How Western aid enables graft addiction in Ukraine.

How Western aid enables graft addiction in Ukraine.

Greg Krasovsky: If Ukraine's foreign benefactors and well-wishers want to help reduce corruption in Ukraine, then the only way to do so is to stop turning a blind eye on corrupt politicians who are loyal to you.

Russia ignored the corruption of President Kuchma and Yanukovich's regime because he was considered pro-Russian. 

The U.S. and its allies have ignored the corruption in the administrations and governments of Presidents Yuschenko and Poroshenko because they are pro-U.S.

The result? Continued raiding of the Ukrainian government budget by politicians who know that their indiscretions will be overlooked abroad by their supporters. 

Playing musical chairs with Ukraine's government and cabinet of ministers will not help unless these folks are afraid of being detained and prosecuted abroad and their foreign assets (bank accounts, businesses and real estate) frozen.

But as long as these corrupt, albeit pro-US/EU/NATO politicians know that the United States and its allies will prefer their corruption to neutral or, heaven forbid, pro-Russian politicians, then you won't be able to tear them away from the Ukrainian state budget feeding troth - just like pigs.

In the meantime, ordinary Ukrainians remain poor and powerless. 
   
Selected excerpts:

"Over the past 25 years, Western donors have funneled billions of dollars into post-communist Ukraine, with two main goals: helping the country build a self-sustaining, competitive market economy, and laying the legal and regulatory groundwork for a law-governed state.

April 14 saw the appointment of yet another government dominated by insiders from Ukraine’s discredited post-communist establishment. This ended a political crisis sparked in February when Aivaras Abromavičius, the respected minister of the economy, resigned over persistent graft among his underlings.

Abromavičius’s resignation was just the latest confirmation that the hopes that accompanied the EuroMaidan movement of 2014 have crashed on the rocks of renewed asset-grabbing (see here, here and here). The gains from modest successes in economic reform have been washed out by impunity at the top along with a lack of progress in civil service reform and movement toward a law-based state.

These developments prompt the question: Can Western aid actually support the cause of reform in Ukraine? Or is Western assistance enabling an entrenched elite to continue stealing and avoid building a functioning state? 

...

Ukraine’s elites deploy the courts and police to raid companies they covet. Extortion, not public service, is the primary activity of state regulatory agencies. Even more damaging is the plundering of state assets. To be sure, the current government ended the practice by which private intermediaries reaped illicit billions from the exploitation of gas subsidies — at least for now. A previous government eliminated such intermediaries in 2009 only for the scheme to return under the next administration.

The looting of state-owned companies by oligarchs and state officials, including figures close to the president and former prime minister, remains very much alive (see here and here). Privatizing these enterprises is no solution; if history is any guide, they will be sold to government cronies for a song (seehere, here and here). Tax and customs fraud along with myriad subsidies have further enriched powerful insiders, hollowing out the state in the process.

Ukraine’s leaders might have constructed effective state institutions capable of preventing such plundering and fostered a market economy that can maximize tax revenue. But their virtually unlimited access to Western assistance has freed them from the need to do so. It has also heightened their interest in maintaining the status quo.

...

How to make sure that the aid will not continue enabling Ukraine’s acquisitive elite? How to ensure that the results will be different this time around? These questions rightly occupy the attention of the donor community.

Ukraine’s benefactors face two options. The first is to resume assistance in the event that the new government puts forward a reform plan and passes some legislation recommended by donors. This is the approach the West has followed in the past.

The other option is to refrain from resuming aid until the coming to power of a truly new leadership that excludes most people with previous high-level government experience..."

Please read rest of the Article at http://www.washingtonpost.com/news/monkey-cage/wp/2016/05/05/how-western-aid-enables-graft-addiction-in-ukraine/


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Baiting the Bear: Russia and NATO.

Baiting the Bear: Russia and NATO
by Conn Hallinan at CounterPunch.org

  

Greg Krasovsky: I agree with U.S. Admiral Mark Ferguson, commander of U.S. naval forces in Europe, who is cited as saying “I don’t think many people understand the visceral way Russia views NATO and the European Union as an existential threat,”.

 

Selected excerpts:

"“Aggressive,” “revanchist,” “swaggering”: These are just some of the adjectives the mainstream press and leading U.S. and European political figures are routinely inserting before the words “Russia,” or “Vladimir Putin.” It is a vocabulary most Americans have not seen or heard since the height of the Cold War.

The question is, why?

Is Russia really a military threat to the United States and its neighbors? Is it seriously trying to “revenge” itself for the 1989 collapse of the Soviet Union? Is it actively trying to rebuild the old Soviet empire? The answers to these questions are critical, because, for the first time since the 1962 Cuban missile crisis, several nuclear-armed powers are on the edge of a military conflict with fewer safeguards than existed 50 years ago.

...

First, it is the silly season—American elections—and bear baiting is an easy way to look “tough.” It is also a tried and true tactic of the U.S. armaments industry to keep their production lines humming and their bottom lines rising. The Islamic State is scary but you don’t need big-ticket weapons systems to fight it. The $1.5 trillion F-35s are for the Russkies, not terrorists.

There are also those who still dream of regime change in Russia. Certainly that was in the minds of the neo-cons when they used The National Endowment for Democracy and Freedom House to engineer—at the cost of $5 billion—the coup that toppled Ukraine into NATO’s camp. The New American Century gang and their think tanks—who brought you Afghanistan, Iraq, Libya and Syria—would to leverage Russia out of Central Asia.

The most frightening aspect of current East-West tension is that there is virtually no discussion of the subject, and when there is it consists largely of distorted history and gratuitous insults. Vladimir Putin might not be a nice guy, but the evidence he is trying to re-establish some Russian empire, and is a threat to his neighbors or the U.S., is thin to non-existent. His 2014 speech at the Valdai International Discussion Club is more common sense than bombast.

Expansionist? Russia has two bases in the Middle East and a handful in Central Asia. The U.S. has 662 bases around the world and Special Forces (SOF) deployed in between 70 and 90 countries at any moment. Last year SOFs were active in 147 countries. The U.S. is actively engaged in five wars and is considering a sixth in Libya. Russian military spending will fall next year, and the U.S. will out-spend Moscow by a factor of 10. Who in this comparison looks threatening?"

 

Please read the rest of article at: http://www.counterpunch.org/2016/05/04/baiting-the-bear-russia-and-nato/

As Russians Struggle to Pay Bills, Debt Collectors Mimic the Mob.

Greg Krasovsky: Sounds like Russia desperately needs a tougher version of the U.S. Fair Debt Collection Practices Act!

See https://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices_Act

Things in Russia have gotten pretty bad on the debt collection front as the country's economy stagnates due to low oil prices and Western sanctions over Ukraine.

Just read this recent Moscow Times' article:

"Russia's Debt Collectors Bring Back Brutality of the 1990s.

According to Alexander Akhlomov, an executive at the United Credit Bureau, which monitors credit history, 11.5 million Russians held overdue debts by the end of December. Seven million people were more than 90 days in arrears. And an under-regulated, sometimes predatory collection industry is capitalizing on their predicament.
...
At the start of the decade, consumption was wild. "Time to have it all," said the credit companies in advertising campaigns. "Take it, you can return it later," the slogans crooned. And, as borrowing peaked and the economy stalled, a parallel collection industry grew up for those who couldn't pay.

Some banks began in-house debt recovery, but many began selling overdue loans to specialized agencies. These firms often operate on the edge of the law. "In most cases the activity of collectors is directly connected to criminality," the Prosecutor General's office said in a statement earlier this year. These agencies process more than 40 percent of bad debts, says Akhlomov — meaning that at least 3 million Russians are targeted."

See http://www.themoscowtimes.com/business/article/russia-s-debt-collectors-bring-back-brutality-of-the-1990s/559229.html
 
But there's some light at the end of the tunnel, as Russia's Rights ombudsman supports full ban on debt collectors in Russia:

"Russia’s new Human Rights chief Tatiana Moskalkova has told reporters that she supports a ban on private debt collectors and at the same time wants to improve working conditions of court bailiffs.

“I would support the idea of stopping the work of collector agencies and significant changes in the work of court bailiffs – their structure, status, functions and equipment, because the current level of their salaries causes low quality of their work and a constant deficit of skilled professionals,” Interfax quoted Moskalkova as saying on Monday.

In February, chairs of both parliamentary chambers jointly drafted the bill proposing restrictions on debt collector agencies. The document directly bans debt collectors from using physical force or threats, deceit or damage to property.

The collectors are also not allowed to disclose the information about debtors – either through personal contacts with relatives or co-workers, or through various media, like the internet or outdoor advertising.

The document also allows collectors only two phone calls and one personal meeting with an individual debtor per week. It is specified that neither phone calls nor meetings can take place at nighttime.

In mid-March, the bill was approved by the government without any correction, according to mass media reports."

See https://www.rt.com/politics/340830-rights-ombudsman-supports-full-ban/

Strict government controls on debt collection practices in Russia are just as necessary in Russia as they are in the United States, as self-regulation in this industry may be just like asking foxes to regulate their raids on chicken coups:

See "New ethics code for debt collectors introduced in Russia.

A professional association for debt collectors has introduced new ethics code which prohibits the use of several excessive measures such as discussing debt with debtors’ children, Izvestia newspaper reported on Tuesday.

According to Izvestia, the National association of professional debt collector agencies (NAPCA) was behind the new ethics rules. Last code was introduced 8 years ago and contained vague definitions.

The new code prohibits the debt collectors from speaking to debtors in disrespectful manner, hiding cell number during the calls or mentioning security agencies when talking to debtors. One of the most important innovations of the code is prohibition to talk about debtor’s debt with children and “third parties” as well as prohibition to disrupt the functioning of medical, educational entities and infrastructure objects, Izvestia reported.

Other prohibitions mentioned in the code extend to sending messages to debtor’s friends in social networks, discussing debtor with his or her colleagues at work. The new code obligates debt collectors to draft strategic approach and only use approved speech templates."

at http://www.rapsinews.com/news/20160426/275969763.html


Selected Excerpt from the New York Times Article "As Russians Struggle to Pay Bills, Debt Collectors Mimic the Mob.":

"MOSCOW — They have stripped and sexually abused a woman, severely burned a toddler by firebombing a house and broken a woman’s pinkie as a warning. Gang members, bandits, mobsters? Not exactly. These are debt collectors, a peculiarly Russian variety that is flourishing amid the country’s economic turmoil.

As a punishing recession stretches into a second year, people struggling to make ends meet are resorting in growing numbers to borrowing at astronomical interest rates that many cannot possibly afford.

With unpaid debts mushrooming, collection has turned into something of a blood sport reminiscent of the shocking gang violence of the 1990s, with threats and violence by debt collectors spreading across the sprawling Russian hinterland largely unrestrained by public authorities.

“As a rule, small sums are involved in these cases, and it is easier to recover them by physical force,” said Danila S. Mikhalishchev, a debt collector turned consumer advocate. “It is easier to frighten people than to sue them.”

In 2015, the amount of unpaid debt surged by almost 50 percent to $15 billion, or about 13 percent of all personal debt, according to Alexander A. Akhlomov of the United Credit Bureau, a private organization that tracks credit ratings. A borrower making no payments for three months is considered to be in default. Just since March of last year, the number of Russians in that category has leapt to 7.5 million from 6 million, he said."

Please read rest of the article at: http://www.nytimes.com/2016/04/30/world/europe/russia-debt-collectors-mob.html