Zelenskiy’s reforms were too slow for us, but too fast for Putin | Phillip Inman

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Zelenskiy’s reforms were too slow for us, but too fast for Putin | Phillip Inman


Ukraine’s president. Volodymyr Zelenskiy, came under pressure to tackle corruption from the moment he was elected in April 2019.

His government was on its knees financially after a series of scandals that had seen the country’s biggest bank collapse following allegations of looting. Soon after, it was nationalized.

Most acutely, the International Monetary Fund, the US-based lender of last resort and the country’s main benefactor, was threatening to withdraw a $19bn funding package.

In September 2019, Ron van Rooden, the fund’s mission chief for the country, said officials had found “shortcomings in the legal framework, pervasive corruption, and large parts of the economy dominated by inefficient state-owned enterprises or by oligarchs”. Zelenskiy promised to clean up the country’s public administration and satisfy the IMF that its money was safe in Ukraine.

Last year, the Ukrainian parliament passed a law that targeted oligarchs. Zelenskiy said it would ensure the interests of society were served above those of a narrow elite of the rich and powerful.

According to the legislation, Ukraine’s national security and defense council (NSDC) would make the final determination of whether an individual met the criteria of having significant economic or political influence in public life – in other words, whether or not they were an oligarch.

To the Putin administration, all these moves were further evidence of Ukraine’s shift to the west: more transparency to end decades of oligarch domination that followed the end of communism. As we know, Putin wanted a client state, and that meant one run by his contacts among the billionaires.

Meanwhile, there was an expectation inside Ukraine that the US and the EU would reward Zelenskiy’s efforts. And widespread confusion when this did not happen.

However, there is little evidence that oligarchs have suffered under Zelenskiy. Certainly, the IMF has yet to get any of its money back, and critics of the anti-oligarch legislation said it handed the president more powers of patronage – especially in relation to the NSDC, which he can veto.

Critics also say Zelenskiy has struggled to distance himself from the man the US accuses of looting the country’s biggest bank before it collapsed – Ihor Kolomoisky, often cited as Ukraine’s most powerful oligarch. It was Kolomoisky, the US says, who controlled PrivatBank when it was taken into public ownership in 2016 after an alleged fraud left $5.5bn missing from its balance sheet. In March last year, the Biden administration banned Kolomoisky and his family from entering the US over these allegations of “significant corruption”. Kolomoisky has always denied wrongdoing.

The result of these developments for the war currently destroying his country is that Zelenskiy, by the time of the invasion, had changed Ukraine enough to anger Putin, but not enough to please his western allies.

He was slow off the mark in 2019 to make reforms and still faces accusations that he depends on the kindness of oligarchs. His popularity slumped towards the end of last year and one reason was his perceived slowness in tackling corruption.

Of course, the IMF is now providing funds to support the economy. It will give an update this week on its mission to save Ukraine. But there is a fear in Washington that once contracts are issued, IMF money will again disappear into the pockets of the rich and powerful.

It is often said that these reforms – the anti-corruption laws among them, such as they are – have been foisted on Ukraine by western agencies, and the IMF in particular, as the price of successive bailouts. However, Ukraine, with huge bumps along the road, has been traveling a similar journey to Mexico, South Africa, Greece and Indonesia, to name just a few other states.

Those electorates have voted in governments with a mission to tackle widespread and endemic corruption. The voters in question are the aspirational middle-income groups that are worst affected by it. They are the small business owners who must pay protection money, or the public officials who routinely take bribes, often just to make ends meet. Their children’s access to the university is limited by their status. And if they do become affluent, they must live in gated compounds, with security to keep criminals at bay.

South Africa’s president, Cyril Ramaphosa, has faced criticism, like Zelenskiy, for taking his time bringing forward reforms. Last week he was congratulated for announcing a new chief justice and deputy that will give the judiciary a chance to assert its independence.

Ramaphosa has many problems facing him as he seeks to rid the country of corruption, but he doesn’t have the world’s second most powerful military machine waiting on his border to invade should he begin to make progress.

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