Author Archives: Rachel Grossman

Ukraine’s Heroes — Everyday People

kiev kiosk

Following months of protest on Kyiv’s Maidan, many Ukrainians have begun to address one another these days not with hello or how are you? Instead, the exchange follows the old saying from the partisan army that fought for an independent Ukraine during World War II: Glory to Ukraine, with the response: Glory to the Heroes!

Yet over the course of the events on the Maidan, a new group of heroes has emerged – everyday people who work in and own kiosks, shops and cafes, who were fighting for right to live in a more open and prosperous country, free of the corruption that has made it so hard to do business in Ukraine.

Indeed, many businesses – often coordinated by business associations – from across Ukraine took part in the Maidan movement, both in Kyiv and in smaller regional demonstrations. CIPE has heard reports that small businesses contributed thousands of dollars in cash and in-kind donations to support people in Independence Square. Business associations provided legal aid to those who were detained or put on local wanted lists for their role in the Maidan.

Given that business associations did not exist during 70 years of Communist rule, and that they are sometimes considered the country’s weakest civil society institutions, they have shown themselves remarkably dedicated and vibrant organizations during these months, capable of uniting across regional divisions. Indeed, recently, 11 new cross-regional coalitions of associations have taken shape.

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EuroMaidan: A New Kind of Protest in Ukraine

ukraine blog photo

On Sunday morning, CIPE Program Manager Zoia Tsybrova braved the cool, rainy weather to observe the EuroMaidan protests forming in the center of Kyiv. The Shevchenko building, where the rally was intended to be held, could not hold all the participants, and it did not take long for people to start walking, meeting friends and family, filling the streets of Kyiv. The mood, says Tsybrova, was euphoric. Not only on Sunday but today as well. Three days later, the people are still there, with a mass of students demonstrating still; the good mood remains, with people handing out hot tea and sandwiches to those on the streets. People are still dressed up for the occasion, smiling, walking with Ukrainian and European symbols, with homemade cards, signs, banners, and flags. 

What was the impetus of this? The protesters were pushed over the edge by the government’s decision to suspend the pursuit of an association agreement with the European Union (EU). The association agreement could have been signed in Vilnius, Lithuania at the EU Partnership Summit on November 28-29. It is a political and free trade deal that has been on the international community’s radar for a number of months as it offered the possibility to Ukraine to begin integration into the European Union.

The deal’s suspension caused a response that was both unexpected and a turnout that was noteworthy, to say the least. Early estimates have put the number of protesters rallying on Sunday at 100,000. Ukraine has not seen a protest this large since the Orange Revolution in the winter months of 2004 leading into 2005.  Following the government’s decision to suspend the pursuit of this agreement with the European Union on November 21, the people have come together in mass rallies again on Kyiv’s Independence Square (Maidan Nezalezhnosti). Over the weekend, protests sprung in other cities around Ukraine, too, from east to west.

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Strengthening the Voice of Ukraine’s Entrepreneurs and Small Businesses

Ukraine GEW Blog Post Picture2

“But wise is the man who disdains no character, but with searching glance explores him to the root and cause of all.” — Nikolai Gogol, Dead Souls

Corruption in Ukraine cuts across regions, all sectors of the economy, and almost every institution. In some sense it’s become a rallying point: since everyone is harmed by corruption, CIPE’s private sector-led, collective action approach to anticorruption in Ukraine is based on bringing the business community together to work towards common solutions.

Given that Ukraine’s business associations are among the country’s weakest civil society institutions — such associations did not exist during 70 years of Communist rule — small and medium-sized enterprises (SMEs) are underrepresented nationally in civil society and political life. Despite this fact, Ukrainian public discourse on issues affecting the business community is vibrant and relatively open. This appears to be improving on the regional level, in part through CIPE support of business associations representing SMEs, a little more notably each year. Individual business associations, as well as eight new coalitions of associations, now work collectively at the regional level.

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Death and the Penguin: Corruption, Entrepreneurship, and Hope in Ukraine

Dniepr_river_in_Kyiv

Recently I stumbled across Andrey Kurkov’s  Death and the Penguin,
 a deadpan satire of a single man and his pet penguin struggling to get by in Ukraine’s capital, Kyiv. The little novel points squarely at the sometimes absurd but functional atmosphere of Ukraine, where corruption runs rampant and entrepreneurs struggle to hold their own.

The novel follows Viktor, a middle-aged aspiring writer living with his pet penguin, Misha. True to real life, the zoo had been giving away hungry animals to anyone who could feed them. Viktor, abandoned by his girlfriend, took Misha in. For Viktor, too, times were hard, so when he is offered the questionable opportunity to write obituaries for VIPs who are still living, he is quick to accept. Unfortunately, these obits turn out to be a sort of hit list: following each obituary, the subject’s death ensues, which he discovers only later in the morning newspaper. He soon comes to realize that the last obituary he will write will be his own.

Andrey Kurkov poses with a penguin. (Photo: Random House UK)

Andrey Kurkov poses with a penguin. (Photo: Random House UK)

Kurkov’s depiction of post-Soviet life is lined with deadpan satire that clings to the edges of the structures of corruption that have made the country hostile to its own people. One day a commercial comes on the television: penguins in Antarctica, splashing, at home. Misha begins to throw himself at the screen. Ukrainians researchers pop into the frame.

“I appeal to private entrepreneurs and others with funds – on you depends whether our scientists will be able to continue their work in the Antarctic. Have a pencil and paper ready for the account number to which sponsor donations can be made, and a telephone number on which you can hear details of what your money will be spent on,” says a woman. Viktor runs to jot down the information. Despite his friend’s skepticism, Viktor makes a donation, hoping to send Misha to Antarctica. But when that last obit is requested, it is Viktor who takes a place among the crew – it is these entrepreneurs who have saved him.

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Planting the Seeds of Democracy in the North Caucasus

Vladikavkaz Institute of Management alum Azmat Gagloyev preparing for a November 2011 presentation about his recognition at a national entrepreneurship competition. (Photo: Staff)

“Looking at the sheer numbers of young people in the world today, the world does, indeed, belong to youth,” says Ruth Dueck Mbega, Program Manager of Microfinance at the MasterCard Foundation, at a recent event.

Mbega also noted this simple fact: there are 81 million unemployed youth in developing countries. 81 million. Who are these young people? Where do they go? What are their prospects, for themselves, for their districts, cities, for their countries, and, ultimately, for our global community?

For CIPE, this is a serious concern every day, and not only on International Youth Day. That is why two of our three current projects in Russia focus on this issue – specifically on unemployed youth in the restive North Caucasus region.

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Realizations in Russia: 11 Sweater Buttons Later

When talking about governance, it is easy to forget that its impact is often experienced just as much through minor hold-ups and red tape as through the large-scale corruption, fraud, and abuse that usually makes headlines. In a recent pair of articles, The Guardian’s Moscow correspondent, Miriam Elder, has stirred up a surprisingly negative reaction by highlighting one such bureaucratic roadblock faced by everyday Russians.

The “The Hell of Russian Bureaucracy,”  a tongue-in-cheek expose on dry-cleaning in Russia, spotlights an everyday example of unnecessary red tape. In reviewing the details of the process, Elder sardonically laments the fact that the inspection of her clothing took more time than she spent actually wearing them.

Though perhaps overly dramatized, the article presents an amusing anecdote that will make anyone want to check the number of buttons on their sweaters. It also draws a clear link between bureaucratic practices by the state and the private sector. After examining five separate pieces of clothing, counting each button twice, filling out five separate forms, and stamping five separate forms, Elder had spent hours getting her clothing. The process took twice as long when she tried to retrieve it the next week.

This rant on bureaucracy was amusing for anyone with experience living life in Russia, but the dialogue it sparked opened the way to a deeper inspection, as just one day later, Dmitry Peskov, aide and spokesman to Vladimir Putin, responded to Elder’s article:

“I am sorry to hear about Miriam Elder’s experience at the dry cleaners, in which she lost her receipt and so had an hour of her time ‘stolen’ in providing the necessary personal details to retrieve her woollies. But I am also amazed that this anecdote can be passed off as any sort of insight into the state of Russia today.” He also wrote, according to Elder, that “cutting red tape was a high priority for the government,” but then, swerving the focus of the letter, concludes with: “Let me remind British readers of the thousands of hours that are ‘stolen’ from Russian citizens when they complete the UK’s visa application forms, which are a whopping 10 pages. The time, money, effort and inconvenience that Russians face in obtaining UK visas put Ms. Elder’s ordeal into perspective.”

In her response, Elder wonders why after having written about corruption, human rights abuses, the murder of journalists, and electoral fraud for the last five years it was this article that prompted the first and possibly only response from Putin’s office.

To understand this, let’s step back. Elder argues point blank that the Russian form of bureaucracy doesn’t work.

“Let’s say I stole some other woman’s clothes.” she writes, “Despite the forms and the stamps, the (double) passport check and notes, the woman would have no recourse. Court system? Busted. Police? Corrupt.” Elder goes further to point to this as the reason that so many in Moscow have turned against Putin – they are actually, she argues, turning against the system. That system, she says, began corroding in the Soviet era and continued to do so through the “flicker of hope that emerged with the fall of the Soviet Union,” which soon settled “back into a non-functioning corrupt bureaucratic nightmare that now has the added bonus of wheedling itself into the private sector.” As most connected to Russia in some way would acknowledge – “so much has changed – and so much has not.”

While Elder recognizes that her initial article was largely a “rant” meant mainly to express some of the frustration that comes from living in a culture where “even the most menial tasks are often infused with the paper-pushing, stamp-stamping and time-wasting so loved by Russia’s bureaucracy,” it instigated much more.

Though perhaps Eldar was overblown in describing it as “hell,” there is a clear link between bureaucracy and corruption that has been explored for a number of years. Stephan Dalziel, Executive director of the Russo-British Chamber of Commerce, writes that the “problem with such nonsensical rules is that they inevitably lead to corrupt practices.” The real danger of bureaucratic discretion, he says, is that, rather than going through an “exhaustive and possibly costly legal process to ensure that all rules have been followed to the letter, there will often be the temptation to bypass them by placing money in a brown envelope which benefits only the recipient.” Though many people put “bureaucracy” rather than “corruption” at the top of their list of problems doing business in Russia, these things are really “two sides of the same coin.”

This is an argument that has long since gained traction in the development community and is an idea that CIPE expands further in the conviction that democracies and market economies need to develop together and are deeply entwined. Dalziel concludes his article with the remark that “until it’s sorted out, any battle with corruption will be an uphill struggle.” CIPE recognizes this, too — the fact that the activities of a country’s business community through democratic representation are pivotal to monitoring and balancing bureaucratic agencies. Further, both oversight and public accountability should work in conjunction with each other. When they don’t, when there are informational deficiencies, a lack of technical skill, both representatives at the state level, and the public through the small and medium-sized businesses they exist within, adopt a haphazard method of oversight.

Currently, small- and medium-sized businesses, crossing sectors, creating a broad base of support and cohesion, are advocating together to hold elected officials to higher standards, and perhaps more importantly, coming together to recognize the need to redefine laws. This development – coming together to redefine laws, and – by and large – systems – is what is both becoming internationally recognized as key, and actually happening. So when Miriam Elder wonders why her post about dry-cleaning in Russia warranted a response from Putin’s office? Perhaps that’s why. The topic is simple, seemingly unimportant, but in reality, is a very clear reflection of the state and the system that is beginning to come undone.

It’s anecdotal and simple, but 11 sweater buttons later, I’m reminded in a very real and accessible way how the private sector, existing within the system, functions as a mirror for the state —counting each button down the front of a cheap sweater, not yet wholly able to view the sweater (or business process in general) holistically, but getting a lot closer, button by button.

Swerving to work in Ukraine

Photo: www.anaga.ru/travel/moscowtrans.htm

Now that winter is approaching and it is no longer convenient to walk the mile and a half to work each morning, I find myself hesitating at the bus stop, wondering if maybe today the bus could get me to work on time – or at least pick me up at all despite having too many passengers already.

I hesitate, but no longer wait for the bus (never mind that it only sometimes stops for me anyway). I also hesitate to enter Washington, DC’s Metro with any heavy baggage, knowing that when I emerge, I have more than a 50/50 chance that I’ll need to walk up the series broken escalator steps. Nearly every day I fondly recall my days in Ukraine – where, though life in many ways may still be very difficult, public transportation works.

James Greene, President of Effective Engagement Strategies and Former NATO Representative in Kyiv, Ukraine, recently spoke at the Kennan Institute in the Woodrow Wilson Center on, “Ukraine at Twenty: How Strong is the Young State? How Resilient Society?” Having just returned to Washington the night before, he opened his presentation with a few amusing remarks about the state of public transportation here as compared to Ukraine; Metro escalators that work!

I chuckled and thought that he was just trying to be funny in referencing the non-functionality of the DC Metro escalators, but by the end of his presentation, I realized there was a full anecdote here, an anecdote that I can agree with on both a personal level as a Returned Peace Corps Volunteer from Ukraine and on a professional level as part of CIPE Eurasia’s staff. The point is this: The route is there and the vehicle goes – quickly, efficiently and reliably.

The premise of the event was to look at Ukraine from a holistic perspective after twenty years of independence. Greene laid out 4 elements key to Ukraine’s ongoing transition: resources, organization, institutional capacity, and external allies. These elements are all connected and necessary for the modern nation-state and are of special importance in Ukraine – a country at the border between the different political systems of Europe and Eurasia.

Currently, Ukraine seems to follow both systems in both directions, and is wrought with what Greene referred to as “a negative diseconomy on talent” that affects the business community on all levels. Yet, Ukraine has both the resources and the organizational capacity to move more decisively toward reforms. Its people are overtly pro-democratic, but their capacity is neither effectively organized nor is it used. Ukraine’s greatest asset is the people – their diversity, knowledge, and creativity. What is missing is making sure that the people feel that they have a stake in reforms. Only when the people recognize their voice and their role can they help to shape their institutions.

What’s the problem, then, in creating this link between the popular support for democratic and market reforms and actual systemic outcomes? According to Greene, a significant part of it is an attitude of the established business class. Many large businesses are frustrated with government corruption but are tightly bound by a shared interest in preserving the status quo, bearing little to no responsibility for the effect that institutionalized corruption has on the state.

Institutionalized corruption has had a particularly dire effect on smaller businesses, able to operate only by navigating complex bureaucratic road blocks (although just like the drivers of Ukrainian marshrutkas they are accustomed to moving, rain or shine, through any condition). The challenge is to remove those road blocks and to start the process now without waiting for the next great political leader.

The focus should be instead on the SMEs and civil society – the grassroots reformers. The international community should engage them and provide with the right tools to advance concrete reform solutions. Civil society has, in many ways, come together and we should continue to support the people in their enterprises: from locally-owned transportation to agriculture. These are the individuals who are coming together and are ready to move.

When I lament that I can’t find decent public transportation here in Washington (most mornings), I am back in Ukraine on a locally-owned and operated marshrutka that’s going way over the speed limit. It’s so crowded that the bus is actually swaying and swerving from side to side. I hold onto the person next to me or the railings above my head, if I can. It’s definitely a ride on a marshrutka (which I fondly referred to a marshrutka-surfing), but I always got to where I needed to go and always on time. People called out, got on, other people made room, people called out again, people made room again, and people got off at any, designated or undesignated, spot along the route. Though it is perhaps a bit disorganized and a little off-balance, local businesses make it work, and, frankly, all of this sounds a lot like democracy to me.