Singapore
has been battling corruption for 50 years and is a treasure chest of experience
from which Ukraine could greatly benefit. But the one key ingredient in
fighting corruption, particularly corruption as deeply ingrained as in Ukraine,
is the unceasing support of a nation’s top leadership. Our prior op-ed ended
with the question: “Will Ukraine’s top leaders be up to this challenge?”
Although we do not (as yet) have the clearly measurable results we are all
seeking (i.e.,successful prosecution of many of the thousands of criminals who have been violating the
nation’s laws on corruption) and although we still hear of numerous (anecdotal)
instances of war profiteering and corruption we should withhold judgment until
after review of what has been accomplished since the EuroMaidan Revolution that drove President Viktor Yanukovych from power on Feb. 21, 2014.
1. Anti-corruption
programs and legislation
Ukraine
has enacted a “package” of laws and institutions to fight corruption and
introduce greater transparency and civil oversight.
(a)
The National Anti-Corruption Bureau, the National Agency for
Prevention of Corruption, and the State Bureau of Investigation
(investigation of crimes committed by senior officials, judges, and law
enforcement officers) have been established, and newly trained traffic police
and a national police force is already at work.
(b)
To reduce dependence on oligarchs, political parties will be provided public financing
and required to disclose their funding sources as of July.
(c)
New constitutional amendments have been submitted to ensure a competitive and
transparent process for selecting judges, though progress has been particularly
slow in reforming the judiciary.
(d)
A new civil service law has been enacted that “will revolutionize how Ukraine
is governed.” Civil service appointments will be made competitively, and an
independent board will decide on top appointees. Senior bureaucrats are
prohibited from political party membership and limited to a maximum of two five-year terms. The compensation structure will greatly reduce abusive
management
(e)
An online portal has been launched with full public disclosure of detailed
public financial data.
(f)
All local prosecutors and deputies were dismissed and replaced by 700 new
regional prosecutors selected from 5400 applicants with public oversight
(g)
Ministries are increasingly resorting to electronic procurement and
competition.
2. Decentralization:
Decentralization
is a closely related issue to anti-corruption and government reform in that
centralized government control and disbursement of subsidies had offered great
opportunity to play “favorites” while providing local governments with
opportunities to pocket the subsidies and make excuses for poor services.
Constitutional changes and laws have been adopted that transfer responsibility,
authority, and funding for local services to local governments, subjecting them
to closer oversight and community controls. Decentralization of most of the
services having a direct impact on the average citizen brings a level of
accountability and improved governance heretofore unknown. The resulting
reorganization of 11,000 villages into 1500 viable, self-governing units allows
for more efficient use of resources and quicker reactions.
3. Finance and Economy
Investments
and economic growth are closely related to reduced burdens on business, sound
fiscal policy, and reduced opportunity for bureaucratic “discretion” through deregulation. Changes in the tax and budget code have
resulted in a 50 percent reduction in social insurance contributions, a common tax
rate of 20 percent, and increased revenues for local budgets. The banking system was
strengthened through liquidation of almost 50 insolvent banks. The government’s
negotiated restructuring of $18 billion in debts trimmed $3.6 billion off the
face value of its bonds and resulted in an increased sovereign rating of B-.
The government plans to have 183 of its largest state companies audited by
international auditors, and reduce its
$5.3 billion in losses through privatization.
The massive corruption opportunities in purchase of medication has been
curbed by making purchases through such institutions as the World Health
Organization and UNICEF. The Ministry of
Economic Development has set up an “Effective Regulation Office” to improve the
regulatory climate.
4. Energy
Energy
had been one of the most corrupt sectors of the economy and the source of many
oligarchic fortunes. By moving from 90 percent reliance on Russian gas to 40 percent, energy
transactions are now transparent and subject to competitive bidding.
5. National Security
The
Ministry of Defense has employed a team of experts to recommend internal
reforms and has already saved $7 million from on-line procurement. It has
started polygraphing applicants for finance-related jobs.
All
of the 5 categories listed above as well as dozens of simultaneous activities
in other Ministries, oblasts, and cities throughout the country form a very
strong web of reform that holds great promise for Ukraine’s future. Many of
these positive developments result from new, reform-minded, appointees. Many have been forced on the government by
foreign institutions. And many (such as
the two investigations agencies) are only beginning to mature. But in most
cases the president and/or prime minister would have had to approve and support
these initiatives.
In
almost all cases the road has been made difficult and unduly time-consuming by
various “interests”, bureaucrats, politicians, judges, oligarchs, guarding
their turf and attempting to hold on to as much as they can grasp. In some
cases – as in the selection of prosecutors – the selection process may have
been tainted. In tiny Singapore, after
50 years, over 350 cases of corruption have been prosecuted as recently as a
year or two ago. The battle never ends
and it will be several decades before Ukraine could reduce corruption to a
manageable level.
Have
Ukraine’s top leaders met the Singapore Challenge? They have – in part. But progress would proceed much faster if
they were to put their full authority and the power of the “bully pulpit”
behind it.
