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Victor,
This is a very insightful and incisive question!
In fact, I've been working in Russia and Ukraine on the very issues you're describing for the past six years, and have had many, many discussions along those lines.
It seems impossible to separate poverty relief, civic development, market reforms, and organized crime. All of those factors are interconnected to some degree in every location in the world. I agree that rule of law is fundamental, and have in fact said exactly that in an interview with International Committee for Crimea, just prior to Ukraine's Orange Revolution. ( http://www.iccrimea.org/scholarly/economicdev.html ) And you're right: without rule of law, if the economic cake gets bigger, it will likely be consumed for the most part by organized crime merely because they can get away with it.
This comes down to fighting organized crime, which I've recognized and done within Crimea since 2002. Crimea's Prime Minister Kunitsyn, for example, was fired just a few days ago, on April 20. That was not entirely mere coincidence to my efforts in Crimea. I won't detail those efforts here, only because they're too complex to fairly address in a forum brief.
At the same time, I must in all honesty say that the efforts of civic activists across ALL of Ukraine made possible what I set as a personal and professional objective in Crimea: to clean out the Crimean government of utterly corrupt officials, for the very simple reason that it needed to be done in order to have any hope of developing a normal market economy. That would not have been possible without broad-based civic activism and determination across most of Ukraine, among people who were already intent on cleaning up all of Ukraine quite before I raised Hell in Crimea.
Moreover, many civic activists who made it all happen across Ukraine became civic activists because they were poor! Not stupid, not incapable, not without talent, but merely poor because of corrupt, criminal government across almost all of Ukraine who were looting the entire country and economy for their own personal benefit. The need for market reform, whereby most Ukrainians could share the pie rather than a privileged, criminal few, was obvious. Thus, poverty relief/market reform/civic activism/rule-of-law all merged into one whole, inseparable context whereby it wasn't and isn't possible to achieve any of those factors without achieving all of them.
Rule of law, as I've conceded myself, is fundamental to all reform needed in Crimea, and in Ukraine. But there is no separating those other factors. One might say that all factors get to the need for rule of law, and generally I agree with that proposition. Still, without civic activism and development, a strong and very, very intentional focus on poverty relief (at a very personal, not social, level), and focused effort on market reform to share the pie, overcoming organized crime in and of itself probably wouldn't happen.
Respectfully,
Terry Hallman
Kharkiv