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Reforming Ukraine
A New Ukraine, Struggling to Be Born

Ukraine has a base of educated and committed citizens who dearly want the country to be more like Poland and less like Georgia—and who just might be able to build the political and economic strength a successful Ukraine would need. A pair of recent articles by Leonid Bershidsky over at Bloomberg introduces us to these hopefuls, and the immense challenges they face. In the first, Bershidsky tells us of Adomas Audickas,

a 32-year old Lithuanian who is in charge of sorting out Ukraine’s state-owned companies. He graduated from the French business school INSEAD just last year, yet he’s not a novice; he did the exact same job for the Lithuanian government as vice minister of economics. Now, Audickas is an advisor to Ukraine’s economics minister, Aivaras Abromavicius, another Lithuanian.

For the first two months on this job, Audickas worked without pay. (Abromavicius had recruited him by outlining the ambitious task at hand.) Now, international donors fund his team of seven who sift through the Augean stables of Ukraine’s public sector economy. After three months, Audickas isn’t even sure how many state-owned companies Ukraine has; estimates range from 3,000 to 4,000. The number Audickas’s group is working with is 3,350 — 1,833 of them operational and the rest in various stages of bankruptcy and liquidation.

“It’s like a private equity company with these 3,000 mostly inefficient assets,” Audickas told me. “Its limited partners are the Ukrainian people, and they don’t know much about the portfolio.”

As Bershidsky goes on to explain, Audickas is but one of many thirty-somethings working to guide Ukraine’s institutions toward privatization and solvency, rather than the more traditional Ukrainian route: falling under the control of a corrupt oligarch.

He and those with like minds face tremendous resistance, since so many Ukrainians are settled if not comfortable in the old system. In the public sector, wages for jobs like being a police officer have often been set at an unlivable low, specifically because they price the fruits of corruption into the job. Using the law to fight this endemic and near-ubiquitous corruption is one of the hardest and most important jobs somebody working for a reform could do. In another recent article, Bershidsky tells us of a reformer who does just that. We urge you to read both pieces in full.

As Walter Russell Mead wrote in February, the new Ukraine has a critical mass of citizens who genuinely want to move away from the repeated failures of the post-Soviet years. These young people are awfully ambitious, and we wish them well. It’s possible to reform Ukraine and build it into a strong and prosperous state—but only just, and the window of opportunity could be closing.

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  • Pete

    So, the young people will save the Ukraine.

    How?

    The country’s demographics are imploding. It’s fertility rate is about 1.53 which is far, far below the replacement number.
    http://www.prb.org/Publications/Articles/2014/ukraine-population.aspx

    The Ukraine is committing demographic suicide, and for it America should risk war with nuclear Russia.

    Oh, where or where are the so-called ‘realists?’

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