Anders Aslund: Anything but impartial justice and rampant corruption

According to specialist on Eastern Europe, Anders Aslund, the main problem in post-Soviet economies is that the elite work solely in their own interests.  As a result they are simply not fit to carry out the reforms needed to ensure stable development as well as prosperity for the country and its people.

In an interview for the Internet publication Left Bank, Mr Aslund was reminded of his previous statement that President Yanukovych is in many ways copying Russia’s political model, boiling down to concentration of power in certain hands and wealth among those with the same views. Why, they ask, are many post-Soviet countries following this model?

In general hose in power work either for the people or for themselves. In well-tuned democracies there should be a system of controls and balances working on those in power to ensure that they work for the people. Since not one of the post-Soviet countries is a well-turned democracy (not counting the Baltic states), they work for themselves – for a limited ruling elite and not for the people. In order to succeed in this, certain repressive measures are needed. The EU brought democracy to its part of Eastern Europe, but did not find other forces strong enough to do the same with the rest of the former Soviet Union.

He was asked how he saw this political-economic model developing and how viable it was for Ukraine which, unlike Russia, does not have huge energy resources to keep the economy afloat.

He answered that both Russia and Ukraine are ridden with corruption with corruption being concentrated in the leadership of the country.  He cites many of the forms of corruption, such as major bribes at the highest level through rake offs on public procurement. “Since the elite is getting rich on corruption there are no grounds for believing that Russia or other post-Soviet countries will undertake serious reform to give the impulse for economic growth while there is no democratic breakthrough in these countries. After a certain amount of growth linked with the restoration of the economy, the rate of growth has to fall. This has certainly happened in Russia, and probably in Ukraine.

The new Ukrainian regime announced an impressive number of reforms. However the overall problem is that the aim of economic policy is to make a limited circle of people close to the regime rich. The quality of legislation remains low, and the judicial system is considered absolutely useless without any signs of becoming healthier.

What would you recommend that Yanukovych’s team do at present, primarily in economic policy?

That they stop stealing!

With regard to land reforms

When it becomes legal to buy and sell agricultural land, the price of land could relatively quickly quadruple since it will be possible to use land as security for bank loans. In Ukraine’s agriculture there will be a credit boom which could raise agriculture to a new and much higher level of output. Productivity per hectare could quite easily also quadruple.

There is the view in Ukraine that for the sake of so-called stability the West will forgive the Ukrainian President a certain retreat from the standards of democratic society. Obviously on condition that Viktor Yanukovych does not turn Ukraine into something like Belarus. Is that really the case?

I think that there here the concepts of stability and functionality are becoming confused. The main problem for Ukraine under Yushchenko was that he spent all his time on abusing Tymoshenko and blocking everything that she did. Unlike the previous administration, Yanukovych’s could bring in a fair number of serious laws.

Is the West following the court trials of Tymoshenko, Lutsenko and other former high-ranking Ukrainian officials? Should the present regime be worried about sanctions if the trials continue in the present mode?

None of those who even vaguely understand the situation take Ukrainian courts seriously, and the present regime is politicizing the courts even more. After three cases against Tymoshenko collapsed farcically, the authorities (the Security Service) are preparing a fourth. It is too obvious that Yanukovych’s Administration simply wants to put her in prison, it doesn’t matter what for. This is anything but impartial justice and it is crowned by being so clumsy and incompetent that everything is clear. it is possible that such clumsiness is unacceptable for the West. One has to ask why there are so many sanctions against Belarus, yet none against Ukraine if such things are happening.

Slightly abridged from the interview in Russian at http://lb.ua/news/2011/08/02/108529_Anders_Aslund_.html