Category Archives: Eastern Europe

Democracy that Delivers #92: Former US Ambassador Pifer Discusses the Evolution of Ukraine from Former Soviet Republic to a Democratic State

From left: podcast guest Steven Pifer, guest host Eric Hontz and host Ken Jaques

In this week’s podcast, Steven Pifer, a senior fellow at the Brookings Institution and former Ambassador to Ukraine, guides the listener through the development of U.S. diplomatic relations with Ukraine following the breakup of the Soviet Union through the present. He talks about the progress Ukraine has made from a former Soviet Republic to a democracy. While there have been successes and failures, much has been accomplished in the area of economic development and a transition to a market economy. But much more needs to be done in Ukraine, particularly with respect to the biggest threat to democracy there according to Pifer: corruption.

Pifer was the U.S. Ambassador to Ukraine from 1998 to 2000.

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Democratic and Market Values Face Obstacles in Poland

The Committee on Defense of Democracy stages a protest in Warsaw on December 19, 2015.

After the fall of Communism in Eastern Europe in 1989, Poland became a poster child for democratic and market-oriented transition. While the necessary reforms were difficult and often painful to the average citizen, they did deliver political freedoms and rapid economic growth, reversing decades of totalitarian oppression and decline. Poland became a respected member of the European Union (EU) and a model for other countries in the region. Despite persisting challenges typical for transition countries, such as youth unemployment, the overall institutions of democracy and a market economy appeared solidly in place.

This began to change rapidly after the 2015 elections when the Law and Justice Party (PiS) candidate won the presidency and the party gained a majority of seats in the parliament. Inspired by the policies of Victor Orban and his party in Hungary, PiS began a rapid push to challenge Poland’s democratic institutions—from the Constitutional Tribunal to public media. However, unlike the Hungarian Civic Alliance (Fidesz), PiS does not possess the constitutional majority necessary to pursue such systemic changes, which put it on a collision course with Poland’s judiciary and civil society, as well as EU institutions.

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Democracy that Delivers #88: Group 484 on Refugees in Serbia

From left: podcast guests Miroslava Jelacic and Vladimir Petronijevic, guest host Marc F. Schleifer and host Ken Jaques

This week’s podcast features Vladimir Petronijevic, executive director, and Miroslava Jelacic, legal analyst, with Group 484—a nonprofit organization founded in Serbia in 1995 to support 484 refugee families. Working with migrants, local communities, and the government, Group 484 has assisted over 100,000 people in more than 70 Serbian towns through the years.

The majority of the country’s refugees are from Syria, Afghanistan, Pakistan, and Iran. Petronijevic said the Serbian government has had a favorable response to refugees, pointing to 17 temporary housing centers holding about 4,000 refugees. The housing centers are funded by the government and civil society organizations.

While many refugees in Serbia plan to move to other European countries, others hope to become Serbian citizens. Jelacic discussed the process for refugees to become citizens.

Visit Group 484’s website for more information on the organization’s work and support programs.

Want to hear more? Listen to previous podcasts at CIPE.org/podcast.

Subscribe to the podcast on iTunes or on your Android device.

Like this podcast? Please review us on iTunes.

A Call for Democratic Re-engagement

Protest in Warsaw, Poland. Photo by Lukasz Kaminski.

Every year on September 15, the United Nations’ International Day of Democracy offers an opportunity to reflect on the state of democracy and the challenges facing it. This year’s theme spotlights the need to strengthen democratic institutions against a backdrop of increasing disparities of economic opportunity.

In Central and Eastern Europe, those disparities have become more prominent in recent years, heightening the need to re-examine assumptions about the region’s transitions. Although the region made great strides in building democratic institutions and growing market economies over the course of two decades, the quality of—and support for—democracy has started to decline. Corruption has become a way of life in Hungary, where the government doles out public money based on political loyalty and friendships. In Poland, the government has exerted undue influence over the judiciary system, depriving citizens of their fundamental democratic freedoms.

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Associations Play an Important Role in Improving Ukraine’s Business Climate

CIPE expert Nataliia Kobylchak (left) and Mykolaiv coalition member Iryna Yerofeyeva (right) at CIPE’s M-Test training in Mykolaiv, Ukraine.

By Nataliya Zhuhay and Caroline Elkin

As in any state ruled by law, local government officials in Ukraine are obligated to work within the framework of existing laws when developing regulations. But in practice, the regulations they create often act as obstacles for entrepreneurs to run their businesses. These flawed regulations can be poorly written, full of holes that corrupt officials can exploit, or do not correspond to existing laws. Until recently, such regulations did not take into account the costs they imposed, for example, on the café owner who wants to open a summertime terrace—or for that matter, any other basic entrepreneurial activity.

In December 2015, Ukraine’s Cabinet of Ministers adopted a resolution requiring all legislators to calculate the cost of implementing regulations for small businesses. This procedure is known as the M-Test. Although the resolution seems to represent a victory for Ukrainian business owners, many challenges remain. First, previously adopted regulations are not subject to the M-Test. Secondly, officials are not required to examine existing regulations for their corruption potential. Thirdly, the State Regulatory Service of Ukraine is unable to change problematic regulations because it can only make recommendations. Thus, only the courts are capable of compelling local governments to withdraw or change regulations. In practice, though, entrepreneurs are reluctant to pursue such matters in court, preferring instead to keep their heads down. As a result, the conditions for doing business on the local level discourage entrepreneurs rather than encourage them.

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Democratic Backsliding in Bulgaria

Protest in Sofia, February 2013, via Wikimedia Commons

The Institute for Market Economics (IME), an independent economic policy think tank in Bulgaria, has sought to define the main challenges to democracy, investigating their roots and identifying possible solutions. In addition to its research, IME recently conducted two surveys. The general sentiment in both surveys confirms that there is a perception of democratic backsliding. Forty-five percent of experts and 61 percent of students polled believe that the quality of democracy in Bulgaria has worsened in recent years, while only 25 percent of experts and 18 percent of students have seen positive developments. The leading challenge to democracy, as identified by IME surveys and roundtable discussions, is state capture. This is the catalyst for problems in the judicial system and widespread political corruption. These trends are compounded by a closing media environment that is increasingly dominated by a politically dependent media.

The latest CIPE Feature Service article examines IME’s key findings and provides recommendations for various stakeholders, including the government, political parties, civil society, media, businesses, donors and the population at large.

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Removing Barriers to Investment in Ukraine

panelists from Identifying and Removing Barriers to Investment in Ukraine

By Eric Hontz and Kathryn Walson

Three years after Ukraine’s Revolution of Dignity, a centralized, oligarchic power structure has once again taken hold. This has made it challenging to keep the business environment in Ukraine friendly to western investment, as the new power structure allows for increased influence from oligarchs and leads to increased corruption. Further, ongoing hostility with Russia and corruption act as a serious deterrent for western investors, which bring with them demands for higher standards in compliance, governance, and accountability from government institutions.

Because public funding alone cannot solve the country’s infrastructure problems, foreign investment into Ukrainian infrastructure is essential to the country’s ability to increase exports and gross domestic product. Despite this paradox in expectations and reality, an increase in investment in Ukraine has already begun, as Ukraine has consciously turned its efforts towards recruiting western businesses. CIPE and the U.S.-Ukraine Business Council co-hosted a panel discussion in June to discuss the investment climate in Ukraine, featuring Volodymr Omelyan, Minister of Infrastructure in Ukraine; former Ambassador John E. Herbst, current Director of the Dinu Patriciu Eurasia Center at the Atlantic Council; and Matt London, Deputy Managing Director at Amsted Rail Russia-CIS at Amsted Rail Inc.

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