The Ukrainian government, however, shows signs of lapsing into a "muddling-through" mode. The pension reform required by the International Monetary Fund to stabilize public finances has been watered down with 1,000 legislative amendments. President Petro Poroshenko and his cabinet are not pushing hard on another key element of Western aid conditionality, the introduction of a free market in land, because the immediate benefits are uncertain. The Russian market for Ukrainian agricultural goods is all but closed, the quotas for exports to the EU are tiny, and the owners of Ukrainian agricultural businesses fear that, once land can be bought and sold, foreign competitors with deep pockets will eat them alive. Privatization efforts have largely failed because of a lack of investor interest ("Corruption and war are not incentives to invest," the Chatham House report notes drily.) [...]
Meanwhile, the Ukrainian political elite is strikingly unpopular. Poroshenko is still the most popular choice for president, but according to the latest poll by the Razumkov Center for Political and Economic Research, only 9.3 percent of Ukrainians would vote for him now. Just 9.6 percent would vote for Poroshenko's party, now the biggest in parliament. That's understandable: According to the World Bank's October report on Ukraine, poverty is still higher than it was before the 2014 revolution. Ukraine traditionally runs extremely long election campaigns, and it's time for Poroshenko to prepare for the 2019 election. Both he and the parliamentary parties have strong incentives to use the fruits of macroeconomic stabilization and tax reform to boost social spending. That's already happening: The World Bank expects the public deficit to exceed its 3 percent target this year after hitting 2.2 percent in 2016. [...]
Poroshenko and his team have hit a point where neither the Western donors nor Putin can apply much pain without overreaching themselves. Last week, a group of opposition parties and civil society movements -- including some of the organizers of the original 2013 protests -- tried to stage a major rally in the government quarter in Kiev to demand "a big political reform" including tougher action on corruption. The protest, however, wasn't well-attended. Unlike in 2013, Ukrainians are not ready to rise up for pro-Western or, much less, for pro-Russian causes.
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