and inefficient factories and other means of production. Accession to the WTO will likely force the door to Russia open but it is for the government to decide how much. President Putin has announced a number of initiatives that will make it easier to invest in the nation, such as fixing its tax laws and allowing direct investment in securities markets. The leadership has aspirations of transforming Moscow into a hub for financial firms. While this rhetoric is a step in the right direction what effects it may have are to be determined. It is virtually impossible to change the perceptions and behaviors of Russian people as well as potential foreign investors in a short span of time. In a country where it is widely accepted practice to slip a couple hundred rubles to a police officer to avoid a ticket, or have to pay bribes to multiple government workers before establishing a business, increasing investor confidence will be a difficult task. If Putin truly does have ambitions of increasing investment, Gazprom’s price gouging techniques will have to cease and Russia will have to play by customary international rules.  

http://www.washingtonpost.com/business/lithuania-hits-russias-gazprom-with-19-billion-arbitration-claim-for-alleged-price-gouging/2012/10/03/44d36d5e-0d4e-11e2-ba6c-07bd866eb71a_story.html

http://www.pca-cpa.org/showpage.asp?pag_id=1470

http://www.doingbusiness.org/rankings

http://www.forbes.ru/mneniya-column/152610-chego-boitsya-bank-rossii

http://www.forbes.com/sites/kenrapoza/2012/10/03/is-russia-ready-for-life-after-oil/

http://www.forbes.com/sites/kenrapoza/2012/10/03/russias-turn-to-grow-slow/