Monday, March 3, 2014

Konstantin E. Jacoby: UkrainEUkraine – Time Came for Responsibility

The stolen civilized future   


21st and 29th November 2013: the Cabinet of Ministers of Ukraine suspended the preparation process to conclude Association Agreement with European Union and at the EU Summit at Vilnius ex-president of Ukraine Viktor Yanukovych allegedly aborted that agreement, which was negotiated and finalized in years of negotiations. As such Viktor Yanukovych and his government denied the expectations and right of the Ukrainian people to get closer to the Western civilization, buried all hopes of the people for a self-determined life, for justice and chances to develop themselves from poverty – socially and economically - in freedom and independence. Instead and additionally a future again under dependence from Russia was apparently decided for them.

The outrage of the Ukrainian people about this betraying political U-turn resulted in the biggest and since Orange revolution of 2004. Again in peaceful demonstrations, well-known meanwhile as the Euro-Maydan in Kyiv and other Ukrainian cities, but this time with the experience that after 2004 the necessary reforms were not undertaken and since 2010 with the presidency of Viktor Yanukovych a verticalization of state institutions (legal environment, courts, executive forces, administration) were enforced, where at the same time the national wealth and also important media assets were concentrated in the hands of a few people, being the family clan of the ex-president, government members and president loyal oligarchs, whilst a parliament majority got a corrupted and useless state organ, only a vicarious agent of the leading individuals. Corrupt schemes, falsification and fraud, provocations and repression to opponents and journalists from day to day got the more dominating environment the people had to life in, without any prospect of escape. The words by Ruslana Lyzhychko express best the understanding and emotions of most Ukrainians about what was going on:

“The future is stolen from the honest Ukrainian! The civilized future is stolen by a group of usurpers, who promised the people one thing and do the other, for the sake of the interests of one family and another type of state” reads.

Euromaydan – resistance against the system


30th November: That night the process of striking down the mass protest by violence started, using in perfidious way special security forces (Berkut and militia, and others), with the first life victim and lots of injured. In the absence of a system of justice, the peacefully demonstrating people were left actually to mistreatment and even lynching. Thus, the people, the Euro-Maydans, decided to defend themselves. We all saw the pictures of the barricades in Kyiv, with the will to resist the regime this time to the very end, not knowing yet how long they really had to withstand and for which price.

16th / 21st January:    

Tough anti-protest laws hastily passed by the Ukrainian parliament were immediately enacted by the Viktor Yanukovych, actually to finally install dictatorship. Abduction and brutal torture of the most active participants of the protest continued increasingly. Now debates of the European Parliament and consultations between Foreign Ministries of EU member states, USA, Canada started preparation of directed sanctions. The dialogue between the “Power” and the leaders of the opposition parties and of the protesting society, as demanded by EU and US politicians, never was conducted with the intention for a resolution. Instead, intentional disinformation and blatant lies were spread by the ex-president and his apparatus to the public and to representatives of other countries and their leading politicians. The increased diplomatic pressure resulted finally in the so-called “cancellation law” to the anti-protest laws, being a compromise with conditions of realization being a deadly trap.

18th – 21th February –

and the “Maydancy” knew about the trap, thus expecting the night of 18th to 19th November as being the decisive one of not giving up their Maydan as the symbol and shelter of resistance. And the Maydan stood on 19th November yet, with a lot of shot victims, and a continued and even higher bloodshed the next day by sniper attacks. The diplomatic mission of EU ministers and parliament members with its basically unacceptable, and in this unacceptability ‘helpfully decisive’, results came in the last possible moment, thus causing the breakdown of the regime and disempowerment of the Viktor Yanukovich. The documents detected in the residences of the ex-president give evidence that a mass-murder scenario beyond any imagination was prepared already to strike down the resistance.

Short-term tasks 


I am recalling above the history of the last three months to remind of the large responsibility of all involved sides to set up a state system in Ukraine, which gives the people back the foundations and trust to have a future. Actually it appears that the majority of them really at present take responsibility. It is certainly not “romanticism” as the ex-president called it in his notoriously cynical responses to the people. It is their pure right, because they with Maydan as their symbol and home “defended the European values”, as expressed by one of the members of the European Parliament on stage of the Maydan in Kyiv. We as Europeans are finally taking now a great deal of responsibility for future development in Ukraine, as the Ukrainian people took the responsibility for their future into their hands, paying with more than 80 victims and hundreds of injured.

The new “Technical Government” is now taking the governmental responsibility to lead Ukraine in a first phase of transition to a democratic state system with early presidential and parliamentary elections together with setting the framework of irreversibility of the won liberation from a dictator system. However, the oligarchic system still exists and several tens of billion Euro have been moved somewhere offshore by previous “power holders”. The collapse of the state – social, economic, and territorial – is to be avoided. Regarding the avoiding of the social collapse I do have confidence in the Ukrainian people and their ability and creativity to stand together and help each other. However, for achieving economic recreation and maintaining political and territorial integrity of the nation they do need constant and reliable support at all levels. A major supportive and protecting step needs to be the signing of the Association Agreement between Ukraine and the European Union yet in March. Hopefully, at the EU summit of 21st March that major step, including the DCFTA with its mechanisms of trade integration, can be reached and provide the Ukrainian people a higher level of confidence in future development.

Energy relations


Availability and accessibility to energy, heat and electricity for the end-users, i.e. for the people, communities, infrastructures of the country, businesses and industries, from small to large scale, is essential for any country. Ukraine, as well as its neighbours in the EU, especially the V4-countries, play an important role as transit countries for primary energy sources of natural gas and oil in the East-to-West direction. The gas crisis in winter 2009 made this very obvious, and the subsequent decisions and measures of the concerned EU member states implement mitigation of consequences from the unidirectional transit flow of primary energy resources and also respective diversification.
As Ukraine is concerned, its energy sector is both, essential for the survival of the nation’s economy and yet in hands of a few businessmen. The state energy strategy lacks from clear targets and additionally suffers from a highly corrupt system. Its exploitation as a “cash-cow” reached during the last years incredible levels.

The problems in the electricity supply in Ukraine reached this winter its culmination. In 2013, the electricity generation decreased by 2.2% compared to 2012, the transmission grid of the country experienced during the recent years the toughest operating conditions, where dispatching services have temporarily disconnected consumers from the network to avoid a system crash. District heating systems show heat losses up 50%, energy efficiency measures in buildings are practically absent, respective plans are mostly pure paper work! Cold winters can lead to an energy collapse, as many objects operate at their technical limits. Meanwhile, dozens of large-scale projects with millions being invested in are frozen. Their completion is not depending on money, but the objects are not conserved by the utilities or owners, because this is/was considered too expensive. However, money in any case was drained by corrupt schemes around the projects. "Kickbacks" in this area reach up to 300% (!) - about "kickbacks" at 40%, horrible enough, market participants already cannot think about, as is known from representatives of companies involved in the tender processes of public procurement for equipment, services and fuel for energy facilities    (e.g.: , in Ukrainian language; ; etc.).    

The first steps to bring transparency into that matter have been started by engaged press and media, but also politicians and need to be continued consequently. Programs funded by the European Commission and EBRD have been undertaken since nearly two decades, mostly with delays and under limited possibilities to drive a change. The present situation, as difficult as it appears at present, but with the backing of a strong public will of Ukrainians to go the change, give reason that these long term investments finally work for the benefit of the Ukraine and its integration with the European market. In addition, strengthening links at all levels, at bilateral programs, at municipal levels, at direct business and industrial levels, and at international business association levels (e.g. European Ukrainian Energy Agency) should be used to strengthen ties and make development opportunities implemented in reality.

Energy and energy-industrial links with Russia have geopolitical dimensions with considerable impact to Europe on the one side; however, the range of dependency of Ukraine is crucial. Although we witness at present steps of military aggression against Ukraine, it is hard to understand, how an economically week or even collapsed Ukrainian economy can be of interest to Russian business and energy organizations. A vital and independent as well as market-oriented and productive economy of Ukraine, which created added value, had much more benefit to Russia. Only a healthy partner buys goods and pays them in a sustainable way and also opens an attractive market. How attempts of the market entry of Russian enterprises to Europe, e.g. nuclear new built projects, may be considered in Europe under the background of military intervention to Ukraine, which would mean a breach of the Budapest Memorandum on Security Assurances of 1994, shall go successfully is more than questionable, even if being welcomed from a technical and economic point of view. Public opinion in this area is considered to be a major stake.

Without exaggeration it can be stated that time has come for taking responsibility, and the Ukrainian people has done the first and decisive step.

Author: Konstatntin Jacoby

Konstantin E. Jacoby acts as energy technical-institutional consultant at EEE JacobyKo.

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