published on February 2, 2021

To Kyiv… with Love? International Assistance and Ukraine’s Self-Reliance

by Maryna Rabinovych

International assistance is becoming ever more politicized as donor countries openly use aid to achieve their geopolitical aims. This has been salient amid the Covid-19 pandemic: from China’s deployment of medical teams and supplies worldwide, to “from Russia with love” packages in Italy or the United States. In Ukraine, since the 1990s, funds from Western donors have been earmarked for democratic and market reforms. Yet, the lack of local support for such reforms has resulted in backsliding and aid dependence. Ukraine received approximately US$3 billion of macro-financial assistance in 2020. Which donor agendas are being promoted in Ukraine? How has Ukraine benefitted so far as a recipient country? And why should the national government and international donors work together on a self-reliance strategy for Ukraine?

Upon the end of the Cold War, the United States adopted the Support for Eastern European Democracies (SEED) Act in 1989, with a commitment to allocate US$938 million over three years to promote political democratization and economic liberalization in Poland and Hungary. In 1991, this assistance was extended to Bulgaria, Czechoslovakia, Estonia, Latvia, Lithuania, Romania, and Yugoslavia. Ukraine was, however, terra incognita for much of the West. The United States had had the experience of politically supporting Ukrainians in the Soviet Union as a “Captive Nation” during the Cold War and, in 1992, Washington became the first international actor that officially began development cooperation with Kyiv. Yet, the “collective West’s” treatment of Ukraine was marked by the legacy of a Moscow-centered approach to the region. Western leaders also lacked “local knowledge”, a first-hand understanding of the situation on the ground. In 1994, the Partnership and Cooperation Agreement (PCA) initiated European Union (EU)-Ukraine development cooperation. Moreover, amid a difficult economic transition, the 1990s marked the start of Ukraine’s cooperation with the International Monetary Fund (IMF). Kyiv, though, regularly failed to get all the promised tranches due to its non-fulfillment of the IMF’s conditions.

From the late 1990s until the Euromaidan revolutionary events in 2013, Kyiv propagated a multi-vector foreign policy, keeping a balance between the West and Russia. Despite a Russian presence in virtually all spheres of politics and economy in Ukraine, Western donors persistently promoted a pro-Western transition. The pro-Western Orange Revolution of 2004 was a turning point in that period. EU initiatives ensued, beginning with the European Neighborhood Policy (ENP) of 2004 and the Eastern Partnership of 2009. Then, the Association Agreement (AA) of 2014, and the negotiations for the visa liberalization that was instituted in 2017, played a critical role in promoting Ukraine’s transition to liberal democracy and a market economy. Together with bolstering support for pro-European politicians, the ENP also served as a basis for numerous technical assistance projects that readied Ukraine for free trade with the EU. These projects addressed reforms in areas like competition law, public procurement, the judiciary, and law enforcement agencies, and they also included capacity-building, exchange, and mobility opportunities for students, professionals, and civil society.

Still, the transition was far from completed, and energy and trade conflicts with Russia undermined Ukraine’s economy. Ukrainian President Viktor Yanukovych’s refusal to sign the AA in 2013 triggered the mass protests known as “Euromaidan” or the “Revolution of Dignity”. In 2014, the conflict with Russia over the regions of Crimea and Donbass exacerbated the economic and institutional crisis in Ukraine under the newly elected president Petro Poroshenko. The international community made an unprecedented effort to help Ukraine and stop it from disintegrating. The early post-Euromaidan aid to Ukraine was marked by several breakthroughs. The revolutionary inspiration and high hopes for a successful transition gave rise to strong cross-dimensional pro-reform networks, comprising pro-Western politicians, the representatives of the international donor community, and Ukraine’s civil society and academia. These networks were active in virtually all reform domains, ranging from constitutional and electoral law to deregulation and cultural policy. The scale of the “rebuilding Ukraine” endeavor required extensive coordination: donors opted for a sectoral approach to reform support and moved away from the practice of poorly interconnected assistance projects. Alongside the reform support per se, international donors granted Ukraine considerable macroeconomic support (for example, IMF loans of US $4.3 billion and US$1.7 billion in 2014 and 2015, respectively) and provided humanitarian assistance in the territories that Ukraine had lost control over to Russian forces.

As a consequence of these developments, Ukraine became more involved in international cooperation, and more prominent in the international arena. The Ukrainian authorities’ capacity to manage international cooperation projects was strengthened, largely because a national assistance coordination system was put in place. Advancements were made in some priority reform areas, such as decentralization, the digitalization of administrative services, public procurement reform, and the deregulation of the business environment. Considerable progress was achieved in re-orienting Ukraine’s economic policy towards Western markets.

Ukraine is, however, still “lost in transition”, on the way from a command economy to a market one. Corruption remains a persistent obstacle. Moreover, officials and the general public seem to have developed “reform fatigue”, with any endeavors labeled as “reforms” invoking criticism, anxiety, and distrust. While operational cooperation with donors has become better organized, public trust in donors and enthusiasm about reforms is low. Alongside the low living standards and high trade tariffs, public distrust is fueled by a narrative of Ukraine being “externally governed by the West”. Such reactions are rooted in the lack of an autochthonous, comprehensible strategy for Ukraine’s self-reliance. Surprisingly, although international donors do like to develop strategies, the ones they often lack are for the transition away from aid. The EU, for example, specifies general criteria for aid allocation (such as country needs, capacity, country commitments and performance, and potential EU impact), but not for country-specific paths to self-reliance. Nor do many other bilateral donors, such as Canada, Switzerland, or China.

An exception is the USAID’s 2019-2024 Country Development Strategy for Ukraine that puts self-reliance at the heart of American efforts, yet hardly links its achievement to specific milestones. USAID uses a narrow definition of self-reliance, linking it to Ukraine’s ability to finance the fulfillment of its own socio-economic goals. Yet, the self-reliance concept can be extended to any policy domain, ranging from “high politics” to defense or energy. A joint government-donors self-reliance strategy should include specific milestones and time spans for their attainment, as well as a transparent monitoring and evaluation methodology. Alongside serving as a common roadmap for the pro-reform stakeholders, the self-reliance strategy could also be used as a crucial public relations and communications instrument. Most importantly, a focus on self-reliance would offer stakeholders a much-desired sense of finality for reform processes and international assistance. To ensure that the journey to self-reliance is not eternal, parallel steps are needed to counter “reform fatigue” among officials and the general public. Strengthening anti-corruption and anti-fraud legislation, promoting transparency and accountability practices, and improving how international assistance is communicated — including by countering disinformation and fake news are the essential elements for a strategy of transitioning from international assistance to national self-reliance.

Maryna Rabinovych is an Assistant Professor in the Department of Public Policy and Governance at the Kyiv School of Economics, Ukraine. She holds a PhD in Legal Studies from the University of Hamburg. Her research interests include EU external relations law, EU-Ukraine relations, and law and politics in Ukraine, particularly conflict settlement and decentralization. Her articles have appeared in East European Politics, Brill Open Law, and Global Affairs, and she is a co-editor of the volume Decentralization, Regional Diversity, and Conflict: The Case of Ukraine (Palgrave Macmillan, 2020).

Publication supported by the Konrad Adenauer Foundation in Ukraine.