The crisis began
when Ukrainians swept into the streets to protest President
Yanukovych’s abrupt refusal to sign an association agreement with
the European Union. Explaining that Ukraine was bankrupt and required
an immediate cash injection that the EU was unprepared to provide,
the president gratefully accepted a $15 billion bailout from an
obliging President Vladimir Putin of Russia.
While
the protests have morphed into a countrywide revolt against cronyism
and corruption, a political resolution is currently deadlocked, while
Ukraine’s beleaguered currency remains in freefall and its
bankrupted economy faces imminent collapse. A bellicose Putin is
using the unfolding drama to suborn Ukraine economically and
politically, in much the same way that Stalin attempted to leverage
the devastation in Europe to advance communism after World War II.
These
circumstances pose a clear geo-strategic choice to the EU, US and
Canada: can the West afford a poor, politically unstable, autocratic,
economically derelict nation of 46 million potential refugees on
Europe’s eastern border tethered to a poor, but aggressive Russia;
or is it in the West’s collective interests to embrace a
prosperous, democratically confident and economically stable Ukraine
firmly integrated into Europe?
Indeed,
as pithily explained by geo-strategist Zbigniew Brzezinski, the
ultimate prize for the West is not even a stable Ukraine, but a
democratic Russia; a peaceful, prosperous European Ukraine destroys
Putin’s residual imperial ambitions and provides Russia with an
opportunity to eventually transform into a democratic, responsible
and peaceful partner, sharing common values.
This
outcome requires the development of a comprehensive
assistance
plan for Ukraine modelled on the post-World War II European Recovery
Program, better known as the Marshall Plan. In 1948, facing
the dual threats of Soviet expansionism and the total collapse of
Europe’s economies, the United States pumped $15 billion (roughly
$148 billion in today’s terms) into modernizing
and integrating Europe’s economies.
This far-sighted strategic decision resulted in the total political
reconstruction of Western Europe,
leading to decades of
unprecedented growth and prosperity on the continent.
The
recovery plan for Ukraine (let’s call it the Ukraine Recovery
Program, or URP) should take this same bold, strategic approach. It
should be based on the following framework: in return for starting to
implement pre-agreed structural reforms (and only then), a new
reform-oriented Ukrainian government demonstrably committed to (and
capable of) implementing reforms should be offered a substantial 3-4
year aid package that 1) facilitates the democratic transformation of
Ukraine’s governing institutions; 2) stimulates the modernization
and competitiveness of the Ukrainian economy; and 3) by offsetting
the adverse socio-economic consequences of Russian economic
retaliation, provides a social cohesion cushion in three key sectors:
energy, state-owned enterprises, and the pension system. Social
cohesion assistance in the following areas would cost between $21-25
billion, comprised of stand-by money to be used to backstop the plan
agreed with the government to modernize the economy.
Moreover,
a detailed outline of the URP, beyond vague promises, should be
announced immediately. The impact of the EU, US and Canada
demonstrating their willingness to stand behind Ukraine with a
massive program of assistance will help break the political logjam
and provide a framework for the outcome of the current negotiations.
It will 1) reassure Ukrainians of the West’s seriousness in helping
Ukraine integrate into Europe; 2) build support among Ukrainians for
a European future; 3) assuage the fears, stoked by the governing
party and Russia, among Ukrainians (especially in the densely
populated and heavily industrialized eastern part of Ukraine) of
losing their jobs and pensions during the integration process; and 4)
undermine the specious arguments that Ukraine’s only hope of
economic salvation lies with Russia.
With
this plan the West reaffirms its position as an honest broker to the
current dispute, as the URP would be politically neutral and
addresses the concerns of all sides.
Notwithstanding
the hobbling economic problems in the West, the URP is worth the
investment; the cost of containing the long-term fall-out from
economic collapse in Ukraine will be significantly higher. For
the West, Ukraine is too big to fail. Moldova and Georgia may also
lay claims for massive assistance, but their own viability as
independent states may depend on whether or not Ukraine falls back
into Russia’s orbit. Only Ukraine has the heft to block Russia’s
imperial aspirations.
Ultimately,
the URP will reassure the Ukrainian people that they can enter
through Europe’s “open door” not as paupers, but as proud
partners.
Finally,
the EU, backed by the US and Canada, should take the long overdue,
and now obvious step of explicitly promising to open talks with
Ukraine on EU accession following implementation of the reforms.
Ukrainians
have shown the world that they are prepared to die for the values
behind the original Marshall Plan – they have certainly earned the
right to be integrated back into Europe.
Daniel Bilak is an international lawyer based in Kyiv and a former United Nations Development Program senior governance advisor to the government of Ukraine.
