Amid Russia’s Assault, Ukraine’s New Government Focuses on Reform

While Russia’s takeover of Crimea has dealt a heavy blow in Kyiv, the young Ukrainian government is nonetheless pressing to pass large-scale reforms. Late last week, deputy education minister Inna Sovsun sighed in frustration as she described layers of corruption in a school system where apparently everything had been up for sale. Under President Viktor Yanukovych, school directors had been closing schools to sell off the buildings and pocket the money, she said. Putting away her personal Mac before heading into another meeting with her staff, the minister asked: “Do you know what’s been happening in Crimea this morning? I haven’t had time to check the news.”

Although Russian pressure is making it difficult for Ukrainian officials to ignore the conflict even for a few hours, they are committed to making reforms quickly. The interim government of Arseniy Yatsenyuk has adopted a motto of “100 steps in 100 days” – and Sovsun’s education ministry has published a to-do list that includes “introduce transparent accounting,” “publication of the ministry’s budget online,” and “decrease … bureaucratic regulations that were devoid of management content.”

As Yatsenyuk and his ministersfend off Russia’s invasion and a state bankruptcy, they are rushing to repair the malfunctions of a government shredded by years of massive corruption. As they search for the billions in state money stolen by Yanukovych and his cronies, Kyiv’s new top officials struggle to rewire the state’s procurement systems, create new opportunities for small businesses and install other changes essential to governing and stabilizing the country.

And they’re doing it knowing that they may have just a few weeks. Campaigning for the May 25 presidential election may revive the political infighting that has stalled reform and pro-democracy movements since Ukraine’s independence. If Russia’s military incursions and covert fomentation of conflict in eastern and southern Ukraine escalate, their efforts are likely to be upended. Even in defending the country against those assaults, corruption has eroded the state’s capacities; in Ukraine’s army, equipment so desperately needed now was long ago sold off for personal gain.

Volodymyr Groysman, the new deputy vice premier and minister for regional development, knows that there is not a moment to waste, even if some changes will take years to fully implement. Fresh from the central city of Vinnytsia, where he was elected mayor at the age of twenty-eight, Groysman is eager to introduce nationwide the standards of transparent and participatory governance that he developed in his constituency. He is a pioneer of e-governance, his otherwise nearly empty office dominated by two big computer screens showing off the Vinnytsia government’s portal. Groysman says Ukraine’s governance system has been built like a criminal enterprise. That needs to be dismantled, he says, and internet technology used to help citizens receive government services, file complaints, and communicate with the state, cutting out physical interaction with bribe-taking functionaries. He knows that there will be much opposition to such changes but says simply that “people need to understand that transparency is the best way to combat corruption.”

Ukraine is Europe’s most corrupt country, and on a par with Nigeria and Iran, according to the Transparency International Corruption Perceptions Index. The fight against fraud is largely what brought tens of thousands of people into streets and maidans (public squares) for the past four months, leading to Yanukovych’s ouster. Investigative journalists, young lawyers, human rights activists, policy experts and government officials are all drawing up laws and projects to try to put an end to the practice that hollowed out the state and its coffers. Journalists and lawyers are investigating the corrupt practices of previous high-level officials, and they hope that countries like Austria and the Netherlands will freeze and eventually return their assets to Ukraine. Six Ukrainian research centers, including the International Renaissance Foundation and Transparency International Ukraine, have agreed on an anti-corruption reform package of 31 detailed steps to tackle corruption comprehensively through legislative amendments. Some of these changes already are being discussed in parliament.

Their every step is being closely watched by the civic activists who have formed the core of Ukraine’s political revolution. At Kyiv’s main square, Maidan Nezalezhnosti, a rugged group of demonstrators, distrustful of political elites, is still living in tents and speaking out in open political forums. These activists are pushing for quicker and deeper anti-fraud measures, including sanctions against perpetrators of past fraud, from judges to high level officials. They say the government is not revolutionary enough and, for example, should disqualify  former corrupt state officials from future public positions. 

To reduce opportunities for more stealing from the state budget, Economy Minister Pavlo Sheremeta has made new public procurement rules the number-one priority. A graduate of professional programs at Harvard and the French-based business school INSEAD, Sheremeta once advised the Malaysian government on economic reforms. Now forty-two, he left his post as president of the elite Kyiv School of Economics to attempt the dramatic changes needed to keep the economy from sinking completely. Ukraine’s foreign debt is estimated at $19 billion and foreign reserves at $15 billion, and the national currency is quickly depreciating. Huge reforms are needed immediately, even as international lending agencies are calling for deep cuts in state expenditure and energy subsidies. Sheremeta wants to move in a new direction, rapidly opening opportunities for small and medium size businesses through deregulation. He bristles with energy and a keen sense of the need to communicate his message to maintain the political will and popular support for economic reform. He, too, underlines the need to rid the government and police of corruption.  

Many top officials in Ukraine’s new government are ambitious, determined and professional. Ukraine has a highly organized and experienced civil society and expert community to provide support for policy and legal change. But some of the old, corrupt and retrograde elite still sits in parliament and many state institutions. The current government is a fragile coalition and plenty of political horse-trading still goes on, with many appointments based more on political connections than on merit. Reformers must work against a deeply entrenched bureaucracy resistant to changing the practices of the past government. Unlike in Georgia in 2004, where newly elected President Mikheil Saakashvili dismissed much of the state bureaucracy, including all the traffic police, Ukraine’s much bigger, more complex civil service cannot simply be fired overnight. “We don’t have good courts, good prosecutors, or good investigators,” said Yegor Sobolev, a popular activist about to take a government position. “All we have is lots of good will.”

Ukraine’s authorities and society are fighting against the clock, and there is little certainty that they will succeed in creating a more democratic and transparent country than the one that emerged after Ukraine’s previous political uprising, the 2004 Orange Revolution. Russia, which helped trigger the current revolution by encouraging Yanukovych to abandon Ukraine’s plan to sign an Association Agreement with the European Union, is stepping up its pressure on Kyiv, and may be seeking the failure of both the government and the state. But the energy and popular will in the capital is deeply evident, and there is a strong sense that the country won’t soon have another chance to prove that it can build a democracy to join those of Europe.

The United States and EU countries can help. There should be no delay in getting large-scale technical and financial assistance to Ukraine as happened last week when the US Congress put on hold until at least 24 March a promised $1 billion loan guarantee. The EU should sign on 21 March the full Association Agreement including the Deep and Comprehensive Free Trade Agreement. Ukrainians are counting equally on trade benefits that will accompany the swift removal of barriers to exports into EU countries, and on the political and legal obligations that will push their politicians to embrace reform. International lending and development agencies should be doing more to help Ukrainian specialists prioritize and amplify reform, not only pushing for greater austerity but also helping the country better employ its rich resources by cutting down on graft. 

Washington, Brussels, Berlin, London, Paris and others should agree on stronger sanctions against Russian for its belligerence toward Ukraine. If Moscow continues to veto the deployment of a full mission of the Organization for Security and Cooperation in Europe to Ukraine, the EU should quickly send its own civilian monitors. It should focus on stabilization and confidence-building in parts of eastern and southern Ukraine where press reports indicate that provocateurs from Russia have triggered violent clashes with government supporters and police. The Ukrainian government desperately needs support from its international friends so its young reformers can keep focused on reform, ultimately the most effective way to push back against Russia and guarantee the country’s unity and stability. 

Sabine Freizer is a senior fellow at the Atlantic Council’s Dinu Patriciu Eurasia Center.

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Image: Economist and lawyer Arseniy Yatsenyuk, who is now Ukraine's interim prime minister, meets officials of his new government at parliament in Kyiv. March 1, 2014 REUTERS/Andrew Kravchenko/Pool