UKRAINIAN REFORMS

UKRAINIAN REFORMS: Reigniting the flame of hope: Ukraine must win fight against corruption in 2016

Anti-corruption efforts must produce concrete results if Ukraine is to maintain international support for its ambitious post-Maidan reform drive

UKRAINIAN REFORMS: Reigniting the flame of hope: Ukraine must win fight against corruption in 2016
About the author: Andy Hunder is President of the American Chamber of Commerce in Ukraine
Wednesday, 20 January 2016 16:13

Joe Biden gave a historic speech to Ukraine’s Parliament on December 8. The Vice President of the United States urged Ukrainian MPs to act decisively in reforming the country. Biden spoke mostly about the courage of the Ukrainian people, their unquenchable thirst for dignity, decent living conditions, and the kind of genuine respect that every human being on planet Earth is rightfully entitled to. He frequently used the words of faith, such as “hope” (10 times), “future” (9 times), and “opportunity” (8 times). Not surprisingly, the word “corruption” was pronounced even more – 11 times. Apart from political turbulence and Russian intervention, corruption is the number one threat to Ukraine’s sustainable growth.

Joe Biden assured MPs that Ukraine is not alone in the struggle against corruption: “You have the unwavering support of the United States of America and the American people -- including nearly 1 million proud Ukrainian Americans.”

 

Importance of judicial reform

In early November, AmCham presented the results of the Corruption Perception Survey. According to the poll, the majority of business representatives have not noticed any significant progress in the fight against corruption since March 2014. Most business leaders believe that the absence of political will is the key obstacle to eliminating corruption.

Despite the lack of tangible results to date, reform in the anti-corruption realm is happening. Specialized state bodies (the National Anti-Corruption Bureau of Ukraine, National Bureau of Investigation) have now been set up. The chief anti-corruption prosecutor and detectives have been appointed.

During his December speech, Joe Biden fairly admitted: “It’s not enough to set up a new anti-corruption bureau and establish a special prosecutor fighting corruption. The Office of the General Prosecutor desperately needs reform. The judiciary should be overhauled… Oligarchs and non-oligarchs must play by the same rules.”

The American Chamber of Commerce in Ukraine has constantly stressed the importance of judicial reform, as well as the need to decrease red tape and further deregulate the Ukrainian economy. We acknowledge that corruption is a multi-faceted problem and many aspects of it should be taken into consideration.

 

Anti-corruption progress

To combat corruption in the financial sector Ukraine has to ensure transparency in tax collection and budget spending. In 2015, the Ministry of Finance of Ukraine introduced VAT electronic administration and an E-data portal that facilitates public control over national financial resources. Moreover, state bodies now actively use ProZorro, a new era platform for equitable procurement. ProZorro significantly cuts the price of products and services. Greater transparency, achieved with the help of modern technology has brought a saving of UAH 2 billion to the state budget.

Our recent corruption perception survey shows that 51% of respondents are optimistic about the prospects of the anti-corruption fight in 2016. To date, the establishment of Police Patrol Service is the biggest success in this area.

“We’ve taken so many critical steps already. But all of you know there’s more to do to finish this race. Not enough has been done yet,” noted Joe Biden, recognizing certain progress.

As long as Ukraine keeps pressing forward, it can rely on Western support. The U.S. plans to commit approximately USD 190 million in new assistance to support Ukraine’s ambitious reform agenda.

We asked Ukrainian businessmen what should be done to tackle corruption in Ukraine. Most respondents (72%) advised to replace the entire staff in the most problematic governmental bodies. The second most popular solution focused on providing proper compensation to public servants. Nearly half of respondents emphasized the importance of stricter punishment.

Closing his public address, Joe Biden motivated Ukrainians to seize the opportunity: “It may be your last moment. Please, for the sake of the rest of us, selfishly on my part, don’t waste it. Build a better future for the people of Ukraine.”

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