Francis O’DONNELL: “Quality of life is not only income growth but also access to justice and free information”

Francis Martin O’Donnell, the Resident Coordinator of the United Nations system in Ukraine, has been working in our country since 2004. He coordinates the activity of UN agencies working in Ukraine within the framework of different projects and programs. In the following interview O’Donnell talks about cooperation between the UN and Ukraine and how UN agencies are helping.

UKRAINE SHOULD CONTINUE REFORMS

What are the UN’s priorities in its cooperation with Ukraine?

“We recently implemented a system that makes an emphasis on the support of governmental efforts concerning the deepening of international integration. It became understandable that Ukraine would want to maintain the best possible relations with its different neighbors, with all of its neighbors, including its historic relations with the Russian Federation as well as other countries, and also its very close relationships in recent years with those countries that are making very strong strides towards deepening democracy. At the same time, the depth of relations with Europe seems to be increasingly questionable. I think this is partly because of the sense of frustration in some Ukrainian circles that wanted to fast-track Ukraine into the European Union, which is having a constitutional crisis now and absorbing new members. This creates a difficult challenge of waiting for Ukraine in terms of the European integration prospective. But Ukraine should continue to pursue reforms, because the continuity of these reforms is essential for spreading the benefits of rising economic welfare for most people in Ukraine.”

IT IS IMPORTANT NOT TO SIT ON THE LAND ISSUE TOO LONG

Which problems, in your opinion, should Ukraine solve first?

“There is a risk that we can see the situation where the disparities between the urban and rural environment are growing in Ukraine. So it is very important to start to move energetically forward to introduce the final stages of land reform legislation and also to strengthen the institution of registration systems that would allow the early lifting of the moratorium.

“There is a certain school of thought that thinks that the welfare of people in rural areas, especially on small farms, is best served by freezing the sale of land, because in the situation of the land market the concern is that there would be someone’s speculation on land values, and the poorest farms will get the best value for any land they might sell, if they want to sell. This is to some extent a reasonable concern, but it should be counterbalanced by another concern, which is that small farmers in Ukraine, if they want to expand their production and develop their farming, need to access credit. Ukraine is now in the situation where the substantial influx of foreign companies is making access to credit much easier for Ukrainians as consumers, as industrialists, and as small businesspeople, and indeed this should be the case for small farmers as well. Credit is more easily affordable, there is a substantial interest on the part of lending institutions to widen their client base, but so far this has not been able to significantly affect the urban poor, because they are unable to use their land title as cadastral in order to access credit. They can, of course, mortgage their future crop production, but this is not an optimal alternative compared to the possibility to cadastralize their holding, which does not mean that they will sell their land, but the land will have a market value that could be determined. And that could be used in order to gain access to credit, and have a possibility to develop at the very same level. And from this point of view it is important not to sit on the land issue for too long; it has already been a very long time that this moratorium has been in place. We would strongly recommend that monitoring be lifted as soon as possible, and in the meantime the Verkhovna Rada should enable the process of legislation.”

STABILITY MAY BE GAINED THROUGH REFORMS, NOT AT THE EXPENSE OF REFORMS

One of the pre-election slogans of today’s coalition was to provide a better level of life right now. Why do you think the new coalition has not fulfilled its promises? Also, is it true that improving the living standards of the population is directly linked to the fast pace of production, as First Deputy Prime Minister Mykola Azarov has said?

“Yes, it is quite interesting that this new government came to power with the slogan “Stability, not reforms.” We would say that you could have stability through reform, not at the expense of reforms. This problem of constitutional uncertainty at the moment is making Ukraine look like a higher-risk situation than it necessarily needs to be. In fact, I personally believe that fundamentally Ukraine is a stable society with a stable political environment. It is, of course, a contested political environment, but that is normal in a democracy. But when you get into the question of constitutional domains and prerogatives, it is important at the relatively relevant division of labor and prerogatives between, on the one hand, the president and Cabinet of Ministers, but also between parliament and the judiciaries. But it would be in Ukraine’s best interest in terms of its own self- perception to attain a constitutional compromise. I think it would also be important that people maintain respect for political institutions - this is very important for democracy that people have faith in the legitimacy of those institutions. It is in the competence of their leaders of government, parliament, and the president to always try to build the trust and confidence of citizens in those political institutions. So we would encourage a resolution of the constitutional dilemma in the country.

“On the question of goals...There is no doubt that there is clear evidence that the fast development of the economy will certainly lead to the rise of incomes, and the link between growth and rising level of human development is less obvious, because we determine human development as access to new quality of life and new development perspectives. And new qualities of life do not only mean the rise of incomes, but access to justice, freedom of information and association, the ability to practice democratic rights, and to enjoy a full spectrum of human rights. But people should continue to have vigilance towards the behavior of institutions, of necessary accountability of those institutions to citizens; there is a need to do more to transform the relationship between state and citizen, and towards one of service rather than domination. So I would consider this government’s general perspective of the employment of macroeconomics to fulfill stability as a positive one. I think Mr. Azarov’s approach to managing the economy is a reasonable and favorable one.

“We do think it is important to maintain a certain amount of fiscal austerity until it is too much of a populistic expansion of expectations; the unjustified increase of benefits that may be eroded by inflation must also be kept in check. Besides the rapid influx of capital through the banking system from foreign banks, which is a positive thing, access to credit should also be increased. On the other side, there is a tendency for much of this credit to be released in dollars rather than in hryvnias. Thus, a rapid increase of the dollarization of the economy may lead to exchange rate instability, and this could be risky as well.”

Generally speaking, the hryvnia is a strong currency, and we don’t see too much reason for devaluation economics fundamental for Ukraine in terms of maintaining the devaluing of the hryvnia at the present time.”

INSTITUTIONAL REFORMS SHOULD BE PROMOTED IN ORDER TO SATISFY ALL CITIZENS’ NEEDS

You mentioned that many UN agencies are working in Ukraine. How are they helping to improve the situation in Ukraine?

“First of all, in the past two years we have had three important reports with a top-class level of expertise from Ukraine and outside Ukraine, on fundamental policy challenges that any government will face in the current environment in Ukraine. These reports remain valid in terms of the general prescriptive content that is, in fact, as far as acceptability or of the recommendations of the reports, or as far as the interest of the government is concerned, every government in the past few years has looked, I believe, closely at these recommendations and taken them into consideration in their policy and strategy. Nonetheless, towards the end of last year the EU and a concrete team of agencies here prepared a document on policy recommendations for consideration of the state authorities; and by state authorities we do not mean to restrict just to the government but also the members of the Verkhovna Rada, and the president as well, and the judiciaries. So, these recommendations have a very strong content in terms of emphasizing the importance of things that need to be done to consolidate democracy in Ukraine. So, first there would be talk on the need of constitutional resolution, as well as the promotion of the institutional reforms.

“Second, we think, it’s very important to continue to empower civil society in order to deepen democracy by helping the civil society to actively function more effectively, to flourish without bureaucratic impediments, and by reforming the legal frame, that could allow a more free social dialogue; but also by means of establishing public consulting mechanisms between government and society.

“Thirdly, by democratizing health care and ensuring financial reforms in the sphere of health care.

“Fourthly, by making HIV and AIDS a national concern, because it is continuing to make inroads into the population, increasing from 1.4 to almost 5 percent of the population, and it is going to be a dramatic way for Ukraine.

“And lastly, by democratizing the economy in order to reduce the disparities between urban and rural regions, and also by spreading the benefits of economic growth by promoting the development of smaller enterprises.

“What practical steps do we take? The UN has been involved in a whole range of international technical programs, programs coming not only from the UN system but from the European Commission, from the US system, from Canada, Japan, and many other countries, including Israel.

“As for very specific programs, one of the very specific areas for our activity is preventing harm, so what we are doing on HIV-AIDS and tuberculosis is aimed at protecting the citizens from the possibility of harm, and also helping people suffering from these diseases, to cope with them, to recover. I think there should be much more done in this area. We have to look for a more active approach.

“In terms of helping people directly, we have done a lot in the past year in terms of legal assistance and creating advisory bodies and centers, as well as creating local communities in six cities in two oblasts. We helped to prevent human trafficking, so that’s another sphere where people can directly benefit.

“On the labor front, we are promoting a distinct work program and in answering a social dialogue between the government and the private center and trade unions. Much of this has to do with the social inclusion of the disabled, especially vocation and rehabilitation of the disabled, thus giving them access to labor.

“We have been actively involved in supporting the preparation of draft legislation on refugees, and we are also helping Ukraine to control borders in a more effective way. And one of the most successful programs is underway: it is about the EU border system mission between Ukraine and Moldova. This is implemented by the United Nations.

“On the institutional front, of course, we have been definitely involved with institutional reforms, and we helped to conduct a functional review of some ministries last year, made recommendations concerning the way these ministries may be further strengthened.

“We’ve also been working at the local level in terms of municipal strengthening, helping municipalities deal with challenges, such as energy efficiency, as well as in dealing with community organizations. We have three regional programs, one of which is the Chornobyl Program, which continues; another one is the Crimean Program, and the Municipal System Development; they will easily be brought together in another local program.”

CORRUPTION IS A THREAT TO THE POPULATION

How would you assess the index of human development in Ukraine?

“The first observation is in terms of income. The second step is in terms of educational indicators. Ukraine’s educational indicators should be improved in terms of the technology of the 21st century. And of course, corruption should be removed from the educational sphere, in the same way as from the state’s other structures. We also should make a positive issue out of the negative trends existing in the society, such as different diseases, alcoholism, and thus lengthen the life expectancy among the population.”

You mentioned the UN’s recommendations to the state. What was the reaction of the Ukrainian government?

“In terms of the areas where we would like to see much more effective cooperation, what we have to deal with is corruption in society, in education, in state structures. Corruption is a threat to the human population. We will continue to cooperate with the government. But it is necessary for the government to put this problem on the radar screen.

“Last year we hoped for more cooperation between ourselves and Ukraine, to provide more resources for the UN to work more effectively in Ukraine both in terms of financial counterpart contributions to programs and projects, and also in terms of expanding the capacities of the United Nations. We are very pleased to see that Ukraine has moved to establishing an agency for international development. And we will be very interested in the ways we may help Ukraine use this capacity to use its resources abroad, to help other countries.”

“WE ARE IMPROVING PEOPLE’S LIVING STANDARDS BY CREATING A STABLE ENVIRONMENT WHERE DEMOCRACY MAY FLOURISH”

Can you name the countries where cooperation with the UN has brought good results?

“Most of our work consists in cooperating with different governments. We have been cooperating with many governments; we are spending a lot of our resources investing them in institutional transformation. And I think that from that point of view, the UN system has been very effective in helping to develop institutional capacities in many countries in the world. And most notably, we helped those countries that were recovering from difficult situations. It becomes easy to see if you start to think how Cambodia is a democracy with an economy that is recovering, with people starting to work in a normalized environment after the devastating genocide. You see clearly, you know, how the UN helped the country to come to life again. And the same can be said about the situation in the Balkans, in Bosnia in particular. In Bosnia we have seen how the UN gave not just humanitarian assistance, but also helped bring peace to that situation.

“In the East Timor situation, a country was brought into being after a post-colonial struggle for independence and finally achieved three years ago. It still faces challenges in terms of stability, but now East Timor is a UN member state. And we have to expand democracy in the parts of the world where it has not existed before and to improve people’s living standards by creating a stable environment where democracy can flourish and the economy is back on its feet again.”