Ukraine’s two enemies

The country is on the brink of bankruptcy. There is a need for radical measures.

«Two enemies are preventing us from developing our country – one external and one internal. The external is the war, the internal the corruption”.

This is how a leading Ukrainian politician described the situation in the country in a recent meeting with the Oslo Center in Kiev. The meeting was initiated by Parliamentarians, who sought advice and support from other countries in strengthening the democratic institutions in Ukraine.

The war in the Donbass region in Eastern Ukraine, which has been ongoing since March 2014, evokes concern and strong emotions far beyond the Ukrainian borders. Since the beginning of this year the conflict has escalated further. More than 1 million people in the region have fled their homes and more than 6.000 lives have been lost. At the same time, arbitrary detention of civilians, torture and disappearances have been reported. The armed separatist groups are responsible for most of the offenses. But according to the UN, Ukrainian authorities are also allegedly behind some of the offenses, like arbitrary and extrajudicial executions. The Russian involvement in the conflict brings to life geopolitical tensions and conflicts that most considered to be part of history. Ukraine has become the arena for the bloodiest conflict between Russia and the West since the Cold War.

The war has also led to significant economic problems for Ukraine. The country had a decline of 7.5 percent in the GDP in 2014, and at the same time inflation seems to be reaching 20 percent in 2015. The value of the currency is plummeting, and the country is on the verge of bankruptcy. The Ukrainian economy is still closely linked to Russia’s, especially because of the significant imports of Russian gas. In addition, many families depend on the income of the more than 3 million Ukrainians working in Russia.

A four year loan agreement valued at more than 16 billion Euros has been reached with the International Monetary Fund (IMF), in order to turn the negative developments in the economy. But the conditions are tough. A number of austerity measures will be implemented, especially directed at the public sector. Many public employees will lose their jobs. This will be a hard blow for a population where the real unemployment already is higher than 10 %. Still, the biggest hindrance for economic growth is the extensive corruption in the country; Ukraine is decisively the most corrupt country in Europe. According to Transparency International, Ukraine is ranked as number 144 among 177 of the most corrupt countries in the world.

Corruption is present on all levels of Ukraine’s economy. It permeates much of the country’s judicial system, police, bureaucracy and administration. This criminal activity contributes to the sustainment of the black economy in Ukraine. Different analysts estimate that it constitutes 50-60% of the total economy in the country. Under former regimes, the political will and administrative effort to fight corruption has been almost non-existent. Oligarchs and criminal groups have had comprehensive and deep connections to the political and financial systems of the country. Public economic activity and state property have been attractive areas for corruption and criminal activity, because important economic reforms have been implemented without the necessary administrative supervision and in the absence of political control and monitoring.

The new political leadership in Kiev wants to systematically “clear up the mess”.  The Parliament has created an anti-corruption committee that will fight corruption on all levels in the Ukrainian society. This is a demanding and difficult task. A complicated and somewhat incomprehensible legislation that suffers from lack of transparency prevents an effective fight against corruption. A number of economic reforms did not seem to have the preventive and deterrent effect on the economic crimes as was hoped for. There is a blatant need for more drastic measures that include the legislative framework, imposes harder sanctions, introduces better control mechanisms and abolishes bureaucratic and obscured governmental practices and unclear regulations.

Despite the war and significant political and administrative challenges, the government still managed to conduct both a Presidential and Parliamentary election in 2014.International organizations and observers have denoted the elections to be both fair and democratic. There has been a change in the composition of the Parliament, as representatives that were supportive of the former regime have been replaced with new representatives supporting the reforms.

The need for reforms is huge, but the public – and partly also the politicians – is pessimistic about whether the necessary administrative and legislative changes are even feasible. The election presented various political challenges. A lot of new political parties, with vague political programs and priorities, were created right before the election. That created a cluttered and unclear political landscape which complicated the election process for many of the voters. After the election five parties joined forces and created a coalition. The rivalry for leading positions such as Secretary of State, as well as lack of negotiating experience has made the cooperation within the coalition difficult. This has also had an effect on the voting in Parliament.

The goal to establish good governance in the country is still high on the political agenda for all the parties. Thus there is a great interest in learning from international parliamentary experiences and practices, which can help improve the political decision-making processes and strengthen cooperation within the coalition.

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