Friday, November 28, 2014

Despite Cease-Fire, Ukraine Conflict Grinds On, With Deaths Mounting

PISKY, Ukraine -- Since a cease-fire was declared in eastern Ukraine on Sept. 5, nearly 1,000 soldiers and civilians have died in a grinding conflict with rebel separatists that is being waged largely out of sight.

Members of a Ukrainian militia walk past a house riddled with shrapnel.

That is almost a quarter of the 4,317 killed since April and an average of 13 a day, the United Nation estimates.

Over the same three-month period, the Ukrainian military says it has recorded 3,412 rebel cease-fire violations, while separatist fighters regularly accuse Ukrainian forces of shelling the region’s biggest city, Donetsk, killing civilians.

And Russia has continued to build up the rebel forces, sending in troops, military vehicles and heavy weapons, including what Ukraine says was a convoy of 85 vehicles this week carrying heavy armor, fighters and ammunition.

All this has made for a nervous few months for the Ukrainian soldiers in the village of Pisky, who endure almost constant shelling, sniper fire and raiding parties from the rebel separatists only a mile away on the front lines of a confrontation that carries the potential, at almost any moment, of exploding into a hot new theater in a revived Cold War. 

The front zigzags through a glum tableau of abandoned houses, muddy fields and trash-strewn streets, where all but a few retired people have long since fled.

The two sides are only about a mile apart, so close that they can see each other’s positions through a high-powered periscope.

On a recent visit to the Ukrainian side, gunfire broke out near the abandoned house where a soldier calling himself Simferopol and his mates in the all-volunteer Dnipro-1 pro-Ukrainian militia were stationed.

As bullets whistled over a nearby fence, walkie-talkies started crackling.

“Who’s shooting?”

“Look to your 3 o’clock.”

“I don’t see anything.”

Eventually, they gave up, as they often do, unable to ascertain the origin of the shooting.

Another Ukrainian unit reported later that it was test-firing a gun, though it was unclear whether this was the same incident.

All the same, after some time, the Ukrainians decided to send off a return volley of mortars, shot in the direction of Donetsk.

“If you cannot see clearly what is happening, you shoot, to ease your soul,” said Simferopol, who took his nickname from his hometown on the Crimean Peninsula, which he left after Russia annexed the territory in March.

He was unsure of the purpose of this firing, or where the next bullets might come from.

“I’m not really a professional,” he said.

“I used to sell Tupperware.”

Simferopol and Ukrainian paramilitary and regular army soldiers deployed in the village say they are fighting defensively, noting that, despite their efforts, rebel lines have been creeping forward.

And yet, the Ukrainian forces regularly fire mortars and artillery toward the separatist lines.

“They shoot at us to remind us they are still there,” Simferopol said of cease-fire violations that run into the dozens of incidents daily.

“And then we shoot at them, to remind them we are still here.”

The two sides may seem dug in, but the rebels have advanced several hundred yards since the cease-fire declaration.

In an interview, Zhora, a commander in the Vostok battalion, a pro-Russian, separatist militia, said he had success in “expanding the lines,” and this was necessary to better defend the flanks of a position that the rebels held before the cease-fire, but was vulnerable for jutting into the Ukrainian zone.

The position had been under attack.

“We moved ahead,” he said, in an interview at his headquarters, where dozens of empty, green wooden boxes for artillery shells were stacked in a parking lot.

“We had no left or right flank. What we did was smooth out the line.” 

Pro-Russian soldiers deny receiving aid from Russia, and yet a proliferation of ammunition, howitzers, new uniforms and high-caliber sniper rifles on their side tells a different story.

However enfeebled and impoverished the Ukrainian Army, rebel fighters who were on the ropes in the summer before a Russian incursion could hardly be pushing an entrenched regular army equipped with artillery and tanks without state sponsorship.

Both Simferopol and Zhora say they are fighting to win back their home territory from the other side, but the similarities end there.

A Russian flag adorns Zhora’s headquarters in a warehouse, while graffiti saying “This Is Ukraine” is scrawled on the abandoned house that is Simferopol’s temporary home.

As the pro-Russian line is flush with the city of Donetsk, stray shots by the Ukrainian artillery regularly land in outlying districts of the city.

In Pisky, rebel shelling is a menace to the Ukrainian soldiers but few civilians, since most have left the village.

The only residents to be found were a retired couple, Ivan and Lyubov Siderov, who live in their root cellar in the buffer zone between the two armies and stayed on because “we have a cow, we have a reason to stay.”

They trade milk for bread with the soldiers, and emerge from the cellar only to do chores, and in this way hope to survive until one or the other side wins.

One of the Ukrainian paramilitary soldiers, who uses the nickname Zloy, or Angry, said he was motivated by what he saw as a Russian attempt to oppress Ukrainians, and not for the first time.

“Russia oppresses us and not only for six months in this war, but for centuries, from the time of Peter the Great,” he said.

“There were Cossacks who went to Moscow and kneeled and bowed, and there were those who did not. I’m one of those types.”

With the Russian buildup on the other side, nerves are fraying, particularly in light of a catastrophic defeat for Ukrainian volunteers in the town of Ilovaisk last summer.

There, as here, volunteers fueled by heady patriotism headed for the thickest part of the fight, ahead of the Ukrainian Army.

But a Russian advance then pushed the Ukrainian regulars off a road protecting the retreat, and at least a hundred paramilitary soldiers were killed and hundreds more captured.

“What can we do, a soldier just lives through the day,” said Grigory V. Matiash, a 22-year-old from Kiev, the Ukrainian capital, who volunteered after participating in last winter’s protest in Independence Square.

Such fatalism is understandable in a surreal war zone where boredom is relieved only by deadly attacks, and the sound of .50-caliber sniper fire — first the snap of an incoming bullet, then a boom a moment later — has become background noise.

The separatists and the Ukrainians alike send artillery controllers to spot the flashes of outgoing artillery, and correct answering fire.

While in a sense defensive, as the spotters are intended to silence the other side’s guns, their activities only escalate the small-arms firing, as each side tries to shoot the other’s observers, using infrared scopes. 

Also, the Ukrainians sometimes shoot randomly in the direction of their enemy’s lines, something they call “prophylactic fire,” to keep heads down.

After the sun goes down, Pisky becomes an even scarier place, as the buffer zone of abandoned houses becomes a no-man’s land of constant skirmishes between nighttime patrols sent out by both sides.

“Our guys die, and their families suffer,” said one of the Ukrainian fighters, a former Pentecostal preacher who uses the nickname Padre.

“There are widows and orphans. And our government doesn’t want to declare war. We are at war with Russia. Nobody wants to say it, but this is a real war.”

Source: The New York Times

Thursday, November 27, 2014

Tech Sector Leading Ukraine's Pro-European Revival

KIEV, Ukraine -- It has been a year since President Viktor Yanukovych refused to sign Ukraine's EU Association Agreement, unleashing the Maidan Square street protests in Kiev that led to his ousting.

Staff at MacPaw, a Kiev-based Apple app developer, hope the new government's pro-EU stance pays dividends quickly.

His replacement, President Petro Poroshenko, signed the agreement in June.

Amongst other things, it calls for a free trade area in the next decade, steps towards visa-free travel, and Ukraine to adopt EU regulations and standards.

So what does all this mean for Ukraine's vibrant tech sector?

'Gave their blood' 

Dmytro Kostyk, owner of Interactive Restaurant Technology, says fewer trade tariffs will help Ukrainian hardware companies importing and re-exporting components.

Software companies, on the other hand, will see less of an impact. 

"The biggest problem for any high-tech start-up in Ukraine is intellectual property," he says.

Ukraine's legal system does not provide enough protection, he argues, so many companies register in Delaware or Nevada in the US, as well as in their home country, to put their patents under the protection of Western laws.

If Ukraine were to adopt more EU legal standards, tech firms would benefit, says Mr Kostyk.

Viktoriya Tihipko, managing director of investment company TA Venture, agrees, arguing that harmonising Ukrainian and European law could also help tackle corruption and make life easier and safer for tech entrepreneurs.

"[Ukrainians] gave their blood for the agreement," says Eveline Buchatskiy, managing partner of start-up incubator EastLabs.

"They saw the EU as an external auditor that would save them from themselves."

The agreement could speed up improvements to the country's IT infrastructure, she believes, because it commits both sides to building an "information society".

Improving the speed and availability of broadband internet and rolling out 3G mobile connectivity would be of significant benefit to the country.

Ukraine is a "sleeping IT tiger", she says, that could benefit from the successful e-government reforms enjoyed by other post-Soviet nations, such as Estonia and Georgia.

Free movement 

The agreement's impact "is more psychological", says Andrey Kolodyuk, one of the founders of the Ukrainian Venture Capital and Private Equity Association (UVCA) formed by tech investors in August.

But in his view, tech entrepreneurs would benefit greatly from visa-free travel.

"They travel a lot, and every time they go to different countries, to take a visa, it takes a lot of time, money and process," he says.

The founders of the UVCA envisage the association becoming the "front door" for foreign investors interested in backing Ukrainian ventures.

June also saw the start of a new tech angel network, UAngel, led by veteran technology investor Jaanika Merilo.

"Amid the political tumult, there is a paradoxical revival of the Ukrainian high-tech sector," says Adrien Henni, chief editor of Ukraine Digital News.

Investors would appear to be hammering at Ukraine's door.

Sir Richard Branson is one, through his involvement with the Brain Basket Foundation, a body aiming to train 100,000 new IT professionals in Ukraine by 2020.

'No-one is afraid' 

Despite the political turbulence in Kiev and war with Russian-supporting separatists in the East, new investment in tech companies continues to pour in.

"It's very important because we've got new fresh capital, new fresh people coming into this sector," says Mr Kolodyuk.

European investors and trade officials have not been deterred from visiting Ukraine's west - Mr Kolodyuk sees two or three European delegations each week.

"No-one is afraid, people are coming here - they understand nothing [bad] is happening in Kiev," he says.

He points to Israel as an example of a country where civil unrest and war have not prevented a flourishing tech sector.

But other tech companies hope the benefits of the EU Association Agreement will be felt quickly.

"I do hope that Ukraine is regarded as a priority partner from the European perspective," says Oleksandr Kosovan, head of MacPaw, a Kiev-based Apple app software development company.

"The price Ukraine has paid - and is still paying - for it is drastically high."

Russian invasion 

One surprise is that Russian investment in Ukraine has not dried up despite rising tensions between the two countries.

Russian investors have been significantly involved in four of Ukraine's five largest start-up investment deals this year, says Yevgen Sysoyev, managing partner of AVentures Capital.

These include April's $3.25m (£2.1m) investment in data storage and virtualisation developer, StarWind Software.

Other Ukrainian start-ups receiving significant Russian roubles this year include bus-ticket software developer Gillbus, web-to-print developer Keen Systems, and Settle, a service for paying bills in cafes.

Domestically, Ukraine's oligarchs, who lost control of some of their enterprises this year and had property destroyed, have been investing in mature IT projects but avoiding start-ups as too risky.


It is the scale of corruption in Ukraine, not civil conflict in the East, that deters foreign investment, argues Dmitry Shimkiv, Microsoft Ukraine's general manager.

An active participant in the Maidan revolution, Mr Shimkiv was appointed deputy head of the presidential administration in July, with particular responsibility for administrative and economic reforms.

In August, he released a list of 14 priority areas for reform in the tech sector.

These included: simplifying obtaining permits and licences, opening a catalogue of applications for registering intellectual property rights, and permitting Ukrainian nationals to open companies and bank accounts abroad without a licence from the National Bank of Ukraine. 

The parliamentary elections at the end of October also returned for the first time five new members from tech sector backgrounds, who will press for reform from within the legislature.

Brain drain 

Victor Halasyuk, chief executive of Bionic Hill innovation park, warns that Ukraine continues to suffer its own brain drain, given that there are about 900,000 unfilled IT vacancies across Europe.

Without more subsidies or tax breaks for research and development, Ukraine risks becoming a "world university", says Mr Halasyuk. 

Reforms are necessary if this recent investor and start-up activity is to translate into growth, he believes.

But UVCA's Mr Kolodyuk is optimistic.

"Not only because of Shimkiv and people in parliament," he says, "but [because] there is understanding on a government level that, with new deals closing every two or three days, IT could be what changes Ukraine's perception abroad in terms of investment."

As Maidan turns one, Ukraine's future now lies with Europe - with the tech sector leading the way in attracting new investment from within the EU.

But with Transparency International listing the country as the most corrupt in Europe in the last Corruption Perceptions Index, the obstacles to reform remain substantial.

Source: BBC News Business

The West Should Encourage Ukraine’s EU Hopes

KIEV, Ukraine -- Ukrainian President Petro Poroshenko intends to prepare his country for European Union (EU) and NATO membership within six years.

If the West keeps frowning snobbishly as Ukraine stumbles and sometimes backslides, Putin will ultimately have his way.

Some of his fellow East Europeans who are already members of both organisations will actively encourage that ambition, while leaders of NATO and EU will do their best to rain on Poroshenko’s parade.

I think the East European attitude has rather more merit.

At first glance, six years is an awfully short time for Ukraine to prepare for membership in the European clubs for nation states.

Economically, the country is a wreck — lacking international reserves, almost devoid of globally competitive businesses, poor in exportable natural resources and still run by corrupt, bungling politicians.

For months, Ukraine’s fiercest advocates have been calling for radical deregulation, to little effect.

Last week, Anders Aslund of the Peterson Institute for International Economics, who has long rooted for a European Ukraine, thus described the recent coalition agreement of Ukraine’s pro-EU parties that together have a majority in the new parliament:

The draft coalition agreement even reminded me of reading Leonid Brezhnev’s speech at the 26th Party Congress of the Communist Party of the Soviet Union in 1981.

This is not a reform programme, but an old-style bureaucratic Soviet document for the preservation of the old system.

Such a conservative document will never bring reform.

There is no declaration of will or strategy.ation of the old system.

Militarily, Ukraine is a mess, too.

In June, Poroshenko vowed to end the conflict in eastern Ukraine within a week.

In August, the Ukrainian army and ragtag volunteer battalions were trounced by a small contingent of Russian airborne troops, forcing Kiev to accept a humiliating and shaky ceasefire with the pro-Russia rebels.

The EU needs Ukraine as much as it needs another Greece, and NATO might as well admit Georgia, with a similar history of fighting Russia.

And Poroshenko’s insistence that he has a six-year plan to meet EU and NATO membership requirements sounds improbable.

Yet, miracles happen, and Ukraine certainly is due for one after missing every chance in 23 years of independence.

The leaders of some post-Soviet countries, having already won membership, clearly feel it would be wrong to dampen Poroshenko’s enthusiasm to give it a try.

If he does not, Ukraine will remain stuck in limbo between Europe and Russia.

Lithuanian President Dalia Grybauskaite’s response, expressed at a joint press conference with Poroshenko, was encouraging:

“You need to work, you have to do a lot of homework, it’s not an easy process. Why should you? Because any country that makes the effort and carries out reforms will meet the criteria to be a NATO member.” 

Grybauskaite, however, is an outlier within the EU.

She recently called Russia a “terrorist state”, to which Moscow replied with an undeclared customs blockade of Lithuania.

Core EU and Nato members are wary of such radical confrontation, which is why they do not particularly want Ukraine to lay a miracle on their doorstep and force them to cope with it.

“I see partnerly relations between Ukraine and NATO, but no membership,” German Foreign Minister Frank-Walter Steinmeier recently told Der Spiegel.

He added: “It makes little sense today to speculate on Ukrainian membership in the EU in the distant future.”

What, however, if Grybauskaite and those who agree with her in Poland, Latvia and Estonia are right?

Sally Painter, a veteran US foreign policy consultant, argued in a recent article that the West should not be too strict when dealing with aspiring alliance members from the Russian sphere of influence.

So what if reforms under the likes of ousted Ukrainian President Viktor Yanukovych or former Georgian President Mikheil Saakashvili were incomplete?

The West should have valued their intentions and welcomed their countries to its exclusive clubs:

When it comes to needed reforms, western leaders have too often insisted on the perfect to the detriment of the good, weakening the leaders they should support in the process.

To prevent the further unravelling of pro-Europe forces, policy makers must support the progress that has already been made — and the local leaders who are driving it.

While I think accepting demagoguery in place of true economic and political reforms would be transparently hypocritical and unfair to countries that have made a genuine effort to tear themselves from their Communist past, Painter has a point.

If the West keeps telling Ukraine that its efforts are futile, if it keeps frowning snobbishly as Ukraine stumbles and sometimes backslides, Russian President Vladimir Putin will ultimately have his way, and see the country forget its European aspirations.

In a way, that is what happened to Russia in the 1990s.

Who knows, it might have had more will to reform itself — as Germany did after Second World War — had the West provided a version of the Marshall Plan instead of looking on with wary scepticism.

Perhaps that error can be rectified with Ukraine, turning it into an example for Russians who now see no alternative to Putin.

It would be a risky strategy, but the only morally acceptable one if western leaders truly reject Putin appeasement, as they say they do.

Adopting this strategy will mean studying and correcting Poroshenko’s accession plans, as well as providing plentiful but strictly-controlled aid for the transition.

It would also mean publicly voicing support for Ukraine’s aspirations rather than pouring cold water on them.

Source: The Washington Post

Canada Sends Parkas, Boots To Ukraine As U.S. Weighs Request For Weapons

OTTAWA, Canada -- Canada will send the Ukrainian army more than $22 million worth of cold-weather gear, including jackets and boots, Defence Minister Rob Nicholson said Wednesday.

Defence Minister Rob Nicholson details the gear Canada is supplying to Ukraine.

The donations come from surplus military stocks.

The green clothing dates from the late 1990s, said a Defence official, who also indicated that white camouflage winter smocks will not be among the donated items being loaded on a C-17 transport for a flight Thursday.

The Department of Foreign Affairs will follow up with an additional $5 million in non-lethal aid early in the new year, including a field hospital, tactical radios, night vision goggles and bomb-disposal equipment, Nicholson said.

That portion of the donation will be purchased directly from commercial suppliers and shipped by sea.

Nicholson would not say whether the Harper government supports providing heavy military equipment, including tanks and armoured vehicles, to replace Ukrainian material destroyed in fighting Russian-backed separatists.

Ukraine’s embattled government is only asking Canada for non-lethal aid, he said.

There was also no mention at Wednesday’s announcement about possible next steps in Harper government’s reassurance measures for jittery allies in eastern Europe.

Four CF-18 jet fighters, taking part in NATO air policing missions over the Baltic, are set to return home at the end of December and a senior military planner recently told the Commons defence committee that proposals for possible continued involvement in the alliance’s reassurance mission are on Nicholson’s desk.

The Obama administration and the Pentagon have so far ruled out sending arms, despite pleas from both sides of Congress and a long shopping list from Ukrainian President Petro Poroshenko’s government.

Last week, the U.S. deputy national security adviser told a Senate committee that the administration should review that position in light of the renewed appearance of Russian armoured vehicles in eastern Ukraine.

Anthony Blinken, who has been nominated to be deputy secretary of state, said at his confirmation hearing that the recent moves are a clear violation of the fragile ceasefire brokered between Poroshenko’s government and separatists in September.

Vadym Prystaiko, the outgoing Ukrainian ambassador to Canada, says his country has been receiving much needed non-lethal protective military gear, such as helmets and body armour and he’s hopeful allies will step up with “lethal” equipment.

The latest shipment of supplies out of Canadian Forces Base Trenton, Ont. follows a donation of protective military gear that the Harper government sent over on a C-130J transport in August.

Canada has loudly opposed Russian intervention in Ukraine and Prystaiko praised Prime Minister Stephen Harper for his tough words to Russian President Vladimir Putin at the G20 meeting in Australia. 

Harper told Putin he’d shake his hand but said the Russians had to get out of Ukraine.

The encounter made international headlines.

In 2008, Canada was an outspoken supporter of Ukraine’s bid to join NATO, a proposal that was ultimately turned down by the alliance at the time.

Had Kiev been a member, Russia’s annexation of Crimea and support of eastern rebels could have triggered NATO’s self-defence clause. 

Poroshenko hasn’t given up on joining NATO and recently said he would hold a referendum on joining the alliance in several years’ time, something Russia said would increase regional tensions.

“This discussion is going,” said Prystaiko, who noted that NATO foreign ministers will discuss the issue next week.

“We’re trying to reform our military to bring it to the standards of NATO. Then we can seriously talk about coming into NATO as a full member. But that is a matter for the future, hopefully not too distant.” 

Source: Global News