The best place to find Alex Frishberg now is off the Miami coast, relaxing on a boat in the Atlantic Ocean. His law firm, Frishberg & Partners, is still up and running in Kyiv, as it has been since 1991, the year of Ukraine's national independence.
Frishberg has written three books about his 24 years in Ukraine, including “Doing Business in Ukraine,” an encyclopedic guide with partner Scott Brown; “The Steel Barons,” a not-so-fictional account of the gangster era in Ukraine; and “The Foreigners Guide to Ukrainian Women And Other Stories.”
The books never made money, but they did bring in new clients.
He was born in Kyiv and returned in 1991, so he doesn’t exactly qualify as an expat. But he can trace the evolution of an independent Ukraine better than most people.
His current view is not optimistic. “Ukraine is completely drained of everyting,” Frishberg said. “Everyone who can is leaving.”
Ukraine may have reached the point of no return after missing its chance to join Europe in the 1990s and 2000s. “It’s reached its … breaking point, plus we have a war in the east that’s going to pick up speed,” Frishberg said. “What the next cycle is nobody knows.”
How did we get here? Frisberg can trace it from the beginning.
When he got to Kyiv in October 1991, he recalls a dark, sleepy provincial town with few restaurants, hotels or nightclubs. Soon, the gangster era was in full swing, instilling fear everywhere, with shakedowns and assassinations were common.
Nothing improved under the first Ukrainian president, Leonid Kravchuk. “Every one had their own bandits,” he said, in describing what he calls the “first stage of corruption.”
Frishberg said the best times may have been during the first term of the nation’s second president, Leonid Kuchma, who took power in 1994.
Kuchma got rid of the street racketeers and created the first institutions of a nation.
“He told the KGB we’re not going to be doing a Sicilian economy. ‘If you stop, you can live, if you don’t, leave the country. “Everyone loved Ukraine and Ukrainians loved Ukraine,”
The problem is that Kuchma institutionalized corruption as well, and many of the bandits “became members of parliament.” After his reelection in 1999, Kuchma “went rogue,” Frishberg said, becoming accountable to no one.
Fortunes were made overnight on dirty privatizations that made people like Kuchma’s son-in-law, Victor Pinchuk, wealthy. The Georgiy Gongadze murder took place in 2000. Many other murders or mysterious deaths took place.
Frishberg lays blame on the Harvard Kennedy School of Government types who came to Ukraine and preached that privatization is the answer to everything. The problem, Frishberg said, is that the oligarchs snapped up all the “crown jewels” in Ukraine cheaply, never let them go and never let a market economy with rule of law develop.
That leaves today’s situation where “you have a handful of oligarchs and everyone else is poor.”
The Viktor Yushchenko era from 2005-2010 is another wasted five years, with Frishberg describing the ex-president “as a complete incompetent idiot.”
But what came after Yushchenko proved to be even worse. The Viktor Yankuovych years, from February 2010 to February 2014, “were a disaster on so many fronts I don’t know if Ukraine will ever recover.” The Yanukovych-era of greed was off the charts, even by Kuchma standards, with out-of-control kickbacks 20 percent of value-added tax refunds “had to go in his pocket” – and corporate raids.
While every country has corruption, Frishberg said, Ukraine never developed any institutional checks and balances to eradicate it, as other nations did.
“Nothing much has changed” since 1991, Frishberg said. “It’s not so much law, but who you know.”
