Oil price collapse good news for Ukraine’s anti-corruption efforts


The global collapse of oil prices is good news for Ukraine, says Anders Åslund, a senior fellow at the Atlantic Council and author of Ukraine: What Went Wrong and How to Fix It:

In 2013, Ukraine imported natural gas and oil for $18.6 billion or 10 percent of its GDP. At current energy prices and consumption, Ukraine will only spend about one quarter of that amount, barely $5 billion, on oil and gas imports in 2016. With less money being made in the energy sector, Ukraine may finally manage to clean up its pervasive corruption. This will mean a major gain in welfare.

But depressed oil prices are bad for Russia and other autocratic states, he adds:

During the last period of low oil prices, the Soviet bloc and the Soviet Union broke up, and about half of its successor states became democracies. Russia may face another regime implosion and attempted democratization. The timing is impossible to predict. It can go fast or take long time.

Last time, it took a decade from the fall in the oil price in 1981 until the collapse of the Soviet Union and the democratic breakthrough in 1991. Nor can we be sure of regime implosion and democratic breakthrough.


Fighting government corruption is an integral part of the battle against Islamic State and violent extremism, U.S. Secretary of State John F. Kerry said Friday.

“Corruption is a radicalizer because it destroys faith in legitimate authority,” he said in a speech at the World Economic Forum in Davos. “It allows the predators to move in. And no one knows that better than violent extremist groups, who regularly use corruption as a recruitment tool.”

“We have to acknowledge in all quarters of leadership that the plagues of violent extremism, greed, lust for power and sectarian exploitation often find their nourishment where governments are fragile and leaders are incompetent or dishonest,” Kerry said.

He noted that corruption either caused or fueled crises in Iraq, Nigeria, Syria, Ukraine, Libya and Yemen, adding that graft and bad governance “complicates every single security, diplomatic and social initiative we undertake” and costs the global economy some $2.6 trillion a year, CNN adds.

Some Ukraine-related sanctions against Russia could potentially be lifted within months, Kerry told the forum, reflecting cautious optimism among western diplomats over Moscow’s engagement in the Minsk ceasefire process, The FT reports:

A series of encouraging recent meetings with senior Russian officials have raised hopes in Washington, Paris and Berlin that the President Vladimir Putin is serious about settling the dispute over eastern Ukraine and paving the way to sanctions relief before the year is out….. Kerry said: “With bona-fide legitimate intent to solve the problem on both sides, it is possible in these next months to find those Minsk agreements implemented and to get to a place where sanctions can be appropriately, because of the full implementation, removed.

“Russia’s tone and pace in addressing this have changed,” said a European diplomat involved in discussions of the conflict. “They no longer hold us at arm’s length with platitudes. When we talk about elections, nothing is taboo, and there’s no detail too small to be addressed.”

Russia’s seizure of Crimea was accomplished with such speed, deception and outright cynicism that Western powers could do—or chose to do—nothing to stop it, notes one observer:

Within a year, following a Russian invasion of eastern Ukraine disguised as a domestic uprising, the leaders of France, Germany, Ukraine and Russia met in Minsk, Belarus, to hammer out a deal aimed at stopping the fighting. To a large extent, it did. B

ut by freezing the conflict, the agreement also cemented Russian gains in Ukraine.

Europeans disinclined to keep up the pressure on Moscow could portray Minsk as evidence of Russia’s good behaviour. “But in doing so, they have to conveniently forget the whole issue of Crimea and of Ukrainian integrity,” says Keir Giles, an associate fellow in the Russia and Eurasia Program at Chatham House. He adds some European leaders have “demonstrated quite clearly that they’re willing to do so.” In that outcome is another victory for Putin: the creation of divisions among his Western opponents.

What’s driving Russian policy now, says Lilia Shevtsova, a non-resident senior fellow at the Brookings Institution [who delivered the National Endowment for Democracy’s 2014 Lipset Lecture on Russia’s Political System: The Drama of Decay], is a desire to end Russia’s isolation. “The Kremlin’s agenda is firstly to return back to the role of the superpower at the table with other key international actors,” says Shevtsova……Putin doesn’t intend to achieve this by persuasion or by making concessions, but by forcing the West to compromise. “The usual Putin and Kremlin way to pursue their goals is to apply pressure, to break windows in order to achieve the grand bargain. It’s blackmail.”

Putin’s allies blame Western ideological contamination for the conflict.

“After Ukraine’s declaration of independence, they have tried and continue to try to implant in us a foreign ideology,” said Alexander Zakharchenko, who heads Donetsk People’s Republic, one of two self-declared republics in eastern Ukraine.. “If once upon a time we were raised on fundamental concepts such as family, fidelity, brotherhood, love to the motherland, then now we can see we are being raised on Coca-Cola, Mickey Mouse, jeans and also on Playboy.”

In World Affairs, Alexander Motyl offers an optimistic take on Ukraine, detailing some of the country’s major successes since the Euromaidan revolution (HT: FP’s Democracy Lab).

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