VoxCheck of the President Speech: Half of the Truth

 

How much truth, lies and manipulation was in the speech of the President Petro Poroshenko at the press conference and last Friday? VoxCheck and Center for economic strategy examined economic issues in the speech of the head of the state and found two cases of lie, four exaggeration or manipulation and seven truthful statements. Not bad for Ukrainian politicians, but certainly there is room to grow.

Full text is available in Ukrainian and Russian.

Globally Famous ‘Ukrainians’

We follow so closely careers of famous compatriots, we take their successes and failures so closely to our hearts. Sometimes this is called “national pride”. VoxUkraine looks at the Wikipedia list of “most famous people” born in Ukraine and finds a few interesting things. But this list of famous provides a few reasons for irony. For example, the number one on the list, Leon Trotsky, hardly had any sentiment for Ukraine, while his neighbour Mykola Gogol’s writings are all about Ukraine, although he was writing in Russian.

When someone from your country wins a medal or a championship, this does not make you healthier. When someone from your country wins a Nobel prize, this does not make you smarter. When some of your compatriots becomes a Hollywood star, this does not make you richer. Then why do we follow so closely their careers, and why do we take their successes and failures so closely to our hearts?

Sometimes this is called “national pride” but in reality, perhaps, the thing is that we all want to be proud of ourselves. And the simplest way to achieve this – is to be proud of belonging to the same group (be it nation, race, gender or any other inherited characteristics) as that famous actor, sportsman or scientist. It is a nice feeling to belong to something great and famous. For this reason, making lists of outstanding nationals is so popular. TV shows such as “100 greatest Britons” attract millions of people in the world. Over 800 thousand people voted in a similar Ukrainian show in 2008.

Sometimes the “famous nationals” theme is used by politicians willing to exploit patriotism to achieve their goals. Often, we can hear them saying “our nation produced that many great… [politicians, scientists, artists etc.]” which implies that each of us is very smart and creative. They hope to get more votes by saying pleasant things to people. So recollection of a country’s achievements or “achievers” is quite a popular thing and done in many different ways. Some people would even use it to justify their [irrational] belief that their nation is better than others.

When compiling “the list of most famous Ukrainians”, two methodological questions arise: (1) how to quantify “famous”? and (2) who is Ukrainian? The last question is especially acute given that Ukraine is a very young state, so the citizenship criterion would throw away many centuries of its history.

One of the possible answers to the first question, how to quantify fame, is by studying Wikipedia.

In a recent study published in the journal ‘Scientific Data’, Amy Yu and her colleagues of the MIT Media Lab describe the Pantheon 1 dataset, a database of ‘globally famous people’, people whose biographies are present in more than 25 languages on Wikipedia. A total of 11341 people madeit to this list, 111 of which were born within the borders of present day Ukraine, placing Ukraine 17th on the ranking of countries where famous people were born.

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More: http://pantheon.media.mit.edu/rankings/countries/all/all/-4000/2010/H15

Among these famous Ukrainian-born people there is only one economist, Ludwig von Mises, but there are many soccer players, writers and politicians. This is the consequence of the methodology chosen to compile the rankings.

The dataset ranks persons by page views, therefore it should not be viewed as the list of most important people in terms of their contribution to a particular activity; rather, as a list of currently popular i.e. famous (as the full title suggests) people. Thus, a soccer player may outweigh a dozen of Nobel laureates. It also seems notably skewed toward countries where internet penetration as well as Wikipedia usage is high – for example, among Ukrainian-born film directors on the first place is Otto Preminger, who worked mainly in the USA, while Oleksandr Dovzhenko, who even by western critics is recognized as a significantly more influential contributor to the history of cinema, comes only the third. With dancers this is even more profound, as Serge Lifar has not made it to the Pantheon, while Vaslav Nijinsky did. At the same time, being a European country, Ukraine outperforms China in a number of famous people.

Only 15 out of 111 globally famous Ukrainians are female (13.5%), while Canada has the highest percentage of famous women originating from it (30%).

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More: http://pantheon.media.mit.edu/treemap/country_exports/UA/all/-4000/2010/H15/pantheon

The most interesting part of this ranking is to browse through the list of names of globally famous ‘Ukrainians’. The top three on the list are Trotsky, Gogol and Brezhnev.

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More: http://pantheon.media.mit.edu/rankings/people/UA/all/-4000/2010/H15

Browsing through the list helps to understand the difficulty of answering the second question, that is defining who is ‘Ukrainian.’ The list uses a place of birth and current borders to define to which country a person is allocated. But of these 111 people probably less than a third would identify themselves as Ukrainians. Others might well belong to Russian, Polish, Jewish and other “halls of fame”. This reflects the fact that territory of the modern Ukrainian state was long divided between Russian, Polish-Lithuanian and later Austro-Hungarian empires. Symmetrically, some of the famous Ukrainians are not in the list because they were born in other parts of the named countries. For example, a famous physicist of Ukrainian-Polish origin, Petr Kapitsa, is on the list of most famous Russians since he was born in St.Petersburg.

This list of famous Ukrainian-born people provides a few reasons for irony, too. Thus, the number one on the list, Leon Trotsky, hardly had any sentiment for Ukraine, while his neighbour Mykola Gogol’s writings are all about Ukraine, although he was writing in Russian (which created the ground for a long-lasting discussion on which culture he belongs to).

Stepan Bandera (64th), the famous fighter for Ukraine’s independence, stands next to Lazar Kaganovych (63rd), one of the organizers of the 1933 famine intended to ultimately suppress the resistance of Ukrainian people to Russian-Bolshevik invasion. One of the greatest Ukrainian writers Lesya Ukrainka (67th) is a “neighbour” of Andriy Vyshinskyi (68th), the organizer of the Stalin’s “great terror” of the late 1930s. Ivan Mazepa (45th), anathemized as a “traitor” by Peter the Great and all subsequent Russian governments stands near the singer Sofiya Rotaru (46th) who would probably get the same definition from many of today’s Ukrainians.

The obvious conclusion from the above is that the place of birth is a poor proxy for association of oneself with a nation, let alone patriotism (thus, Valentyna Matviyenko, the speaker of the Russian parliament, who voted for Russian invasion to Ukraine, is 99th in the Ukrainian Pantheon). A more relevant criterion might well be self-identification – a person is Ukrainian if they ever identified themselves as Ukrainian.

Perhaps, you would expect us to provide an answer to the “how to quantify ‘famous’” question. Luckily, there is no unique answer to it, so each of us can invent their own methodology, and each methodology will have its advantages and flaws. Taking a step back, is there a need to compile lists of “most famous nationals” at all? Isn’t it better to just work on making our country a pleasant living place for people of any nation? This activity would certainly make each of us healthier, smarter and richer.

What Will it Take to Change the Elites in Ukraine

The decentralization reforms that have been imposed upon Ukraine are incomplete, since they do not provide for any major changes that would vest local governments with real power. Today, all central authorities – the President, the Parliament, and the Cabinet – should understand that the time has come to transfer real authority and initiative to the local level.

In Ukraine, the same deck of politicians is endlessly shuffled, migrating from one party to another, from one era to the next. Why are elites not changing, and how can young leaders be brought in? The theme of decentralization has already bored everyone to death, but I believe that this is happening in the first place because we discuss it without fully understanding the concept. Reflecting on the quality and quantity of the Ukrainian political elite prompted me to raise this issue.

I often ask myself why, over the last 25 years, we have formed such a small governing elite? Why are there so few candidates for senior management and associated teams? Why, over and over again, the same people appear on TV, just wandering from party to party, from era to era? Why is active change of elites not happening?

One of the reasons for such stagnation is the lack of social mobility for young politicians. This, in its turn, is a consequence of the fact that the only place in Ukraine where you can show your worth is Kyiv and the central government.

In most civilized countries and developed democracies, the situation is the opposite. First, you prove yourself as a young activist locally, and then you become a deputy or a representative of your constituency in your town, city, or region. Then you can become a mayor or a leader of a party branch, and only then you go to the capital. Why is this not happening here? One of the reasons is the fact that the local authorities in Ukraine, by and large, have no impact on anything. They are entirely dependent on Kyiv.

Independent and proactive local governments are part of the European system. If you can’t make a good showing of yourself at the local level, you cannot claim to be able to run the country. In the case of Ukraine, if local governments are capable of doing something positive for their region, they can only do so by using their ability to negotiate with the capital.

The problem is not that politicians in Ukraine cannot rise from the local to the central level. They can. Only that in the UK or in France, to do so, an official has to show effective management and good leadership skills, whereas in Ukraine he needs to either have connections or to be able to maintain the right relationships with the central government. It is now time to abandon this practice. Local authorities have to independently solve their own issues: repair the roads that Kyiv will never see to, manage taxes, and set the local budget.

Negotiating and bargaining skills vis-à-vis the capital (which can currently ensure the successful career of a local official) are not what really makes young leaders. Therefore, to make sure that new leaders emerge, it is necessary to give local authorities a chance to make decisions independently. Towns and villages should have the right to decide how and where to build roads, and, whether to build them at all. Otherwise, a situation arises when political winds may change, but both the authorities and the elites remain the same.

The central leadership is afraid of transferring its authority to local governments. Often, this fear is disguised as the concerns about preserving the integrity of the state. I wouldn’t like us to recourse to doublespeak instead of clearly defining what decentralization stands for. Of course, the state should not transfer to the local level the issues not falling within the competence of the local councils, such as the country’s monetary and foreign policies. These are the competence of the central government, since the delegation of power to local authorities in this case would really pose a threat of separatism, especially in the current situation.

However, local issues, such as local budgets, can and should be resolved locally, giving young leaders the opportunity to prove themselves. In the future, many local activists and officials could become politicians, forming that new, deep cadre of professional politicians that Ukraine needs so badly. As a result, we would finally have competition between political leaders. There will be a wider choice of people trying to get into the central government.

The decentralization reforms that have been imposed upon Ukraine are incomplete, since they do not provide for any major changes that would vest local governments with real power. Today, all central authorities – the President, the Parliament, and the Cabinet – should understand that the time has come to transfer real authority and initiative to the local level. Otherwise, the more decisions are centered on Kyiv, the higher is the risk of making serious mistakes that could be disastrous for the country.

To achieve real change for the better, the country’s leadership needs to be able to sacrifice. To sacrifice careers and wealth, power and authority. What for? For the sake of the people. And for our shared future.

The article initially was published at “Novoye Vremya”

 

How the China and France Are Helping Russia to Undermine Humanity’s Non-Proliferation Regime

The demonstrative cooperation of politicians of the nuclear powers China and France with a Russia comes at a high price not only for Ukraine. Continuing, re-building or even intensifying official ties to a violator of the NPT may currently look to many politicians, across the world, as feasible and pragmatic. However, future generations may regard, especially, the collaboration of leading representatives of guarantor-countries of the NPT, with the Kremlin, as an impermissibly consequential digression from humanity’s non-proliferation regime.

The international repercussions of the so-called “Ukraine Crisis” go beyond Eastern Europe. Among others, Russia’s attack on Ukraine subverts the logic of the 1968 Treaty on the Non-Proliferation of Nuclear Weapons (NPT) designed to curtail the spread of weapons of mass destruction. In the mid-1990s, Ukraine gave up its atomic weapons arsenal, then the world’s third largest, it had inherited from the Soviet Union, and joined the NPT. In exchange, three of the five permanent members of the UN Security Council, the US, Russia and UK, at a CSCE summit in Budapest in December 1994, signed, together with Ukraine, a Memorandum on Security Assurances. In this document, Moscow, Washington and London, as the three original signatories of the NPT, assured Kyiv of the territorial integrity and political sovereignty of Ukraine.

Russia has, with its annexation of Crimea and its hybrid war in the Donets Basin broken most of the promises it had given 20 years before to Ukraine. De facto Moscow has abandoned the Budapest Memorandum and thus implicitly abrogated the NPT. What most people are less aware of is the deep involvement of Beijing and Paris in this touchy issue of world security. The Chinese government as well as some prominent French mainstream politicians have, with their equivocal stance on Russia’s behavior, assisted the Kremlin in its subversion of humanity’s non-proliferation regime. Few today remember the messages sent by Paris and Beijing to Kyiv, concurrently to the Budapest Memorandum, twenty years ago. Apart from the United States, Russia and Great Britain, the remaining two nuclear powers under the NPT too declared their respect for Ukraine’s political sovereignty and territorial integrity in official governmental documents.

Though also being a party to the 1994 deal on Ukraine’s nuclear arsenal, Beijing avoids to take any clear position on Russia’s recent conduct, and has only made general statements on the inviolability of state borders. China was the only permanent Security Council member that abstained from the 2014 UN General Assembly vote in which 100 countries condemned the annexation of Crimea. Beijing did not do so in spite of the fact that, 20 years earlier, it had provided Kyiv with a “Statement of the Chinese Government on the security assurance to Ukraine issued on 4 December 1994.” There, Beijing had pronounced that it “fully understands the desire of Ukraine for security assurance. […] The Chinese government has constantly opposed the practice of exerting political, economic, or other pressure in international relations. It maintains that disputes and differences should be settled peacefully through consultations on an equal footing. […] China recognizes and respects the independence, sovereignty, and territorial integrity of Ukraine.”

The Crimea Week

Crimea Triangle: Where do Missing Trucks from Ukraine Go? (Yuriy Gorodnichenko (UC Berkeley) and Oleksandr Talavera (U Sheffield), co-founders of VoxUkraine)

The Geostrategic Games around the Word «Investment» in Crimea (Ridvan Bari Urcosta, political scientist)

In view of the contents of this declaration, intentionally or not, Beijing is, with its current behavior, further widening the already deep crack in the global security system. The intensification of Chinese-Russian political contacts and economic ties since spring 2014 contradicts the spirit of the NPT, in general, and of Beijing’s 1994 assurances to Kyiv, in particular. Beijing’s behavior helps Moscow to compensate for its loss of economic ties with the West, and provides important public symbolic support to the Kremlin, at bilateral and multilateral summits. The Chinese leadership takes geopolitical advantage of the Kremlin’s current isolation and uses the West’s disengagement from its various partnership programs with Russia, in order to get easier access to Russian raw materials. With such self-serving tactics, China is strengthening the perception that the official nuclear powers will ignore foundations of humanity’s non-proliferation regime when it comes to asserting their national interests. Moreover, Beijing does so at the expense of a state which once had far more nuclear weapons than China, yet gave them voluntarily away. Instead of following up on their earlier announcements and assurances, such is the impression that not only Moscow but also Beijing conveys, the official nuclear powers will pursue their own interests and disregard the logic of non-proliferation, when push comes to shove.  

To be sure, this is not only a problem of the non-Western political elites of Russia and China. In July 2015, a group of ten French parliamentarians, most belonging to the party The Republicans of former and possible future President of France Nicolas Sarkozy, visited occupied Crimea. By doing so, the mainly conservative deputies were violating the Western sanctions regime against Russia’s annexation of the peninsula as well as, by implication, the NPT. The visit demonstrated the disregard of the deputies for the assurances given to Ukraine, with regard to her territorial integrity, when it joined the NPT in the mid-1990s and got rid of its large nuclear weapons arsenal.

The trip of the French right-wing parliamentarians to Simferopol had a different meaning than the earlier visits to occupied Crimea by representatives of European radical fringe parties. The visit of the prominent conservative politicians happened although, on 5 December 1994, France, under its then center-right Balladur government, that included Minister of Budget Sarkozy, had issued a “Statement by France on the Accession of Ukraine to the NPT.” In this document, “France reasserts its commitment to respect the independence and sovereignty of Ukraine in its current borders, in agreement with the principles of the final Helsinki Act and the Paris Charter for a New Europe. France reminds its attachment to the principles of the CSCE according to which borders can only be modified through peaceful means and mutual agreement, and the participating States refrain from using threats or force either against the territorial integrity or the political independence of a State, or through any other means incompatible with the goals of the United Nations.”

The demonstrative cooperation of politicians of the nuclear powers China and France with a Russia that officially includes Crimea and unofficially wages war in the Donets Basin comes at a high price not only for Ukraine. Continuing, re-building or even intensifying official ties to a violator of the NPT may currently look to many politicians, across the world, as feasible and pragmatic. However, future generations may regard, especially, the collaboration of leading representatives of guarantor-countries of the NPT, with the Kremlin, as an impermissibly consequential digression from humanity’s non-proliferation regime.

Andrew Kinder and Remi Boissonnas helped with preparing this text

Sergei Guriev: Decentralisation will Not Work If Large Companies Remain in Government Ownership

The review is a response to the article Ukraine Needs Decentralization to Develop Future Democratic Leaders written by Tymofiy Mylovanov (University of Pittsburgh), Roger Myerson (University of Chicago, Nobel prize laureate 2007), Gerard Roland (University of California Berkeley).

Timofiy Mylovanov, Roger Myerson, and Gerard Roland make a very important argument in favor of decentralization. Ukraine needs a change in the political system that would support emergence and growth of new politicians rather than bureaucrats. The only way to do it is to have more democratically elected leaders.

However, there are many risks related to decentralization and the devil is in the details. The authors discuss some of the risks and acknowledge that addressing them will not be easy. I would add one more issue that I believe is the most important one. Political decentralization should be accompanied by the economic one.

Elected mayors should have sufficient tax base to balance their budgets rather than depend on transfers from the central government. And if these transfers remain in place, they should be based on transparent formulas. Otherwise, the mayors will be dependent on the central government rather than accountable to the voters and decentralization will simply not deliver.

Also, decentralisation will not work as long as large companies remain in government ownership. Whatever the reform of corporate governance is undertaken, state-owned companies will always be used as a political tool; their production and investment decisions will be yet another lever for central government’s influence on local affairs. If political decentralization is to work, there should also be fiscal reform and comprehensive privatization.

Decentralization Week

Polish Experts Criticize Ukraine’s New Decentralization Law (graduate of the National University of Kyiv-Mohyla Academy and of the Autonomus University of Madrid)

Hlib Vyshlinsky: It is Important to Understand What Features of the Decentralization are the Key for Emergence of New Political Leaders (Hlib Vyshlinsky, Executive Director, Centre for Economic Strategy)

Decentralization vs. Anti-Centralization (Oleh Zahnitko, Gide Loyrette Nouel)

Struggle For The Constitution Is Going On (Appeal of Vice Speaker Oksana Syroid about the proposed amendments to the Constitution of Ukraine)

Viktoria Sumar: Terms Require Greater Concentration of Power in President’s Hands(Viktoria Sumar, MP of Verkhovna Rada (8th convocation), fraction of political party “People’s Front”)

Yuriy Hanushchak: Naively to Expect a Breakneck (Rapid) Disappearance of Local Oligarchs Due to the Efforts of Law-Enforcement Agencies (Yuriy Hanushchak, a Director of the Institute of Territorial Development and expert in issues of decentralization of power)

Georgy Egorov: the Central Government Should Have the Authority to Intervene with Force (Georgy Egorov, Kellogg School of Management, Northwestern University, USA)

Opinion on the Draft Law Amending the Constitution of Ukraine Submitted by Oksana Syroyid (Oksana Syroyid, deputy speaker of the Verkhovna Rada of Ukraine, member of the constitutional commission)

Paul Gregory: Ukraine Must be Concerned by the Sabotage of Elections by Russian Money and by Russian Special Operations (Paul Cregory, Hoover Institution, Stanford and University of Houston)

Andrei Kirilenko: There is a 500-Year-Old History of Formal Self-Governance in Ukraine (Andrei Kirilenko, MIT Sloan)

Smart Decentralization: a Bottom-up Path Toward Functioning Institutions and Economic Prosperity (Mark Bernard, Assistant Professor of Economics, Goethe University Frankfurt, Germany)

How Can We Ourselves Improve the Economic Situation in Ukraine?

Whenever there is a new government, academics, experts and NGOs start writing reports on what the new government and the individual ministers should do to improve the economic situation in Ukraine and finally realize the Ukrainian economy’s full potential. This advice is typically well meant and to the point, however, it often does not reach or fails to convince the people to whom it is addressed. That, at least, is the impression one gets if one compares the reports that have been addressed to previous Ukrainian governments and what has been realized by these government.

Hopefully this new government will be more receptive to some of the ideas proposed but in spirit with the Maidan movement, it might be a good idea to not just wait for politicians to do something, but instead also let the men-and-women-in-the-street take the initiative. Here are some ideas on how non-politicians can improve the Ukrainian economy.

First, Ukraine has a huge amount of money saved under the mattress, an estimated 70-80 billion US$ dollar is ‘lost’ for the economy in that way. Indeed, when money is deposited in the bank, it provides extra liquidity to the bank, thus strengthening the fragile Ukrainian banking sector, and that money can be reinvested, while under the mattress money just remains idle and is useless to all but oneself. Hence, all of us who have mattress savings can stimulate the Ukrainian economy by getting our money from under the mattress. Simply consuming that money will already be a stimulus – investing it in a productive way oneself or through depositing it at a bank will be even more useful. My own research has shown that an important reason why Ukrainians save their money in cash is that they do not trust banks but I am sure that one can easily find a fairly trustworthy bank in Ukraine (for a start, look for big banks that care about their reputation).

Second, an economy needs entrepreneurs to thrive. This is also true for transition economies: already, in 2002, John McMillan of Stanford and Christopher Woodruff of the University of California, San Diego argued ‘that the success or failure of a transition economy can be traced in large part to the performance of its entrepreneurs’. Hence, this is the right time to unleash your creative spirit and start developing those business ideas you have had for a long time. True, it is a rough environment but that means that if you are able to survive in this environment you will flourish when the economy picks up again – and by investing in your ideas you will contribute to that picking up of the economy.

Third, yes, your boss is not a nice person, but by working more efficiently yourself or by giving your boss some pointers about how the business can be run more efficiently, you will give a boost to the company, which will benefit your boss but more importantly it will also benefit the Ukrainian economy – and who knows, it might even benefit yourself from it in the long run.

Fourth, true we don’ t trust the politicians to use the tax money well but maybe it is time to come out of the dark, and start paying more taxes? In this way we can signal the new government we are willing to give them the benefit of the doubt and hope that they will ‘reciprocate’ and spend the government money well (there is a large academic literature that highlights the importance of reciprocity as a motivational factor). Moreover, paying taxes is an integral part of the functioning of a well-developed market economy and isn’t this what we all want?

Fifth, in a similar spirit – we all hate ‘big-scale’ corruption, but many of us will not be able to resist small acts of corruption (data from EBRD’s life in transition survey show that in 2010, 70% of the Ukrainians who interacted with the road police made an unofficial payment – only about 40% of these had been explicitly asked to make such payment by the road policy, another 30% paid because they assumed payment was expected while the remaining 30% offered payment to get things done more quickly). True these small acts of corruption make life a lot easier, but can we really expect big scale corruption to disappear when so many of us cannot do without small corruption?

Finally, be excited about the future of the Ukrainian economy – in a recent experiment, those people who were asked to say to themselves they were excited before giving a speech were judged by independent evaluators to be more persuasive, competent and relaxed speakers than those who were ask to say they were calm before giving the speech. Another experiment suggested that fooling yourself into believing you slept well will increase your performance even if you did not sleep well. So a certain level of self-deception can come in handy. Excitement can also help to convince others to be excited, though it is crucial to stay realistic in one’s excitement – a foreign investor who is convinced by overly excited Ukrainians to enter the Ukrainian market is likely to leave disappointed – all this suggests that a bit more self-deception but a bit less deception of others might be good for the Ukrainian economy.

The above points are all fairly easy to implement and while I cannot promise to do all of them, I commit to work on them – after all, to save the world, shouldn’t we start with ourselves?

A version of this post in Russian is published in Forbes.