US support for Ukraine should be tied to reform progress

A Ukrainian flag flies on the parliament building in Kyiv. (REUTERS/Valentyn Ogirenko)

Ukraine is the most important country in the ongoing confrontation between Russia and the West. This makes Ukraine’s domestic reform agenda a strategic priority for the entire Western world.

The recent Russian military buildup on the Ukrainian border sparked international alarm over the prospect of a major escalation in the simmering seven-year conflict between the two countries. While these fears are now receding, Russia has reinforced its long-standing red line that it will not allow NATO to draw closer. Meanwhile, it looks increasingly unlikely that the Kremlin-controlled “separatist republics” of eastern Ukraine will ever rejoin the rest of the country.

Under these circumstances, US policy is best invested in efforts to increase Ukraine’s resilience in the face continued Russian attempts to undermine the country’s sovereignty and territorial integrity. The Biden administration’s goals would be best served by the adoption of a “tough love” approach towards Ukraine designed to encourage reforms.

Despite some isolated examples of progress, today’s Ukraine has failed to make a radical break from the past and continues to struggle with many of the same corruption and mismanagement issues that helped fuel the 2013-14 Euromaidan Revolution. The US must make clear that continued billion-dollar support for Ukraine will be conditioned on tangible domestic reform progress.

The Biden administration currently has a chance to reinvigorate US policy towards Ukraine following the presidency of Donald Trump, who was accused of prioritizing his own reelection bid over support for principled reform. However, there is also a danger of repeating mistakes made during the Obama administration if US policymakers fail to fully appreciate the domestic resistance within Ukraine that hampers almost any effort to promote meaningful reforms.

Ukraine’s strong dependency on Western aid in the early stages of the war with Russia meant that the country’s elites had little choice but to comply with the conditions attached. Under US and EU pressure, Ukraine established a number of specialized agencies to combat high-level corruption. In order to meet IMF conditions, the Ukrainian authorities raised gas tariffs to eliminate the margin for oligarchic rent, and cleaned up the country’s notorious banking sector.

But reforms stalled after 2017 and failed to reach a decisive breakthrough. The political establishment and courts found creative ways to undermine the new anti-corruption agencies. Broader economic restructuring dragged out indefinitely, while gas sector reform was never fully consolidated.

President Volodomyr Zelenskyy was elected in 2019 in part thanks to his commitment to fight corruption. However, a number of negative developments under his tenure raise questions over his ability (and willingness) to put Ukraine on a positive track.

The US should hinge its new Ukraine policy on the need to re-calibrate conditionality to discourage Ukrainian policymakers from circumventing their reform commitments.

US Secretary of State Antony Blinken struck the right note earlier this year by imposing sanctions on Ukrainian oligarch Igor Kolomoiskiy. This was a much-needed helping hand to the Ukrainian government as it seeks to withstand anti-reform pressure from powerful oligarchs and other vested interests.

At present, Ukraine remains in need of external finance to cover debt repayments and to get through a severe…