Reforms to nowhere? Or why Ukrainians continue to be skeptical about the path they are on

UNDP's Democratic Governance Advisor in Ukraine Marcus Brand reflects on what is needed to re-establish trust between citizens and their institutions: a long-term partnership for local-area development and social mobilization. Reforms are not an end in themselves, but must lead to tangible benefits for the people of Ukraine in terms of well-being, equality and justice.

cq5dam web 380 253The latest country-wide poll, published by IRI, showed that the trust in the political elite and state institutions remains low. Few Ukrainians have confidence that their country is on the right track. This must be a sobering report card for a government that had declared it a priority to deliver on reforms when it came to office half a year ago. The poll follows the unprecedented publication of full asset declarations by state officials, which once again show-cased the huge chasm between the haves and the have-nots in the country. Ella Libanova's recent research on inequality in Ukraine used a methodology developed by Thomas Piketty to show that the richest one percent of the population has an average income 43 times higher than the average of the poorest half of the population. In the US, known for high inequality among highly industrialized countries, that ratio is 24 times, while the European average is just under 12 times.
And yet, at the same time, the EU and other international partners rightly commend the incumbent government for pushing through an unprecedented set of reforms. Ukraine's international partners have made available unprecedented financial resources to support the reform agenda in various sectors, bringing hordes of experts and consultants into the country, requiring a complex system of coordination meetings and mechanisms, and making the conference and seminar rooms of Kyiv's top hotels fully booked for months at a time. So why does Ukraine's public not seem to buy into the 'reforms'?
Many of those international experts who came to this country to support the reform agenda enjoy the benefits of Kyiv's upmarket shops and restaurants with mixed feelings. Kyiv's upper-end city life is among Europe's most hip and exciting, however these enjoyments are accessible only to a small percentage of privileged citizens, while many have to struggle with the basics of a decent standard of living. A stroll through one of the many bustling improvised second-hand flea markets in the suburbs around town is a real eye-opener in this regard. And in villages around the country, spanning the vast rural areas of Ukraine from the Pannonian plane to the Donbas, the situation is chronically dire.
In principle, the ongoing decentralization reforms ought to bring relief to local communities, merging small and inefficient administrative units into 'amalgamated hromadas' and therefore shifting significant new resources to regional and local authorities through fiscal decentralization. Local authorities benefit from a newly introduced share of income tax, which creates an incentive for mayors and local councilors to attract businesses and provide them a safe and reliable environment. A lot has indeed happened in this direction, and voluntary amalgamations are bringing up fast the number of these new entities. Still, some 80 percent of villages have yet to go through this process, and for many depressed areas economic recovery is still a distant and elusive goal. Dozens of single-industry towns and settlements teeter on the verge of complete breakdown once unaffordable subsidies will melt away.
It is because of this protracted socio-economic quagmire that the results of reforms will not be measured by the number of laws passed, or even the number of new Administrative Service Centres that are being set up all over the country. The result of reforms will be measured by Ukrainians feeling that they are respected and treated fairly as citizens, that they have the means to afford a decent standard of living, and that they can do so without cheating or stealing from fellow citizens or the general public good. Ukrainians deep down know that they live far below the country's potential, and that they have fallen behind almost all their neighbours over the past 25 years, especially those in the West. The trouble is that Soviet-style handouts and social benefits are not only not affordable in the long run, they also don't really contribute to economic revival and the harnessing of the enormous innovative and creative potential of the people in this country. It will take some time until foreign investments will find their way into small towns and villages, and the national financial markets are far from playing the leading role in this regard.
What is needed, instead, is a medium- to long-term partnership for sustainable and inclusive development that organizes targeted financial contributions for local area-development and rallies bottom-up engagement through social mobilization. Such a partnership would be led by the Government of Ukraine, with an increasing role played by regional and local governments, but include the private sector, international donors, and in particular also civil society, especially in the form of civic associations and community organizations.
Such organizations have formed the backbone for UNDP's local development programme for the past eight years in all regions of Ukraine. Over 3,000 community organizations have seen the participation of some 300,000 Ukrainians in local development, carrying out thousands of projects that focus on energy-efficiency, refurbishing social infrastructure or housing or getting small cooperatives started and creating jobs, especially in marginalized rural areas. In this way, some 70m Euros have been invested in the improvement of local facilities, co-funded at roughly a fifty-fifty rate on average between the EU/UNDP and local government budgets. In an era where there is a realistic concern that villages across the country might be dying, such small-scale initiatives contribute to reversing a negative spiral of depopulation and economic depression and bringing hope back to communities.
To be sure, this approach does not come without risks. For one, investing in community-led projects must not create a system of grant-dependency, that could distract the attention of local governments from focusing on their own communities' potential. The experiences of poorer regions across the EU with decades of regional, social and cohesion funds tell many tales in this regard and lessons should be learnt from these. Also, the sudden influx of money into poorly-run local structures poses huge risks in terms of public financial management and corruption. Again, local civic organizations can play the role in providing oversight over public funds, especially local government expenditures of bigger infrastructure items that cannot be managed by small community organizations, such as roads and new public buildings.
On the whole, the global Sustainable Development Goals, a universal commitment adopted by the United Nations and serving as a broad framework for development until 2030, can serve as a new development paradigm for Ukraine. Reforms are not an end in themselves, but must lead to tangible benefits for the people of Ukraine in terms of well-being, equality and justice. The Goals put emphasis on the three dimensions of sustainable development: the economic, social and environmental.
Only if Ukraine's reforms will be perceived as 'leaving no-one behind' will they be fully embraced by the general public. When Ukrainians can fulfil their potential in dignity and equality and in a healthy environment, trust between the state and the people will be restored. The legal, financial and institutional reforms led by the Government must translate into actual improvements of living standards, at least a realistic expectation that after a period of hardship, a new positive cycle of sustainable development will set in. The Government cannot achieve this on its own, but it must harness the partnership with the private sector and civil society, including especially at the local level. And international assistance must find a balance between providing advice and capacity building and providing financial resources for actual improvements.
This is why the United Nations Development Programme continues to work for the success of Ukraine's reforms. Reforms matter for a lot more than the popularity of any particular government – they must genuinely transform Ukraine into a leader on sustainable and inclusive human development, for the benefit of its people and beyond.