The year 2021 was marked by abandoned hopes and gained opportunities. And 2022 will be either a year of new rules in politics or a turning point for the revenge of old, corrupt practices.
Oligarchs tackled
I regard the law introducing restrictions on oligarchs, the so-called ‘de-oligarchization’ law, a major achievement of 2021.
No matter how much it has been mocked by oligarch-controlled TV channels, no matter how much it has been trolled and vilified, the oligarchs have really become scared about their prospects: first, their inclusion in the register of oligarchs; then their transition from superhumans to toxic characters, as politicians will have to report about any meetings or phone calls with them.
The oligarchs will be required to file income declarations and report any purchase exceeding $5,000. After their inclusion in the register of oligarchs, they will experience more complicated relations with international banks, which will have to conduct additional integrity checks.
That’s why the law on the oligarchs, widely regarded as innocuous, could create a new reality in 2022. In fact, it is an invitation to renegotiate the social contract between oligarchs and society, when everything will not work in the interests of several families.
The law’s provisions come into effect on May 7, 2022.
Vaccines finally take off
Another achievement in 2021 is the fact that Ukraine has managed to handle the coronavirus crisis without too much disruption.
Yes, the situation was critical for some weeks, with deaths hitting hundreds a day. At the same time, the vaccine was made available to everyone who wanted it.
Ukrainians enjoy a completely free choice of vaccines many other countries do not have: choose whatever you want – either AstraZeneca, or Pfizer, or Moderna, or CoronaVac.
As is the case in all other countries of our region, the problem is many people simply don’t want to get vaccinated. Some political leaders also contributed to this: Yulia Tymoshenko and Dmytro Razumkov seem to have turned out to be anti–vaxxers, and Petro Poroshenko called the Covishield vaccine “Sh*t.”
Various carrot-and-stick approaches ensured 40% of adults in Ukraine got fully vaccinated. This is less than in most developed countries. But this is much more than the opposition predicted in their horror stories throughout 2021.
Health Ministry data shows that as of Jan.1, 2022, 44% of adults had received both doses. At the same time, all fully vaccinated people could spend their electronic Hr 1,000 bonus for getting vaccinated on the creative sectors of the economy via the Ukrainian-made Diia mobile app featuring a COVID passport which is internationally recognized.
Other notable strides forward
Diia and digitalization in general make Ukraine a tech leader in the region. And the adoption of a law on a special legal framework for the so-called Diia City can enable Ukraine to play the role of an intellectual technology hub.
There were other progressive laws in 2021 too. Mechanisms for supporting industrial parks were created. In recent weeks, a law was passed to facilitate localization and push incentives for local producers.
Another plus in 2021 is the Great Construction program. Despite the criticism, the building of roads in Ukraine grows manyfold annually compared to those in previous presidencies.
Road-building booms, rail operator on track towards viability within two years of the Great Construction, almost 14,000 kilometers of new roads were built, which is almost 40% of roads of national significance. While between 2009 and 2019, a mere 10,000 kilometers of new roads were built in Ukraine. And in January 2022, it is planned to launch road traffic across a Zaporizhzhia bridge, which has been under construction for decades.
The focus of the Great Construction for 2022 will be the south of Ukraine, namely the Odesa, Mykolaiv, and Kherson Regions. What is more, the construction of a bypass road outside the capital will finally begin.
2021 was a year of change for state rail operator Ukrzaliznytsia, also known as the Ukrainian Railways (on whose Board I sit). As our supervisory board insisted, new, fair railway rates were finally approved for the oligarchs to transport commodities, namely iron ore, coal, farm produce. This enabled Ukrzaliznytsia to earn an additional Hr 2 billion (about $70 million) in 2021.
For the first time ever, rates charged for transporting ore by rail will exceed the cost. That is, the company will stop subsidizing the oligarchs. Another Hr 12 billion is expected in 2022 because of the new rates. Rinat Akhmetov’s group, Metinvest and DTEK, will pay Hr 5 billion.
Nevertheless, all the transportation problems reported by the corporate sector must also be considered – the quality of services must improve along with the higher rates.
Another step forward in 2021 was land reform, with more than 60,000 agreements concluded within the framework of the land market and not a single dubious case reported.
Next year’s budget includes record-high spending on defense and security – Hr 323.1 billion, or 6% of GDP. The highest ever spending on medicine and education is also planned.
Few people know that the minimum wage in Ukraine is now higher than that in Russia. It is over 200 euros compared to 150 euros in the aggressor country.
Corruption fight was sluggish, met roadblocks
However, 2021 was also a year of abandoned hopes, wasted time, or boycotting of reforms.
First of all, I have in mind the soap opera with selecting the chief of the Specialized Anti-Corruption Prosecutor’s Office (SAPO). This person’s remit is to exercise procedural supervision over all corrupt high-ranking officials who are under investigation by the National Anti-corruption Bureau of Ukraine (NABU). The selection dragged on for 15 months, indicating a lack of political will in some quarters.
But this also blocks the de-oligarchization process because the SAPO is now probing PrivatBank, and it will sooner or later get to oligarch Ihor Kolomoisky, whose bank was nationalized at the end of 2016.
There is the case of the Rotterdam Plus coal shipment scheme, a formula used for purchasing coal for thermal power plants, which was introduced by former President Petro Poroshenko in the interests of Akhmetov’s business. There are cases pending against Oleh Bakhmatyuk, Oleksandr Onyshchenko, Mykola Martynenko, Mykola Zlochevsky, Maksym Mykytas, and other former oligarchs.
Oleksandr Klymenko, an agent of the NABU, won the competition held to select the SAPO chief, but the selection commission has been refusing to approve the results for weeks. There are fears this will further stall the process despite obligations to citizens, the requirements of the law, and a joint declaration in this regard by Ukrainian President Volodymyr Zelensky and U.S. President Joe Biden.
Another failure of 2021 is the Constitutional Court, which had previously become a vehicle to impede the reform process. Former Constitutional Court Chairman Oleksandr Tupytskyi, who was backed by oligarchs Kolomoisky and Viktor Medvedchuk, did not give in, despite his removal by President Zelensky. Tupytskyi is trying to get reinstated, although such attempts will not last long – his term expires in the spring of 2022.
What is more, judicial reform is meeting attempts to block it via the Constitutional Court. This court has received an appeal from judges of the old guard who, in their self-interest, insist that the enlisting of international experts in the assessment of integrity and professional qualities is unconstitutional.
This line-up of Constitutional Court judges has already discredited itself with a decision aimed to destroy the system of e-declaration of assets and anti-corruption infrastructure. And in 2021, those judges did not permit two new peers, who were elected within President Zelensky’s quota, to be sworn in.
By the way, U.S. sanctions against Tupytskyi imposed in December are a clear signal to all those trying to derail reforms in Ukraine.
Another unreformed legacy of 2021 was the notorious Kyiv District Administrative Court headed by Pavlo Vovk, who is a participant in high-profile NABU-investigated cases. During 2021 this court continued to stamp out decisions that could disrupt the reform of Ukrzaliznytsia or the competition for selecting the chief of SAPO.
A bill tabled by President Zelensky to reboot the court has not been put to the vote yet.
Road to EU gets smoother, President visited D.C.
One breakthrough in the international arena was the fact that President Zelensky became only the second European leader (after German Chancellor Merkel), who visited Washington. However, Biden signed a deal with Merkel on the completion of Nord Stream 2, but no guarantees for Ukraine in this sphere have yet been implemented.
Without an invitation to join the EU, Ukraine is on the way to concluding declarations recognizing its European prospects – there are now seven such documents (with Croatia, Slovenia, Poland, Lithuania, Latvia, Estonia, and Slovakia). With most European states supporting Ukraine with such declarations, the goal is to achieve this result by applying the necessary diplomatic pressure on other European countries that may still be hesitant.
The Russian threat re-emphasized
But 2021 ended with a fresh build-up of Russian troops on Ukraine’s borders.
Putin's goal is to conclude a major agreement behind Ukraine's back, seeking guarantees that Ukraine will not get NATO membership, thereby outlining a zone of geopolitical influence.
The only way to counter this may be to increase our defense capabilities and transform Ukraine into a modern, developed economy and democracy, regardless of whether we are a member of the EU or NATO.
That is why 2022 should be dedicated to achieving these goals.
Note: Sergii Leshchenko was a member of the supervisory board of rail operator Ukrzaliznytsia, for two years from Sep. 2019. In Sep. 2021 the Cabinet of Ministers failed to prolong his tenure after a parliamentary committee was critical of the board’s work. Leshchenko was duly successful in a tender and on 29 Dec, the Cabinet of Ministers appointed him a member of the board.
