Strengthen strategic partnership between EBRD and Mobiasbanca
Three distinct oligarchic systems dominate in Moldova, Ukraine and Georgia. In Moldova, there is a unipolar oligarchic system, while in Ukraine there is a multipolar system. Even if it is unipolar as the Moldovan system, the oligarchic system in Georgia is more precautious in displaying oligarchic interference. All these “oligarchic ecosystems” prosper in different conditions of domestic and foreign comfort. Threatened with the Russian factor genuinely or imaginarily, the oligarchs are actually vulnerable to the pressure exerted by the Western partners.
The excessive influence of the oligarchs fueled “state capture” in each of these states. The key obstacle to counteracting this phenomenon resides in the malfunctioning of the “checks and balances” system. Vladimir Plahotniuc in Moldova and Bidzina Ivanishvili in Georgia as well as Petro Poroshenko in Ukraine managed to wipe out many or even all of the boundaries between the state powers. Without these boundaries, democracy as a form of government is devalued, while the risk of pushing society to authoritarian preferences becomes inevitable.
The interference of justice in politics additionally contributes to strengthening oligarchies. This is seen in each of the three cases, from the nine-year jail term given to ex-Premier Vlad Filat in a trial held behind closed doors, continuing with the withdrawal of Ukrainian nationality from Mikheil Saakashvili and up to the politicized criminal cases in Georgia. Such actions have a demoralizing character for others who could be welcome in politics.
Unlike Ivanishvili, who accumulated his wealth mainly until 2003 from (semi)legal businesses in Russia, Plahotniuc and Poroshenko built and extended their informal influence from internal sources of their countries of origin. Therefore, the oligarchization of political power in Moldova and Ukraine is more visible. This is more prey-like in character, meaning spending of public funds, parasitizing on state-run enterprises or monopolization of the lucrative sectors of the economy.
The non-state players that are of systemic importance for the survival of democratic institutions have no chance before the oligarchs. The opposition political parties, the mass media and civil society organizations are often pushed to communicate in “echo rooms” with limited access to the general public. Falsifying the public agenda and filling it with insignificant, but provoking cases, the oligarchized governments of the three countries distract attention and use the resources of the non-state pro-democracy players.
The European integration promoted by the European Union is for now unable to disband the oligarchic pyramids in Moldova, Ukraine and Georgia.
On the one hand, Brussels is affected by existential problems that will always be more important than the individual situations in the three countries. The cases of security, like Russia’s offensive in eastern Ukraine or the annexation of Crimea, are the only cases that can catch the attention of the EU that is short of time, interest and resources. On the other hand, the leaders of the Eastern Partnership (Moldova, Ukraine and Georgia) haven’t yet won the European perspective, including owing to the oligarchs, and are in unequal competition with other regions involved in the Euro-integration process that was fully assumed by the EU – Western Balkans (IPN, February 19, 2018).
Ingredients of oligarchies in Moldova, Georgia and Ukraine
The powerful positions of oligarchs reside in a set of deficiencies existing in state machinery: (1) weakness of state institutions; (2) ramification of informal relations based on nepotism; (3) corruption in justice; (4) favoring of monopolies, including the state ones; (5) system of political parties focused on the private interest and insufficiently attached to the public one.
The consolidation of public institution and eradication of corruption from the public sector can play a major role in redistributing revenues, concentrated currently in the hands of oligarchic groups. From the National Integrity Authority up to the Competition Council, in each of the three countries these need protection and resources to be able to fulfill their institutional duties. A public sector immune to the influence of oligarchs envisions the resolving of the problem of integrity, which depends both on salaries and on penalties imposed for committing abuses.
The informal relations and nepotism are deep-rooted in the societies of the three states. Even Georgia, which is recognized for the efficiency in fighting petty corruption, is paralyzed by the impact of nepotism. A first solution can be the promotion of competition based on merits, in parallel with the persecution of this phenomenon in any corner of the public sector. The eradication of nepotism in politics necessitates an active involvement of the mass media and civil society, which should familiarize the public with the noxiousness of nepotism.
Without amity with corrupt judges, the oligarchs would have found it difficult to unrestrictedly collect different political and economic benefits, including to ensure unconditional immunity. The freeing of the judiciary from corruption will not only inhibit the phenomenon of oligarchy, but will also equal all the players in rights. The re-confirmation of the right of ownership and the effective protection of this will produce negative effects in a chain, especially for attracting foreign investors.
The private character of the political parties dominated by the oligarchs in Moldova, Ukraine and Georgia shows their real intention. The poor representativeness of the general public and the population of these parties depending on the relationship of nepotism or another type of informal subordination exclude any possibility that these entities will act according to rules. The rules of the game are rather being constantly modified so as to identify a situation of comfort for the oligarchic group. The open party lists, principle of proportionality, harsh punishment for the improper use of public funds, liberalization of the media market and free and fair elections are several of the measures that could propel non-oligarchic parties to the bodies of state power.
European integration, possible or not, without Europeanization of oligarchs?
The leitmotif of the European integration resides in the implementation of the reform agenda. In the current conditions, no serious reform will be successful if it does not correspond to the strategic calculations of the oligarchic groups. Any incorrect move can cause the collapse of the systems that are maintained artificially, despite the public legitimacy that is dangerously insignificant.
In fact, while the given countries cover a difficult European integration path, the oligarchic groups are trying to gradually adjust their behavior according to the rules promoted by the EU, but not to the detriment of the own interests. For this reason and because of the limited resources (Moldova’s case), the given oligarchs have pro-European views and oppose the return of the pro-Russian forces. There are different reasons that dictate a loyal attitude to the EU among the oligarchs in Moldova, Ukraine and Georgia.
First of all, the possessions of the oligarchs are situated in the West and developing positive relations with the EU is the safest method of having access to these.
Another motivation of the oligarchs resides in the attractiveness of the European funds from which obscure interests in Ukraine, Romania, Bulgaria and other countries already benefited. Without a functional dialogue with Brussels, no assistance and, respectively, eventual sources of benefits will cross the European borders.
Last but not least, the European affiliation of oligarchs extends their political life and increases their electoral chances.
Instead of conclusion...
The oligarchic systems in Moldova, Ukraine and Georgia have many things in common and are even able to coordinate their actions. Owing to the massive penetration into the political system, the oligarchic groups managed to legalize the informal relations and to monopolize, including the process of taking political decisions.
Unlike the Georgian oligarch, the Moldovan one has open political ambitions, while the Ukrainian one, even if he takes an active part in politics, is trying to balance the interests of numerous oligarchic groups.
The European integration and related reforms can play a very important role in the de-oligarchization of the given countries, but without success if the “checks and balances” system is not restored and made to work. The probability that the given oligarchs will stop interfering in politics is low as this ensures their immunity and, respectively, their impunity. Therefore, the foreign partners, on the one hand, and the non-state pro-democracy players, on the other hand, will have the difficult task of gradually dissolving the oligarchic systems that seriously undermine the democratic institutions.
Areas of interes: European integration, European policies, EU's foreign policy, migration and energy security.
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IPN publishes in the Op-Ed rubric opinion pieces submitted by authors not affiliated with our editorial board. The opinions expressed in these articles do not necessarily coincide with the opinions of our editorial board.
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