What Does The Future Hold For Ukraine?

After the bloodiest week in Ukraine’s history as an independent state, the last twenty four hours have seen a dramatic turn of events including:

 - A signed agreement between President Yanukovych and the opposition political leaders to end the crisis

- A promise of early Presidential Elections

- A unanimous vote (386-0) in the Verkhovna Rada, Ukraine’s Parliament, to return to the 2004 Constitution that greatly reduces Presidential powers

- The decision to free, by a vote of 310 lawmakers,  former Prime Minister Yulia Tymoshenko, Yanukovych’s long time political rival and perhaps the most charismatic political figure in the country

- Yanukovych has fled from Kiev, presumably ending his reign

Yet the future for Ukraine remains uncertain.  As welcome as the developments are, many of the underlying reasons for the crisis are still very much in force and none can be expected to be resolved in the near future.

First, there is the agreement itself, which is largely symbolic.  The opposition leaders, Vitali Klitschko, Oleh Tyahnybok, and Arseniy Yatsenyuk have little official authority, other than their positions in Parliament and in their respective parties.  Also, their own political future is unclear.

Klitschko, whom I’ve met on several occasions and always found to be intelligent, honest and sincere, is a world champion boxer with little political experience—the US Ambassador was overheard saying that he needs to do his political homework.  Tyahnybok is considered too radical to be a viable leader and Yatsenyuk will likely be overshadowed now that Tymoshenko, the leader of his party, will be freed.

Tymoshenko herself is another wildcard.  Always a firebrand—think of Sarah Palin on steroids with exponentially more intelligence—she’s sure to want to settle scores after 30 months in prison. The former “gas princess” took no part in the discussions and will not be beholden to any assurances given in order to achieve the agreement.

Second, there is Russia.  Vladimir Putin’s representative, Russian Human Rights Commissioner Vladimir Lukin, left Kiev without signing the agreement.  It is doubtful that the Russian President has not given up his intentions to form a Eurasian Customs Union of former Soviet states.

Further, a victory for the opposition in Ukraine can only be seen as a loss for Putin at home.  We can expect that he will do everything in his power, starting with trade sanctions, to undermine the fragile peace that has been established. Otherwise, he risks emboldening the opposition in Russia that he has worked so hard—and so brutally—to put down.

Third, is the political divisions within Ukraine itself.  As I’ve explained before, these have been much overblown in the western press, but they still exist and are important.  While Yanukovych himself has little support, polls show only a moderate preference for the EU over Putin’s Customs Union.

Fourth is the corruption, which is difficult to truly comprehend unless you’ve experienced it personally. Sure, there is corruption everywhere and it’s easy to dismiss the what goes on in Ukraine as a more virulent cousin of Chris Christie’s bridge scandal. Yet in Ukraine, the problem is not so much that politicians become intoxicated by power as it is that people go into politics primarily for monetary gain.

If you are in business, it makes good financial sense to invest in a seat in Parliament, where you are given immunity from criminal prosecution.  From there, you are free to do just about anything—from extortion to violent crime—and rest assured that you will face no consequences.

And that corruption pervades every facet of society.  In Ukraine, you don’t pay taxes so much as negotiate with a tax collector who is more interested in his own cut than filling the government’s coffers. Medical treatment is free, but the quality you receive is often proportional to the bribe you pay your doctor.

Finally, there is the Maidan itself. Kiev’s central square is normally the type of place you take your family on weekends to shop in the underground mall, enjoy a drink of kvass or simply meet friends, spend the day and people watch.

Yet in troubled times, it becomes the center of political unrest.  Stages—as well as barricades—are erected, speeches are made and people hunker down in the bitter cold (for some reason, revolutions in Ukraine always seem to happen in the dead of winter).

Through the years, the Maidan has become more than a mere geographic location, but a symbol of the ultimate sovereignty of the people over those whose job it is to serve them.

Many of those who braved the police baton—and during the past week the sniper’s bullet—were also there during the Orange Revolution in 2004.  Some of them camped there for weeks at a time.  Others came at night and went back to their regular jobs in the morning, eyes red from lack of sleep and tear gas.

All remember the betrayals of the last decade and suffered injury and privation in the hopes that this time would be different.  A common saying goes that everywhere else, people wake up to a new day, but in Ukraine, they always wake up to yesterday.  The people of Maidan are desperately seeking tomorrow.

And many do not accept this agreement.  They fear that once the eyes of the world find another crisis, they will be cast aside once again. Politicians will make their backroom deals, announced reforms will be reversed and the game will go on.  They don’t want Yanukovych in office another day. They want him in jail or worse.

Although the shooting has stopped, Ukraine remains a mess.  While much has happened, little has changed and, if there is a future, it is far in the distance.

Yet still I am hopeful. The Ukrainian people are injured and angry, but they are also intelligent, cultured and—above all things—patient.  They are searching for solutions, not miracles. They want a government that serves them instead of one that oppresses and steals from them.  Their most fervent desire is to live a “normal life” in a “normal country.”

I spent the late 1990’s in Poland and I’ve seen a deeply troubled and dysfunctional society transform itself into an emerging economic power.  We’ve learned lessons and know how to make it happen.

First, Yanukovych must not return.  If the past three months has shown us anything it is that nobody wants him in Ukraine.  Not his erstwhile political allies—28 of his Party of Regions MP’s defected yesterday—not the oligarchs and certainly not the Maidan.  Nobody.  To jail or to exile, but he must go.

Second, is greater integration with Europe.  That doesn’t have to mean a split from Russia, but as anyone who saw the vast corruption, intolerance and incompetence on display at the Olympics in Sochi could tell you, Putin’s way is not the way forward.

Integration with Europe in not a mere matter of changing alliances, the ascension process itself is essential to progress. The reforms needed in Ukraine are almost beyond comprehension. Think about the much needed tax reform process in the US—already stalled for years—and then multiply that by a thousand.

Virtually every aspect of public life—from the judiciary, to the civil code to the very structure of the government itself—needs to be transformed.  Each reform will bring concentrated losses to an entrenched set of special interests and diffuse benefits to the general public. Even the most educated electorate couldn’t hope to keep track.

However, EU ascension requirements play the role of a valuable shorthand.  It’s binary.  Either the government is fulfilling its obligations or it isn’t.  We should remember it wasn’t a heroic leader that brought Poland into modern prosperity but a fairly boring former communist apparatchik.

Lastly, Ukraine will need financial assistance.  Although the amount of money involved will not be enormous, there will still be complicated issues.  Previous aid packages ended up in Swiss bank accounts, so strict controls will be essential.  However, Putin will be happy to offer billions with few strings attached, except personal loyalty and a rejection of the EU.

So the story is far from over.  I would give Ukraine no better than a 50/50 shot and I’m an optimist.  In truth, with so much that needs to be done, so many competing interests and a dizzying array of moving parts, nobody can say for sure what the future holds for Ukraine.

The only thing that is certain is that the Maidan still stands, it's watching and, if betrayed, it will surely rise up again.

Update: The Ukrainian Parliament has voted unanimously (328-0) to impeach President Yanukovych. It appears that Parliament will run the country until new presidential elections are held in three months. The EU is expected to appoint a special envoy soon.