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Ukraine Gets Its Chance

Few former Soviet states have fared worse than Ukraine over the past three decades, owing to the country's domestic politics and geopolitical position. But with an popular new president who has promised to crack down on corruption and get serious about economic reforms, Ukrainians are right to be optimistic.

KYIV – Suddenly, opinion polls find that Ukrainians are more optimistic about their future than are citizens of most other countries around the world. That will come as a surprise to many, given Ukraine’s manifold challenges. And yet it is justified by the country’s current political trajectory.

For the first two decades after the collapse of the Soviet Union, Ukraine was one of the most poorly governed of the successor states. Whereas Russia initially underwent liberal economic reforms and has long benefited from high oil and gas prices, and the Baltic states were admitted to the European Union in 2004, Ukraine was left in the dust. Neighboring Poland’s per capita GDP is now almost five times higher than Ukraine’s, even though the two started post-communist life on roughly the same economic footing.

Although Ukraine’s 2004 Orange Revolution revealed a popular yearning for change, it soon ended in internal disputes and disappointment. By the time the country’s long-held desire for closer alignment with the EU began to materialize politically, a newly ambitious Russia had reemerged to challenge Ukraine’s shift to the West. Making matters worse, Ukraine’s financial situation was a disaster. Endemic corruption and the absence of serious reforms had essentially disqualified it from receiving help from the International Monetary Fund or Western governments, leaving then-President Viktor Yanukovych heavily dependent on the Kremlin (probably much more so than he would have wished).

In late 2013, Yanukovych acceded to Russian demands that he scuttle Ukraine’s EU Association Agreement (with its promise of a Deep and Comprehensive Free Trade Area). Ukrainians exploded in anger, and the Yanukovych regime responded with violence, killing some 100 people in the streets of Kyiv. But, failing to stop the protests, Yanukovych eventually fled to Russia, which intervened militarily.

By the spring of 2014, Ukraine was in limbo. Russia had occupied and annexed Crimea, backed and recognized two breakaway regions in the eastern Donbas region, and was conducting a thinly disguised operation to carve off Ukraine’s southern regions for incorporation into a “New Russia” (Novorossyia). With its very survival in question, the country was also quite literally broke.

But Ukraine staged a remarkable recovery. In May 2014, Petro Poroshenko won the presidency in an electoral landslide that was unprecedented in the country’s short democratic history. Ukraine started to fight back, and Russian President Vladimir Putin was forced to deploy regular Russian Army forces into Ukraine’s eastern provinces of Donetsk and Luhansk. A ceasefire and political process outlined in the Minsk Protocol that September served as a face-saver for Putin and his misbegotten Ukraine project, though the conflict remains unresolved. According to United Nations estimates, the fighting has claimed some 13,000 lives and forced millions of people to flee.

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The latest chapter in Ukraine’s saga started early this year, when Volodymyr Zelensky, a popular comedian with no political experience, clinched a surprise victory in the presidential election. And in parliamentary elections a few months later, his new political party won an absolute majority. When it comes to pursuing difficult reforms, Zelensky and his team are better positioned than any other government in Ukraine’s post-Soviet history. 

Zelensky’s election reflects a deep-seated yearning for radical change. His campaign focused on corruption, economic malaise, and the ongoing conflict in the east, and it is these issues that will loom large during his presidency. Although Ukraine has adopted more far-reaching reforms than any other European country in recent years, voters want more, and they have come to believe that Zelensky and his young team are the ones who can deliver it.

Zelensky has outlined a (still-vague) program of radical policies aimed at expanding the size of the Ukrainian economy by 40% in the coming years. As he and his advisers have made clear, this will require a substantial increase in foreign investment, which will not be forthcoming until the judiciary is seen as clean and efficient. A vigorous crackdown on corruption is a key prerequisite for economic growth.

One particularly promising economic proposal would expand private ownership of land, in order to encourage competition and innovation in the agriculture sector. As home to one-third of the planet’s super-fertile “black earth,” Ukraine has already surpassed Russia as the world’s top grain exporter, and is the EU’s third-largest food supplier after the United States and Brazil. It could accomplish much more with growth-enhancing reforms in place.

Zelensky and his team are benefiting from strong tailwinds for now. But Ukraine’s future will depend on how well they use their political honeymoon to implement difficult reforms. Headwinds will inevitably arrive. But the initial signs are encouraging. Ukrainians are not wrong to be optimistic.;
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