Just over a year ago, President Obama signed into law the Ukraine
Freedom Support Act, which provided congressional backing to sanctions on
Russia following the Kremlin’s illegal annexation of Crimea and invasion of
eastern Ukraine. Since then, sanctions have hurt Russia’s economy and prevented
individuals in President Vladimir V. Putin’s inner circle from traveling to the
West. The Obama administration should be commended for sustaining a successful
sanctions regime.
But Washington must do more than just punish Russia. It must bolster
Ukrainians as they struggle to build a new, reform-minded government while
continuing to fight to maintain their country’s territorial integrity.
As winter sets in, the continuing war in Ukraine’s east has devolved
into an economic siege as Russia leverages gas supplies, coal shipments and
debt repayment to attempt to extract concessions from a Ukrainian government
that is still battling Russian proxies violating the Minsk II cease-fire. With
Ukraine’s economic output having shrunk by a quarter, the currency sharply
devalued and a population fearful of an uncertain future, Ukraine is teetering
on the brink.
Appropriately funding efforts to improve Ukraine’s stability is a down
payment on Europe’s collective security. Russia’s land grab in Crimea violates
the very security architecture — including the Helsinki Final Act responsible for establishing the inviolability of
Europe’s national borders — that has kept Europe secure since World War II. But
the durability of this system depends on the West’s willingness to defend it.
Failing to do so signals to both adversaries and allies that agreements among
nations simply do not matter.
Support for Ukraine’s democratic aspirations in the face of Russian
aggression is one of the few areas where both Democrats and Republicans agree.
But the gap between rhetoric and resources pledged is shockingly wide. Next
year, Ukraine can expect approximately $3 billion to $4 billion in conditional
support from the United States and the European Union, combined. This sum is
insufficient. Lawrence Summers, the former United States Treasury secretary, called
on Europeans to deliver on promises to support Ukraine’s reform efforts with
increased funding of $5 billion to $10 billion, calling it an important
“security investment.” He’s right.
Congress and the Obama administration should work together to provide an
additional $2 billion to $5 billion in economic support. At the same time,
Washington should seek to persuade the European Union to make a similar
commitment for a total of $10 billion, the optimal amount of support to allow
Ukraine’s government room to maneuver. If budget concerns prevent that, it is
essential that together the United States and European Union find at least $5
billion in assistance, the minimum threshold to ensure the viability of an
independent Ukraine that can sustain its nascent reform effort and withstand a
persistent campaign of economic sabotage by Russia.
This grand aid package could include loan guarantees, direct budget
support grants and debt swaps, as well as assistance to support reforms in key
sectors, like banking, energy and the judiciary. It could also be used to
encourage investment in Ukraine. Loan guarantees, which have been the preferred
method of support approved by Congress to date, should only constitute part of
the package. There is a limit to how much debt Ukraine can take on before
default. Loans could be paired with direct budgetary support to assist with
balance of payments and with debt swaps, which have a proven track record of
helping sustain young democracies: The United States granted them to Poland in
the 1990s.
As former American ambassadors to Kiev, we recognize one of the main
challenges in providing economic support to Ukraine: corruption. This is why
any future assistance package must be made conditional on the Ukrainian
government’s commitment to accelerate reform and root out corruption. The
current Ukrainian leadership is far from perfect, but the seeds of
accountability have been planted, and Ukraine’s robust civil society ensures a
steady supply of nurturing sunlight. The recent resignation of a notoriously
corrupt parliamentary kingmaker and the appointment of a new top
anti-corruption prosecutor are signs of Ukraine’s progress.
Longtime observers of Ukraine who are impatient for change have
criticized the pace of reform. But the move toward market pricing in the gas
sector, cleaning up the banking sector by closing insolvent banks and
introducing transparency checks into banks’ ownership structures are
commendable. So is the creation of the National Reform Council, the development
of an official anti-corruption strategy and the gradual adoption of
e-government and other transparent-governance tools.
A new Ukraine was born in the Maidan, but the United States and Europe
have thus far failed to make an adequate commitment to its success. That must
change. The West must now provide support commensurate with the military and
economic threat Kiev faces, while also pushing the Ukrainian government to
reform. A global order based on rule of law is at stake. Defending it cannot be
done on the cheap. For the West, a Ukraine impoverished by Kremlin aggression
will be far more costly.
___________________________________________________
John E. Herbst, director of the Dinu
Patriciu Eurasia Center at the Atlantic Council, was American ambassador to
Ukraine from 2003-6. Steven Pifer, a senior fellow at the Brookings
Institution, was ambassador to Ukraine from 1998-2000. William B. Taylor, Jr.,
executive vice president at the United States Institute of Peace, was
ambassador to Ukraine from 2006-9.
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