They could have moved one step, but they took half a step.  My results of Ukraine Recovery Conference

They could have moved one step, but they took half a step. My results of Ukraine Recovery Conference

On July 4-5, Lugano (Switzerland) hosted a large-scale international conference on the restoration of Ukraine. At the conference, representatives of Ukraine proposed a large-scale Renovation Plan.

I will consider the results of the conference in the model of a triangle – the interaction of three subjects. The first subject is the Ukrainian authorities (government, parliament, president’s office). The second is international partners: the governments of the respective countries and international organizations. The third subject is Ukrainian civil society in a broad sense: public organizations, business communities, expert centers, local leaders, volunteers.

The goal of the process, in which the conference is the next link, is to create a system that will make it possible to search, accumulate and receive money, and spend it for the benefit of the people of Ukraine.

Consider the results in this model in terms of the goal of the process – how close we are to it and what needs to be done next.

1. The first positive news is that the aforementioned triangle has formed.

Prior to this, the dialogue took place in a stretch between two subjects and was characterized as “a dialogue between an autopilot and an answering machine.”

The appearance of a third entity makes it possible to somehow arrange productive interaction and attract the competencies necessary for this, as well as build a system in such a way that it inspires the trust of international partners. Otherwise, they simply won’t give money.

True, the transition from stretching to a triangle was assessed differently by other subjects. International partners directly joined in making the voice of civil society louder, for this they organized a separate event, which (symbolically) took place three hours before the main one (here is the thesis of my speech there). All key representatives of the West spoke about the role of civil society. However, the Ukrainian authorities were (with certain personal exceptions) very unhappy, and I understand them well.

2. The second good news is that civil society itself has visibly consolidated itself in order to deal with challenges and pitfalls.

It needs to be mentioned here:

– a civil society manifesto (“Lugansk Declaration”) on the principles and values ​​of reconstruction and post-war life;

– the consolidated position of Ukrainian business on economic policy expressed by the Coalition of Business Communities for the Modernization of Ukraine;

– the project “Ukraine after victory”: a common vision of 40+ think tanks, actively disseminated and discussed on the sidelines of Lugano; this is a first draft, an invitation to dialogue that will be rolled out shortly;

– a series of conferences “Lessons of war and restoration of the country and society”, which started on the common platform of the universities of NaUKMA and UCU;

– finally, the Ukrainian business organized a Ukrainian-Swiss business hub by joint efforts, renting a room opposite the congress center, and very interesting discussions constantly continued there, sometimes more interesting than on the main stage.

3. The third good news is that the international partners have also taken several important steps to consolidate their position.

First, the principles for restoring Ukraine were formally agreed upon:

– partnership based on Ukrainian leadership;

– focus on reforms;

– transparency, accountability and the rule of law;

– democratic participation and decentralization;

– involvement of business, civil society, scientists and local government;

– gender equality, inclusiveness, human rights;

– principles of sustainable development and “green transition”.

Secondly, the governments of European countries essentially spoke with almost one voice, proclaiming certain principles. This is clearly seen in the special session of official statements, where each country and international organization had two or three minutes to declare the amount of their assistance and the conditions for its provision.

Of course, there are still certain disagreements in the positions between the European Union and the United States – by the way, it is not entirely clear who will be the leader of the process. The European Union proclaimed that the restoration of Ukraine is part of the process of European integration. There are some pitfalls here that still need to be dealt with.

Also, international financial institutions, which traditionally have very different approaches, have not yet finally agreed with each other. But one way or another, the process of consolidation continues intensively in this corner of the triangle.

This is where the good news ends.

Between good and bad news, most of the Ukrainian officials looked pretty good on stage: clear communication, good slides, good English.

I do not write it down as good news, I consider it normal. Prime Minister Denys Shmyhal, ministers Alexander Kubrakov, Alexei Chernyshev, Mikhail Fedorov looked like representatives of a modern European country who can conduct a dialogue on an equal footing with their foreign partners.

Again, I think this is normal and I see no reason to celebrate here. (The terrifyingly disastrous performance of Daniil Getmantsev stands apart, but this is rather an exception).

Now the bad news.

1. The first bad news is that in fact there was no convergence of positions between the Ukrainian authorities and international partners.

The latter expected a clear plan of action and a transparent architecture of the funding system – they were offered only certain approaches and principles. This is also not bad, but on the other hand, they counted on more. (I am writing on the basis of conversations with different people, realizing that someone else had other conversations and other impressions).

So, we could move one step, but we took half a step.

The Ukrainian side was expected to answer the main question: how will all this work? He is not there yet.

(However, some documents are now published in the public domain, and during the conference, friends from public organizations showed me a couple of lines there, where billions were already assigned to Igor Kolomoisky).

2. The second bad news: against the background of the consolidated two aforementioned corners of the triangle, the third one – the Ukrainian government – looked unconsolidated, not like one team. The various performances, often brilliant in their own right, were unrelated. Well, individual characters carried outright nonsense. Others have vociferously supported the narrative (which I’ve heard for 30 years) of “investment potential, great educated and hard-working people, rich natural resources” where they were expected to speak about institutions and the business climate.

3. Probably the biggest blunder was that investments from the list of funding sources fell out of the main discussion frame.

No one said a word about the liberalization of the economy, economic freedom and protection of the rights of investors, about specific steps on the list of urgent anti-corruption measures. This was especially surprising at the economic panel, where Daniil Getmantsev was the key speaker, and the hall was filled with representatives of investors. They didn’t hear what they expected. I wanted to pose a question to the clueless speaker, focusing his attention on the main problem, but I was not allowed to do so.

Grants, loans and donations alone cannot raise enough funds even for a simple restoration of Ukraine, not to mention modernization. This is astronomical money, there is simply not so much in the world. The main source of funds will be investments. And investors are interested in very specific issues, which were not mentioned at the conference.

Not without curiosities. Investors, politicians and diplomats are very good at reading “body language”, so when one high-ranking official rubbed his hands while talking about the flow of money, this was noticed and then discussed on the sidelines. Stirlitz has never been so close to failure.

Probably, here it is necessary to put an end. After the conference, everyone should do their “homework”: establish interaction and develop expected documents, including specific design solutions for the main areas.

The overall assessment of the effectiveness of the conference as the next stage on the way to the main goal described above is 50% (my subjective assessment). Let’s break this rock further.

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