Phoenix Rising in the Euromaidan?

360 degrees of a protest at the Euromaidan.

From various recent photos, it could be presumed that Ukraine is consuming itself into a fiery maelstrom. However, the seeds for these protests lie in the recent past, starting with the Orange Revolution. In 2004, Viktor Yanukovich (show in red for clarity) was running against Viktor Yushchenko (shown in orange) for the presidency of Ukraine. Bizarrely, even before polls had started, Yushchenko had been poisoned with dioxin, leaving him pockmarked and scarred. This was very suspect considering that Yanukovich had a history of criminal activity through assault, battery, and robbery. The exit polls gave Yushchenko a margin of victory of 11% while the official results declared Yanukovich the victor by 3%, sparking massive protests in the street. After many months, threats of secession from the pro-Russia East of the country, and a re-run of the polls, Yushchenko won by 8 points and finally took office as the president of Ukraine. The political intrigue did not end with the Orange Revolution. Viktor Yanukovich was elected president in 2010, beating the populist opposition figure Yulia Tymoshenko, one of the leaders of the Orange Revolution, which the international community observed as free and fair. Shortly thereafter, Tymoshenko was arrested and convicted to seven years in prison and fined $190 million for supposedly signing a disadvantageous contract with Russia for natural gas when she was prime minister. There were more protests, though smaller in nature and mostly only Tymoshenko supporters.

The effects of the dioxin poisoning on Viktor Yushchenko.

Within this politically charged atmosphere, there was always a geopolitical divide between pro-Europe factions and pro-Russia factions. With the return of Vladimir Putin to the presidency in Russia, there has been a revival in the idea of a Eurasian Union. Having already lowered tariffs and customs duties, Russia, Kazakhstan, and Belarus aim to create an economic union similar to the European Union. Key to this Eurasian Union is Ukraine, as it is one of the biggest markets from the former Soviet Union. Russia is the destination for a quarter of Ukrainian exports. One of the main worries for Ukrainians is that a Eurasian Union will lead to a political union dominated by the Russia, as Putin has been seeking closer ties with the former states of the Soviet Union.

Through this whole background, Ukraine was slowly inching towards European integration. Under Yulia Tymoshenko, a EU-Ukraine Association Agenda was agreed upon in 2009. Yanukovich continued closer ties with the EU through negotiations to lift visa requirements and establish a free trade agreement with the EU. However, November 2013, the Ukrainian government decided to suspend agreement talks, sparking the largest protests in Kiev since the Orange Revolution. Shortly thereafter, Ukraine and Russia signed a treaty where Russia would buy $15 billion in Ukrainian bonds and supply natural gas at a reduced rate. This is widely considered to not only keep Ukraine in the Russian sphere of influence, but also to keep alive the dreams of the Eurasian Union. Russia has even tried to influence the Ukrainian economy by banning the import of Ukrainian chocolate.

Protesters in Kiev battle with police on the streets.

This has not set well with the Ukrainian people, especially those around Kiev. They have set up protests in Independence Square, now known as the Euromaidan, camping out there since November 2013. Protesters have barricaded themselves in government buildings, including the ministry of justice and Kiev city hall. The Ukrainian government passed a series of harsher restrictions on protests, known by protesters as the “dictatorship laws”, by a show of hands. These laws include such flagrant violations of civil rights and protests, such as trial in absentia and a blanket amnesty against those who commit crimes against the protesters, like the security and law enforcement officers. The law with the most far-reaching consequences is the law requiring non-governmental organizations accepting foreign funding to register as “foreign agents”, modeled on a similar law passed in Russia.

The Ukrainian parliament votes for restrictions on protest with a show of hands.

In Russia, the “foreign agents law” has been used to crack down on civil society organizations. The Golos Foundation, a civil society organization that helps monitor elections, has been fined $10,000, even after they stopped receiving funding from foreign sources. Amnesty International, Transparency international, charities, non-orthodox churches, and even a french language school have been raided by the Russian security forces trying to weed out “foreign agents”. The nature of the law has been to “stigmatize and discredit NGOs engaged in human rights, election monitoring, and other critical work”. In essence, the law has been used to stymie dissent from organizations promoting community-wide discourse. There is the fear that Yanukovich, with his his criminal history and suspected involvement with vote-rigging, could clamp down on civil society and harass organizations in a similar manner as they have in Russia. Luckily, the Ukrainian parliament repealed the anti-protest laws with near unanimity. However, as it’s shown in the past, the Russian bear is always waiting in the wings.

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When All Else Falls, Remittances Rise

After the recent military ousting of president Morsi by the Egyptian military, the US has decided to put a cap on military aid to the tumultuous country. This is not the first time. Back in August, the U.S. had cut some of its economic aid to the Egyptian government. Cutting off military aid may have a louder effect, considering military aid to Egypt greatly  surpasses economic aid. Thus far, the Egyptian government has been expectedly peeved in response to these actions.

With government aid in the news, it’s relevant to look at some of the other financial flows to Egypt. At CGP, we try to get a more complete picture of foreign assistance by looking at investment, philanthropy, and remittances.

With the recent turmoil, investment, the most fickle of the four flows, has subsided after the sharp rise in the spring of 2013. Much of this earlier rise came from neighboring Arab nations, after Europe and the US pulled out. Since the military takeover, sources suggest that all in all FDI has dried up and billions have been lost.

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