“The United States has a profound interest in supporting the emergence of a new, reform-minded Ukraine — not just for the sake of the Ukrainian people, but for the sake of the broader American-led international system.”
—Center for Geoeconomic Studies at the Council on Foreign Relations, September 2015
The overthrow of President Yanukovych in early 2014 gave Ukraine a real opportunity to launch necessary political and economic reforms. Threatened by the possibility that Ukraine’s pivot to Europe might serve as an example for the Russian people, Moscow sought to maintain Ukraine within its sphere of influence by illegally annexing Crimea and funneling arms and equipment to pro-Russian separatists in the Donbas region of Eastern Ukraine. The future success of Ukraine as a functional and democratic state is important not only for Kyiv, but can serve as a beacon of hope for the entire post-Soviet space.
The Maidan represented not only Ukraine’s rejection of Russia’s sphere of influence but also corruption within its own government. Working together with its Western partners, Ukraine seeks to fulfill the population’s desire for democratic institutions, while simultaneously defending against a Russian-led insurgency. One of the most important consequences of the Maidan was the rapid development of an immense and vibrant civil society that subsequently played the leading role in drafting reforms and pushing for their implementation. Government infighting and corruption make this task all the more difficult, and the slow pace of change frustrates both Ukraine’s public and the country’s Western partners. Moreover, three years’ worth of structural and back-end reforms — despite their scope and importance — have been largely invisible to the Ukrainian people, who are impatient to see judicial, education, and healthcare reform, as well as the rebuilding of infrastructure.
Today, Ukraine fights an undeclared war against two small pseudo-states called the Luhansk and Donetsk People’s Republics (LDNR). Kremlin “curators” direct the politics and the military operations of the breakaway republics, in addition to distributing minimal social payments and financially supporting the leadership. Framed by the Minsk agreements, the negotiations to end the war are deadlocked over whether political concessions from Kyiv or security-related concessions from the Kremlin and the LDNR — a durable ceasefire — should come first.
The United States plays an important role in keeping Ukraine economically and politically stable. Together with the European Union, the U.S. has imposed individual and sectoral sanctions on Russia both for the annexation of Crimea and for its role in the war in Ukraine’s easternmost regions. The U.S. government has provided over $1.3 billion in aid to help speed up reforms, stabilize the economy, and reinforce civil society and public institutions. The U.S. has also sent advisers and technical assistance to Ukraine, and provided a total of $600 million in security assistance. Aside from direct aid, the U.S. has provided Ukraine with three separate loan guarantees of $1 billion each. The Ukraine Freedom Support Act of 2014 authorizes increases in military and economic assistance for Ukraine. The 2015 and 2016 National Defense Authorization Acts expand U.S. security assistance to Ukraine. The STAND for Ukraine Act, which passed only the House of Representatives in September 2016, would reinforce U.S. sanctions and formalize non-recognition of the annexation of Crimea. Many congressional and administration officials have called for the U.S. to provide defensive lethal weapons to Ukraine, though the U.S. has not taken this step.
Any U.S. policy on Ukraine must be underpinned by the following principles:
- Recognition that Eastern Europe’s security and stability are U.S. strategic interests;
- Dedication to upholding Ukraine’s sovereignty, territorial integrity, and right to self-determination;
- Increasing Ukraine’s capacity to face its own domestic challenges.
These principles are the basic building blocks of America’s Ukraine policy and form the basis of this report.
The United States has a fundamental interest in Ukraine’s future and needs to play a larger role in the relevant international negotiations. As a signatory to the Budapest Memorandum giving Ukraine certain security assurances, the U.S. should be proactive in setting strategic goals regarding Ukraine rather than reacting to Russia’s actions. It is important to understand that the Kremlin’s reckless behavior toward the U.S. and its allies is calculated to make Russia appear as if it is not a declining power, but a strategic adversary. Russia’s primary interest in destabilizing Ukraine is not to counteract decades of Western-bloc expansion, but to prevent Ukraine from becoming a successful democracy that might serve as an example for others in the post-Soviet space, especially for Russia itself.
The Kremlin uses a Huntingtonian civilizational narrative to justify intervention to halt the development of democracy in East Slavic countries (its perceived sphere of influence), thus creating a self-fulfilling prophecy of the incompatibility of democracy with East Slavic culture. Ukraine, the story goes, inherently belongs within Russia’s sphere of influence, its integration with Europe is a threat to Russia’s interests, and the military conflict in the east is a manifestation of Ukraine’s internal ethnic divisions. This framing denies Ukrainians the right to national self-determination and grossly exaggerates the tensions between different groups of Ukraine’s multiethnic society. Supporting Ukraine’s transition is the best way to counteract this narrative. Therefore, Ukraine and its partners must focus on building a successful and prosperous Ukraine on the territory it currently controls. For the U.S., this means maintaining a robust sanctions stance and keeping the stakes and costs high for potential Russian escalation, while simultaneously helping Ukraine grow its economy and reform its political system.
Finally, it is important to understand that from the perspective of the Ukrainians who joined the Russian-led separatists, the war was induced by economic difficulties: the Donbas War is not an identity-based conflict. An analysis published in the Journal of Comparative Economics demonstrates that neither support for separatism nor the incidence of separatist violence falls along ethnic or linguistic lines; rather, separatism is better predicted by economic vulnerability. This suggests, in turn, that any resolution to the crisis will need to include significant socioeconomic components, and not just political concessions from Kyiv.
- To break the deadlock in the Donbas War’s peace process, the U.S. should push for progress to be made in parallel in the security, political, and humanitarian directions. The U.S. should become more deeply engaged in the entire peace process and emphasize that a sustainable ceasefire must be a prerequisite to any other steps in the security, political, and humanitarian directions.
- The U.S. must continue to demand Russia’s full compliance with Minsk II, and should prioritize Russia’s compliance with the security points of the agreement as a condition of sanctions relief. The U.S. should also encourage Ukraine to specify that amnesty for separatists, granted in September 2014, does not apply to international or war crimes. The Minsk II agreement includes mechanisms that the government of Ukraine can use to strengthen the sovereignty and territorial integrity of the country. While Ukraine has fulfilled nearly half its Minsk II obligations, additional progress increases the likelihood the EU will remain united behind the current sanctions regime.
- The U.S. should increase non-lethal military aid to Ukraine; the U.S. should consider providing defensive lethal weapons as the situation on the ground develops. Note that while it is unclear whether it is in the interests of either Ukraine or the United States for the latter to actually provide lethal defensive weapons to Ukraine, it is in both parties’ interest that the Kremlin continue to believe there is a real chance the U.S. would do so.
- The U.S. should continue supporting Ukraine-based broadcasting in Ukrainian, Russian, and Crimean Tatar languages, as well as other forms of engagement with populations vulnerable to Russia’s propaganda. The U.S. must continue to combat Russian propaganda.
INSTITUTIONS AND INFRASTRUCTURE
Civil society groups play a disproportionately important role in the reforms process, drafting the relevant bills or Cabinet orders, pushing for their passage, and leading their implementation. It is important that American and international experts offer their help in drafting reforms in all sectors, noting that cooperation is particularly important for civil society groups working on energy sector reform.
Ukraine must continue the prosecution of current officials for corruption. This effort should be based on continuing the judicial reform process, reforming the law enforcement system by limiting the powers of the Prosecutor General, creating efficient and effective anti-corruption bodies and anti-corruption courts, and managing the system of income/wealth e-declarations. Ukraine can increase the accountability of current officials by strengthening the involvement of businesses in the anti-corruption effort (e.g., by adopting legislation punishing “supply-side” corruption), strengthening the involvement of citizens in anti-corruption efforts, and adopting laws on whistleblower protection.
- The United States should encourage the Ukrainian government to focus on top-priority reforms and avoid political infighting. These key reforms include liberalization and deregulation of the economy, anti-corruption legislation, tax and fiscal reform, as well as electoral and civil service reform. The U.S. should promote the creation of public forums for wider discussion of draft laws on constitutional amendments and reforms.
- The U.S. should help Ukraine develop new formats of cooperation with civil society that give those organizations a seat at the reforms table rather than a purely consultative role.
- The U.S. should take a strong stance on civil liberties within Ukraine, standing up for vulnerable groups like Ukraine’s 1.8 million internally displaced persons (IDPs) and independent journalists under government pressure. The U.S. should encourage the President and the Prime Minister to efficiently implement promised de-oligarchization policies.
- As public frustration with austerity and the slow pace of reforms increases, the U.S. should increase the visibility of American assistance. In order for Ukrainians to continue to support Ukraine’s pro-Western choice, they must feel that it has had a positive impact on their lives. The public is impatient to see infrastructure rebuilt and the education and healthcare sectors reformed. Structural and top-level reforms, though important, can be largely hidden from an impatient public.
HUMAN RIGHTS AND SOCIETY
Strict conditionality of financial aid remains an effective tool to influence Ukraine’s political elites. The IMF’s support package for Ukraine is an example of the effective use of conditionality, although the tight fiscal policies may actually be exacerbating rather than ameliorating the recession in Ukraine. The conditionality of aid should be re-focused on strengthening and legitimizing state institutions rather than dismantling state control; for example, Ukraine’s economy can recover quicker if property rights are secured and the judiciary is cleaned up.
Donbas War-related sanctions and the sanctions tied to the annexation of Crimea represent one of the strongest sources of leverage for the West. The U.S. must continue to condemn Russian occupation and annexation of part of Ukraine’s territory. Talk of possibly recognizing Crimea’s annexation or of unilaterally lifting sanctions erodes the U.S. bargaining position. Diplomatic, legal, and economic means must be used to press the Russian Federation to protect members of civil society from persecution in Crimea, and from violence in the Russian-controlled Donetsk and Luhansk People’s Republics.
- The U.S. should continue to highlight the severity of the Donbas War, especially the fates of the 1.8 million people displaced from their homes and the 10,000 killed. The U.S. should continue to highlight the plight of the Crimean Tatars, Crimea’s indigenous Sunni Muslim population, as well as Crimea’s pro-Ukrainian activists, who have been the target of systematic repression by the Russian de facto authorities.
- The U.S. should provide seed funding to encourage Ukraine to develop and implement a coordinated plan to promote and bring about the successful reintegration of displaced persons and the return of their full political and economic rights. This process includes encouraging donors to invest in housing, infrastructure repair, and job training in secure parts of Ukraine to create jobs and housing opportunities for displaced families.
- The U.S. should provide financial aid and expertise to help Ukrainian and international organizations more effectively investigate human rights violations committed against the millions of people who live on Russian-occupied territory. The U.S. should urge the de facto authorities in Crimea and the Donbas to comply with international human rights laws and standards.
- The U.S. should help Ukraine in its efforts to provide Russian-language radio and TV broadcasting to Crimea and the Donbas. For example, the U.S. could help build transmission towers so that 3G cell phone coverage can be provided to the occupied territories. The U.S. should encourage Kyiv to increase engagement with the south-east of Ukraine with a public awareness campaign focusing on building local self-government and minority rights.
- In every conversation with senior Ukrainian officials, the U.S. should highlight humanitarian concerns, support for international humanitarian law, and the need to bring an end to Ukraine’s commercial food and medical blockade of occupied territories. The U.S. should insist that Ukraine’s military and intelligence agencies respect fundamental liberties, including the right to be free from torture.
- The U.S. should encourage the government of Ukraine to separate all pension payments from IDP benefits, and to establish clear rules and procedures with a reasonable deadline for the completion of residence re-verifications.