Sunday, September 15, 2019

Ukrainian Economy Doing Much Better than Russian One, Inozemtsev Says

Paul Goble

            Staunton, September 11 – The spate of bad economic news in Russia has led Moscow to try again what it has done so often in the past: tell Russians that no matter how bad things are in their country, the situation in the “non-existent state” of Ukraine is worse. But now, Moscow has a problem: the situation in Ukraine isn’t worse but better, Vladislav Inozemtsev says.

            Despite all the problems economic and otherwise Ukraine faces, the Moscow economist says, in the second quarter of this year, Ukraine had the highest rate of GDP growth in the last three years (4.6 percent), salaries rose 10 percent, capital investment 17.8 percent, and construction 21.2 percent (

            The Ukrainian government argues that the main drivers of this acceleration were expanded agricultural production and retail trade growth in the first half of the year, Inozemtsev says. But those developments “have their own causes,” and they are far from the only things going on that are boosting the Ukrainian economy.

            In part, he continues, the large percentage increases reflect the low base from which Ukraine started given the fall in real incomes over the last four years and the weakening of the national currency.  But in the last year, he says, “the trend has changed.” Openness to Europe has allowed Ukrainians to work abroad, increasing competition at home, and boosting confidence.

            Obviously, the growth in Ukraine’s GDP from 2015 to 2019, from 90.6 billion US dollars to 131 billion, is in large measure a recovery and won’t be “eternal, but it must not be underrated” as Russian commentators often do. And there are several other circumstances that lay the foundation for optimism about the future.

            “Cooperation with the US has become a major boon for Ukraine,” he continues. Over the last four years, EU investment has helped open “more than 200 industrial enterprises;” exports to the EU have risen more than 30 percent since 2015; and even the liberalization of the visa regime has helped promote economic growth.

            Also helping Ukraine to grow economically is that its system is still oligarchic but it is competitive. That is, various oligarchic groups are represented in the government, but they have to compete with each other, unlike in Russia where competition is usually suppressed, something that “kills the investment climate.”

            Moreover, and in contrast to Russia, Ukraine has “a quite effective judicial system, the rights of investors (especially foreign ones) are respected, and entrepreneurialism is not, unlike in Russia, a criminally punishable phenomenon. Even state companies there to a much greater degree than in Russia act like commercial organizations and not like government agencies.”

            “All this lays the foundation for the maintenance of positive macro-economic trends,” Inozemtsev says.

            Moreover, not only have government and police raiding of businesses fallen, but there is hope that with the coming to power of a new regime taxes will be reduced and bureaucracy will be cut back.  And the new regime may gain statistical growth if it is able to shift more of the Ukrainian economy out of the gray zone.

            At present, approximately 30 percent of GDP is in the gray zone. If the government can reduce that by several percent, it will see reported GDP go up by a similar amount. While that reflects bookkeeping rather than production, it will by itself give more people confidence in the economy and thus contribute to real growth.

            “Undoubtedly,” Inozemtsev concludes, “Ukraine remains in many ways a country with many problems … but the direction of the development of the Ukrainian economy toward liberalization, openness to the outside work and the encouragement of competition leaves no doubt and therefore, as in 2004, one can say ‘Ukraine isn’t Russia.’”

            “Neither in a political nor in an economic sense.”

Karelian Republic Far Less Free than Komi Because Moscow Fears Influence of Finland, Shtepa Says

Paul Goble

            Staunton, September 11 – Paradoxically, Karelia which shares a common border of more than 750 kilometers with Finland has far less freedom of speech and far fewer opportunities for civic activism than does its fellow Finno-Ugric republic Komi which has no such border, Vadim Shtepa says.

            But this paradox is more apparent than real, the editor of Tallinn’s Region.Expert portal says, because it reflects Moscow’s view that Karelia’s location on the border “is not a stimulus for cooperation and development but rather a risk and a threat” and thus the center allows things in Komi that it immediately suppresses in Karelia (

            What makes this divergence so striking, Shtepa says, is that during perestroika, Karelia was one of the most progressive regions of the country. It had its own Peoples Front, it adopted its own declaration on state sovereignty, and it sought to promote the creation of real federalism within the Russian Republic.

            And taking advantage of cooperation with Finnish firms, Karelia’s capital Petrozavodsk saw its apartments wired for the Internet already in 1997, “even earlier than was the case in Moscow,” the regional specialist says. During all this time, the Komi Republic was mostly a quiescent backwater.

            “But today the situation has radically changed. Komi activists are in the lead in protesting Moscow’s plans for a trash dump at Shiyes, and Oleg Mikhailov, a member of Komi’s State Council, has very publicly decried “Moscow’s ‘colonial policy,’” something no Karelian politician could do without suffering serious reprisals. 

            Moreover, in the Komi Republic there has emerged an active youth movement “which combines the struggle for civil society with the promotion of the cultural uniqueness of their republic. They have even thought up a new version of the republic flag, one of ‘Scandinavian type’” which Shiyes protesters are now carrying.

            What is striking is that they aren’t being persecuted or prosecuted for doing so, Shtepa continues. In Karelia, the situation is entirely different and entirely different from what it was 30 years ago during perestroika.  Yes, some activists have sought to revive the Otava flag but generally they’ve kept it and themselves out of politics.

            Displaying this flag or talking about the Ukhta Republic is dangerous, Shtepa says.  And Karelians haven’t been able to achieve even the modest de-sovietization others have: “Practically all the central streets of Petrozavodsk up to now bear the names of communist ideologues and Soviet leaders right up to Andropov.”

            “Moreover,” Shtepa notes, “Karelia is the only Russian republic in which the titular language does not have official status.” The regime says it can’t make it the state language because it uses the Latin script and Russian law requires that all “state languages in Russia” use Cyrillic.

            When Aleksand Khudailaynen became republic head in 2012, many Karelians hoped for a positive change largely because of his Finnish name. but they were quickly disappointed. He closed the only Baltic-Finnic philology department at a Russian university and began broadscale repressions against opposition figures in the republic.

Galina Shirshina, the elected opposition mayor of Petrozavodsk was forced out and direct elections for the mayor were cancelled. Local Yabloko leader Vasily Popov was forced to ask for political asylum in Finland. And Shtepa himself ultimately left, for Estonia, when officials signaled that he was in trouble. 

The situation in Karelia has become even worse since Artur Parfenchikov replaced Khudilaynen in 2017. Most notoriously, he has overseen the persecution of historian Yury Dmitriyev who unearthed and then documented the mass graves of Stalin’s victims at Sandarmokh. 

That created a problem for Moscow which had decided to “rewrite the history of Sandarmokh” just as the Soviets did about Katyn and suggest that the bodies buried there were “not GULAG inmates but Soviet POWs shot by the Finns in 1941-1944.” In addition, Parfenchikv has brought in numerous security types to serve in his regime.

As a result, as Karelian journalist Andrey Tuomi has pointed out, Karelia is now returning not to the days of perestroika but to those of the 1930s when Soviet security officials ran Karelia because there were so many GULAG camps there.

Is Kyrgyzstan about to Become the Last Turkic Republic to Move from the Cyrillic to Latin Script?

Paul Goble

            Staunton, September 11 – When the Soviet Union disintegrated, scholars and officials in all five Turkic republics called for changing the alphabet their national languages used from Cyrillic (Russian) to the Latin script. As of now, four of the five have taken serious steps in that direction, although none has been able to do it without difficulty.

            Now, after many years of discussions in which opponents argued that the shift would cost too much money for the impoverished republic and make it more difficult for Kyrgyz to use Russian, something important because of the large number of migrant workers from there in Russian cities, Latinization is again taking center stage in Kyrgyzstan.

            In recent days, there have been a series of articles, academic conferences and discussions in the parliament in which ever more people have come out in favor of making the switch in order to bring that republic into line with its Turkic counterparts and make the learning of English easier ( and

            The arguments for and against such a shift in Kyrgyzstan repeat the arguments that have taken place in the other Turkic republics (cf. and  

            But there is one additional twist: Kyrgyzstan has long been closer to Russia than the others and is clearly worried about taking a step that would be highly offensive to Moscow. Consequently, Kyrgyz opponents of the move are saying that Tatarstan and Bashkortostan do just fine with Cyrillic alphabets so that Kyrgyzstan can as well.

            That argument may be persuasive to some, but it is a double-edged sword: If Kyrgyzstan in the end does make the change bringing all five Turkic republics into line with Turkey and most of the West, there will undoubtedly be even more pressure in Tatarstan and Bashkortostan for a similar change, despite Putin’s law against it.