George Soros: “new Ukraine” it is an idea that is real

In an interview with Ukrayinska Pravda, George Soros spoke about his expectations from the new Ukrainian government and the reforms that Ukraine must urgently implement.

By Sevhil Musayeva-Borovyk, published in Ukrayinska Pravda 

“The European Union would save itself by saving Ukraine,” American billionaire George Soros wrote this October. His main gripe against Europe is that it is not doing enough for the new Ukraine, which has to contend with Russian aggression, bureaucratic resistance both at home and abroad.

Soros also urged the IMF to provide additional support to Ukraine, which needs approximately $20 billion for reforms and rebuilding Donbas.

A week after his article was published, Soros traveled to Ukraine for several days to meet with Ukrainian government officials and businessmen. Soros promised to personally help Ukraine find the necessary funds for rebuilding. A donor conference is planned for early 2015, where Ukraine hopes to get up to 11 billion euros for reforms and the reconstruction of Donbas.

In an interview with Ukrayinska Pravda, Soros spoke about his expectations from the new Ukrainian government and the reforms that Ukraine must urgently implement.

– In your recent articles and speeches you speak about a ‘new’ Ukraine that is radically different from the old Ukraine. What do you mean?

– The old Ukraine was a mafia state, similar to Putin’s Russia, in which the rulers used the power  of the state to preserve themselves in power and to amass material wealth. The mafia state preserved the outward appearances of democracy, elections were held but the results were controlled by the rulers.

The people of Ukraine rebelled against the Yanukovych regime and defeated it in Maidan.  They are determined to have a real democracy in which citizens actively participate and ensure that the state serves the interests of the people, not the interests of the rulers.   In short, the ‘new’ Ukraine is the opposite of the old Ukraine.

– Is the ‘new’ Ukraine real or is it just an idea?

– It is an idea that is real in the sense that the defenders of Maidan were willing to sacrifice their lives in order to make it real.  It is a potent political force but it is resisted by other forces, notably Putin’s Russia and the remnants of the Yanukovych regime.

The future of Ukraine depends on the outcome of this struggle, first of all on the attitude and behavior of the Ukrainian people, but also on Russia on the one hand and Europe on the other. The elections gave a clear mandate to the elected representatives to form a coalition that will turn the ‘new’ Ukraine into a reality.

– You have met with the leaders of the coalition. They seem to have some differences. Do you think they will be able to resolve them?

– I believe they will because that is what the public expects from them but it won’t be easy because they face a very difficult task.  They have to act in accordance with the constitution and at the same time they must change the constitution in order to make it appropriate to the ‘new’ Ukraine. 

It is important to distinguish between these two tasks and follow the proper procedure for each. Changing the constitution is a fundamentally different process from executing a set of economic and political reforms. Changing the constitution is much broader and more inclusive. It involves not only the executive branch – the President and the government – but also the Rada and the public-at-large.

Executing a set of reforms approved by a majority of the Rada is purely the task of the executive branch. Yet both tasks have to be carried out at the same time. That is what makes the situation so complicated but if the distinction between the two aspects – the constitutional and legal on the one-hand, and the practical or executive on the other – is clearly recognized a lot of mistakes can be avoided.  We must also recognize a distinction in the constitutional changes.

 We must distinguish between the transitional and the final arrangements.  The transitional arrangements should apply only to the transition from the old to the new Ukraine; the final arrangements should apply when the transition has been accomplished.  That will help to ensure the proper sequencing.  If these two distinctions are observed a seemingly impossible task will become achievable. 

Let me give you a practical example: lustration. There is an irresistible demand from the public to get rid of corrupt officials but lustration cannot be the only method.  Before you get rid of the corrupt officials you must establish a new efficient and honest bureaucracy and judiciary. They have to be well-qualified and well-paid.

So the appointment of new officials has to take precedence over the lustration of the old ones.  You have to get the sequence right.  You can suspend officials when you have new ones to replace them as a temporary measure, but you have to assume that they are innocent unless they are proven guilty.

Otherwise you violate their human rights. So the temporary suspension that would allow qualified and well-paid officials to take over would have to be followed by a judicial process that would start only after the new judiciary has taken over. In this way lustration and the appointment of new officials would be combined in the right sequence.

– So how do you see the sequence that would lead to the establishment of a new Ukraine?

– The first coalition would establish a government of national unity whose members would be selected on the basis of their qualifications, not their party affiliation. But the balance between the parties would respect the wishes of the electorate.

In the optimal case Yatsenyuk would become Prime Minister and Groysman would remain Vice Prime Minister in charge of devolution, e-governance and civil service reform. But other arrangements are also possible. For instance, Turchynov would make an excellent speaker of the Rada but that would be incompatible with Yatsenyuk being Prime Minister because that would give too much power to their party.

At the same time the coalition would elaborate its priorities for radical reform and reach an agreement on the functioning of the coalition. All this could be done in November because a lot of the preparatory work has already been done under the aegis of the National Reform Council with the help of Strategic Advisory Groups (SAGs) attached to various ministries.

The government and its program could be presented to the Rada at the beginning of December, immediately followed by a presentation to the European Union as the basis of a request for financial and technical support.  The priorities would include radical civil service and judicial reform with special emphasis on the energy sector.  Naftogaz has been the black hole in the government’s budget and the main source of corruption.

Reorganizing it, bringing the price of gas in line with the cost of production and replacing hidden subsidies with direct subsidies to needy households could greatly increase energy efficiency and totally eliminate Ukraine’s energy dependence on Russia.

The project would cost over 10 billion Euros but it would pay for itself in a few years; that makes it both financeable and profitable.  In a best case scenario a donors’ conference could be prepared for February to be followed by an investors’ conference. Anything approaching this timetable would ensure the success of the new Ukraine.