On corruption and rule of law

Corruption is bad and the lack of rule of law is bad also. To say this though is not to explain why cultures tolerate both of these. The short asnwer is that it gives people in power things and power and there is something to this. But that is not the whole story. Below I post an analysis of corruption and rule of law which I did for a company looking to help Afghanis set up rule of law systems in Afghanistan.

The problem here though is setting up a dispute resolution program in Afghanistan. Because of the lack of rule of law traditions, the problem is not so much setting up a dispute resolution mechanism; that can be done quite easily. The problem is setting up a dispute resolution mechanism that is effective. That is a much more difficult problem...[and] presents some extra difficulties.

What we usually mean by a lack of rule of law is that a dispute resolution method is not in keeping with the standards we use in the West. Those standards focus on impartiality and transparency. From our viewpoint, countries that lack rule of law systems are not transparent enough and are not impartial enough to be effective. And this is true. Countries that have systems that are impartial and transparent have rule of law systems. So we want countries to adopt measures to make them more impartial—or at least create the likelihood of more impartiality-- and more transparent because we want them to have rule of law systems.

The problem with this perspective is that it tends not to recognize—or to downplay if it is recognized at all--the problems inherent in making those kinds of changes to a country’s system. And when we add the term “corruption” and say that these systems are rife with corruption, which they can be, that word usually kicks things into an emotional high gear and the problem then becomes one of either the people of the country learning not to be as greedy, or as “bad,” as they are or dealing with the low pay of civil servants. Both of these things may be a good thing to have happen, one being more possible than the other, but they both miss the point. There are cultural reasons why these systems are the way they are and these cultural reasons are usually of longstanding having been in place for centuries in some cases. But it also fails to realize that these cultural reasons are often intimately bound up with the identity of the people in that country. To ask them to change is not to ask them to be better but to ask them to jettison part of what identifies them as a society and as individuals in that society.

Traditional societies rest on different foundations than Western societies do. The point is that traditional societies are contextual in the way they see the world and their place in it. That context is defined by relations, personal relations, relations, for example, not with an abstract “government” but with the person in power, something which we would define abstractly as “government.” This relationship identifies them as do their other relationships within their tribe (often substituted now by country), their family and within their religion.

In the West, people know things about people without really knowing them. Any stranger on the street has certain inherent characteristics that identify him or her in the West. These are the characteristics of freedom, equality and fundamental rights as a human being, for starters. And these characteristics establish a relationship between people that occurs whether they know each other or not. But that relationship is abstract; it doesn’t depend on who it is standing before them, be they family, friend or stranger.

In traditional societies it is different. Persons who are a part of traditional societies need to actually know who the person is to know something about that person. It is the actual relationship they have with that particular person that establishes everything for them. With a stranger, they have no such relationship. What this means is that, in the West, even when we have no context with other people we have a type of relationship with them. In traditional societies however, no context with a person means no relationship. And it is that relationship which is important. Those
relationships are found in context.

The point is that in traditional societies, context is everything and that means relationship is everything. Relationship is context. And that relationship also helps to establish identity. In the West, to say, for example, “My dad was a butler; my grandfather was a butler and I am a butler” is a pitiful description. Abstractly it suggests that the person is pleased with subservience and that he has no ambition to do anything other than serve. And that is how it would be viewed from a Western perspective. But in traditional societies, this has meaning. It establishes a relationship, not to power or authority in the abstract, but often to a specific person or family. That relationship can pinpoint where a person is and that serves to create identity. But it also helps to create identity further in another way: It establishes a relationship with a person’s ancestors and with history.

In traditional societies, therefore, the problem for any system of justice is obvious. In these societies, since relations are of the utmost importance, they can have an effect on the justice system, since that may result in some sort of relation to the case or to the trier of fact. (And that relationship may be cultivated if it does not already exist.) In the West and in America, any connection to the case or to any party to a case by any trier of fact, a jury or a judge, will result in a dismissal for cause of the jury member or a recusal for any judge. This is an essential part of fairness for us. No one is to have any relationship with the parties or the case; they must be detached from either. That lack of connection is a significant component in creating
impartiality.

But for traditional cultures, relationship is everything. Though we would see any relationship with the trier of fact to potentially bias the results, they do not see things this way. For them, a relationship to the authority creates a system that is more congenial to their traditions. People know people by virtue of relationships and those people are often expected to get them results by virtue of the type of relationship they have with them. In its favor, one might argue that that type of system takes more into account the people before it, their individual characteristics, more effectively than our impassive system does. There is nothing of the personal in our system. In these societies where contacts and relationships are the norm, however, justice, at least as they would define it, if they define it at all other than relationally, has a recognizable face to it.

This means that an approach that works through existing mechanisms will be much more effective in Afghanistan. And that is what I understand your organization is
doing. That is the only way to go about it, in my opinion. Going about it this way means going about it from their cultural perspective and not our own. That will make for a greater likelihood of success than most rule of law programs have had to date. They tend to go at by looking at it from a Western cultural perspective and then by imposing a Western standard.

One of the things that should be of use is Islam. Most people would think of Islam as a hindrance. It need not be. Historically, Islam has a tradition of fairness and tolerance that can be drawn upon to buttress effective dispute resolution procedures. When the Jews were expelled from Spain, for example, many found refuge in the Ottoman Empire, the site of the caliphate of Islam, and were treated fairly and with a greater degree of tolerance than they had been and had had in Europe. That is a useful tradition.

The same thing is true of any non-Western culture.

One man once stood up at a conference discussing third world poverty where corruption was a topic and said, "One of my colleagues in the Far East once said to me, 'You call it corruption; we call it family values.'" That I think that expresses the problem quite succinctly.

Putin's speech

In Putin's state of the country speech, he said the following which has gotten some play in the blogs:

Let me remind you again of how modern Russian history began. First of all, it should be acknowledged, and I have spoken of this before, that the collapse of the Soviet Union was the greatest geopolitical catastrophe of the century. And for the Russian people, it was a real drama. Tens of millions of our citizens and fellow-countrymen found themselves outside the Russian Federation.

I am not one who thinks that Putin is moving the country back toward a Soviet styled state. I think he is not in as much control of things as the West tends to think. But I do think the Kremlin acts like it has no sense some times. I think it comes from insularity. They get the information that reinforces their own biases and worst instincts because they have cut themselves off from other sources of information.

In any event, when I read this I was amazed at it because it sounded like some of what was said before Hitler invaded the Sudetenland and Austria. It was the ethnic Germans he was looking to protect, he said, though his real intentions were something much larger and much worse.

Does this signal anything as sinister? Maybe not of the same order of magnitude but anything that might be short of that, I really don't know. At the very least, Putin is pandering to nationalism. But stoking a fire like that can create consequences that maybe even Putin would not want. If he can manage democracy, however, maybe he and his people think that managing nationalist sentiment will be the same kind of deal.

Does he think that this will make his neighbors comfortable, those with ethnic Russian populations, especially at a time when Hitler and the consequences of the war are on the minds of so many people?

And Bush got grief for using crusade language when referring to the Middle East.

I just think it is one of a number of stupid things to have come from the Kremlin recently.

The corruption problem

A few weeks back, my wife took our youngest girl to the kindergarten she goes to. As she was walking home, she saw a woman she recognized as being from our building. She fell in with her and struck up a conversation. Since my wife had just left off our daughter, she naturally asked this woman what kindergarten her daughter went to. The woman named one that we had tried to get into, a kindergarten that had some reputation in the area. The reason we could not get in is because the director told us there were no places. We ended up taking her to another school a little further away.

So my wife was interested in knowing how this woman got her daughter into that kindergarten. My wife said to her, “They told us there weren’t any places.” The woman responded, “Of course there weren’t any places. When I went to talk to the director, I took $200. $100 I put in my pocket. The other $100, I took in hand. I then told her I wanted my daughter to go to that kindergarten and handed her $100. All it took was the $100. I didn’t need any more.” My wife said that the woman spoke with the air of someone who had made the best deal of her life.

The problem is that all the kindergartens are government schools and it is illegal for the directors of these schools to take bribes. It was that way before Yuschenko came to power and it is still that way.

Makes me wonder who she voted for. Yuschenko campaigned on eliminating corruption. That she might have voted for Yuschenko she would not see as inconsistent. She was looking out for her own interests and that was that. But the problem is that corruption here is not limited to the oligarchs nor to Kuchma nor is it limited to those in power. Everyone has been involved in it to some extent. That was and still is how people got and get by.

During the election, Yuschenko said that corruption was eating away at the Ukrainian soul. That is an all encompassing statement not limited to Kuchma and to the oligarchs. And he was right.

More price controls?

More price control

It was reported on Radio Era this morning that the natural gas companies are looking to hike their prices. The government sees a conspiracy in this so the PM has informed them that they cannot raise them more than a set rate, a rate set by the government. It looks like price control for the natural gas industries too.

It is hard to understand why they are doing this. The comments suggest that it might have to do with the elections in 06. But that would be buying the election in the way that Yanukovych tried to buy the presidency (at least it was one leg of his plan to buy the presidency.) Yuschenko appealed to the crowd with ideas and they followed him. Is he now looking to buy them for the Rada elections? I would think Yuschenko could see the inconsistency.

The other idea is that Moroz is behind it all. That is plausible but I think Yuschenko didn’t cave into him to select him as PM, why would he need to cave in on this sort of thing, especially in the face of his promises to rationalize and modernize the economy? I think Moroz had his couple of picks and is a non-issue now. Other things must be afoot. What those are I have no idea. But the movement does not seem to be in the right direction.

Kuchma ordered it?

Oleksandr Turchynov says that the order for troops to move in on Maidan to disperse the protestors and put an end to the revolution came from Kuchma, according to the Ukrainska Pravda This was the troop movement that occurred on November 28th which was followed by US satellites.

Of course, Turchynov was a member of Yuschenko's team at the time and this may be what he believes happened. It would be interesting to know on what he bases this. Maybe he has some evidence of it. Being the new head of the SBU might suggest that. But I would be interested to know what it is he has, if anything, that would show Kuchma did.

I think he did and thought so at the time. There were very few people, only a handful, that could have issued that order. But I don't think anyone other than Kuchma would have issued it on their own. Kuchma may have been on his way out in absolute terms, but he had been the power and, for all they knew, was still the power that had to be dealt with. I doubt anyone would have issued any such order without his consent.

This is, of course, speculation without any kind of proof. And that proof will only be in the form of recollections of people to the event, unless an order is found with Kuchma's signature on it. (That is doubtful.) And these recollections will not constitute definitive proof but will serve, if a number of them come forward to speak, as better and better evidence that he did.

Some government action

I don’t know what to make of this but there have been some actions by the government that are not market oriented. Some of them are:

--The Rada approved the appointment of a socialist, Valentyna Semeniuk, as head of the state property fund. She does not have a history of being pro-market and pro-privatization. The state property fund is in charge of privatizing state businesses. One of the big businesses still set to be privatized is UkrTelecom, the Ukrainian telephone company. It was set to go last year but then it was to be this year. With this appointment, it might be much later or never. If this means that privatization will be slowed or stopped altogether, that could affect the budget. It also still leaves portions of the economy in state hands. That is good neither for the economy nor for the people in the long run.

--The government has halted the steep rise in gasoline prices by putting restrictions on the mark-ups of refineries and retail outlets. The limit is 15% over costs. This is price control pure and simple and, though I am not an economist, it will not benefit the economy in the long run.

The government also instituted a ban on the export of diesel fuel in an attempt to keep the prices down in the Ukraine. More state intervention.

--The state is set to make purchases of beef and pork in the amount of 500 million.
This meat will then be sold by the government through state enterprises at low prices. Meat prices have been going up quite steeply in the past few months. We have been hearing that the government was instituting policies that would bring the price down. But we had heard it would be through a decrease in import duties. That may still be what they are doing and this purchase might be a short-term way of getting the price down as we move into the Easter celebration. But it is obviously not a market method.

--The government is set to reduce the electricity tariff paid by agricultural producers by 20%. Energy is quite heavily subsidized by the government here and lowering the rate paid by these producers will mean the government will have to make up the shortfall. So it will just be subsidizing the energy costs even more. This is not something that will directly affect people like the cost of meat for Easter or the rise in gasoline prices. But it could be a bid to stop rising prices without injuring the agricultural sector by doing something like lowering tariffs. But again this is more government interference in the economy.

I don’t know why the government is doing all of this. It could affect the entry into the WTO and won’t look good for EU accession. Maybe though they are just trying to give the people some evidence that their lives have changed for the better, some kind of short-term strategy. But if it is more than this, it will only delay the reckoning. Eventually, state enterprises will have to be privatized, the prices of gasoline and meat will have to be left to the market and energy will need to be paid for by those who use it.

Oligarchs assert their human rights?

It has been reported that the Krivoryzhstal Mill re-nationalization will be taken to the European Court of Human Rights. If it is true, it is priceless and signals to me that they are no smarter about any of this than they were during the revolution. I went to the site to see if they had filed anything and couldn’t find anything noting they had. That doesn’t mean they haven’t or won’t, I just didn’t find anything about it when I looked.

After the last election, when Yanukovych finally lost, they threatened to take the whole thing to the same court. I think people are still laughing about this one. It was hard to know what he thought he could gain from that. Everyone in Europe thought he had stolen the prior two elections, so he was going to go to the ECHR and argue what? That they stole the election from him? The story that would have been circulated about it would have been along the lines of, “A corrupt politician (Kremlin backed, by the way) and his oligarch backers are seeking to use the institutions of Europe to overturn what was finally a free and fair election.” Or something like that. It is hard to see that he would have even gotten a hearing on it. I guess they were to the point of using any threat to hand. This one wasn’t a particularly good one.

If Pinchuk and Akhmetov take this case to the ECHR, it suffers from the same sort of problem. The story would be something like, “Corrupt oligarchs frustrated by free and fair elections and a campaign to root out corruption, seek to use the institutions of Europe to get what they want.” Or something like that. These people might consider this to be entirely unfair, but that will be the gist of it from most of the press (except of course, from the Guardian who saw America behind it all. Guardian: “America, bad. Anybody arrayed against America, good.”) And that is if they could get a hearing on it in the first place. (If I have some time, I might post something on the merits of their claim under the convention.)

But let’s assume that they get the Court to rule in their favor, something I think won’t happen on the merits, but let’s assume it. What does it get them then? If the Court grants them some sort of damages, how would they collect them? “The Court hereby orders the Government of Ukraine to pay to y and z, x amount of money in damages.” How would the Court enforce this order? The Ukraine is a sovereign nation and in control of its borders with the ability to use force in its own territory to enforce its own laws and to further its own policies. How then would the Court get the Ukraine to pay up? Send in the sheriff? (Visa denied.) Shake its finger at them?

The International Court of Justice recently ruled that the execution of Mexican nationals in the US violates some international treaties. What has been the result of that ruling? Absolutely nothing. The Mexican nationals in question were in fact executed under the laws of the states where they were convicted of the crime. And, if they are convicted and sentenced to die from now on, they will still be executed under the laws of the state where they are convicted of the crime. This has internationalists wringing their hands, livid that the US ignores international law. Setting aside the problem of international law—is there really any?—the practical problem is that that ruling cannot be enforced because the US is a powerful sovereign nation and the UN cannot do much of anything about it. In theory, they can convene the Security Council and pass some sort of resolution against the US creating sanctions because of its violations of international law, but that would be subject to a US veto. And even if the US had no veto, it could ignore the resolution with impunity. The point is that there is nothing in reality they can do about it. The Court has no ability to enforce its decisions just as the UN has no ability to enforce its decisions, absent a country (read: “the US”) or group of countries (again read: “the US”) that will take it on.

And, as an aside, a court that issues decisions that are ignored will never develop any authority of its own. A more careful court, that is, more careful judges, interested in nurturing and cultivating its (their) authority, might pick its battles better. But one gets the feeling that this Court has simply constituted another forum for US bashing, a growth industry in the UN for a number of decades.

This is the same problem here. If the ECHR issues its decision, how will it be enforced? Conceivably, the EU authorities could issue some sort of sanction or sanctions against the Ukraine for ignoring the opinion of the Court or it could bring up the decisions when Yuschenko or anybody else talks about EU integration. (The EU official waves a hand in the air. “I know, I know you want to talk about integration. But we have serious concerns here about Krivorastal. We won’t even talk to you about integration until you deal with this problem.”) But that would be subject to politics and interests not to mention foreign policy objectives not only directly with Ukraine but also with the US. The whole thing, assuming that they get the Court to rule in their favor, a big, big assumption, would just be sidelined and swept under the rug. Nobody is going to want to be seen as helping out corrupt interests and enemies of democracy in the Ukraine. The point is that in Europe and the US, these guys are seen as corrupt and interested in fleecing the country and its people for all they can get. They might take issue with this characterization, but that is how they are viewed.

I have made the argument in another posting about how they should go about it if they were smart. I made this argument not to give them any help but to alert anybody who cared about it what the strategy might be if someone clever stepped in. But it looks like business as usual for these guys. The problem is that the world has changed out from under them. They used to speak and it was done. They can no longer do that. And that is a serious infringement of their rights that the ECHR should look into.

If, of course, it is true.

On corruption and collapse in Russia

Here an interesting article in the Moscow Times:

A former KGB man, Lebedev was once considered a stalwart backer of Putin's government policies. But recently he has moved into politics, launching an unsuccessful bid for Moscow mayor in 2003. Even though he is a member of the pro-Kremlin Duma faction United Russia, this year he has moved from battling on a regional level to openly criticizing federal policies.

"Before 2004, everything that was being done by the Kremlin was without doubt the right thing," he said. "They were stabilizing the political situation; there was tax reform, [moves toward] administrative reform and pension reform. All this was correct.

"But somewhere along the line a year and a half ago, we reached the point where we needed to stop strengthening the power vertical and get busy with social reforms," he said. "But look what happened: Pension reform collapsed, administrative reforms collapsed, and with tax -- you see for yourself -- now the problem is with tax administration. No one believes the tax authorities anymore. And the monetization of benefits, you see how terrible this was, while the cancellation of elections for governors was the wrong move."

In the meantime, he said, state officials are too busy lining their own pockets, and are starting to challenge the oligarchs who won property in the 1990s for their ability to toss money to the wind.

"Name me just one official of a state corporation who is not a multi- multimillionaire," Lebedev said. "This is a new phenomenon we have to fight. We have already beaten the private oligarchy. They have either run away or they are trembling with fear. But now there are state oligarchs who are spending billions of dollars abroad. ... The residents of European countries see the yachts they are sailing in, they see the hotels they are staying in, which planes they fly in and which jewelry boutiques they frequent and what they buy.

"We are disgracing ourselves all over again," he said, identifying the state officials only involved as the heads of major state-owned corporations but declining to give names. "Of course we will not go far with such state officials. They don't care about the rest of the people who live in this country."

Other businessmen agree that what they see is a new carve-up for control of financial flows. "This reminds me very much of what was happening at the beginning of the 1990s," said the other businessman. "For a number of people working for the state, all the limits have been lifted. These people are trying to redistribute financial flows in their favor and are trying to use the levers of the state for their own gain.

"This is the East. There is a new clan, and for this clan all is forgiven," he said.

But as fears grow over where things are heading, the worsening situation could prove to be a powerful motivation for the Kremlin to wake up and make efforts to rectify the situation, he said.

This is consistent with other reports I have read that corruption has actually gotten worse.

The article suggests that the Kremlin hasn't had a real good view of reality. Mentioning the Orange Revolution, it says:
.

There are signs of panic over future stability from the Kremlin itself, including the Medvedev interview, said Stanislav Belkovsky, the head of the Council for National Strategy, who said he was called just last week by a Kremlin spin doctor in a scrape over what to do next. "They're frightened everything could blow up at any minute," he said. "They still don't understand the Ukrainian revolution. They were 100 percent certain [Kremlin-backed candidate Viktor Yanukovych] would win and the people would leave the streets because it was freezing cold. It was a tragic misunderstanding of the situation. Now they are afraid of everything. They are even afraid of their own shadow. They have lost the key to understanding the political situation.

In the West, Putin is seen by some as creating a new Politburo and taking Russia back to the era of the Soviet bosses. I think though there is abundant evidence that he is not in as much control over things as many think. He has amassed power to himself but it has not been enough. Problem is that that power has\been amassed to the Kremlin and it looks like Putin is not in complete control there.

Russian prediction for Ukraine

What is in store for Ukraine? According to some Russian commentators, take a look at where Russia was and where it is now and that will tell you the future of Ukraine.

Ukraine today is Russia yesterday, i.e., Russia under Mr. Yeltsin. It has the same enthusiasm of a beginner, the same revolutionary black-and-white judgments, the same romanticism at the expense of balanced pragmatism, the same unrealistic promises to the population, and, regrettably the same, inevitable rush to appoint inappropriate people at the top. And, at last, it has the same blind belief that "the West will help us."

These symptoms can only pass with time and with the help of Russia, which emerged from the same troubles quite recently.

As an experienced patient, Russia can provide Ukraine with numerous tips on how to avoid some of the mistakes committed by Russia's young reformers, if the Ukrainians choose to listen. It can happen at any moment, sooner or later. Mr. Putin's task is to seize the moment tactfully.

There is no doubt that the crucial moment will come. Market and geopolitical laws cannot be ignored, and Russia-Ukraine relations are no exception.

The main thing that has to be understood, though, is that Russia may have lost out in the short-term, but it will still win in a long term. With this in mind, the president's visit to Kiev can be seen with more optimism.

There is no reason to panic whatsoever. Johnson's Russia List
9092, #32RIA NovostiMarch 16, 2005, UKRAINE TODAY IS RUSSIA YESTERDAY MOSCOW, (RIA Novosti political commentator Pyotr Romanov)

Of course the panic caution is not for Ukrainians but for Russians which is more of the same. There are differences though that make the outcome not as certain as is thought here. One of these is that democracy has not been impeached by economic disaster as it was in Russia. They would say that it hasn't yet, but just wait. (Disaster would be a good thing?) But this remains to be seen; the economic signs look good though.

This is I guess there to stop all the handwringing about Ukraine being lost. Don't worry, it says, they are just like us except much more naive and immature. When they wake up they will find that they have ended up where we are.

A lot should be said about this but I will leave it up to Ukrainians to say it.

Pavlovsky on Chubais

This is a bit old I know but interesting nonetheless.

Catching up on some of Russian news and commentary, I saw some commentary on the Chubais assassination attempt by Gleb Pavlovsky that should continue to endear him to many Ukrainians.

I wouldn't speak of it as an attempt on Chubais's life: this is not self-evident to me, because the methods used could reach no other goal but an awkward chance. In my mind, the matter concerns quite a foul staging aimed at achieving provocative political goals. The maker of this wasn't actually aiming at murdering Chubais, but
wanted to produce the atmosphere of event for getting subsequent comments….

This impairs the country's reputation on the global arena; this is among the tasks of this staging in which firearms was used. I wouldn't like to think that Chubais's inner
circle is involved in this. These are irresponsible shadow political circles, which are
willing to upset the situation. The opposition will use this event widely for propagandistic goals, mostly by the extreme anti-Putin, the oligarchic opposition. This suits their style. However, it is inadmissible to point at any of the politicians.

This could be compared to Gongadze's story in Ukraine, where an absolutely senseless murder was contrived with a provocative goal of arising criminal suspicions against the authorities. Johnson’s Russia List #7, Vremya Novostei, March 18, 2005.

In short, what Pavlovsky believes is that the Gangadze murder was perpetrated by anti-government forces who did it as an attempt to discredit the Kuchma government.

It would be interesting to know if he is using this as a reason for why he lost the election for Yanukovych. He is the Russian political technologist—we would call him a “spin doctor”—who shoved the idea of fascist conspiracies undermining the government and Yanukovych down the throats of Ukrainians. When he lost, he beat it home and, if he didn’t say it directly, at least insinuated that the forces of the West, the CIA mostly, undermined him at every turn.

One more arrest

A couple of days ago it was reported that the police arrested the owner of a local (and popular) restaurant on charges that he trafficked in women. (The restaurant is near downtown. We pass it all the time.) That is much like the arrests I already reported in the last post. This guy sold women too. They have found 39 of them.

I have followed this trafficking situation here somewhat and know that there wasn’t much headway being made. This looks like headway to me.

The thing that is also interesting about this arrest is that it was reported Interpol was there with the officers. Interpol is not an international police force, contrary to what Hollywood might lead people to believe. It is a clearinghouse for information mostly. (They do consulting too, I know, but that doesn’t change their status at all.) I can assure you that this guy is not resting in an Interpol jail at this moment. He is breathing in the air of a Ukrainian jail.

But Interpol being there means that the arrest was meant to be transparent from the start. These things might not have been transparent before because of the possibility of corruption—the guy might just negotiate his way out of the mess at the scene and we don’t want any witnesses, of course. Interpol being there means that there would be no business like that there.

And the guy apparently thought he might be able to do something because he offered 180,000 to the officers to let him go. There were no takers. Heartening.

Some interesting arrests

Some information from a Yanukovych stronghold sounds hopeful. It looks like a couple of local police in Dnieper-Petrovsk were arrested the other day for selling 13-15 year old girls into the sex slave trade. These girls ended up in Moscow. This sort of thing is a scandal in this area of the world but they might just as well have ended up in Japan, Western Europe or the US.

These guys were nabbed though and 19 of the girls were returned to their families. (I am not sure if that is all of them.) The thing that may end up being the second most significant thing about this is that the families had lodged complaints with local police officials but they said the complaints were ignored. The fact that something has now been done about and these guys nabbed could mean that the stranglehold on at least this area by corrupt interests has cracked or is being broken. If this is true, that would be very good news and a testament to the election of Yuschenko. I hope this is what it means.

Business opportunity--Europe/Ukraine

Business opportunity—Europe/Ukraine

Firm needs financing for production of new yacht

Business: A European firm has designed a yacht to be produced in Ukraine that will be offered for sale to yacht purchasers and pleasure cruise operators. Firm projects sales of 40 within the first three years from a total market of 200 per year at a net profit per boat of close to $80,000.

Amount needed: $2-$3 million (possible joint venture.) Investment to be used for production and marketing and not for infrastructure upgrades.

Market: Yacht purchasers and pleasure cruise operators worldwide. The yacht is in the under 50 foot range and has been designed to better capture market share from the competition. (Forgiving of sailing skills, greater stability for more passenger comfort—a pleasure cruise must--larger deck area, lower hull maintenance, and lower sales price.) The firm will also be looking to introduce boats to compete in the over 50 foot market later.

Chubais

This should have been posted a couple of days ago. Blogspot often isn't ready when I am so here we are:

Anatoly Chubais was the focus of an assassination attempt yesterday. A roadside bomb was detonated as his two car convoy passed on the way into Moscow. The assailants fired what were probably AK-47s. (High velocity 7.62 round, cheap to buy, easy to get a hold of and very nasty; can penetrate some body armor and armor plating.) Chubais’s armored BMW was able to drive away even though it was hit in the windshield and front tire. The guards in the second car returned fire but the assailants, dressed in fatigues—special forces either moonlighting or supplementing an income made in the new economy?-- made a getaway into the woods where a car was said to have been waiting for them.

The news reported to day that two had been arrested in connection with this attempt. Chubais thinks he knows who bought the contract on him. And his political party, I can’t remember the name of if right now, says that it was politically motivated.

Chubais is not all that well liked in Russia. He was the one who spearheaded the economic reforms that ushered in the Wild West capitalism that has only diminished somewhat recently. Those reforms made the oligarchs, allowing the concentration of capital into the hands of these few. These reforms are seen by many as having impoverished most Russians. So there are a lot of people in Russia who might think about doing something like this. But with two assailants and roadside bombs, it would be hard to believe that it was some disgruntled pensioner looking to give Chubais his comeuppance.

It might be because of business interests. Chubais is the head of United Energy Systems, which is supposed to be attempting to bring some competition into the energy sector of Russia. That might tick some people off. The Kremlin thinks differently about UES, accusing management of trying to establish a new energy monopoly. The Kremlin may be making these claims for political purposes—a lot of what comes out of there seems to be for that reason these days—but they are not retrograde enough to try and deal with it by assassination. And Chubais may be a leader of the liberals that would be in opposition to Putin, but the liberals are all but out of power and pretty insignificant. That means Chubais is no political threat to the president, even if it were assumed he would deal with him this way. And I for one don’t believe he or the government would.

As to any business reason, assassination was a tool for dealing with the competition in Russia or for consolidating power in a sector in the past, the bad old 1990s. That sort of thing seems to have diminished quite a bit but it still happens. Chubais might just be in the way.

If it were some sort of old score that is being settled, it could be from anything. But there doesn’t seem to be all that much old score settling this way. Assassination has been a business tool—no offense, this is just business, you understand—not one used for revenge, though it does happen. So I guess it could be that but in the majority of the cases it would be less likely to be the reason.

Who knows though in the end. With the arrest of these two, I hope we end up finding out. The problem is that most of these cases never end up being solved. The suspicion is that those who do these sorts of things have powerful allies that allow them to escape prosecution.

Kravchenko

Of course the most interesting news from here in the past couple of weeks is the death of Kravchenko, Kuchma's Interior Minister. The SBU (the Ukrainian security service—ex-KGB) thinks it’s a suicide. But the suicides of these people here are never simple. To be a suicide he had to have shot himself twice. The first bullet entered under his chin and exited out the upper part of his jaw. The second entered his right temple. The SBU thinks he shot himself again when he found the first one didn’t take.

But here’s another point of view on it that is interesting:

Zvarych, the justice minister, has expressed doubt that the former interior minister could have recovered sufficiently from the shock of the first wound to have delivered the second."I have certain doubts personally speaking about whether someone can pull the trigger twice in order to commit suicide," he said. "There's this threshold of pain, I think, that one would need to be able to cross in order to be able to do that, something called a 'pain syndrome,' that I think is very difficult to overcome."

But whether it was suicide or murder, this pattern [of deaths] has begun to emerge as a result of the psychological aftershock that these people [of the former regime] must be dealing with at this point.

"Because of the widespread doubts over the announcement that Kravchenko's death was a suicide, Piskun said Friday he was pursuing the investigation as if it were a homicide to make sure any possibility of foul play could be ruled out. (The Los Angeles Times from March 13th as reported in the Action Ukraine Report
#441, article 5.)

Piskun, the Prosecutor General, is doing the right thing. Before it would have been officially declared a suicide within a couple of days, even if it happened under the most suspicious circumstances, and left to disappear on its own. The problem with it is that it always disappears from the press, after a time, but the people don’t forget it. The suspicion that powerful interests had someone killed who was a threat to them always remains. That these kinds of suicides happen over and over makes that suspicion fact to people.

Business opportunity--Ukraine-plastic film

I have gotten some inquiries about investment opportunities in the Ukraine so I thought I might post some here in between trying to figure out what is going on here politically. This one is more specific but some will be more generalized analyses of business opportunities.

Ukrainian factory plant and equipment modernization

Business: Plastic film manufacturing used for candy wrappers, agricultural bagging and packaging, dairy product containers (sacks), detergent packaging, foodstuffs packaging, etc. (The Ukraine has an extensive food processing sector.)

Amount needed: $6-$10 million for plant and equipment upgrade. (Potential for joint venture.)

Market: The manufacturer is looking to position the company to take advantage of two market opportunities. The first is in manufacturing packaging to customer specifications allowing for direct sale to the customer. Cuts out several layers from the distribution chain resulting in a cost savings.

The second market is to supply Twispan film to local candy makers at a savings in cost and in time. 80% of this product is imported. A minimum order of 17 tons is require to make the order. (Local customers must pool orders to come up to the minimum.) Importation causes delays of from 7 to 14 days and results in tariffs costs for entry. Local manufacture would save time and result in cheaper product.

Other potential markets: There is potential for export to the CIS region and to Europe.

Technology and infrastructure: Company uses older technology but is looking to upgrade to the state of the art. The plant facilities are mostly remnants of the Soviet era so they also need to be modernized.

Privatization revisited

A lot has happened since I have been posting here regularly. One of the most interesting from my point of view is the court annulment of the Kryvorizhstal steel mill privatization, the mill sold to Kuchma’s son-in-law, Pinchuk and to Donetsk oligarch Akhmetov. The good thing about it is that it will reverse what all have considered to be a cooked deal to give Kuchma people a valuable state asset. The steel mill was sold to both of these men in the face of higher bidders like Russia’s OAO Severstal and US Steel.

The real problem though is that this might have opened up the reconsideration of most of the privatization deals made during the 1990s, if not all of them. That amounts to about 3000 businesses from what the news has reported. And Yulia Tymoshenko has confirmed that they will be looking into these deals.

This is a problem because it will turn off investors interested in looking at the Ukraine. What they will see is not the righting of severe wrongs but the re-nationalization of a company originally privatized. And if the government can do it once, it has the power to do it again as soon as the opposition gets its hand on the levers once more. The point is that title to these companies has to be quieted in some way in order for investors to have any confidence that they will not have a company nationalized out from under them. If there is any risk of that, any risk, they will avoid investing in the Ukraine. And there are indications that investors have had their confidence shaken recently with the announcements of these investigations.

That there were all sorts of state assets sold corruptly to friends and supporters of those in power there is no doubt. That may end up being true for all the privatizations that took place in the 1990s. A sense of justice would require that these be reconsidered so that the people can get fair value for these assets in the form of more money to the state coffers to pay for services and infrastructure. Ukraine needs money for both.

But an examination on such a wide scale will spook investors and they will end up going to more private property friendly countries to make what would be safer investments where they will not have this kind of threat hanging over their money. And there are any number of countries just a short distance to the west of here now members of the European Union where they would not be subject to that kind of risk.

Ukraine needs investment and it needs it badly. There are very few companies that have been able to modernize on their own here. The European Bank for Reconstruction and Development has been of some help in this providing loan guarantees for certain projects. But they have only worked in the hundreds of millions of dollars (or euros) and the Ukraine needs billions to modernize. That type of capital can really only come from private investments. The Ukrainian government needs to encourage that kind of investment, not discourage it. Taking action against all the privatized deals will not be encouraging it.

One thing that is driving this in part I think is not just getting justice for the people, though I do take them at their word on that. The problem is that the government faces a budget shortfall and 3000 deals made in the 90s could end up generating the kind of revenue to the state that would make their budget for next year. That is what Georgia did. They actually kind of blackmailed the people who got these kind of sweet deals under Shevardnadze (a real statesman, I think, who just got in over his head when president.) They went to these people and told them to cough up money on their assets. I don’t know if they paid the difference between the market price and the price they actually paid. But all of them came up with the money and the government was able to bridge somewhat their budget gap. I think this is some of what is animating the administration here.

But they stand to lose more than they might gain in the long run if they investigate so widely. The Ukraine represents more of an investment opportunity than Georgia does. One minister in the Georgian cabinet said, for example, that it would take 75 years for them to have a European standard of living. The Ukraine is only at the very most a decade from that if they get the policies right and investment starts coming in. (There are numerous opportunities for investors in the Ukraine which I hope to get to in the next few weeks here.)

The problem is that the government can’t just ignore the privatizations either. A lot of these assets were bought at fire sales (where there was no fire) by those who had the right contacts in government. That can rankle and end up souring people on market solutions if things get a bit tight or worse. So what should they do? They should go after the most egregious cases of banditry in the privatizations deals. To do this, they should sit down and set out, possibly by presidential decree, just what is an egregious case and then stick to that definition all up and down the administration. That may be a difficult thing to do but it must be done if they are going to have rule of law and are going to give people confidence in the Ukrainian governmental systems at all. These are problems here too that need to be solved. Giving more confidence to investors would be a result of this.

What about the rest of the companies? There could be some sort of non-privatization way of dealing with them. What about losing priority in dealing with the government if they don’t establish the transparency of their original purchase? Or maybe they could lose a tax benefit or some other benefit that might be useful in doing business if they don’t? At the very least, maybe the government could establish a list of companies that have cleared themselves of the cloud of having gotten their assets corruptly. That would at least give people some information about who they might not want to deal with.

In other words, what should be done with the rest of these companies is to put the burden on them to come clean or suffer some sort of penalty short of re-privatization. If they can’t establish this, then they should be required to pay to reinstate themselves in some way. This would serve to respect the property right while adding to the state coffers on all or most of these companies. And it would also give the people more confidence that justice was done.

This has to be done across the board too with the moguls of the administration who also acquired assets in the 90s. They should come clean on how they got hold of their companies too or it will look like business as usual, that is, the party who gets power puts it to the party who lost power. The courts will be working full time bringing people to some sort of justice, but it will be believed, if it is not the fact, that it is only the people who had certain party affiliations. That is the sort of thing Yuschenko has said he wants to change and I believe he does want to change it.

There is some indication though that the government may not revisit all the privatizations. Yuschenko himself has said that maybe a dozen or so will be but that is all. That would be good but what criteria they are using to go after what companies should be set out clearly. We’ll see if it happens.

Yanukovych and the national hero

The following should have been posted yesterday but I couldn't get on the blogspot server. Here it is:

Yesterday was the anniversary of Shevchenko’s birth. Taras Shevchenko is considered to be a national hero of the Ukraine. He lived in the 19th century and was part philosopher, part poet, part educator and he was also an artist of some repute. It would be hard to equate him with anybody from US history across the board but he bears some resemblance to Jefferson. He shared with Jefferson that sort of Everyman quality, an ability to be good at a number of things and was even involved in politics. A Renaissance man is what we he would be considered now, if anybody considers such things. But the thing that keeps him in the hearts of the people is that even though he lived in Russia for some time, he still wrote in the Ukrainian language and wrote of freedom, freedom, that is, from the Czar. Many of his poems were made into Ukrainian songs. We went to a concert a year or so back and heard a group sing some of these. Many Ukrainians can recite a poem or two of his by heart.

In Kiev, a university is named after him and there is a park with a monument in the center of it dedicated to him. And the Russians count him as one of their own also and erected a monument to him in Moscow. So he is a significant figure for Ukrainians and Russians alike.

Which brings us back to yesterday. On this anniversary yesterday, there was a pilgrimage to the monument of Shevchenko by the likes of Tymoshenko, Moros and other political figures to lay flowers in honor of the day and of the man. (Yuschenko is out of town I believe or he would have been there too I suspect.) Tymoshenko spoke there and said cryptically that the time had come for the words of Shevchenko to come true. (He wrote about Ukrainians improving their lives so it may not have been a reference to Russia, though, since it was Tymoshenko speaking, it would be hard to discount that.)

Meanwhile, in Moscow, the loser of the 2004-2005 election for the president of the Ukraine, the man who some consider to be the head of the opposition in Ukrainian politics, Victor Yanukovych, laid a wreath at the monument to Shevchenko there. When he laid the wreath, he said a few words in Ukrainian. His wife was by his side but, interestingly, said nothing.

This man has got to have some of the worst political instincts ever. He’s got a real tin ear. He is considered to be the Russian’s Ukrainian and the easterner’s man in Kiev. All of this is on the strength of his Russian credentials. But he goes to Russia and speaks Ukrainian at the monument of a national hero. Maybe he has gotten a hold of an advisor who wants him to triangulate. It worked for Bill Clinton why not for Yanukovych?

All I can think of is that he might have thought, if he thought at all, that he was killing two birds as the saying goes. He can show how pro Moscow he is by going there. That secures his base and keeps up his ties with the motherland. (I wonder though how welcome he is there these days.) But he can also appeal to the Ukrainians in the West and in Kiev by laying a wreath at Shevchenko’s grave and by making some remarks in Ukrainian. But I guess he doesn’t know that by speaking Ukrainian he alienates his own people in the east and by appearing at the monument in Moscow he alienates the people in the West. It would have been better for him to appear at the monument and speak in Russian which would claim Shevchenko for the Russian speakers. That appeals to his base. Or he could have appeared at the monument in Kiev and spoken Ukrainian there to appeal to the West. But he could not appeal to both.

Of course he might have been there and just taken the occasion to lay the wreath. But that plays into the prejudices of a lot of people here. They think he is in the pocket of Moscow anyway and appearing there confirms this.

Anyway, the people I spoke to just laughed about it when they heard what he did.

Life goes on here

I have not been around for awhile as you can tell, those of you still around, that is. I have been busy trying to get our apartment in shape to live in and we have been trying to get all the services turned on so we can live with less difficulty than we have had to live for the past month or more.

My wife went to the government agency in charge of certifying the apartment building the other day to see if she could get them to turn on the hot water and some other things. She talked to the head guy and he said that he had problems with the building, that the builder needed to convince him that things were done right and he did not know when the building would be certified. He was bureaucratic perfunctory with her but showed some humaneness when she said we had a small child. But even so he was still not able-- or not willing-- to give her a date when the services would be turned on.

A couple of days later, however, there was a note by the elevator that the hot water would be turned on the 9th and 10th of March. That note could be taken two ways though. One way was that the water would be turned on for those days only we think because they want to make sure that the pipes don’t leak in the building, the ones carrying the hot water. The other was that they would be turning on the hot water and it would take those two days to do it. We preferred the second interpretation and the woman who guards the building—I used “guard” loosely because graffiti has started to show up on the stairway walls, on a new apartment building no less—said that they would be turning it on for good.

We were thinking that my wife’s visit had had some effect, that is, until yesterday the 9th. Yesterday, there was no hot water. And this morning, the morning of the 10th, there is still no hot water.

The elevator saga continues. They said it would be on 24 hours beginning a couple of weeks ago. But we come home often to find that it is off. And on this past Monday and Tuesday, holidays here, the elevator was off. (“Don’t you know it’s a holiday? The elevator does not work on a holiday.”)

And on the day before, we had come back from church at about 1 p.m. My wife grabbed the kids to see if she could get them up by elevator. I had to go back to the church to find something we had left. I got back to our building and found the elevator off.

Some minutes later, when my wife opened the door and gave me oxygen, she explained that an apartment owner had gone over to the government agency and had paid an employee there, the one in charge of the elevators, to come and turn it on for him on that Sunday. (Otherwise it was going to be off all day.) That apartment owner was taking his stuff up when my wife and the kids got to the elevator. She let them go on up but had the oldest boy ride along to make sure the elevator got back. That government employee was on the elevator when he got back but was on it turn it off again. When he saw my wife with the kids and the baby, however, he made one more trip and took her up. That was nice of him but it shows the real problem.

Last night though, the elevator was off when we left but when we got home at about 9 p.m. we just went in to check it in the off chance that it might be working. It was to our surprise. Why it was we do not know but it seemed to be working until late last night. This remains an inscrutable mystery.

Anyway, life goes on here.

More prosecution

I never know whether it is better to update a post already made if there is more on the subject or just to make another post on it with the additional information. I think what normally happens is that the title of the post is seen and, since that one has already been read, the reader moves on. So my tendency is to make another post.

In the last post, an anonymous commenter takes the position opposite mine in response and makes a compelling argument—the people are for it. In a democracy, what could be more compelling? Of course, that the people are for it has come from opinion polls and they can present their own problems. What would be the answer if the question asked, for example, “Would you be for lustration if there were a possibility that it would delay or make impossible government reform?” The objection to that is that it is a bit too leading. Often though the questions that get us to what the public is supposed to want are as leading in an opposite direction. But public opinion polls are accepted as a reflection of the voice of the people and in democracies, vox populi, vox deii--the voice of the people is the voice of god.

A digression. If an opinion poll is valid, it still suffers from the problem that it is a snapshot of a person’s opinion at a given point. What would it be the next day or the next hour or even minute? Wouldn’t you need to take a sampling over an extended period of time to get the real opinion? A government would be really democratic that based its policies on what the majority of the people thought. So give them a button to register that opinion and have a computer compile it from moment to moment. Wouldn’t make government workable because the people are, what even some of the founders made the case for, fickle? That is one reason why we have an arbitrary time set for elections and a time limit to them. We get the will of the people at that set time and move on. Government would not be workable otherwise. And all this talk about elections in the US is simply trying to get to what the opposition absolutely knows to be the opinion of the people based on polls. But that is not the system. Vote, figure out who won the majority of those votes and set up office for 2 years, 4 years or 6 years. Is the vote the best way to register the will of the people? Maybe not, but it is the only workable way.

I’m finished. Now back to the issue.

But possibly the even more compelling reason for lustration as it is called here is that Yuschenko himself is for it. He made it an issue during the revolution and seems to be still making it an issue. And that may be driving opinion as much as anything.

And there is a lot to the argument that those who have committed crimes against the people through abuse of their office should be brought to justice. Or those who have used their political power to get rid of certain people like Gangadze should be brought to justice. You might say that there has been a sort of dam that has kept justice pent up for not only the years of Soviet rule but for centuries before that under the Tsars. Prosecutions of those who have perpetrated these crimes would bring some sort of release—relief-- a sense that justice has finally been served. I find that to be a compelling argument too.

And who could look at the widow of Gangadze (I believe he was married, right?) or at his mother and say that the government will delay dealing with those who killed him so brutally. Delay is what they have had to this day. To them delay would mean the same it has meant under the Kuchma regime which would make the Yuschenko government to them and to those for whom this is a significant issue, no different. That is a compelling argument to me also and I don’t think I could look at them and do it.

But even with all of these arguments, I think there is a reason not do it, at least not yet. (Don G. in the comments makes the argument that this would be better dealt with later by a successor regime. That makes a lot of sense to me.) And this reason could create more good for the Ukrainians so as to be a more moral reason to wait than to act right now. The reason is that reform of the government and dealing with corruption is a way to prevent the abuses that brought about the murder of Gangadze and the flagrant abuse of power that the Ukrainians have been subject to under the Kuchma regime. If corruption can be dealt with, and I think it can be under a man like Yuschenko, that would go a long way to prevent what resulted in taking the life of Gangadze.

So why can’t Yuschenko do both? Why can’t he proceed on two fronts, prosecuting the criminals and reforming government to deal with the source of these abuses? The short answer is that he does not have absolute power. To be frank, he is only president of Kiev and the western part of the Ukraine. He has to work to consolidate his power over the eastern part. That he will most likely be able to do this right now is because of a certain acquiescence by those in the east--maybe it’s fatalism, kind of a cultural trait?—and because the opposition has gone to ground, for now.

That opposition has not gone away though. It is still there and still powerful. They have money if they don’t have political power. Yuschenko is not in control of the Parliament either and that Parliament has been controlled by the oligarchs to a great extent for years. They still wield considerable influence there even if it is a minority.

Kuchma, as one focus of lustration, may not enjoy the support of the oligarchs anymore. I don’t think he is getting any phone calls from them today, do you? Out of office and out of favor is always the rule. But what about Pinchuk? He seemed to come out more moderate in the tail end of the revolution. That made him seem to be more of a realist than some of the others. He still has considerable power and wealth. Would his realism mean that those would not be at the disposal of Kuchma if he were to be prosecuted?

And what is Kuchma’s own personal wealth? He may not have political power but if he has money, he has power. He can still buy a lot of influence in the event he were to be prosecuted.

If I didn’t have a conscience and, as a result, were capable of defending Kuchma were he to be prosecuted and I had a virtually unlimited budget to do it, I would take on the whole incoming government and focus the light on a lot of them. None of these guys, with the possible exception of Yuschenko, is squeaky clean. You cannot look closely at a lot of these people and not come away with something that doesn’t look right. No one who participated in the free-for-all that was privatization and came away with anything is pure. And they may have even acted legally but by present lights it might not look all that good.

Tymoschenko is a most appealing target of opportunity, not so much because she has done anything—that hasn’t been shown—but because there has been so much out there and so many interested in taking her down. They could be called out to do it again very easily. But she is not alone. How did Poroshenko get his wealth, for instance?

So put the attention on these people and their histories. Set up a Maidan-like website to publicize it and get the media outlets that are friendly still to publicize it. Even the ones that are not friendly will most likely not turn down advertising money. Put together a half hour or hour expose and pay the stations to run it. They might even think it’s a public service since they may be having some pangs of journalistic integrity for having come down so whole-souled for Yuschenko in the revolution. For journalists when information comes out about one side that is not good, objectivity often means finding something bad to say about the other side.

Have an issue a day press conference to keep it in the news. And if there is any hint that the press is being muzzled by the government, howl long and loud about how the Yuschenko camp talks about freedom in public but issues its own temniki or comes down on the press in its own way in private. As part of that front of the campaign—that is what it is a war campaign—take any suspicion of government restrictions on freedom of the press to the International Court of Human Rights. (Supported by evidence of course. That can always be found.) Do they have jurisdiction for such a case? I don’t know and frankly, if I were a part of this amoral world, wouldn’t care. The thing would be to take an issue to the West on the West’s own terms in their own institutions. Frankly, for me, it might be better that they refuse to take it. The argument would be that the West is hypocritical about freedom of the press and human rights. Hit them where they are most sensitive. Then have the PR firms follow up in the West consistently—meaning daily--to keep the issue in the forefront there.

I can assure you that it will be only a short time before the stories start to show up: “The promise of the Orange Revolution started to go sour today when it was revealed that the government of Victor Yuschenko has engaged in (fill in the blank.)” Or: “The Yuschenko government has come to resemble more the government of Vladimir Putin in its treatment of the press…” At that point, the honeymoon with the West will be over.

If the Yuschenko government were confronted by daily bombardments of information about the activities of some of their leading lights, what would they do? I think Yuschenko is a man of principle but he is not the only one who would have any power that could be used to deal with this sort of thing. Wouldn’t the real temptation be to try to stop this the way it has been stopped before? A very old reflex.

And it wouldn’t matter if there was any real truth to any of it in the end. That it might be true is the only thing that matters. That would keep the people on their heels about this. And the Western outlets would begin to examine this too more closely than they did. A story about a fall is much more interesting than one about any rise. The story is the thing—just ask Dan Rather.

If this happened, Yuschenko and his government would be fighting battles that have nothing to do with the central important issue of corruption. The opposition in Parliament wouldn’t stand still. They would ask for inquiries and point fingers when they didn’t get them. They would howl that this is more of the same thing that Yuschenko pledged to do away with. They could bang away on the “this is undemocratic chord” to some pretty good effect I think in the West and here. Some will be sensitive that the revolution they gave so much for not be hijacked by those who were supposed to be its friends. They might join in in the criticism.

And the more people are exposed to this over and over, the more that they become uncertain about things. Is it true? Was (fill in the blank) really involved in these types of corrupt activities? If it is true, then he/she is no better than anyone involved with Kuchma et al. It wouldn’t necessarily cause support to change to the opposition, but it might neutralize any support of the people when that support is needed by the government.

And how would this play in the east and north of here? It would play into their very prejudices about the Yuschenko government. It would confirm them all. Would that be good? Not hardly.

And the same sort of thing could happen if any of the other oligarchs were singled out for prosecution. The Yuschenko government would spend its time putting out all the brush fires and not do what it needs to do and is absolutely crucuial to Ukrainainas that it do. And Yuschenko does not have unlimited time to do what he needs to do.

Will this happen? I don’t know. The opposition has not shown themselves to be all that clever. (Selection for leadership of the clans seems to have been on the basis of loyalty not on the basis of smarts. Maybe there was a reason for it? Promote those who are not a threat? Sounds like any other organization.) That they might do it should be enough to give the government pause for these reasons. I think the revolution could very well hang in the balance if they don't.