The elections are underway in Ukraine and voter turnout is strong in Kiev and the west. All over social media people have posted pictures of Ukrainian citizens that live abroad, lining up to vote at consulates around the world. I can feel the national pride and enthusiasm, as citizens come to vote wearing the traditional Ukrainian embroidered blouses and shirts. The exuberance is palatable, and can even felt through the internet.
Voter turn-out is a critical factor that will determine the legitimacy of these elections. And watching the live reports gives me a sense of hope. But that optimism is quickly wiped away when I read about the elections in Eastern Ukraine. In Donetsk, the separatists have forced at gunpoint, the closing of many polling stations and smashed ballot boxes. Few people have voted there and where they have, ballots have been stolen.
On Friday, Putin was interviewed by CNBC at the Economic Forum in St. Petersburg. Journalists tried to force Putin to answer the question about whether or not he would recognize this election. He finally said that he would; but Putin is also known for saying one thing and doing noting of the sort. The reality is that an independent and thriving Ukraine poses one of the greatest threats to Putin’s presidency so he will continue to torment Ukraine until his dying day.
There are 21 candidates on the ballot and the leading candidate is Petro Poroshenko, the Chocolate King – owner of the confections company Roshen [great chocolate by the way]. If Poroshenko doesn’t obtain more 50% of the votes, there will be a run-off election held in mid-June. But let’s say Poroshenko wins the election.
I have great faith in Poroshenko, but only because I don’t have much choice. Hearing the platforms of the other candidates doesn’t inspire much optimism. Poroshenko is a successful businessman, which could translate into the implementation of strong management which is exactly what Ukraine needs. He is extremely wealthy, which could diminish the need for theft and corruption, although there is no guarantee of that. Poroshenko supports a free and independent Ukraine, but also understands the importance of Russia as both a neighbor and trading partner and he will likely try to stabilize that relationship.
The problem is that Ukraine’s interests are conflicting and the balance is very delicate. Poroshenko will look to West and will try to bring Ukraine closer to Europe. However, I don’t think that he will push for Ukraine to join NATO because he knows that is Putin’s greatest fear and he will not want to back Putin against the wall. He may eventually push the issue of Ukraine joining the EU – but he does I hope he will follow Poland’s lead and maintains Ukraine’s own currency – a decision that kept the Polish economy from recession during the economic crisis, over the last several years.
But whoever wins the election, the agenda for the next president is clearly laid out and it is as follows:
1. To stabilize the country and address the insurgents in Eastern Ukraine. Unfortunately, a solution to this may include giving up Donetsk and Luhansk, either to Russia or allowing them to be independent states.
2. Fix the Economy. This is a Herculean task as Ukraine is teetering on the brink of bankruptcy.
Unemployment has been high and as a result of the crisis has increased to approximately 20%. GDP growth which was almost flat will now be several percentages into the negative.
A critical component of fixing the economy is to alleviate the corruption which prevents foreign investment by foreign companies.
On a positive note, Ukraine has a number of resources that over time could bring the country to financial independence and give it a competitive advantage.
In terms of resources, Ukraine has enough natural gas (and some oil) to not only supply its own country, but it has enough to export to Europe. The challenge will be to extract the gas from the soil and without a proper investment this will be difficult to do. Even an aggressive energy plan will still take approximately two years for Ukraine to become energy independent.
Ukraine has world class soil so agriculture is another resource. Ukraine also produces heavy metal and machinery, and has a dominant skill in this sector as its people are highly technical. One of the reasons that Putin wants eastern Ukraine is that it has heavy industry and factories that make the sophisticated ballistics and machinery for Russia’s military.
But the greatest resource of Ukraine is its workforce – highly educated and very technical with a strong inclinations to math, science and engineering. If properly leveraged, Ukraine’s workforce can give the country its greatest competitive advantage in a world economy.
Ukraine has the potential to be a great nation, but it needs strong leadership. I am hopeful that today’s election will be a positive step forward in what will be a very long and difficult road to freedom and independence. But here in the United States we are celebrating Memorial Day which reminds us that there there is a cost to freedom. But when you live in place where you are deprived from basic human rights you come to understand the battle for democracy is worth the fight.
Keep fighting Ukraine – I promise that it will be worth it!