Ukrainians Repudiate Government’s U-turn on Integration with the EU

iloveeu_0 It was truly heart moving and soul uplifting to learn about the rallies of over three hundred thousand Ukranians in the freezing streets of Kiev shouting “Down with the Gang” in November 30th and December 1st, and thousands more in other cities across the Ukraine, as a vigorous protest against the shameful U-turn on the process of integration with Europe made by  President Viktor Yanukovich a few days earlier.

The rally was reported as being by far the biggest seen in the Ukranian capital since the Orange Revolution in 2004-2005.

On late November Yanukovich backpedaled from signing a landmark deal at an upcoming summit in Vilnius on closer relations with the European Union. The great divide between Yanukovich’s personal decision and the Ukranian people could not be greater.

President Yanukovich’s refusal to sign the far-reaching political and trade accords with the European Union, opting instead for closer ties with Russia as a bizarre substitute for the EU deal, is a clear sign of a weak and incompetent president. This is another grotesque episode of extremely poor governance in a political system that still is highly contaminated with the poisonous political style of the former Soviet era.

Yuri V. Lutsenko, a former interior minister and a leader of Ukraine’s Orange Revolution in 2004, speaking to the huge crowd gathered in Independence Square in defiance of a court order stated: “I want the authorities to know that this is not a protest; this is a revolution!”. The crowd repeatedly roared back “Revolution!”

Ukraine EU

In the same place, Vitaly Klitschko, the heavyweight boxer-turned-opposition politician called for Yanukovich’s resignation: “They stole the dream. If this government does not want to fulfill the will of the people, then there will be no such government, there will be no such president. There will be a new government and a new president.”

There are abundant examples in recent decades, that uncontroversially provide the testimonial required to understand, once and for all, the major truth behind any developing nation’s social, political and economic progress —or its lack thereof. It’s a rather elementary cause/effect analysis, in a historical perspective. The results are overwhelming.

A transparent, law-abiding, accountable society, that rewards hard work, savings, and the entrepreneurial spirit, has consistently proved to be the best model to follow for a quick and swift development.

There are no exceptions to this. A clear evidence are the impressive success stories of  the four Asian Tigers, New Zealand, Israel, and more recently Chile and the Czech Republic, Slovakia, the Baltic Republics, and Slovenia, among others. All of them have showed the way to move from rags to riches (to different degrees) in just a few decades. The evidence is stunningly unequivocal.

The Ukrainian people seem to have it crystal clear.  Since gaining independence in the early 90’s, a good number of the Ukraine’s sister countries —former Soviet republics— have already achieved a GDP per capita larger than Russia’s —some of them substantially larger.  The resounding success of these countries is too obvious to be ignored. The table below shows it with unquestionable clarity (Source: CIA’s World Factbook). The lesson is unmistakable: true independence from Russia is a prerequisite for prosperity; submission to Russia has meant impoverishment. Given the geographical position of the Ukraine —Russia’s neighbor, and the natural bridge between Russia and Europe, along with its relatively large territorial extension and population— Russia has gone the extra mile to insure the Ukraine’s permanent submission.

The countries in boldface were part of Yugoslavia. Although, nominally for three years after WWII they were part of the Soviet republics, they were expelled from the Soviet system in 1948. Hence, these seven countries had a very different, and independent development from the Soviet republics. For that reason, their comparison to the rest of the former Soviet republics must be differentiated.

The countries in boldface were part of Yugoslavia. Although, nominally for three years after WWII they were part of the Soviet republics, they were expelled from the Soviet system in 1948. Hence, these seven countries had a very different, and independent development from the Soviet republics. For that reason, their comparison to the rest of the former Soviet republics must be differentiated.

Behind poor —and extremely poor— governance lies a golden opportunity of economic growth and well being for billions of people all over the world worth well over one trillion dollars a year of missed output. The connection between good, effective governance and prosperity is unequivocal. Governance is so important that a full section of my book GLOBALIZATION is devoted to it.The Ukranian society —and the whole world for that matter— are fed up with totalitarian, superlative corruption, and incompetent governments. It is utterly painful that after thousands of years of human evolution, we still have political systems that are so inept and unresponsive to the best interest of their people, that dare to govern against the majority’s will, perpetuating poverty and despair instead.

The most prosperous nations on earth are the best governed.

As simple as that; there is no major mystery behind that major truth. Hence, there is no socioeconomic project with a higher impact in the world than to improve governance across the globe. Granted, it is easier said than done. Nonetheless, that’s where the jackpot is.

It is relatively simple to conclude that the examples of nations and jurisdictions mentioned  three paragraphs before are an uncontroversial testimony of this truth.

It is extremely important to differentiate between society and their governments. Most of the time, the latter are a poor reflections of the needs and possibilities of the nations under their administration. The most extreme examples of poor governance are, naturally, among the most underdeveloped nations on the planet. The most developed nations, without exception, happen to be the best governed. There are gigantic opportunities for improvement, even in the most developed nations.

There is a great ray of hope when societies wake up to this reality. That is the beauty behind  the Ukranian’s case. Our best wishes for those efforts to be well guided, in a consistent manner, to achieve what they are after: a wealthier and equitable nation, with truly accountable governments, with high-employment rates and abundant harmony.

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About Martin Marmolejo

Global Investment Manager | Founder & Managing Director at MMA Global Investment Management | Proud husband and father | Follow me @globalmarmolejo.

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