Corruption: the last hurdle for Ukraine’s recovery



Ukraine has made remarkable progress, positioning the economy for strong growth. But, as is so often the case in post-Soviet states, old-school clientelism could quickly smother the promise of prosperity, notes Anders Åslund, a senior fellow at the Atlantic Council in Washington, DC, and the author of Ukraine: What Went Wrong and How to Fix It . The country has experienced an impressive economic turnaround, but corruption remains rife. President Petro Poroshenko’s administration has stabilized public finances, but failed to rein in clientelism, he writes:

In July, Poroshenko stripped the citizenship of Mikhail Saakashvili, the former President of Georgia whom Poroshenko invited to Ukraine and appointed governor of Odessa in 2015. Poroshenko’s decision, carried out by decree and without due process, is legally dubious, and Saakashvili, rather than accepting his fate, has used his denationalization to galvanize Ukrainian civil society. This month, he and the Ukrainian opposition leader Yuliya Tymoshenko entered Ukraine from Poland without going through passport control. By inviting prosecution, Saakashvili has gained a platform from which he can criticize Ukraine’s justice system and Poroshenko’s neglect of the rule of law.

Saakashvili made a typically flamboyant return to Kiev on Tuesday, telling a crowd outside the presidential administration that Ukraine’s political elite must change its ways or prepare to be ousted, The Irish Times reports:

Pointing to widespread dissatisfaction with the pace of reform and pressure on critical media and civil society groups, Mr Saakashvili accuses Ukraine’s leaders of trying to crush potential rivals before elections due in 2019 – even though polls earlier this year suggested he and his party had little support.

“Those polls were taken when we were blocked from all media. And the same polls showed that no party had more than 8-9 per cent support,” Mr Saakashvili told The Irish Times as he walked with supporters and press through central Kiev.

Kurt Volker, the U.S. special envoy to Ukraine, recently urged Poroshenko to focus on enhancing “the rule of law…on your own governance of the country, because Ukraine needs to be a successful country if it is going to withstand this kind of aggression from Russia.”

Ukrainian state-run gas firm Naftogaz said on Tuesday the remaining members of its independent supervisory board had tendered their resignation in protest at what it called government obstruction of efforts to reform the company, Reuters adds:

The move will add to speculation that the authorities lack commitment to eliminate the power of vested interests as promised to backers such as the International Monetary Fund (IMF) and the European Bank for Reconstruction and Development (EBRD).

“The key test of reform is the rate of real GDP growth, and 2.4 percent is disappointing, given the very low base,” notes Oxford University’s Timothy Garton-Ash. “Ask yourself why Ukrainian growth lagged and it was because of the lack of foreign and domestic investment – which mostly relates still to the poor business environment and endemic corruption.”

Transparency International today called on the Ukrainian authorities to create an independent anti-corruption court as part of Ukraine’s legal obligations and its commitments to the EU and the International Monetary Fund. Only this will strengthen the country’s efforts to fight corruption.

“Ukraine should adopt an independent anti-corruption court to ensure that nepotism and cronyism play no part in how justice is delivered in Ukraine,” said José Ugaz, Chair of Transparency International. “President Poroshenko understands the urgency of the situation but his proposal of a chamber within the current system will not work. People do not trust the judiciary to hold the powerful to account because the courts have shied away from this in the past.”

Ukraine could have a new Supreme Court installed by next month as part of a judicial reform process aimed at rooting out corruption, Ukraine’s Justice Minister Pavlo Petrenko said on Tuesday.

“I think from October the new Supreme Court will start working,” Petrenko told Reuters. “The next challenge for us is to establish new appeal courts throughout the country, and to take in new judges in the regional courts.”

Meanwhile, civil society groups, such as a young NGO called Wounded Warrior of Ukraine and later renamed Warrior’s Heart, are struggling to cope with the casualties of Russian-backed hostilities in eastern Ukraine.

As of April 2017, over 300,000 veterans have been demobilized after serving in eastern Ukraine, according to a World Bank report. It is projected that up to 30,000 people per year will continue to join the ranks of veterans if the conflict continues, the Atlantic Council’s Iulia Mendel writes:

Many of them have trouble re-acclimating to civilian life, and many experience PTSD. According to the same report, 23 percent of all Ukrainian veterans have accessed some form of psychosocial assistance. However, most have found this to be both inappropriate and substandard….. In 2016, the organization Warrior’s Heart received support from USAID and the National Endowment for Democracy, and conducted trainings across the country for almost 3,000 returnees—only one thousand fewer than the whole state psychological rehabilitation program had treated as of September 2017.

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