Ukraine 2020: trends and challenges

For our opinion the year 2020 in Ukraine will be marked by ending of political “honey moon” for President and his team, the intensification of confrontation between power and opposition, clashes within (inside) the power team, intensification of socio-political protests, local elections, the government crisis, external and internal financial pressure on state power.

 

In front of the President of Ukraine V. Zelensky, the mono-majority in the Parliament (“Sluga naroda”) and the Government – power - in 2020 there will be several key challenges:

1). Keeping of the team unity and completing the construction of an “architecture of power” amid the growing influence of oligarchs (especially I. Kolomoisky, V. Pinchuk, R. Akhmetov, V. Khoroshkovsky and others) and of creditors (IMF, EU, private lenders oriented to the USA and EU).

2). Maintaining of the social support (ratings) and stability (in the street and economic) - it is necessary to demonstrate success in key social requests. Because without public support, weak power in the face of external pressure and opposition from the oligarchs will not be able to carry out quality reforms.

3). Continuation of liberal reforms (launch of the land market, tax reform, privatization, deregulation, democracy and so on).

1.

The current architecture of power in Ukraine consists of 3 large blocks: 1) Office of the President of Ukraine (under control of V. Zelensky, with influences of I. Kolomoisky and V. Pinchuk); 2) the parliamentary fraction of the mono-majority of “Sluga naroda” (131 deputies out of 254, elected by majority districts - most of them have their own interests; “Presidential Group” - 80-120 deputies; the Kolomoisky\Avakov group - 20-40 deputies; groups of V. Pinchuk (20+), I. Pavlyuk (24-26), Russian Federation, regional centers of power); 3). A. Goncharuk's government (focuses on Western partners and creditors, formed with the influance of the Prime Minister, President and A. Avakov, V. Pinchuk and V. Khoroshkovsky.

The system is sufficiently fragmented. This is reinforced by a lack of control by the President, filled with internal conflicts and with competition (above all for financial flows), saturated with new ones non-professional players with huge ambitions; due to the inexperience and poverty of many members of parliament and government, it is quite, easy and cheap to corrupt them.

That`s why over the course of a year, the government's personnel policy will be dominated by three opposite trends:

1). The completion of the central government (there are still more than 50 vacant vacancies at the level of services, committees, inspections and agencies), executives of state-owned companies and enterprises; diplomatic corps;

2) Leaving the system by politicians and officials who lost in the struggle for influence or failed to achieve their goals. For 2 months of full-fledged work of the new government and parliament have already left the head of the President’s office, the Minister of Development of Communities and Territories of Ukraine, the Secretary of the National Security and Defense Council, 4 governors.

3). The dismissal of officials associated with Poroshenko, the Democrats in the United States and the former head of the president’s office A. Bogdan.

This process will continue, and most likely will affect the government. In the begining 2020, the resignation of some ministers is likely. The resignation of the government as a whole is possible by the end of the year - October-December.

There may also be the resignation of the Prosecutor General, the head of the State Security Service, the leadership of anti-corruption structures - NABU and NAZK.

Similar tendencies will occur in the parliament - it`s likely exit from the fraction of “Sluga naroda” of some majoritarian deputies, exclusion of list members; further crystallization and separation of influence groups within the fraction, who, without leaving it, will begin to play an increasingly prominent role and block important initiatives of the Office of the president and the Cabinet of Ministers of Ukraine (especially the Kolomoisky).

Early parliamentary election in 2020 are unlikely due to the provisions of the Constitution (parliament has 1 year of immunity from dissolution), and they have a low probability in 2021, because any next parliament in composition will be worse for the President than the current one. Only the President has the right to dissolve parliament.

Constitutional reforms will continue in terms of democracy, decentralization, growing the role of the President in the political system. It is possible to hold referendums on land issues, Minsk agreements and so on.

There is a possibility of reformatting the mono-majority of “Sluga naroda” into a coalition of “Sluga naroda” and “Golos” (formal or informal), especially if fragmentation processes in the Presidential faction and/or individual deputies will leave it.

The key lines of the conflict in the system are privatization, the land market, personnel appointments, the budget, Avakov, Kolomoisky, Poroshenko, Medvedchuk, the influence of creditors.

One more reform of the courts, prosecutor's office and anti-corruption structures in 2020 will not give prominent result - the situation with the protection of property rights, other rights and freedoms will remain low.

The foreign policy situation will remain unstable: the level of support for Ukraine from the United States and the EU will be the same in the best case (at worst, it will begin to decline); The Western countries will gradually continue to return with small steps to cooperation with the Russian Federation in the field of security and energy; Trump and the Democrats until November 2020 will continue to try to use Zelensky and Ukraine in the presidential election campaign in the United States; foreign economic conditions will deteriorate due to the export and raw materials nature of the Ukrainian economy.

2.

Preservation social support (ratings) and stability (primarily street and economic) - it is necessary to demonstrate success in key social requests: peace (war in the Donbass), the fight against corruption, improving the welfare of citizens (lower tariffs, higher incomes).

Appendix 1.

The ratings of the President and his political party are likely to decline and reach 30-45% of support by the end of the year, the topic of impeachment will arise, opposition leaders and parties will retain or increase their support (first of all, Tymoshenko and Boyko, maybe - Poroshenko); oligarchs will be in search of new political persons and projects in terms of possible early parliamentary elections of the year 2021. As a result, decisions by the authorities will become more difficult, their level of legality will decrease, and the likelihood of referenda will increase.

Within of the “fight against corruption” there is likelihood of the arrest of P. Poroshenko and his inner circle (due to the struggle for the assets of the Roshen group and the opposition to street protests that P. Poroshenko’s team can stand behind); the conflict between the power team and the Mededchuk-Levochkin group will be exacerbate (it is possible defeat of Medvedchuk's media holding, interception of his business with Russia, detentions and arrests); crises will occur situationally between Zelensky and Kolomoisky (primarily due to the informal influence of Kolomoisky on power and situation about Privatbank).

It is not expected of major breakthrough in the implementation of the political part of the Minsk agreements and in the returning of Donbass to Ukraine. Most likely, the situation will go towards to freezing the conflict. At the same time, a certain demilitarization will take place - the armed forces will be divorced on separate sections and the total number of shelling and casualties will decrease, exchanges of captured persons will take place, the procedure for crossing the demarcation line between citizens and freight transportation will be simplified. Perhaps even steps will be taken in terms of restoring of social payments and transport links. Probably, even a meeting of the Norman Four will take place, but the political part of the Minsk agreements will not be implemented. New Law of Ukraine "On the peculiarities of local self-government in certain regions of the Lugansk and Donetsk regions" ("on special status"), which was adopted at the end of 2019 - at the beginning of 2020, should be rejected by the Russian Federation and in "LDPR". The Russian Federation will continue the integration of the "republics" by universal passportization of the inhabitants of Donbass and further unification of social and legal life.

Most likely, will be held the meeting in the "Norman format", and conversations about the change of the Minsk negotiation format will be updated. A referendum on agreements is possible.

In 2020, Ukraine will try to update the issue of Crimea as an instrument of pressure on the Russian Federation.

Despite the fact that the geopolitical players USA, EU and Russia are gradually softening the confrontation in Ukraine, they are still only in search of a scenario for ending the “Ukrainian crisis”.

The authorities are unlikely to be able to significantly reduce tariffs for housing and communal services (although the President promised personally, tariffs may even increase) due to the huge budget deficit (about $ 4 billion; + external debt of $ 83 billion) and pressure of creditors (primarily the IMF), which will increase social discontent. Also, incomes of citizens will not change significantly.

The issues of peace and war, local elections, as well as land reform, and tax changes (for example, a new system of taxation of individuals of entrepreneurs), will be the areas of street instability, which can be used by competitors of Zelensky - Poroshenko, Medvedchuk, Tymoshenko, the right radicals to organize mass protests and pressure on country power. The authorities are sensitive to such protests, and competitors will try to take advantage of this.

The land reform will be launched (a law will be passed), but its format and launch dates may still change significantly.

There are notable risks of either consolidation of power in the hands of the President (although external/foreign support and consensus will be needed), or attempts to radically destabilize the government through protests and activities of radical groups.

Also in Ukrainian society there is an hard problem of social exclusion and separation (even fragmentation). Poverty, war, bed humanitarian policies and other factors lead to the fact that 50-80% of Ukrainians do not participate in public life/activities. And on none of the key political issues (except the issue of independence of Ukraine) there is no social consensus (75% of public support and more). The phenomenon of radicalism and a weak state policy in this area exacerbate the problem (Appendix 2).

 

3.

The continuation of introduction of liberal reforms (launching the land market, tax reform, final privatization, deregulation, democracy, etc.) will become a zone of political confrontation and destabilization and will not give quick results.

Based on the budget of Ukraine for 2020, the economic priorities of the new government are:

- repayment of debts (438 billion UAH - 37% of the budget revenue) + war and security (246 billion UAH - 20%) = 57% of all Budget 2020 revenues;

- infrastructure and agriculture (which can be considered within one cycle: creating conditions, roads, ports, etc. for exporting agricultural products from country). In case of loss of the opportunity to receive financing from the IMF and other lenders, Ukraine may expect default scenarios, although this is unlikely.

Already in 2020, in connection with the launch of Nord Stream-2, Ukraine may lose at least the third part of revenues from the transportation of Russian energy carriers to the EU (about 3 billion dollars annually) and switch completely to gas supplies from the EU at European prices.

Possible fall in the index of industrial production and prices for Ukrainian export is also a big problem.

Another significant risk for Ukraine is the situation with the devaluation of the national currency. It`s revaluation in the last years is due to the active issue of government bonds. The dependence of the exchange rate on currency inflows on government bonds in 2019 is 95%. Wherein, the trade deficit is increasing (the growth rate of imports exceeds the growth rate of exports); direct foreign investments are decreasing, they are already at a meager level; receipts from Ukrainian guest workers slowed down. Further dynamics of the exchange rate depends entirely on non-resident speculators. If for some reason they want to fix their profits (for example, a likely global financial crisis, worsening foreign economic conditions or political instability in Ukraine) and begin to withdraw currency from Ukraine, a sharp devaluation of the hryvnia may occur. If for some reason they want to fix their profits (for example, due to global financial crisis, worsening foreign economic conditions or political instability in Ukraine) and begin to withdraw currency from Ukraine, a sharp devaluation of the hryvnia may occur.

Appendix 1

Zelensky support:

Rating Group (end of January). The confidence rating for President Vladimir Zelensky was 59%, and the distrust was 32% (in December 2019, these figures were 67% and 26%, respectively). 26% trust Dmitry Razumkov, 44% do not trust (44% (28% and 44%), 25% trust Yury Boyko, 56% do not trust (23% and 58%), 22% trust Svyatoslav Vakarchuk, 62% do not trust (28 % and 59%), 20% trust Aleksey Goncharuk, 53% trust (22% and 44%), Yulia Tymoshenko 20% trust, 73% do not trust (19% and 74%). The leader of the anti-rating of politicians is Petro Poroshenko with a level of confidence of 15% and distrust of 77% (13% and 81%).

Decrease in the rating of trust: to Zelensky (-8%), Razumkov (-2%), Goncharuk (-2%), and a slight increase in trust in representatives of political forces in the opposition: Boyko (+ 2%), Tymoshenko (+1 %).

Center for Social Monitoring and the Yaremenko Institute (end of January). The Verkhovna Rada of Ukraine became the leader of the anti-rating of mistrust - 68.5% with a confidence level of 23.4%. 68.3% of respondents do not trust the Cabinet of Ministers, 23.4% trust. 65.5% of respondents do not trust Prime Minister Goncharuk, 23.5% trust. 39.3% of respondents do not trust President Zelensky, 49.4% trust.

Survey on the order of the Embassy of the Netherlands (end of December 2019). 62% of respondents trusted Vladimir Zelensky, 31% did not trust

Party Support:

Rating Group (end of January). Among those who are going to vote and decided on the “Servant of the People”, 42.2% of respondents would support (in December 2019, support was 47.8%, that is, we observe a decrease in support by 5.6%), HRE - 13 , 5% (11.4%, + 2.1%), the EU - 9.5% (9.0, + 0.5%), the Fatherland - 8.1% (7.8%, + 0.3%), “Strength and honor” - 3.6% (1.9%, + 1.7%), “Voice” - 3.4% (4.4%, -1%). The remaining parties won less than 3% of the respondents' votes.

Center for Social Monitoring and the Yaremenko Institute (end of January). Among those who will vote and make their choice, 38.9% would support the “Servant of the people”, 14.8% would support the HLS, 10.8% would support the “Fatherland”, 10.6% would support the EU, 4.6 % - VO Svoboda, 4.4% - Golos, 3.9% - Strength and Honor, other parties scored less than 3%.

Razumkov Center (mid-January). Among those who decided and will vote, “Servant of the people” was supported by 45.4% of respondents, “HMO” - 13.8%, “EU” - 12.3%, “Fatherland” - 8.0%, “Strength and honor ”- 5.2%.

 

Right-wrong direction of the country.

According to a poll from the Center for Social Monitoring in conjunction with the Ukrainian Institute named after Alexander Yaremenko (late January), 58.1% of respondents believe that events in the country are going in the wrong direction, 39.3% - in the right direction.

The Democratic Initiatives Foundation and the Razumkov Center. According to its results, 13% of respondents fully believe in the success of reforms in the country; believe, but doubt 38%; do not believe, but hope for the best 31%; they do not believe at all - 13% (this is 10% less than last year - 23%).

The respondents consider the main driver of reforms to be the President (60.1%), the government (37%), and the majority in BP (29.7%). The oligarchs (50.9%), the bureaucracy and officials (43.1%), as well as the parliamentary faction of the European Solidarity party (22.2%) were named the biggest obstacles to reform.

The main problems that hinder the development of Ukraine, the respondents identified: corruption (69%), the war in the Donbass (68.9%), the dominance of oligarchs in the economy (30.7%), the lack of professionals in power (25%) and the exit of the working population from the country (24.8%).

Appendix 2

The Ukrainian Institute for Analysis and Management of Policy, together with the nongovernmental human rights organization “Common Goal” and other independent experts, has been monitoring the human rights situation in Ukraine starting from 2004. Since 2015, the annual report on the results of this monitoring was published every year under the name “Xenophobia, Anti-Semitism and Violation of Minority Rights in Ukraine” indicating the observed time period.

Many years we monitoring such things as a legislation, which is related to the rights of minorities in Ukraine and also affects the restriction of these rights; statistics and patterns of hate crimes; level of xenophobia in Ukrainian society; the activity of nationalist and sports groups in Ukraine; the attitude of the government to the particular acute challenges.

According to the results we are forced to ascertain the existence of serious challenges with the conduction of human rights in most areas of public life in Ukraine, particularly protection against discrimination, the functioning of the state mechanism and justice restoration ability; the state and radical groups pressure on the media; issues of gender and ethnocultural equality; manifestation of xenophobia and anti-Semitism; migrants and temporarily displaced persons problems solution; anti-democratic actions of the state and politicians in the fields of religion, culture, education, self-identification, etc.

In accordance with official data of state structures and public monitoring organizations under Art. 161 of the Criminal Code of Ukraine “Violation of the equal rights of citizens depending on their race, nationality or religion” (there is official data of the Prosecutor General of Ukraine from 2013) alone we can note the rapid growth of the recorded number of such crimes – almost 5 times from 2013 to 2018, with a consistently low quality of investigations - on average only 5% of recorded cases ended in a guilty verdict:

Year

The number of offenses under 161 article

The number of convictions

The number of cases for which no court decisions were made

2006

14*

N/A

N/A

2007

87*

0**

0**

2008

58*

0**

1**

2009

N/A

0**

1**

2010***

N/A

0**

0**

2013

15

1

14

2014

22

6

16

2015

33

1

32

2016

41

4

37

2017

52

3

49

2018

82

4

78

* According to the Congress of Ethnic Communities of Ukraine.

** According to the Ministry of Internal Affairs of Ukraine and the Supreme Court of Ukraine.

*** From 2004 to 2010 5 convictions were announced under Art. 161, yet all convicts received suspended sentences (not a single real imprisonment).

 

If we correlate these data with those provided by human rights organizations, we can assume that official statistics do not take all crimes into their account, but even they show an annual rapid increase in the number of hate crimes.

International and national organizations (Transparency International, Amnesty International and others) annually record cases of attacks on human rights defenders and public activists in Ukraine. It is noted that in most cases a police investigation was not carried out and the perpetrators did not bear any responsibility.

Monitoring structures also note a significant deterioration in the field of LGBT people rights in Ukraine: since 2014, the number of attacks on them has increased by 17 cases, and since 2016, another 4 times, or up to 276. In 2017, the number of attacks decreased, but in 2018 a peak number of them was reported.

Year

Total number of attacks on LGBT representatives*

2014

54

2015

71

2016

276

2017

226

2018

324

*According to the human rights LGBT center “Our World”.

The level of hate violence against Roma has increased, and by 2018 xenophobia towards them (expressed through cases of pogroms and killings) became systematic.

Some improvement with the situation with anti-Semitism can be noted: in 2018, the number of cases of anti-Semitic vandalism in Ukraine was minimal for the period observed by the UIAMP, and there were no reported cases of anti-Semitic violence in 2017 and 2018.

Year

Number of cases of anti-Semitic vandalism*

Number of cases of anti-Semitic violence*

2015

22

1

2016

19

1

2017

24

0

2018

12

0

*According to The Association of Jewish Organizations and Communities (VAAD) of Ukraine.

In addition, according to the reports of the National Union of Journalists, 79 attacks on journalists were reported in 2017 and 86 attacks in 2018 respectively. A number of killings of media representatives (Pavel Sheremet, Oles Buzina) are still unsolved.

In Ukraine, radical organizations are quite active, which have repeatedly attacked the media, representatives of national minorities and supporters of opposing political views. However, there should be noted a slight decrease in their popularity due to the partial transition of nationalist rhetoric to the main political parties of Ukraine. Simultaneously in 2018 the process of heroization of historical leaders of radical right-wing organizations at the state level has finished in Ukraine.

It is also necessary to highlight legislative practice related to the restriction of the rights of certain social groups: the rights of national minorities to receive education in their native language and the free use of their native language and cultural product in their native language, freedom of religion right.

The government language policy in the 2015-2018 period led to a significant reduction in the number of educational institutions taught in languages ​​of national minorities:

 

2004/

2005

2009/

2010

2014/

2015*

2015/

2016*

2016/

2017*

2017/

2018*

2018/

2019*

Crimean Tatar

14

15

0

0

0

0

0

Moldovan

8

6

5

3

3

3

2

Polish

4

5

5

5

5

5

4

Russian

1555

1253

621

614

581

471

194

Romanian

95

88

78

75

75

72

69

Hungarian

74

71

68

69

71

72

72

*Without Crimea, Sevastopol and separate regions of Donetsk and Luhansk Oblasts.

Also, due to legislative changes, the number of pupils studying in Bulgarian, Crimean Tatar, Russian, Romanian, Hungarian has significantly decreased, while the number of pupils learning other languages has increased:

 

2004/

2005

2005/

2006

2006/

2007

2007/

2008

2008/

2009

2009/

2010

2010/

2011

2011/

2012

2012/

2013

2013/

2014

2014/

2015*

2015/

2016*

2016/

2017*

2017/

2018*

2018/

2019*

Ukrainian

4260514

4089567

3938426

3778080

3624183

3555554

3421606

3408517

3370306

3352871

3281644

3316459

3376785

3462894

3614637

English

334

349

377

392

402

389

408

476

498

526

400

323

379

401

405

Bulgarian

105

97

107

95

80

44

65

67

64

65

78

68

61

70

69

Crimean Tatar

5797

5608

5964

5886

5644

5592

5399

5498

5406

5551

0

0

0

11

46

Moldovan

6128

5776

5525

5175

4756

4300

3877

3508

3288

3087

2984

2797

2693

2652

2558

Polish

1418

1445

1514

1430

1389

1401

1357

1436

1470

1526

1594

1698

1785

1844

1839

Russian

1242764

1093280

971960

876125

791594

750727

696039

706864

694331

703572

356262

351948

355955

347867

319815

Romanian

26436

25220

24226

22804

21671

21092

18866

18850

18094

17518

16808

16426

16139

15985

16106

Slovak

38

45

53

70

79

102

113

114

127

137

134

143

145

148

151

Hungarian

19996

19374

18544

17756

16768

15918

15426

15201

15140

15001

15172

15535

16020

16450

16845

ВСЕГО

5563530

5240811

4966696

4707813

4466572

4355119

4163156

4160531

4108724

4099854

3675076

3705397

3769962

3848322

3972471

*Without Crimea, Sevastopol and separate regions of Donetsk and Luhansk Oblasts.

Also, due to legislative changes, the number of pupils studying Bulgarian, Crimean Tatar and Russian as a subject has significantly decreased, while the number of pupils learning other languages has increased:

 

2004/

2005

2009/

2010

2014/

2015*

2015/

2016*

2016/

2017*

2017/

2018*

2018/

2019*

Russian

1,491,7 M**

1,288 M

1,023 M

960 K***

919 K

955 K

683 K

Polish

5533

4606

26 K

34 K

45 K

56 K

64 K

Bulgarian

10822

8436

8103

8154

7897

7787

7917

Moldovan

1335

1609

2373

2436

2474

2635

2724

Romanian

174

861

972

3940

4182

3744

2060

Hungarian

1454

1198

696

791

1110

1378

2030

Crimean Tatar

26,6 K

16,3 K

308

318

340

360

356

*Without Crimea, Sevastopol and separate regions of Donetsk and Luhansk Oblasts.

**Means millions.

***Means thousands.

In general, we can state a high level of xenophobia in Ukraine, and also note that in some cases it is supported by officially or public persons, state authorities through the development and introduction of laws such as the Law “On Lustration”, “On ensuring the functioning of the Ukrainian language as the state language”, “On education”, “On Amendments to the Law of Ukraine “On Freedom of Conscience and Religious Organizations in Ukraine”, etc. There is also reported state pressure on the media, which is manifested through the penalties and cancellation of licenses for opposition broadcasters.

The annual increase in hate crimes is facilitated by the frequently observed inaction of law enforcement agencies and the inefficiency of the judicial system, which makes such offenses practically unpunishable.

 

Ruslan Bortnik, Eva Antonenko, Valentin Yakushyk, Igor Pilyaev