Dwy dyma yn ei wneud i mi ddodolig i gweithio gyd y 13 o'r pwyllfa ar gael i Llywodraol Ffwrdd dros hynny. Apolygiau sydd ble fan hynny ihen am y Gweithwyr John Scott, ac yn ei gweithio ar gyfer an Ew Wells oeddechydig ni i ddiddordeb agos unrhyw yn ddodolig i John Scott. Efallag mae'n yn gweithio ar gyfer an Ew Wells i'r cyfnwys gyd ac mae enw Wells, a gyfo'r cymdeithas i chi'n ddod o feithio ar y Cynllunheiddiol, oherwydd niei flwyddorol o'r moedder. I have no relevant interests as committee and I refer people to my register of interests. Thank you very much. Agenda item number 2 is a consideration of instruments subject to the negative procedure. The first of these instruments is the Asset Transfer Request procedure, Scotland Regulations 2016, SSI 2016-357. The meaning of regulations 12 and 13 could be clearer in the following respects. Regulation 13-1 could be made clearer to clearly give effect to the policy intention that there may be one or more contact addresses determined in accordance with this regulation. Regulations 12 and 13 could be made clearer to clearly give effect to the policy intention that when a community transfer body sends an electronic communication from address other than a contact address or addresses contained in an asset transfer request or a subsequently notified in accordance with Regulation 13-2 that does not alter the contact address or addresses. On account of this lack of clarity, does the committee agree to draw the instrument to the attention of the Parliament on reporting ground H? Does the committee also agree to call on the Scottish Government to lay an amending instrument to improve the clarity of Regulations 12 and 13 for that amending instrument to take effect timurously for those regulations coming to force on 23 January 2017? Instrument number 2 is the Asset Transfer Request review procedure, Scotland Regulations 2016, SSI 2016-358. The meaning of the regulations could be made clearer in the following respects. Regulation 12-1 could be made clearer to clearly give effect to the policy intention that there is no requirement for the Scottish ministers to appoint a member of their own staff to a review panel. Secondly, review, SSI regulation 18-1 could be made clearer to clearly give effect to the policy intention that, when a community transfer body sends an electronic communication from an address other than a contact address or addresses contained in the application for review, or a subsequently notified in accordance with Regulation 18-2, that does not alter the contact address. Thirdly, review, SSI regulation 18-1 could be made clearer to clearly give effect to the policy intention that, when a community transfer body sends an electronic communication from an address other than a contact address, that does not alter the contact address or addresses. Does the committee agree to draw the instrument to the attention of Parliament on reporting around age on account of this lack of clarity? There is also a drafting error in Regulation 18-2. The reference to the Scottish ministers should be a reference to the relevant body. Does the committee agree to report the instrument under the general reporting ground too? The Scottish Government has undertaken to rectify Regulations 12-1 and 18-2 by laying an amending instrument. That would take effect timuously for those regulations coming to force on 23 January 2017. In light of the undertaking to lay an amending instrument, does the committee agree to call on the Scottish Government to include in that instrument provision to improve the clarity of Regulation 18-1 and Regulations 18-19 taken together? The third instrument is the asset transfer request appeals Scotland Regulations 2016, SSI 2016-359. Regulation 16-1 could be made clearer to clearly give effect to the policy intention that, when a community transfer body sends an electronic communication from an address other than a contact address or addresses contained in a notice of appeal or a subsequently notified an accordance with Regulation 16-2, that does not alter the contact address or addresses. Does the committee agree to draw the instrument to the attention of the Parliament on reporting ground H for lack of clarity for the aforementioned reasons? Does the committee also agree to call on the Scottish Government to lay an amending instrument which would improve the clarity of Regulations 16-17 and 18-19 taken together? Does the committee agree to call on the Scottish Government to lay an amending instrument which would improve the clarity of Regulations 16-17 and 18-19 taken together? Does the committee agree to call on the Scottish Government to lay an amending instrument to take effect timiously for the regulations coming to force on 23 January 2017? The instrument number four is the asset transfer request appeal where no contact concluded. Scotland Regulations 2016, SSI 2016-36 at zero. Regulation 51 could be made clearer to clearly give effect to the policy intention that there is no requirement for the Scottish ministers to appoint a member of their own staff to a review panel. Regulation 18-1 could be made clearer to clearly give effect to the policy intention that there may be one or more contact addresses determined in accordance with this regulation. Regulations 18 and 19 could be made clearer to clearly give effect to the policy intention that when a community transfer body sends an electronic communication from an address other than a contact address or addresses contained in a notice of appeal or application, or as subsequently notified in accordance with Regulation 18-2, that does not alter the contact address or addresses. Does the committee agree to draw the instrument to the attention of the Parliament on reporting ground H in light of this lack of clarity? There is a drafting error in rule 4 to A in the schedule. The reference to notice in writing from the review panel person should admit person. With that in mind, does the committee agree to draw the instrument to the attention of the Parliament on the general reporting ground? The Scottish Government has undertaken to rectify the above matters, apart from in relation to Regulations 18 and 19, on reporting and amending instrument. This would take effect, temisly, for these regulations coming to force on 23 January 2017. In light of the undertaking, to lay an amending instrument, does the committee agree to call on the Scottish Government to include in that instrument provision to improve the clarity of Regulations 18 and 19? The fifth instrument is the Community Empyrament Registers of Land Scotland Regulations 2016 SSI 2016 362. It is an anomaly in relation to the numbering of sub-paragraph D and sub-paragraph I1 and 2 of Regulation 21. Sub-paragraphs 1 and 2 should be included under a separate sub-paragraph E, with the numbering in the remaining sub-paragraphs in Regulation 21 updated accordingly. Given this anomaly, does the committee agree to draw the instrument to the attention of the Parliament on reporting ground H in respect of the form of the regulation that could be clearer? The regulations also contain the following drafting errors. First of all, sub-paragraph G of Regulation 21 incorrectly refers to the Police and Fire Scotland Act 2012, when it should refer to the Police and Fire Reform Scotland Act 2012. And secondly, similarly sub-paragraph I of Regulation 21 incorrectly refers to the Land Registration Scotland Act 2012, when it should refer to the Land Registration etc. Scotland Act 2012. On account of these errors, does the committee agree to draw the regulations to the attention of the Parliament on the general reporting ground? Does the committee agree to welcome the undertaking by the Scottish Government to lay a further instrument to clarify the provisions in respect of all three of these points to take effect before the regulations come into force on 23 January 2017? The sixth instrument is the Land Reform Scotland Act 2016, Consequential and Saving Provision Regulations 2016, SSI 2016-366. In the circumstances where in the state of a deceased person contains two or more interests as tenant under release of an agricultural tendency, the Saving Provision in Regulation 31C and 2 could implement more clearly the policy intention that applies only in respect of an interest or interests that have not been bequeathed by will or other testamentary writing, even though there may be a request of another interest or interests. Accordingly, does the committee agree to draw the regulations to the attention of the Parliament on reporting ground H, as the meaning of Regulations 31C and 2 could be clearer? Does the committee agree to welcome the Scottish Government's urgent laying of a further instrument to clarify the provisions? No points have been raised by illegal advisers on the following instruments. The Air Quality Standards Scotland Amendment Regulations 2016, SSI 2016-376. The Land Reform Scotland Act 2016, Consequential and Saving Provision, Amendment Regulations 2016, SSI 2016-389. Is the committee content with these instruments? Yes. Agenda item number three is the consideration of instruments not subject to any parliamentary procedure. No points have been raised by illegal advisers on the following instruments. The Community Empowerment Scotland Act 2015, commencement number four and transitory provision, Order 2016, SSI 2016-363 and inquiries into fatal accidents and sudden deaths etc. Scotland Act 2016, commencement number two, Transitional and transitory provision, Regulations 2016, SSI 2016-370. Is the committee content with these instruments? Yes. We will be on Tuesday, 6 December, when we will again consider SSIs. I close today's meeting. Thank you.


Good afternoon, I think we'll go ahead and get started with what I think will be a very timely, informative, and I hope informal discussion today. The first to speak will be Bill Taylor, who will actually give you, I think, a perspective from the field, because Bill has just returned from being an election observer with NDI, where he was stationed in Kersan, which is a region of eastern Ukraine on the north border of Crimea, and I think this is a swath of Ukraine in the east that is very rarely reported on in the news, and I think can offer us very interesting insights into the effectiveness of Ukraine's counterinsurgency and political reconciliation efforts. Bill is the vice president for the Middle East and Africa here at the U.S. Institute of Peace, but I think this in no way reflects the breadth of his expertise, substantive expertise. He served as the ambassador, former ambassador to Ukraine in 2006 to 2009, and in the early 1990s, coordinated all the U.S. foreign assistance to the newly independent states at a critical time in their national development. Bill will be followed by George Lopez. George will discuss sanctions and their effectiveness in terms of moderating Russia's policies in Ukraine. I'm sure, as with other institutions around the table, the timing of events is often driven by logistics, room availability, and speakers, but George, given the recent statements by Angela Merkel today with the G7 about their intention next week of discussing with Mr. Putin a possible another round of sanctions unless there's a de-escalation in Ukraine, makes me think that this was actually a very good day to have this discussion. And as you know, there is increasingly a very, very vibrant debate about whether Putin has blinked and whether his acceptance of the elections and their outcome has been sort of a walk back and whether sanctions have had a role versus the perspectives where this is sort of a strategic move that he has gained a lot from the incursions and that is in charge of his own destiny and whether sanctions, in fact, had any input. My name is Lauren Van Meter and I'm the moderator of this panel. Both George and Bill have invited me to take a few minutes to introduce USIP and our work in this area. In June and July, the Institute will be holding two scenario workshops with big thinkers on global trends that are affecting this region as well as with regional experts. I think while we recognize that the Ukraine crisis is extremely urgent, we also think it's important to undertake a regional conflict analysis and look at the unconsolidated democratic transitions on Russia's periphery. It's a really important time to understand what crisis perhaps might be next and to look at these so-called frozen conflicts, which I think we would all agree are in fact very dynamic and have been made much more so by Russia's intervention in Ukraine. So we hope that this will result in a fresh look and a fresh conflict analysis of the region and I'd be happy to discuss this effort with any of you guys after this panel discussion. So with that introduction, Bill, please. Lauren, thank you very much and thank you for joining us here today. Let's see. There are chairs up here. So please come up to the front. Please come join. Yeah. There's even one right back here. And as Lauren says, I would, and I'm sure I'm speaking to George as well, would love to hear your thoughts and your questions and your comments on this. We'll make this an informal discussion with Lauren, Lauren Leading. But this is a great opportunity for me to kind of bounce some ideas that occurred to me while I was in Ukraine a week and a half ago off of people who are interested. As Lauren said, I did observe the election on 25th of May from Herzog and talk a little bit about that, but it was an opportunity to be in. I'd actually volunteered to go to Donetsk, but I didn't send anyone to Donetsk, which was disappointing. But Herzog was, as Lauren says, kind of in the same category. And as such provides a very interesting example of what's going on in that part of Ukraine, I think. I come back relatively optimistic about Ukraine's prospects over time. There's some immediate challenges, which I'll talk about. But it's got some real assets, things going for it at this point, which I will also talk about. I would put one of the assets, and I will talk about this a little bit, the United International Community Response. The Response to the International Community has been pretty solid on this, and I'm very pleased to be sitting next to George Lopez, who is probably among the top experts on sanctions in the city, maybe in this country. We are very pleased to have George here at the Institute of Peace, but I'm very pleased to be sitting next to him to hear his thoughts about the effect of sanctions on Mr. Putin and Russian more generally. The challenges for Ukraine. The first challenge clearly is the Russians. The Russians in Donetsk and Luhansk are clearly causing the problem. Let's be clear. These are Russians that are stirring up the issues, the problems, the controversy, the fighting in Luhansk and in Donetsk. We don't have to look very far. So there was a fighting a week ago at the Donetsk airport, during which separatists were killed. The next day, we've all seen the pictures, the stacks of red coffins going back to Russia. These are clearly Russians that are fighting in Donetsk and in Luhansk. These are clearly Russians who are leading, organizing and equipping. We also see the pictures. It doesn't take intelligence assets to figure this out. The pictures of anti-aircraft weapons, of heavy armor, these are not volunteers. This is not a pickup resistance. This is clearly the Russians causing the problem. It's only in the two areas where the Russians are pouring people, units, equipment, resources across the border. It's only in those two oblasts, Luhansk and Donetsk, where there are problems, where there are resistance, where there's just... I'm not saying that they're not separatists. I'm not saying they're not... They're called separatists in that part of the country, or indeed in other parts of the country. And I'll talk a little bit of her son in a moment, because there clearly are. The Ukrainians have dealt with, have struggled with this question of separatism or of alienation from Kiev for a long time. When I was there, Luhansk says I was there from 2006 to 2009. We had the same set of issues. It's not a language issue, as probably everyone in this room knows, but it is a geographical reason. It is a sense of the eastward orientation of people, Ukrainians, ethnic Russians, ethnic Ukrainians living in that part of the country, living in the south and the east, as Lauren said. So the first challenge is clearly in Donetsk and Luhansk. It's clearly the Russians, because it's the Russians, because there are units, Chechen units, other units who are well-organized and well-funded, Mr. Putin, and this will get into the question about sanctions, Mr. Putin could stop this. He could solve this very quickly. He has some influence. This is a Russian with some influence over what goes on. He could clearly stop the movement of these units, whether they are Russian military or pickup units or what. He could stop them going across the border. He does have control of his own border, and he hasn't. This is the problem. What does he want? Not clear. No one, I certainly can't tell you what's going on in Mr. Putin's mind. We all saw what he did in Crimea. We all heard what he said about who did what in Crimea. He and his minister of foreign affairs, Mr. Lavrov, both initially said, these are not Russian troops. About a week and a half, two weeks later, in an interview and a dialogue and a discussion with the press, he said they were Russian troops. Again, that was obviously true, his second statement. His first statement was clearly a lie. I'll just be clear here in this room, but I don't mind being quoted on that. It was a lie. There were clearly Russian troops in Crimea. That led, as we know, to this attempt at annexation, which nobody in the world, no country in the world accepts, and certainly we didn't and shouldn't. But that's what went on in Crimea. Is that what he wanted? I don't think so. I don't think that's what he's after. I think what Mr. Putin is after is a destabilization of Ukraine so that it is unable, unwilling, not attractive to the European Union or to NATO, for that matter, if that were even an option. He has said in so many words that it's a sphere of influence that he wants. As if that were the rationale or justification or a reasonable approach to dealing with neighbors, a sphere of influence. That's no longer the case. We can talk about this at some length, but spheres of influence is, this is a concept that is gone. You can have influence with your neighbors, and you should have influence with your neighbors. I would argue that Mr. Putin's attempt to have influence with the Ukrainians has totally backfired. Mr. Putin has unified Ukraine, with the exception of the places where he has flooded his people in and Russians in, that is, with the exception of Donetsk and Luhansk, he has alienated and unified the Ukrainians. Let me tell you a little bit about Kherson, which is a microcosm, one oblast in the south, as Lauren says, just north of Crimea, but west of Donetsk and Luhansk. This is an oblast that the Russians, after they'd annexed, they attempted to annex Crimea, tried to move troops into. The Russians tried to send their little green men that they sent into Crimea up into Kherson, as they have done successfully in Donetsk and Luhansk. They tried to do that in Kherson. In Kherson, the people, the Ukrainians there, resisted this. They actually resisted the attempts on the part of the Russians to kind of organize the same kind of separatism that they have organized in Donetsk and Luhansk. They tried and failed in Kherson. That's an interesting point, because Kherson was pretty much like Donetsk-Luhansk Archive in terms of the political orientation up until that point. Kherson voted very reliably for President Yanukovych in both previous elections, in both 2004 and 2010. Luhansk, of course, did, and Donetsk did. Kherson also voted for the party of regions in the parliamentary elections in 2012. The party that came in second to the party of regions in 2012, in Kherson, was the Communist Party.  So the Russians could be excused for thinking that they might be able to do in Kherson what they had done in Crimea, very pro-Russian, and in Donetsk and Luhansk. But they didn't. They failed. The Russians failed in Kherson. And when we got there, this was a real surprise. So we got there a couple of days before the election. The elections, of course, on Sunday the 25th, we got there on Friday. And amazingly, after two months, month and a half of all of this turmoil in Luhansk and Donetsk and Crimea, just to their south, the Ukrainian patriotism, and they were not embarrassed to call it this, the Ukrainian pro-Ukraine flavor and attitude and demonstration. Was surprising to me. Again, there is a strong pro-Ukrainian flag where the Ukrainian shirts, the embroidered shirts, you get a lot of that in the western part of Ukraine. And people who have been there will know what I'm talking about. But not in Kherson, not in the east and the south. And so to see the Ukrainian flags, the blue and yellow flags flying from lampposts, being displayed like three on each car that goes by, and having these large Ukrainian flags hanging off of apartment balconies, this was not what one would expect in a oblast in the south and east of Ukraine. But that's what was going on. That's what was going on at the end of May, based on what had happened in Luhansk and Donetsk and in Crimea. The other thing I noticed, by the way, when we first arrived in Kherson, our hotel was right across from the governor's office, big square as there are in a lot of Ukrainian cities, big square where up until about a month ago had stood, as in a lot of Ukrainian cities used to be, a big statue of Lenin. In many of the Ukrainian cities, across in particular in the west, but also in the center and in Kyiv, what the Ukrainians call Leninfall, not to be confused with rainfall or snowfall, this was Leninfall, and the Leninfall had hit strong, had been heavy, if you will, in the west and in the center, but the Leninfall hadn't gotten to the east and to the south. But after what had happened in Crimea and Donetsk in Luhansk in March and April in May, this Leninfall had spread and the statue of Lenin in Kherson had finally fallen. So this was a very different flavor, a very different set of politics in Kherson that we arrived in. This can't be what Putin expected. This can't be what Putin had anticipated when he, with the invasion. That's why I say that he has unified, had no trouble unifying the west of Ukraine, but to have this kind of pro-Ukrainian, pro-Ukrainian unity in an oblast like Kherson is remarkable. I found remarkable. I'd be interested in your thoughts on that. So to get influence, if that's what he's after, he had the opposite effect. I mean, he scared them and he unified them. So I think this is the very interesting lesson of Kherson. Speaking with the challenges, there's Russians in Donetsk and Luhansk, but I think we should really keep in mind that the attempt to annex Crimea is still out there. And the Ukrainians that I talked to in Kherson, I talked to in Kiev have not forgotten about Crimea. Crimea is still part of Ukraine as far as they're concerned, and it's still part of Ukraine as far as the United States government is concerned. We should act in that way. We can talk about that. That challenge, after the Russians, is corruption. Now anybody who has been in Ukraine or in similar places over the last two decades will agree with me, I suspect, that corruption is a major problem that needs to be deal with. It's a problem that has been recognized, talked about, complained about, hands wrong about for two decades, and nothing much happened. There was an expectation after the Orange Revolution in 2004-2005 that this would usher in a new Ukraine, a new opportunity to clean out the corruption that had followed in the post-Soviet time, but it continued. And so that's a big issue that Mr. Poroshenko is going to have to deal with right at the time. The biggest element of corruption, as far as I'm concerned, is natural gas. In terms of the dollar, or the Hryvna magnitude, or the ruble magnitude of the problem, is natural gas. And the gas coming in from Russia gets imported by, in some cases by middlemen. Some of the middlemen have been extracted, and Mr. Poroshenko, when I was there, actually extracted Rostro-Kunergo out of that middleman, but still there are people who have access to low-price gas, who sell it high. So changes in price, differences in price, some price controls in Ukraine, but also the differences in special deals coming from Russian suppliers, allows some people to make a lot of money. This money gets spent all the way up the line. Rostro-Kunergo that I mentioned is half-owned by Gasprom, and half-owned by Mr. Firtash, one of the oligarchs in Ukraine, part of the corruption that I'm talking about. So the half that goes to Naftegas, the part that goes to the Russians, clearly goes all the way to Gasprom. There are monopolies and oligarchies in other parts of the economy as well. Another big problem is the judiciary. The people who have been put into positions of the judges have been cronies. They have been on the take. They have been corrupt. They have been politicized. That's a major problem for businesses as well as for citizens. Elections. Elections, one of the reasons that NDI and IRA and other international observers and thousands of domestic observers are so important to these elections is the reputation for stolen corrupted elections in Ukraine over the years. And it's down to an art. There are carousel voting where people vote here and then they put on buses and vote again here and again in other places. There are ballot box stuffings. There were. Where even before, when right now, of course, you have transparent ballot boxes. You've seen the pictures of these very transparent ballot boxes, but even in those, you would see these big stacks of ballots all filled out the same way. The corruption was rampant. This time, there were no complaints, virtually no. There are virtually no complaints by the candidates. This election, last in three weeks ago, two weeks ago, on May 25th, there were no complaints from the competitors, from the various 18 people running for president, about any of that kind of stuff. First time in Ukraine's history, we haven't had major allegations of major corruption. And that was borne out by all these observers. We saw no problems, no problems. Again, down in Kershon, I went to 14 different ballot voting places and it was very smooth. The attitude was great. The representatives from each of the parties, each of the candidates were sitting there watching. There was nothing to observe. These people were eager to talk to these foreigners who would come in and sit down and talk to them because they couldn't find any bad things going on. So this was true at the presidential level. From the presidential election, no funny business, no corruption. However, I got back up to Kyiv after the election, the day after, and talked to a friend of mine who had run for one of the city council seats in Kyiv. This young man I'd known when I was there, amazingly idealistic and energetic, he's part of Ukraine's future. This is a young man who we're going to see. He was running for a city council seat in a small little part of Kyiv called Pudil, actually, it's a section of Ukraine down near the river, and in a very poor district he represented. He knew that his opponent, one of his opponents, was buying votes. He knew it because he wanted to represent, his constituency was very poor, very poor. He told me, he hoped that his constituents would take the money from his opponent and then vote for him, and a lot of them did, but he told me at that time they were still counting the votes there by the time I got back on Monday, he said he was five votes short, and then ten votes short, and in the end he was not elected. I only say this because even though the presidential elections were clean, the mayoral elections in many of the cities I'm sure were the same way as this local election that I just described. So there's still that problem of corruption that I have to do. There's one more challenge that I'll mention, there are many, but one more challenge is this economic reform. So the Ukrainian economy is in terrible shape for all the reasons that we've talked about in terms of corruption, in terms of interference from abroad, but also just years of mismanagement. Everybody saw the pictures of Mr. Yanukovych's mansion, that's just a small indication of the enormous amount of money that had been stolen from the Ukrainian government and stolen from the Ukrainian people. Economic reform is going to be necessary in order to improve that corruption that I've already talked about, but also to restructure the problems that Ukraine faces. And they are low natural gas prices, so one big reform that the IMF is already asked for is an increase in gas prices. That's going to be painful, so Mr. Poroshenko is going to have to come in and raise gas prices, natural gas prices. This is going to be politically very difficult because he has to do this. This is a major challenge. And let me just say a couple of quick words about assets, because I really want to hear about the sanctions that George is going to talk about. One asset I've already described is international support for Ukraine. Ukraine's assets, one of the biggest ones, is support from the international community. The IMF has already signed an agreement, one of the conditions of which, as I just said, is some painful economic reforms. The G7 is united, even as late and as repeated again as today, a strong condemnation of the Russians, a strong support for Ukraine from the G7. The UN, again, the Americans and others mobilized a vote in the Security Council. The Security Council voted 13 to 1 to 1. So even the Chinese didn't support the Russians in the Security Council. They then took it to the General Assembly and it was 100 to 10 condemning the Russians for what they've done. So the International Committee has united in support of Ukraine and in condemning the Russians for what they've done. Ukraine is now a priority. I will tell you that there are some advantages to being in a country that is not on the front pages every day. And so this was okay with me. While I was in 2006, 2009, there were problems, there were issues. The President did visit at the time. The Vice President visited. The Secretary of State visited, but it was not the attention that Ukraine's getting now. Ukraine now gets phone calls from President Obama. President Obama is taking this very seriously. Vice President Biden's going to be there for the inauguration on Saturday. This kind of priority is intangible but very important for Ukraine. It's clearly an asset. Another asset is the spirit of the people on the Maidan. They didn't represent every part of Ukraine, but they represented a lot of Ukraine. There were people on the Maidan from the east as well as a whole lot of people there from the west. And that spirit is holding Ukrainian politicians to very high standards. This young man that I mentioned who was unsuccessfully, who ran for the city council, he was on the Maidan. He started off in a kitchen slicing bread and buttering it and getting it out to the people who were manning the barricades. He then moved up and actually led a group of young men without weapons but organized to defend themselves. So there's that spirit of both idealism and energy and an intent, a determination to hold accountable these new politicians. So I put that as a real asset. Really in terms of assets, unity. So Mr. Poroshenko, on a Sunday ago, on the 25th of May, won at least a plurality, won every oblast that was allowed to vote. I bet he would have won in Donetsk and Luhansk because the polls indicated the same thing. They weren't allowed to vote in most cases. There were some that did vote in Luhansk and Donetsk in the outer parts, not in the cities. But in every other oblast, Kharkiv out in the east, Kherson, 49% of the Ukrainians voted for Mr. Poroshenko in Kherson. And the next highest was 12% for Mr. Poroshenko and Mr. Tehivko. So Mr. Poroshenko has unity. It's the first time in Ukraine's history that didn't have to go to a runoff. It's also the first time that one candidate won strong support in the west and the same candidate won strong support in the east. So this unity is something that he has now, should take full advantage of, it won't last. So this is an opportunity he's got. Last sanction is sanctioned, last asset is sanctions, George is going to talk about that. My view is they've done some work. They've had some success. My view is also we should keep them on. We should not talk about any resets or reconciliation with the Russians as long as they're in Crimea. As long as they, as they clearly did disrupt the elections, more sanctions ought to be put on in my view. Sanctions ought to be extended to sectors of the economy. George the expert, you can talk about this. While I was in Ukraine, I had a map on my wall that was put out by Freedom House. I don't know if we have any Freedom House people here today, but we do. So Freedom House map, very useful every year. They put out this map with different colors of free, partially free, not free. The whole time I was there, 2006, 2009, Ukraine was free. It was the only former Soviet Union part of country that was free, other than the Baltics. The Baltics, of course, are a separate category. When Mr. Yanukovych came in, it went back to partially free. It went from green back to yellow. They have the opportunity. This is my bottom line, this is what I started with. The Ukrainians have the opportunity to go back to free. They have the opportunity to take advantage of the support from the international community to improve their economy. They have the opportunity to make decisions for themselves. If they want to join the EU, that's their choice. It's not Mr. Putin's choice. It's their choice. If they want to join NATO at some point, they don't today, I suspect. But if they should, that's their choice too. It's not for us to say, it's not for the Russians to say, in the first instance, for the Ukrainians to say. And that's what they will have the opportunity. NATO then, members, get a chance to have a view on that as well, and they did before. But this is an opportunity, I believe, for a new Ukraine, a reborn Ukraine that has an opportunity to make it into Europe. So I will stop right there. And back to you, Laura. Very good. George, I think I introduced your topic, but I didn't introduce you at the beginning. George Lopez is USIP's vice president, and he leads our Academy for International Conflict Management in Peacebuilding, which is USIP's education and training arm. But as Bill noted, is an international expert on international sanctions, on smart sanctions and their effectiveness, and in fact, has been a critical advisor to the United Nations on their sanctions regime in Iraq, as well as writing vastly on sanctions and counterterrorism. So George, with that, I'll turn it over to you. Thank you, Lauren. And thank you, Bill. I just want to note that I'll give up two minutes of my time at the end, because I want the first question to Bill about one of the things he said, with all due respect to those of you who've come to ask good questions, and you have one for me, so I said we'd go fast. Folks, thank you, welcome. Just in nature of the audience, how many people agree with Bill's last statement, moderately successful, somewhat helpful? Let me just stop there. Moderately helpful sanctions on Putin. How many people would say not helpful at all? How many people, which I hope is the rest of you, think that the sanctions have been very effective? So everybody's undecided. Yes. Good. How many people on Bill's second point think that sanctions ought to be increased? Okay. How many people think they ought to stay the same? How many people think they ought to be taken off? That undecided realm. Excellent. Thank you. I want to talk a bit about the nature of these sanctions. I don't want to bore you to tears with data, but I think from my point of view, two things to start with. Remember that sanctions are a political economy tool for a larger policy. One of the dilemmas the U.S. and the international community has had for a long while is we have imposed on the tool a heavy burden to carry the bulk of the policy, if not in some cases the longevity of sanctions has made it the policy against a particular country. I think in this instance, there's been a proper balance in perspective that the sanctions were one tool of a particular policy of confronting and dealing with Russian activity that Bill outlined so well. The second, I go back to the notion of the political economy. That is, as a sharply focused tool, which this one is because the bulk of it is financial targeted sanctions against both individuals and corporate entities and especially banks, that dynamic gives you the economic clout and the impact that you'd like. That is, they're working, if you look at the economic indicators, but because it's a political economy to sanctions, you can have economic impact, maybe even economic effectiveness, but not have the desired political economy or desired political results. Those of us in sanctions would say, not the desired political results today because we think these are long-term dynamics that take a while to work through and often sanctions slight slowness in producing the political results leads to a dynamic and flow in both the target and the imposer that begin to change the conditions over time so that that which you had hoped happened within three months can't happen within six, and then the whole configuration becomes much more complicated to achieve what the targeted sanctions set out to achieve. In many respects, the coalition, as I'll put it, the Western Coalition sanctions on the Russians is both the best and the worst aspects of this dynamic of the political economy of sanctions. It's the best in the sense that if you look at the large array of sanctions targets over the last 25 years, let me remind you that August of 2015 will be the 25th anniversary of Security Council Resolution 661, which imposed the original sanctions on Iraq for its invasion of Kuwait. We've been at this a very long time as a community. This is the first instance in which a coalition of actors have imposed intense financial sanctions on a hugely diverse and strong economy. One would say, well, you know, South Africa was a strong economy that said, no, nothing's like what we've tackled in trying to deal with having a political economy influence on the Russian economy. Another way that this is one of the best, I'm often fond of saying that sanctions are supposed to not only enrage the target, but actually engage the target. And one of the things that I think has been distinctive about this, and we see it unfolding right today in Brussels, is this is one of the highest degrees of communication between imposers and target. And not only target in a national sense, that is, we're not talking third-level bureaucrats sitting down and negotiating whether you want to take off the trade embargo. We're talking the very leaders who imposed, and the very leader against whom these are levied, even though he's not named directly in the sanctions, but his support system is. They're also the worst of sanctions in a number of respects. Because of the global diversity of an economy, you can hit hard on the financial sector and then see how far that takes you. But it's happened almost the day after the first U.S. sanctions were issued. Brussels said, come on, if you want to have bite, you've got to go to the energy exports. You've got to go to the energy sector. And what about extending the list by 34 individuals in every Russian bank instead of this mechanism? So if you're a believer in the data, which long-term shows that sanctions are most effective that are hit hardest early, you're saying we've done these incorrectly. If you're the believer in the slightly minority view that says, because sanctions are a bargaining strategy and a tool of coercion, what you want to do is always retain the leverage and ratcheting up event. You want the quid pro quo. You impose on the basis of a series of offenses, make very clear why these are the targets, and why you've gone to this particular mechanism, in this case financial, to punish or constrain or influence the decision-makers. And then you become very clear. This isn't where it ends. This is just the beginning. And the psychological dynamic in this political economy is meant to convey, next move is yours. What are you going to do next? Because that'll incur more sanctions. So the reason we've had, depending on how you count it, three or four sort of episodes of sanctions between the West and Putin is because he continued to either do things in a commission way that we decided to punish and constrain, or failed to do things that we issued as ultimatum, like to draw more troops off the border. The question now, which is again in the worst category, is with these kinds of meetings that are going on in Brussels, the absolutely clear strategy by Putin to divide and conquer the political base of these political economy sanctions, do you have a situation where the coalition might weaken, where people would say, well, there's no real corporate delecty anymore. He's just being stubborn. Actors may not agree on the forces that have been entering the region that Bill noted, and say, well, you know, it's hard for us to tell whether that's a conscious decision at the top, or whether that's a continuation of these, so there's all sorts of ways to talk about what's going on and does it lead to another round. And the search for what's going to be the hot issue that Putin takes as an act of commission, as opposed to not doing some things that are supposed to be done given the original set of demands, is a big issue. Now let's go to the economics. One of the things that is very helpful about this group of sanctions is because they're on the financial sector, they can be quickly tracked for their effect. In the old days of trade sanctions, too long to figure out real impact of trade, various ways to undercut the system, but when you're talking about locking down bank assets, you're talking about freezing the financial accounts of the big movers and shakers of an economy. When you're talking about doing away with the system by which major financial actors like MasterCard and Visa do their business, you're going to have an immediate impact. And I think the data is pretty clear and undisputed. Investment banking fee income, which has been very, very helpful to the Russian economy from 2010, is about a third of what it was. It fell $166 billion in the last quarter. That's very, very serious. Russian economic growth overall is expected to further contract where most predictions from the World Bank and others put it at zero by mid-summer. Now, there was a little luck here in the timing of the imposition of sanctions, as many of you know. That is, it was a very slow fourth quarter for the Russians to start with last year. But they had said, look, it's a slight adjustment to the dynamic of what we're doing with infrastructure investment and, in particular, Putin's own reassertion of certain controls of the economy that we're expecting a big bounce. And here's why we're expecting the bounce. Well, in the areas where they thought they would expect the bounce, we've cut off the right financial sectors. In particular, investment fees that had been increased on companies coming into Russia, where companies were willing to absorb because this is considered the biggest best emerging market in that region of the world, those investment fees have been cut to $44 million this month as compared to almost $70 million in May of last year. If you put together that drop with the conscious attempt by the government in December to make investment of this type more attractive, it's not just that the fees have fallen by almost half. It's that what was projected to be, maybe in the area of $100 million a month, you're now at 40 percent or 44 percent. It's very important, I think, to see that on the indices, hedge funds, international market investment funds, Russia's place in equity performance in emerging markets has fallen dramatically. A 13 percent drop in this area is in the minds of some of the people I've talked to, catastrophic. You've now fallen below Mexico in a series of eight or nine other environments that are seen in emerging markets in the globe, and that's been a big source of private capital for the Russians. It's now no longer accessible to them, and that's why we have part of the decline. Many people would say the key indicator for success of financial and targeted sanctions is the drop in the currency exchange rate. So depending on which day you look, the ruble has fallen from anywhere from 7.7 percent to as high as 11.3 percent. Now part of the reason for this, I think not falling more, is the action of the state itself in really bolstering this dynamic and making sure that out of nationalistic fervor, Putin's deciding to say all good investors now should come back. Forget about the London markets. Forget about Geneva. Forget about these other things. Let's come back and build a Russia for Russia. So the inflow of some assets has made them have more currency convertibility than they normally would have. Brings us to the question of what about the energy sector and the available financial funds in the energy sector without doing energy sanctions. There's ways in which Putin very, very consciously, probably unrelated to this dynamic, but just given his economic philosophy of centralization. He really spent a lot of time in the last half of 2013 and the early part of this year creating financial mechanisms in which energy resource monies were brought back in. And a lot of time courting, as many of you know, some of the big oil firms to invest to really upgrade material product and put particularly Russian ability to explore in the worst regions the deepest kinds of reserves. So part of the reason he brought some of the capital back was to create a more favorable condition in which the investors would realize that such a good base and cornerstone here of doing long-term work in the energy sector, we're going in. Not just based on rate of return promises, but on the basis that the Russian economy itself had been putting money into this. Coincident with that policy was the notion of being able for short-term projects to play the international debt market in liquidity in other ways, in which the Russians had actually never done before. So the last half of last year saw Russia on the one hand going to certain debtor relationships and paying it off to zero and then moving money and engage in big loans short-term with others who would give them credit tied to a specific kind of product. That debt swap, that market is no longer available to them because the banks can no longer move money that way. And countries, even if they're not placing Russia on their own sanctions list, know that there's a dilemma with doing this if you want to later do business with the EU. Many in the financial sanctions business say these kinds of indicators are very important and show a real bite. Where's the bite? Not on the Russian people at this stage yet. Local interest rates haven't changed dramatically, even though bank borrowing rates and the rubles rate have changed. I think the government's been very, very careful about not passing that on to the average Russian in the street. At the same time, the client group, even though for some, this is too small in the number named, and the key banks are in fact under great stress. Where will that be three or six months from now? I think considerably more so. One Russian banker who was willing to talk under conditions of anonymity told a friend of mine in town, this is a very expensive idea of Mr. Putin and complete with the sigh. And it's going to become increasingly expensive. Now, does the increasingly inspected matter? If your target is how do we change Putin's mind, I go to one of Bill's early statements who among us would seek to know or could know of Mr. Putin's mind. I don't think that's the issue. Consistently with sanctions, we're interested in outcomes and changes of behavior at the national level, not whether or not somebody blinks twice or pokes himself in the eye. What is important is whether or not we're able over time to continue in this political economy mix to specify to the Russians, if you want greater dialogue about sanctions loosening, then we need to see the particular kind of behaviors. And we have to be clear in communicating to Mr. Putin, despite his ability to meet singularly with certain European leaders, that as a coalition, if you do X, Y and Z, it will be followed by these kinds of sanctions. Now, there's the point in which we I think we can be nervous. There is a way in which the European colleagues have done what you'd ask sanctioned partners to do in order to really, really kick the target in the shins and convey a hurt right away and threaten that there'll be more. You may have to take a stubbed toe. And they've taken a bit of a bite. They're worried about currency circulation. They're worried about being able to maintain their own momentum out of their own recession. They're worried about the dynamic of energy, flow, and export. But I think most analysts would say, if you can keep the political commitment with Europe and go to one or two more rounds of this without it hurting Europeans very much more, you'll have a certain escalator dynamic in some of the sanctions, particularly if those are aimed at another dozen to 15 individuals who, even though they've already moved their own money and their corporate money, we can find ways to constrain that and its movement to other assets as Russian millionaires themselves try to protect themselves from the worst effect of the sanctions. You simply can't save everything in Russia and get an interest rate. And many of these folks over time will begin to say, look, seven years from now, are we going to be in this situation? No. But I'll be in the situation in which one third of my wealth is gone. I'm finding an outlet. It's those outlets that we can constrain. What's the response of international banking community in this Western coalition to where we are now? Very, very important that we realize the gains of what sanctions analysts say is the emerging chilly climate for that target. It's very, very difficult, even for those who have direct friendships long term with folks in Western oil companies to go and say, look, you and I know five years from now we're not going to be at the same spot. Let's not lose our advantage. Let's find a way to do this. They're not getting an appropriate response. They're also aware that those who finance Shell, Mobile, and others are not inclined to give money for this. So that increasingly reverberating chilly climate is going to squeeze and squeeze fairly, fairly steadily. It is a couple of drops in the bucket, but if your bucket's this size, those drops quickly overflow. And I think we're at a point where in some of the sectors, particularly the value of the ruble and that dynamic, we are going to have some overflow that's going to have some effect. If I were to look at the one or two areas that might most trigger either Western unity or Western dissension, it's going to be how the Russians come out with their decision as to what to do with the gas deal and a gas agreement with the Ukrainians. If they're going to play tough, do maximum pricing, continue to call in past debts and the like, that may trigger greater sanctions. I admit it's a little difficult to hear Western societies say, energy shouldn't be used as a weapon if you've at all kept pace with Iran sanctions over the last decade. But that's the position we're taking. Let's see how far it goes. It's also the case of how many exemptions we're willing to give, particularly European neighbors on this. But there's also a best of times ability of the West here to do something that you're often not able to do. That is, Ukraine is the most unfairly affected secondary unit from the Russian sanctions because of this energy flow. If we're willing to pay the money, if we're willing to give them alternative access to gas and various other kinds of things, they can with stall those negative impacts. With stalling those negative impacts, kind of actually then bumps it back to the Russians. The Russians are assuming someone somewhere is going to pay for their gas at the price they determined. A lot of mention a couple of weeks ago about, jeez, those Chinese, they're going to go and buy Russian oil. Look at this deal. That's a significant deal. But let's remember, the Chinese made a similar deal with the Iranians. And then in the first negotiating session, said the Iranians, well, we're very happy to have this deal too. But we're certainly not going to pay market price. And the Chinese derived tons of benefits from that deal. I don't suspect they're paying the Russians market price under any conditions. But the Russians need an outlet, so they'll take it from now. I can't resist, as my closing remark, that everyone knows that sanctions have never brought down a leadership. Not to mention a single leader, including those who had sanctions imposed on them because of mass atrocities they have perpetuated in their own realm. This very expensive idea that Mr. Putin has embarked on might have us analyzing in four or five years whether or not the expensive idea became way too expensive for the economic giants of the society to tolerate much longer. Thank you very much. Did you like the first question? And yes, I will take my first question. But I have a question for you. No, no, no. I'm sorry. OK, go ahead. How would you vote on the questions you asked us? No, I think I made very clear. I think sanctions are having their tailored and focused and reasonably good impact. And would you extend them? I would only extend them. I mean, the trade-off we have is do you? No, no, no, no, no, no.  The trade-off we have is does Treasury do something unilaterally and then say have the Russians react? See, this is no longer a global coalition. This is the old Cold War of the United States. Or do you hold off a bit longer or actually impose less restrictive sanctions but impose them all together, the Europeans and the Americans? That's the trade-off right now. And you come down? I come down on the coalition activity together in the short term is much more important than the bite the sanctions will take in the medium term. OK, now, since you gave us a really excellent analysis of the role of corruption, let me push the envelope, Bill. Is the Russian action, which has been interpreted by 99% of the world as geopolitical and strong-arming and old Cold War stuff, isn't that really about maintaining the corrupt networks between Ukraine and Russia? That at the end of the day, we've all been had that this is about territorial aggrandizement. Crimea is only incidental. What's important is keeping that network that Putin and his cronies have been able to maintain over the last decade and making sure that that source of enrichment doesn't fall victim to falling away. I think not. I think that gives him more strategic vision, strategic actions than he's merit. That is, I think he's a tactician. I think he took advantage of Crimea because he could. He wasn't sure what he was going to do about Luhansk and Donetsk.  So I think he's real tactical, not strategic. The only strategic thing is he doesn't want Ukraine to leave his sphere of influence and go into Europe either in the EU and much worse in the NATO. But so I don't think it was driven by these long-term corrupt connections. But that's my view. I disagree. Good. At this point, we'd like to open it up to questions and also your comments and remarks as well. I would ask there's sort of only one rule that we ask, which is that we are webcasting this presentation today. And it would be very helpful to our audience on the other side of the camera if you could please turn on your microphone and speak clearly into the microphone. Mike Jajic, I believe you've. Yes, thank you very much, Lauren. Mike Jajic's working on a book with George Lopez on illicit power structures. So I want to follow up on his comment with which I certainly agree in terms of the influence of the relationships between oligarchs in Ukraine and Russia. However, there's another interpretation in that if a kleptocracy in the Ukraine could be overthrown by the people of the Ukraine, then Vladimir Putin, who runs a kleptocracy himself, would also be vulnerable to being overthrown. So his one interpretation of his actions are simply self-preservation. And by taking the action that he's done, the rhetoric that he's wrapped his action in of protecting Russian national interest or Russian nationalism has rallied the people of Russia behind him. I wonder, Bill, whether you think that the two together. And of course, that has to do with our reaction because we've targeted our sanctions on his illicit support structure, which may be the most effective way to try to deal with that. Mike, a great question. So I will leave to George to answer the question about the illicit power structures and whether or not he, and he does agree with you on that. On his overall strategy, again, I don't believe that he had this in mind as his goal. I mean, I think he had his general sense that there was a vacuum, if you will, in Ukraine. Yanukovych had just left. He fled. There was a reaction from the Rada, from the parliament, was to appoint a new president. They appointed the speaker. Turchinov and Putin took that opportunity to move in on that. So I don't think it was broader, more strategic, thought out than that. And go back to your first remark. I think if we have folks in the room from the human rights community, they'd say you're exactly right. If you look at the internal repression that's gone on against reporters, activists, even the decision to say that there's gonna be no demonstrations in any of the major squares in Moscow, there is, I believe, a deep-seated fear among he and his compatriots that the Arab Spring could become the other Spring. And that that's something that they don't want the world community to see Russian security forces openly attacking Russian citizens. So this is very, very important, I believe. It's a demonstration effect. Yeah, I had a question. Sorry, could you identify yourself? Sure, my name's Catherine David. I did a Fulbright last year in Ukraine and in Odessa. And I'm currently working for the Holocaust Museum and starting a PhD in Russian history in the fall. And my question is about how we spoke about how Putin's goal was to kind of destabilize Ukraine and use the protests as the opportunity to do that. But in some sense, I mean, hasn't he succeeded in the fact that this panel has mostly been about Putin's goals for Ukraine, as opposed to the Ukrainian people's goals for Ukraine. And perhaps if Putin weren't involved at all, the U.S. would really not have any interest in Ukraine or care what the outcome of the protests are. No, very fair question. And if I focus too much on, or predominantly on Putin, then that's my mistake, because I intended, in my remarks here, to talk about Ukraine and its future and its new possibilities and how the people of Ukraine, as evidenced by this little part of Ukraine in the south, just, I flew into Odessa, by the way, and then had to drive in order to get over to your son. But how that demonstrates that there is a resistance to this Russian one and that that unity, even in the south and the east, is something that is encouraging, that gives me optimism on this thing. So I would say, yes, it is about Ukraine. What I ended with, which is the hope that Ukraine would be able to make its own decisions, own decisions on the EU, eventually own decisions on NATO or other alliances, own decisions on how it develops economically, politically. Those are the kinds of things that we're talking about. However, you're exactly right when you talk about the focus of Ukraine. It won't last. And so Ukraine's gonna have to take advantage of this 15 minutes of fame to get some things done. Take advantage of the attention that it's got from the IMF and the international community. The international community is supplementing the IMF support. IMF's got, what, 17 million, but they need 35. Take advantage of that thing. People are now, the international community is inviting Poroshenko to the D-Day celebrations. This doesn't happen all the time. Take advantage of that. But it is about you're exactly right. I'm glad you raised this and corrected this. It's about Ukraine. I have two questions. Having dealt with sanctions in the Balkans, and I would argue that countries in the Balkans are still dealing with the negative consequences of those sanctions. When you talk about affecting business interests, for example, what we saw in terms of the established financial elite and business elite during the time of Milosevic and the wars in the former Yugoslavia, most of those people are still very wealthy, actually became extremely wealthy during the sanctions period. It changed a little bit when politics changed, so when the ruling powers from that time shifted, lost power, the opposition came, their numbers contracted a little bit, people were sacrificed, but for the most part they're the same people. What gives you a sense that these sanctions will produce a different effect on this political elite that you're trying to affect? It seems to me this is like a business opportunity for them. A different way of thinking. Instead of placing money in transparent ways, you're gonna be placing them in ways that aren't transparent, which create greater problems in terms of trying to build stability in the region, but especially specifically for Ukraine. Secondly, it seems to me, listening to you, there's one big piece missing in this analysis, and if I was a decision maker, especially in Europe, I'd want to see this as part of the analysis. How much is this going to cost Europe? Because they're the ones who are gonna pay the bill. And if you weigh this and you look and you say it's gonna cost X amount to the Russian economy, it's gonna cost Y to the Ukrainian economy, and we haven't heard what it's gonna cost the Ukrainian economy, and I'd like to hear that, because it's gonna cost the Ukrainian economy something. What is it gonna cost Europe? And then does the benefits in terms of what may happen in terms of a political effect, get outweighed by what will happen economically? Thank you, those are just excellent questions. Let me try to be as concise as I can. I think your analysis of the Balkans dynamic is right on point. One of the things we in the sanctions community hope we learned from that situation is that those most powerful hit by sanctions early that are in the government are likely to be able to maximize their control over the sanctions busting operation and be able to put themselves in a situation in which they can maximize their gains when sanctions end. But that's conditioned by what level of rule of law and what level of further financial asset capturing would happen after the sanctions. That is, you could lift sanctions in certain areas that help the new government do business but still keep sanctions on certain other groups that in fact are undermining the process because they're interested in the corrupt economy. Rule of law is their last friend. Democratization is their last friend. They want the system to be oiled in their direction. We were naive in the downturn of the sanctions and I think there's a number of mechanisms that are now in place to make sure that and to even think ethically about what our responsibility for post sanctions environment is. That doesn't mean that any of this is gonna be perfect but the Balkans example is the case that keeps hitting everybody in the face so I'm very glad you mentioned it. You know, I haven't done the calculations but I think you're right. We're in a comparative cost dynamic and again, both on the politics and the economy. Russia, Ukraine, the United States, the EU and also EU, United States, Ukraine in terms of aid flows, in terms of changing trade preferences and any number of other dynamics. The bet here, as was the bet with Iran under other conditions, is that the shock effect that our economy or the Europeans will have to absorb will in fact be pronounced for a while but not nearly as pronounced on their side so in the race for who gets hurt more, they cry uncle first. This is always a bet and targeted financial sanctions. We'll see. George, do you wanna talk a little bit though about the impact of sanctions on Ukraine and its economy? I think that was your third. Well, you're looking at a couple of different levels. One, what was the ability of the past administration before the first changeover to attract lots of financial flows into Ukraine, particularly in terms of real cash investment? I would say because of the corrupt linkages as well as the national linkages and the decision to do heavy investment in areas like Ukraine with a reasonable population, reasonable skills and real resources that this was gonna be a fertile ground for further investment. So if one uses the economic indicator, what investment monies and production and growth now doesn't happen over the next three years because of the sanctions, it's a serious cut and this is why aid from the West and the IMF is really, really critical. The second one is, I'll allow your Balkans question. If there was that boom economy three or five years from now, how much of it is tied to increasing the position of Ukraine on the corruption index? Everybody's happy, everybody's healthy, there's a trickle down money that works, but this is a sham and at some time it's gonna fall into each other and some of the protests originally in the street, in my mind, were to turn over a corrupt system and to figure out a way in which you could do this as a reasonable country under reasonable conditions and get back to the freedom dynamic that Bill talked about earlier. So I think there's a situation in which you can say with all sensitivity to the Ukrainians, things are gonna get worse before they get better, but the better is a better on a political side and an economic side and a long-term side that we hope would be worth the damage and hope that your friends stay beside you. That's very, very critical if the friends stay beside them. My name is Dene Patterson. I'm from the Public International Law and Policy Group and Mr. Taylor, I really appreciated how much you looked at the internal situation Ukraine and their future going forward. You touched on the very real economic challenges that Ukraine's going to face with that and I wanted to direct that a little bit towards their current military and army resources. We've seen that Parshenko has pledged to really pump a lot of resources into the military in order to increase its capacity to address the continuing instability in Ukraine, but those resources don't really seem to be there, even just yesterday the National Guards were forced to leave their base in the haunts because they ran out of ammunition, which is clearly a serious problem. So I was wondering if you could just address what the way forward is from here for Parshenko. Does that mean increased financial aid from the international communities? That mean joint training? Does that mean NATO has an increased role here? I'd love to hear your thoughts on that. Thank you. On George's last point, it fits into this. Ukraine's friends, people who want to see an independent, prosperous, democratic Ukraine need to stand with them. They need to stand with them economically, financially, but also militarily and also on the security side. If the Ukrainians ask, as they have, but to the extent that the Ukrainians are interested in military support, which they clearly need for the reasons that you said, then we ought to respond. We've started, the United States has started to respond pretty small, but we've begun, started with meals ready to eat, okay, pretty small. But now we have actually stepped up and we have done some more on night vision goggles and protective equipment. And some, we should go beyond that. And I think this is where what Mr. Parshenko is asking for is beyond that. In the time I was there, 2006, 2009, there was a very robust military-to-military relationship between the United States, so bilateral, between the United States and Ukraine, but also with NATO. And NATO, as you may recall, had offered, had talked with Ukraine about a membership action plan back in 2008, which would have given them the access, given the Ukrainians access to a lot of the training and a lot of the even equipment that would be necessary for eventual membership in the military alliance. But that kind of support for in military financing, where they can buy things from us, joint training, joint exercises, again, both NATO, the best ones are the joint training with NATO and other, the Romanians and the Bulgarians and the Germans and the Poles and the Baltics and the Americans being there. There were a series of naval exercises. It was extremely valuable for the Ukrainians. This all takes time. The problem of running out of ammunition in Luhansk is a real problem and it's a short-term problem and it's not gonna be fixed immediately.  You can provide that kind of resupply, but the underlying structural problem is gonna take you a long time to fix. And again, to the extent that they asked for it, the Ukrainians asked for it, I think we should respond. I wanna correct one thing I think I said. I think I said at some point that the decline in investment fees was $166 billion, it's $166 million. Hello, gentlemen. Appreciate your comments today. My name is Stuart Gallagher. I work over on the Ukraine Communications Task Force just to give you a little background on that. It was set up about 10 weeks ago in response to the Russian aggression that was taking place against Ukraine, specifically the propaganda side of the house. It's an interagency organization who was put together to address that issue. We've seen some tremendous, I guess an IO capability and campaign on a scale that is pretty much unprecedented. It's pretty much weaponized information on a level, like I said, just unprecedented. So the question really is, we found, it's our contention that the US government at this point in time is not really equipped to engage a threat at that level, just across the board. What are your thoughts going forward? And I guess it's twofold because, number one, what is America slash the EU's end in that area, specifically to Ukraine? Are we looking for it to be stable? Are we looking for it to be a EU member? Are we looking for it to be NATO? And I've been asking folks around the State Department as I've been working over there, what are we looking for over there? Because that's gonna define a lot of what we do going forward. And then secondly, what are your thoughts on putting together some sort of an organization to be able to deal with this start in the future? Because I don't think this is a one-off. This is not a, oh, well, we're just gonna mess with Ukraine right now and then we're gonna move on. This is a regional and a long-term effort and something that's gonna require some significant policy behind it. But moving to a policy of that nature requires some decisions made at some very high levels and reframing the paradigm that the Russians are now our friends. Now where are we going? Are we going back to the Cold War? Because that will drive the train everything else we do. Does that make sense? Okay, thank you. It's a good question. On the broader question, the broader problem, the fact, I would say it is fact, that Russia has changed from a potential partner over the last 20 years to a potential enemy. I mean, it is clearly an enemy that I would say. It's not a partner any longer. It's clearly not a partner. It has violated all of the commitments that it has, all the standards, all the norms that we've been living by, certainly since the end of the Cold War, but I would even say since 1945. I mentioned that the UN debate, where when I went to the General Assembly, Costa Rica, I thought made one of the most powerful statements. Costa Rica said, you know, we're a small country. We don't have an army to defend our borders. We depend on the international community and the international standards of sovereignty and inviolability of borders to protect ourselves. That's challenged now. That's violated now. So it's that challenge to the international community that the Russians now post. And Lauren mentioned a broader discussion of, not just Ukraine, but a broader that she and team here are gonna be taking a look at. So Lauren, you have thoughts. On the first part of your question though, I thought was also very good. What are we after? I think we have to be careful when we talk about what we're after. I think it's better to talk about what the Ukrainians are after and what we're after is to give the Ukrainians the ability to make that choice. We can't make the decision for them. You mentioned membership in the EU. You mentioned possible membership in the NATO. If they ask for it, same way as we talked about in terms of the military support. If they ask for it, then we should support them. That's their decision. Now there will be people say, oh, no, you can't let them join NATO because that would upset the Russians. Well, heck with them. Or other words, that affects. I don't think that's the consideration. I think the consideration is exactly what we said. Give them, allow them, allow the Ukrainians to have the choice on that. The end should be a prosperous democratic Ukraine that can make its own decisions that will integrate as it will into organizations that it wants to. But Lauren, you bring up the... I'll just add a little bit of Envyoliukin too about some of our thinking in terms of the regional perspective. I think there's a real issue here and it's not just Russia's policies and strategies for the regions, but the real unintended consequences of a number of Putin's actions. I think when we look at the situation in Abkhazia today, and their populist uprising that has pushed out the president of Abkhazia, this is not a part of the larger geopolitical struggle, but one really sees in the situation people and actors in the region mirroring Russia as it mirrors Ukraine. So in the sense that Putin was very tactically smart in using the same tactics that the Western Ukraine had used to throw out the regional governments and seize the administration buildings, I mean that's exactly the same sort of populist uprising that happened in Abkhazia. So while the reasons may be different, we're beginning to see sort of an unfreezing of regional dynamics that may in some ways have nothing to do with Putin, but then all of a sudden, sort of understanding the situation they're in. I would say the same thing in Kaliningrad and in South Ossetia, where they now look around at what's happening in the region and say, wow, we wanna rethink our status within Russia. And I'm not sure Mr. Putin intended those types of regional dynamics to unfold in the way they have. I also think that there's also, we need to re-look at the region and what's happened there over the last 10 years. Under Soviet times, there was a real emphasis on all foreign policy relations flowing through Moscow and back down, but a lot has happened in the region since then in terms of inter-regional relations, et cetera. I think Kazakhstan's statement to Armenia this week about joining the Eurasian Customs Union that you may only join once you have UN approved borders, which was Kazakhstan saying to Armenia, what's going on with Nagorno-Karabakh? So I think it's not just the Putin strategy, but what are we beginning to see unfreeze and flow within this region? May I just take a quick bite at that? We're sitting at the US Institute of Peace where our mission is to prevent, mitigate and resolve violent conflict. I think this is a huge challenge for us in a different way in town and the larger globe on the prevention side. For example, the kinds of experiences that you're analyzing obviously in great detail and the mix of them from the propaganda machine to the infiltration to the corruption, all of these things have not been on the traditional diplomatic or even scholarly technique dynamic nor Mike's concern about the real enemies of peace, corruption, crime and illicit networks. None of this can be compared with military hardware. It has to do with a big rethink about the dynamic of conflict in which everything from cybersecurity to how we counter hate speech to alternative sources of social media and news outlets for people who all of a sudden whose televisions have now had the national television station telling one side of the story to infiltration and integrity of borders. All of these things present a new challenge not only to security frameworks at a larger level but it really hits us as technicians who are supposed to be able to be helpful as conflict is unfolding. We've got to come back down the curve and do much, much more anticipation. We're today about Ukraine. How long before about Honduras? Because all the indications of crime, corruption, border security that doesn't hold propaganda run by state controlled media, all of this stuff is there. Except in this case, it also has a lot to do with Los Angeles and gangs in Los Angeles and that gets layered in. So I think it says to us what you're undertaking in this experience is a whole different world because kinetic force doesn't deal with this. The notion of deterrence is turning in its grave because of what happened, what Putin did. And no, it's not about deterrence in my mind. It's not about a new Cold War. It's about a new framework and a new tapestry of threats to security that when mobilized by forces with bad ideas in mind can lead them, at least in the short term, to do what scoundrels have done for ages to win in the short term. The question is what's the gap between their winning in the short term and our ability to get countering corrective devices that reinforce the dynamic of security, freedom and free enterprise. Any other questions? Then if you don't mind, in the last five minutes remaining, Bill, I actually have one, which is, you mentioned the many, many challenges facing the current regime in Ukraine, but I'd like to hear a little bit more about the post electoral politics in Ukraine. It seems to me that while Poroshenko has a very, very strong elected mandate, there's still very strong other centers of power within Ukraine. So the Medan leadership, the national right, can you talk a little bit about how he's going to balance these interests, especially in key areas where he has spoken on in terms of re-establishing relations with Russia and how he's gonna balance that with the Medan leadership in terms of managing the counterinsurgency in the East when you have the national rights so embedded in the security situation there? Yeah, an excellent question, Lauren, thank you. So the politics of Ukraine today are up in the air. The Medan, as I mentioned, as you just mentioned in your question, is a strong force. I think it's a positive force. It's not 100% positive because there are some, so Mr. Klitschko, the new mayor of Kyiv, suggested at the outset, this is an indication of the kind of politics that's going on there, he suggested that, okay, it's about time now, I think, to clear out the Medan, so we take down the tires and the, and the folks on the Medan who are still there and everybody who's visited Kyiv in the past two months has visited that place, they said, Mr. Klitschko, wrong, we're staying here until you convince us that you're going to do what you've promised to do and that we've demanded you to, so it's not entirely under control on the thing, but it's, on net, I think it's a positive force. The right sector is indeed currently overrepresented in the government, in the cabinet of Mr. Turchinov, who hands over the presidency day after tomorrow to Mr. Poroshenko, but his cabinet under Yatsenyuk, who may stay, does have several members of the right sector who were well represented on the Medan and who were also very aggressive on the Medan, I mean, these were the people who actually took physical risks and pushed back violently against the regime of Yanukovych, so they are now represented in the cabinet, they got 2%, they got 2% in this presidential election, they were, and that's both of the parties, this is the right sector and Svoboda, got together less than 2%, so they will presumably not have cabinet positions in this next cabinet, so now, on the other hand, you've got the party of regents, totally discredited, so Yanukovych ran to Russia, the party of regents put up Mr. Dobkin, who, I don't know, got maybe three or 4%, somebody will know how many percent he got, but it wasn't much as the party of regents, Mr. Tehipko, who had been party of regents, left them and he got five or six, seven percent, so party of regents is just not a force any longer on that, so I think, and of course, then you also, this is interesting, very interesting, you've got Mrs. Temeshenko, you got Yulia Temeshenko, who ran, got what, 13% or so, I'm sure she was very disappointed in that, she's rethinking her role, but when I was back in Kiev on Monday and Tuesday, after the election, her people, I didn't talk to her, but I talked to her people, they say she's still in the game and she's still going to be talking about a referendum on NATO, which is probably not the best time to have this at this point, she's talking about a visit here, so people in this room may have an opportunity to host, Mrs. Temeshenko, when she comes here, if she's still in this game, but my only point here is the politics are gonna be unsettled, Porchenko has an opportunity now to force through, not force through, but to kind of get consensus for strong measures, some on the economic side's gonna do, some on the security side that we talked about, dealing with Russia, there is no one in Ukraine, almost no one in Ukraine who doesn't think that you have to have a relationship with Russia, that is not gonna be controversial. The question is under what circumstances, what kind of relations and what kind of negotiations, gas prices, gas volumes, ownership of pipelines, all those things that have been wrapped up in the things that Mike Dages was asking earlier about in terms of these corrupt linkages are still there and he's got to deal with them, Porchenko's got to, so he's got enormous challenges, comes back again to what George said, he needs support from the international community, he can probably develop at least in the short term support for internally, he doesn't have his own party, he's a small little party called Solidarity, but he's now linked up with Udar, with Mr. Klitschko's party, U-D-A-R, which also means punch in Ukraine, so he's got the building blocks on this thing, but the politics is gonna be very interesting to watch, so those of you who are gonna study this, study Ukraine, not Russia so much. Okay, very good. Our session today is over, but I do say all of you should have cards on your chairs to talk to us about how you felt about this event. These cards are actually very important for us and they're taken very seriously, so we would appreciate you taking just a few minutes to hand, fill them out as you leave and to put them up on the counter as you go, and we should probably at some point think of a little reward perhaps for doing this, but again, we would really appreciate your help with that. Thank you.


So, you don't know the general rules of coloring skin. Not a problem. First, understand that a lot of this depends on the style that you're going for. If you are going for straight photo realism, you're probably better off using some photo scanned skin texture maps and using something like Mari to project them to your character. But if you're doing a slightly more stylized genre with hand painting in mind, you can get some very pretty looking results with some very basic coloring techniques. Shout out to JD Styles, which is where I learned how to do this stuff.  If you're using blender, you can do this by dragging a window for the image editor, make a new image, name it, pick your size, okay, then drag a new window, shader editor, press shift a s image texture, connect them like so, and make sure that it's set to the same name as the image you created up here. And now up here, if we go to the paint mode and on the left, change it to texture mode, you will now be able to use your brush and paint tools to color your model. Start with whatever skin colored base you want, then set the brush type to airbrush, probably put it on low strength. And now you can start coloring away. So for those of you who are in blender, just follow along from here. Now, if you're using Z brush on the left, change the material to skin shade four, which usually looks pretty good once you finish painting. But for the sake of this video, I'll do everything over just for you, turn M on and pick the base color for your skin. And then under color, fill object to flood the color to your base, and make sure that RGB is set to true and Z add is set to off. Now from here, you can just use the standard brush with a low focal shift and intensity and pick a reddish color that will use to start pronouncing the blood vessels that normally clump around the face. Usually these areas are the front of the nose, the cheeks, the inside of the eyes, and the lips.  Personally, I try not to go too hard on the lips because once it starts to look like lipstick, things start to look really weird, really fast. Regardless, once you've got the red areas down, now we have to add the yellowish green tint that happens in between the red areas. And finally, for the areas that are farthest away from the blood vessels, we add a slightly bluish fade. So these areas are usually like the sides and bottom of the chin, under and over the eyelids and the sides of the cranium. Finally, use a slightly deeper red to touch out the more fleshy parts like the inside of the mouth and the inside of the eye cavity. Afterwards, from this point on, it is completely up to your discretion as to how to do the makeup. I don't normally put too much, but I do add a very slight eyeliner to highlight the eyes. Now, once you have done the head, you just repeat this exact same process for the body. Use a red airbrush and start dabbing wherever the major blood vessels clutter up on the skin. Usually this happens when skin meets other skin at 45 or 90 degree angles. So above and below the boobs, elbows around the glutes, knees, ankles, toes around the groin, her spine, shoulder blades. Don't forget about the shoulder, collarbone and neck areas as well and knuckles for each finger, wrists and the insides of the hand. Then decide what color her nips are. And now we move to the greenish yellow color and start dabbing the areas in between the red ones. It doesn't need to be perfect. Just a slight touch is more than fine. And finally, we use the blue tent to start coloring the outskirts. So these are areas that are far away from red, but usually on the edge of the yellowish green zones. So this is usually like in between the joints. Once you've completed the painting, be sure to check M and under color fill so that it shades the base of skin shade four. And then right under the UV, set the size and map however you want. And down under texture map, click create from polypaint, and it will plaster your work to your UVs. Then clone it. And at the top under textures, flip vertical and export the image as a diffuse map. If you are in blender, make sure you go to the image and save as not save the file save as image. Otherwise, you will lose all of your work. So remember that. Anyway, once you've done that, you're done. I hope that helps. And as always, if you have a fantastic day, and I'll see you around.