Op-Ed: Ukraine’s Reforms Are A Breakthrough, Despite Slow Pace

By Volodymyr Yermolenko, Tetyana Ogarkova

Today, Ukraine’s Association Agreement with the EU fully came into force. Here are the changes it has helped bring.

The Carpathian Mountains of Western Ukraine are a place of breathtaking natural beauty and a popular tourist destination. But if you travel there this year, you will be surprised to discover that something has changed.

Several months ago, locals built a new road from the city of Ivano-Frankivsk to Vorokhta that passes through all the top tourist destinations. It’s comfortable, smooth, and a major improvement over the old road — “just like in Europe,” as a local driver told us.

That’s a major breakthrough. In post-Soviet Ukraine, road-building has long been an area of extreme corruption. Public funds earmarked for road repair were often stolen. The road would languish with potholes and cracks for another few years. Then new funds would be allocated and, predictably, stolen again. Now, the times are changing.

This particular road is just one of many constructed or repaired across Ukraine. Socially and economically significant progress like this can, in part, be credited to so-called “decentralization” and Ukraine’s Association Agreement with the European Union, which comes into full effect today, September 1.

“Decentralization” is one of the most important reforms taking place in Ukraine. Previously, the country was  highly centralized and the bulk of money earned in the regions would be sent to Kyiv. Now, much more of these funds remain in local communities. Local budget revenues increased by 42% in 2015 and 49.3% in 2016. Thanks to their own earnings and state subsidies, local communities have almost tripled their funds since 2014.

Bilokurakinska, a community in Luhansk region, just 20 kilometers from the front line in eastern Ukraine, was among the first to take this path. Now, the town is able to purchase new medical equipment for its residents. Snitkiv, a small village in the central Vinnytsia region, grows organic berries, a labor-intensive process that employs many locals. Vesele, a small community near the eastern city of Zaporizhia, is turning into a powerful agricultural hub that produces wheat, meat, and dairy. Kutsurubska, near the city of Mykolaiv, opened its first dental clinic and invested in a wind farm. Dozens of other communities now have their own funds to repair kindergartens, solve problems with the water supply, and attract tourists.

With more decentralization and less corruption, Ukraine has a better chance to rebuild its economy. Previously, Ukraine was from 30 to 40% dependent on the Russian market. It faced a dramatic challenge when the Kremlin closed its market to Ukrainian agricultural products and other goods in 2014-2015.

This trade war, combined with Russia’s annexation of the Crimean peninsula and support for a separatist insurrection in Ukraine’s east, was Kyiv’s “punishment” for its ambition to build a more European society.

But three years after the dramatic events of 2014, the national economy is showing the first signs of a re-orientation to Western and global markets. The country is still famous for its agricultural and steel exports, but its high-technology sectors are also developing. The IT industry is second largest after agriculture, and Ukrainian firms from IT clusters in the cities of Lviv and Kharkiv are working on software for numerous clients in Europe and the US.

Economic links with Europe are growing fast. Dozens of factories in Western Ukraine are exporting textiles. Small businesses in Donetsk region, close to the front line, attract European investment to produce local ceramics, organic food, and fertilizer. The southern city of Odessa produces high-tech video equipment. Small- and medium-sized Ukrainian enterprises produce drones, small airplanes, radiation detectors, rubber boats, and designer clothing.

Both decentralization and economic re-orientation are linked to Ukraine’s Association Agreement with the EU. Decentralization is proceeding in the EU-Ukraine deal’s spirit of “subsidiarity” — meaning that the central authorities should only perform functions the local authorities cannot. And thanks to the EU-Ukraine free trade area — the key component of the Association Agreement — Ukrainian businesses have easier access to EU markets, are adopting EU safety standards, and are finding EU investors and partners.

This does not mean that all’s well in Ukraine. Not by a long shot. In key sectors, reforms are moving slowly: the judiciary remains unreformed, Ukraine’s political class is still very corrupt, and ordinary people suffer from poverty. Most importantly, Ukraine is still under military attack from pro-Russian insurgents and Russian forces in the East. The conflict has already taken  ten thousand lives since 2014. Every week, more people die on the front line.

But despite these tragedies, the country is taking its first important steps toward a modern and free society. And it is doing this against a backdrop of democratic deterioration in the Eastern European region.

Over the past four years, the EU-Ukraine Association Agreement, probably the most dramatic deal with a non-EU country in the union’s history, has become highly significant. The previous Ukrainian president’s failure to sign it sparked the Euromaidan protests, a pro-Western revolution, and a military reaction from Russia.

In other words, a complicated bureaucratic text has become a rallying point for Ukrainians and a genuine catalyst for change. Like a stone thrown into a lake, the EU-Ukraine deal is producing ripples of progress. It is helping to create a spirit of freedom, grassroots initiative, and responsibility that will be able to change Ukraine for the better.

And Ukraine is indeed changing — slower than we would like, but faster than ever before.

Volodymyr Yermolenko is a Ukrainian philosopher, journalist at Internews Ukraine and Hromadske.ua, and coordinator of UkraineWorld, a networking initiative.

Tetyana Ogarkova is a Ukrainian university professor and journalist, and heads the international department at the Ukraine Crisis Media Centre.

The article was initially published by Le Monde. It was prepared within UkraineWorld, a networking initiative.