Talking Donbas, Corruption and Debts in Davos

For Ukraine, it was a smorgasbord of international diplomacy: not one, but three high-profile meetings took place on January 26.

As part of the annual World Economic Forum in Davos, Switzerland, Ukrainian President Petro Poroshenko met with U.S. Secretary of State Rex Tillerson. Poroshenko also held a meeting with Christine Lagarde, the Head of the International Monetary Fund (IMF).

Among the questions the Ukrainian president discussed with his interlocutors were forming the much-anticipated anti-corruption court and bringing a potential UN peacekeeping mission to the country’s eastern Donbas region.

Meanwhile in Dubai, Kurt Volker, the United States Special Representative for Ukrainian Negotiations, held talks with Russian Presidential Assistant Vladislav Surkov on the peacekeeping mission.

Oleksandr Sushko, executive director of the International Renaissance Foundation and one of Ukraine’s top experts on transatlantic relations, was present at Davos. He believes Ukraine and the United States must seek a “coordinated approach” on numerous issues: the peacekeeping mission, implementing the Minsk Agreements and “the conditionality which is usually important when it comes to the American assistance to Ukraine and, in particular, the US position in the international financial institutions.”

Sushko also believes that the West is now less willing to give Ukraine advice.

“Most of the international politicians whom I met [in Davos] were more inclined to ask questions about Ukraine [rather] than provide recommendations,” he said. “It would be very naive to say that everybody knows what Ukraine must do.”

Bringing peace to Ukraine’s east

One of the key subjects in the Poroshenko-Tillerson meeting was how to end the war in the Donbas, according to Sushko.

“We are in the process of the big bargain over the idea of international peacekeepers,” he said.

Sushko believes that the only way to make progress in resolving the Donbas conflict is for Ukraine to “have a coordinated position with other western allies.” But this is easier said than done when Ukraine and Russia themselves cannot agree on one position.

“For Ukraine, the most important thing is that Russia is not a part of this peacekeeping mission. For Russia, the major point is that Russia is an essential part of this mission,” he said.

Sushko is unsure how a consensus can be reached. And if it is not reached, “it will look like a failure, like a total failure, which is not in the interests of the major actors.”

Anti-corruption and the IMF

While in Davos, Poroshenko also spoke with IMF head Christine Lagarde, a crucial meeting for Ukraine’s economic growth. Last year, the IMF froze funding from its $17.5 billion assistance package to Ukraine after Kyiv failed to meet its requirement. Such a freeze could prove fatal for the country’s economy.

But the Ukrainian leadership is also unlikely to take the unpopular steps required by the IMF before the 2019 election.

“Ukraine will need external funds in order to pay the debts next year,” Sushko said. “There are not so many sources where Ukraine can get it…There is uncertainty whether the leaders of the country and the government...can even survive without these funds before the elections.”

The price that the IMF requires is quite high, he adds. And it’s not just about setting up the long-overdue anti-corruption court, which Poroshenko finally initiated on December 22 with a draft law.

The IMF quickly reacted in a letter to the Presidential Administration. It called the draft law a “positive step,” but stated that its contents were “not consistent with the authorities’ commitments under Ukraine’s IMF-supported program and the recommendations of the Venice Commission of the Council of Europe.”

Sushko said that “Ukraine’s noncompliance with these conditions” was a subject of discussion at Davos.

He also stressed that the question of anti-corruption institutions is not as critical for U.S. President Donald Trump as it was for the previous Barack Obama administration. But it is still important.

“Tillerson personally and certainly the United States [are] among those actors who strongly require Ukraine to establish a really independent anti-corruption court,” Sushko said.

But success in establishing the court is not the only measure of Ukraine’s progress. More important is “to what extent Ukraine is a part of the global processes,” he said. “Is it [getting] closer to the leaders of the world?…Can it succeed, not just improve its GDP, not just improve its ratings — like the Corruption Perception [Index] rating or Doing Business rating — but mostly it is about: is Ukraine getting closer to global economic trends?”

/Interview by Nataliya Gumenyuk

/Text by Maria Romanenko