Devolution in Ukraine: Panacea or Pandora's Box?
Russia and the West do not agree on much about Ukraine, but both say that state power there has been too centralised. They are right that people in Ukraine’s regions do not feel that the authorities speak for them; but the real cause is ineffective and corrupt government at all levels, not an over-mighty central government. Both Russian and Western prescriptions for redistributing powers could make things worse if the underlying issues are not addressed first.
For Russia, the buzzword is ‘federalisation’ – a radical reallocation of powers so that the oblasts (regions) in southern and eastern Ukraine could have their own foreign and trade policies. According to Sergei Glazyev, Russian president Vladimir Putin’s adviser on Eurasian integration, this could include the right to join the Russian-led Eurasian Customs Union. Ukraine’s interim prime minister, Arseniy Yatsenyuk, has called this “feudalisation”, designed to make Ukraine subordinate to Russia. It would certainly be impossible for Ukraine to implement a free trade agreement with the EU if part of the country was in a customs union with Russia.
On the other side, the EU supports ‘decentralisation’, a vague term which could include giving some budgetary and other powers to local authorities below the oblast level. One of the principal proponents of decentralisation, Anatoliy Tkachuk of the Civil Society Institute in Kyiv, said recently that the focus should be on “consolidating and strengthening municipalities and districts” (smaller units than oblasts). Tkachuk argued that giving more power to the oblasts would “create a layer of oligarchic activity that would continue business as usual”.
Ukraine’s immediate focus is on the presidential election, the first round of which will be held on May 25th. After that, attention will switch from who runs the country to how it is run. Decentralisation features in the ‘roadmap’ for Ukraine put forward by the Swiss Chairman-in-Office of the Organisation for Security and Co-operation in Europe (OSCE), Didier Burkhalter. At the Foreign Affairs Council (FAC) on May 12th, EU foreign ministers welcomed Ukraine’s steps to implement this. Decentralisation is likely to be a key agenda item in the series of public roundtable meetings, held under OSCE auspices, which started in Kyiv on May 14th. The roundtable is co-moderated by the former German diplomat, Wolfgang Ischinger (full disclosure: he serves on the CER’s advisory board).
The key question is whether over-centralisation of power really has been nefarious, and therefore whether either version of devolution is the right answer. While on paper Ukraine’s constitution may suggest that power is too concentrated in the hands of its central government, the events of the last six months have shown that the reality is quite different. The weakness of Ukraine’s central institutions, the influence of wealthy regional power-brokers and the interference of Russia create a risk that Ukraine may fragment. In a country as large and diverse as Ukraine, ensuring that people throughout the country have a voice at the centre is vital. But in focusing on decentralisation without strengthening national-level institutions, the OSCE and the interim government could inadvertently increase the risk of break-up.
Ukraine has amended its constitution repeatedly since gaining independence in 1991, shifting the balance of power back and forth between president and parliament at least three times. The version of the constitution currently in force is as amended in 2004, following the cancellation of amendments strengthening presidential powers that were adopted in 2010 under Yanukovych. It remains a very flawed document. Meanwhile, Ukraine has failed to build strong institutions, particularly courts and law enforcement agencies. In 2007 the Council of Europe warned of a tendency towards “legal nihilism” in Ukraine; things only got worse under Yanukovych, who appointed one of his cronies as chair of the constitutional court. The police are often corrupt and (as recent events in the east of Ukraine have shown) either incompetent or disloyal.
Since central organs of power are so impotent, oligarchs with regional power bases have been able to capture effective control of their areas, particularly in the industrial east, and to manipulate the state to their own advantage. All Ukrainian presidents have relied on these power brokers to a greater or lesser extent. The current interim government in Kyiv has had to accept that real power in the east lies with the oligarchs, appointing Ihor Kolomoyskiy, multibillionaire owner of PrivatBank, as governor of Dnipropetrovsk oblast and Serhiy Taruta, billionaire founder of the Industrial Union of Donbass, as the governor of Donetsk oblast. Ukraine’s richest oligarch and Donbass ‘boss’, Rinat Akhmetov, who seemed for some weeks to be taking a neutral position on the demands of pro-Russian protesters, has now thrown his weight behind the cause of Ukrainian unity. Steelworkers from one of Akhmetov’s plants cleared pro-Russian separatists from the south-eastern city of Mariupol after Ukrainian forces had failed to do so. This may be a good thing in the short-term, but it sends a worrying signal of private power and state feebleness.
Ukraine could probably have muddled on with weak central government and strong regional oligarchs, were it not for Russia’s intervention. The annexation of Crimea, though clearly a grave breach of international law and Russia’s commitments, was relatively unimportant in terms of the future of Ukraine as a state: Crimea was already an autonomous region; it is the only part of Ukraine where ethnic Russians are in a majority; and it contributes less than 3 per cent of Ukrainian GDP. What is happening in the south and east, however, is an existential threat: the majority in these areas, whatever language they speak, identify themselves as Ukrainians; and these regions are Ukraine’s industrial heartland, with GDP per capita above the national average.
Russia’s longer-term aims in these areas are unclear; they may extend as far as annexation on the Crimean model, or the creation of an ‘independent’ state in what Putin has called (using a Tsarist era term for the area) “Novorossiya” (New Russia); or they may be limited to ensuring, by whatever method works, that Ukraine cannot integrate with the EU or NATO. But Moscow’s short term actions seem designed to make the Donetsk and Luhansk oblasts, which contain about 15 per cent of Ukraine’s population, at least partially ungovernable. The central government and the security forces have so far failed to find an effective way to respond.
In these circumstances, any move to devolve power before the centre can re-assert itself is likely to reinforce fissiparous tendencies in Ukraine. The assorted Russian agents, irregular Russian Cossack groups and armed local malcontents running parts of the east are highly unlikely to produce the good governance, economic reform and respect for human rights that Ukraine needs. As they have shown already, they are more likely to foment chaos and violence, with or without the Ukrainian security forces to fight. On the other hand, if the centre gives in to the temptation to hand control of eastern oblasts to the traditional regional bosses, the oligarchs are likely to go back to the corrupt and predatory behaviour which has left Ukraine as such a shocking contrast with its neighbour Poland (see Simon Tilford’s CER bulletin article ‘Poland and Ukraine: A tale of two economies’).
What Ukraine needs in order to progress, and what the EU, US and international organisations should help it to build, are effective institutions at all levels. Once a president has been elected and a government is in office, Ukraine’s first priority should be to start drafting a constitution which delineates clearly what powers belong where, so that citizens know who is accountable for what. The Council of Europe’s Venice Commission on Democracy through Law has been involved in advising Ukrainian governments on the constitution in the past, but the new government should accept its advice more wholeheartedly – including on the need for an inclusive and comprehensive drafting process. It is up to the Ukrainians themselves to discover what system will command the greatest support, but experience in post-communist countries suggests that parliamentary systems consolidate democracy and promote economic reform more effectively than presidential systems: parliaments provide a forum for compromise and coalition-building, while powerful presidencies facilitate state capture by well-connected elites.
Second, Ukraine needs a court system able to make judgements based on the constitution and the law, rather than on threats and bribes. At the FAC on May 12th, ministers tasked the European External Action Service to come up with the concept for an EU rule of law mission. The next FAC should move quickly to agree on recruitment and deployment. In 2004 to 2005, the EU mounted a successful rule of law mission, EUJUST THEMIS, to help Georgia reform its criminal justice system, including fighting corruption in it; Ukraine needs something similar but more wide-ranging, covering civil as well as criminal justice.
Third, Ukraine needs a well-trained and motivated police service which upholds the law and defends the rights of citizens. The police are often the first point of contact between the citizen and the authorities; if the interaction is positive, people are more likely to feel that the government is ‘on their side’. The UN’s ‘Brahimi Report’ of 2000 on peace operations underlined this: “The fairness and impartiality of the local police force … is crucial to maintaining a safe and secure environment, and its effectiveness is vital where intimidation and criminal networks continue to obstruct progress on the political and economic fronts” – a pretty good description of present-day eastern Ukraine. Both the EU and the OSCE have experience of training and mentoring police, particularly in the Balkans; they should agree on a sensible division of labour to tackle the enormous challenge of Ukraine.
Finally, to show the Ukrainian people that the new authorities are serious about fighting corruption, Ukraine needs more open government. Procurement needs to be transparent, so that the flow of money from the state to its suppliers can be audited by citizens. The gas transit business needs to be transparent, so that people can see how much is imported, how much is sold at what price and where the revenues go. At present only Russia knows exactly how much gas enters Ukraine; and the involvement of intermediary companies and the manipulation of prices for different classes of consumers make it hard to work out what happens to the gas inside the country. And the wealth of public officials needs to be transparent, to make it harder for the corrupt to hide illegitimate income. The interim government started well, by appointing the investigative journalist Tetyana Chornovol as its anti-corruption chief, but her efforts to establish a new system for fighting corruption seem to be stalling amid disagreements on the accountability of the planned anti-corruption service. The UK’s Department for International Development and non-governmental organisations like Transparency International could offer their expertise to help Ukraine ensure that public money is not diverted to private pockets. Ukraine is already a member of the Open Government Partnership, a group of 64 countries where government and civil society have agreed to improve government openness and accountability; it should start implementing the steps it has committed itself to.
None of these changes will be easy to implement; and Ukraine will also need economic and other forms of assistance if it is to develop. But if these reforms encourage Ukrainians, wherever they live and whatever language they speak, to feel connected to and protected by the state, they will help to underpin its foundations. Without reform, any edifice of devolved powers may prove fatally unstable.
Ian Bond is director of foreign policy at the Centre for European Reform.