Archive for February 16th, 2013


Another anti-corruption initiative for Ukraine? The EBRD

February 16, 2013

How many anti-corruption initiatives and laws do you need to realise that it is not the number of laws that matter, but that it is the effective, fair and equitable implementation of those that exist that gets results?

It is political will to neither interfere in, and also provide, a suitable legal framework – together with an incorruptible judicial impartiality – that generates if not an entirely corruption free playing field, at least a playing field that is equally corruptible for all players.

Thus it is somewhat with a mixture of dismay and despair that I note the results of a meeting in London yesterday between the EBRD (which is the biggest single investor in Ukraine with investments in 315 projects worth Euro 8 billion) and Ukrainian officials that has resulted in nothing more than calls for yet another anti-corruption initiative and the now standard statements such as this from the EBRD President Suma Chakrabarti – “This will take a lot of work.  We need an Anti-Corruption Initiative that really stands up.”

At a national level, I honestly can’t remember a Ukrainian administration since independence that hasn’t said the same thing – including crafting and passing an anti-corruption law during each term in office.

The effects have been minimal to put it kindly – particularly so when most major corruption takes place within the biggest and most exclusive business club in Ukraine – the RADA.  That would be the same corrupt and exclusive business club in which all members have immunity (and thus act with impunity) towards the very anti-corruption laws they craft and pass.

The average age of a RADA MP is 47 years old with a known annual income of several UAH million.  Add to that the unknown, hidden annual income, and the average Ukrainian RADA MP is 47 and a US$ millionaire several times over.  This has been achieved by fair and uncorrupted practices in a nation with an average monthly income of about $600?  – Hardly!

The one interesting thing that did arise from the EBRD/Government of Ukraine meeting was the suggestion of an independent Ombudsman to impartially oversee business interests of all market players and investors – which seems a reasonable suggestion – until you consider that it is only a reasonable suggestion because the judiciary and legal system can be bought and sold and thus no business dispute can be guaranteed a fair outcome in a Ukrainian  court of law.

Is such a call for Ombudsman nothing more than a way to circumnavigate judicial corruption rather than deal with it?  More laws to be written to create firstly the office of, and then powers of, this Ombudsman?  Appointed by and responsible to whom?  The same corrupt structure (regardless of party in power) that appoints and manipulates the corrupt judiciary?

Any serious business contract worth the paper it’s written on in Ukraine nominates the courts of London or Stockholm for arbitration in the case of business disputes – far outside the jurisdiction of the unreliable Ukrainian judicial system and influence of Ukrainian politicians who act with impunity over the anti-corruption laws they create and also fail to see implemented.

More words, a few more laws, the creation of another office that is likely to be filled by somebody far from independent when it really matters (considering they will be appointed by some of Ukraine’s most corrupt – whether it be a presidential or parliamentary appointment and regardless of party holding power at the time), plus the likelihood of spending a great deal of time and money reinventing (or just tinkering with) anti-corruption policies and initiatives that already exist in huge numbers, be they from the World Bank, IMF, other sovereign nations, the world of academia, the corporate world etc., is going to achieve success where it has failed numerous times before – how exactly?

Is the aim simply to be less corrupt?  Does that make a difference?  Surely not if the rule of law is to be applied equally.  After all the theft of a Snickers chocolate bar and the theft of $1 million is still theft – the very same law still applies to both instances.

Perhaps it is a matter of being less obviously corrupt?  But is there not a kind of perverse honesty relating to the obvious and blatant corruption in Ukraine compared to other nations and entities which sit westwards on the compass, but go to much greater lengths to hide their nefarious dealings?

I know some may think I am somewhat prejudging the outcome of whatever the EBRD/Ukrainian anti-corruption initiative will be, but I have lived here for a long time, under 3 Ukrainian presidents, far more parliaments, seen numerous anti-corruption laws written and left unimplemented (or selectively applied), seen the judicial system interfered with by every administration in that time on several occasions, and regardless of the the political will (existent or not) to implement any such laws, it has always been an abject failure simply because the RADA does not and cannot control the regional fiefdoms. – And it should be said, the EBRD has continued to invest in Ukraine regardless.

If the EBRD expects leadership in this area then it will have to force the issue somehow (perhaps by leading?) – without opening the door for Russia or China to fill those investment gaps with the inevitable geopolitical consequences that would have.

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