Ukraine must not only win the battle against pro-Russian separatists in its Eastern regions, but also the war against corruption to secure its future as a prosperous nation. With the upcoming Ukraine Recovery Conference, it is the UK’s responsibility to support Ukraine’s public sector reforms and lead allied governments, development communities, and private sectors into pursuing necessary action.
Three Strategic Actions Required
Donor Governments Should Extend Credit Where it is Due
Efforts to improve governance in Ukraine deserve approval. The transformation of the country’s public health supply system is proof as it shows how rooting out corruption can save money and lives. In 2014, government auditors estimated that Ukraine was overpaying by 40% on drugs. This money was diverted from the taxpayers to a rent-seeking oligopoly. To break the cycle, the Ukrainian Ministry of Health, together with international partners, including UNICEF, UNDP and Crown Agents, designed and implemented a new supply system, resulting in a boon for Ukrainians and state finances. Pharmaceutical procurement reform alone has saved the state $62 million over five years, along with giving more Ukrainians access to medicines they couldn’t afford earlier.
Governments Should Recognize Ukraine’s Progress
One of the main threats to the war efforts and future reconstruction in Ukraine is the apathy that sets in among Western electorates because it is their support that guarantees the funding Ukraine needs to defend and eventually rebuild itself. Allied governments, therefore, have the responsibility to communicate Ukraine’s progress in the fight against corruption and reassure their public that reconstruction funds will be well spent. Fortunately, since 2014, data confirms that Ukraine has shown remarkable progress, although struggling to survive. In short, there is plenty of credible data for allied governments to publicize Ukraine’s hard-won improvement.
Financial Support Must Go Hand in Hand With Training, Capacity Building, and Sharing of Technical Know-How
At URC, private sector engagement, unity, diversity, and delivery are emphasised, but it is also essential to keep working with government with a strong civil society to help Ukraine put ever-improving governance structures in place. If the UK, with its allies, can lend support and recognition to Ukraine’s continued reforms, the next conference could spark a cycle of greater public sector transparency and efficiency. Such a cycle would provide Ukraine with the weapons to win its battle against corruption, ensure successful reconstruction, and draw this courageous nation further into our community of free and democratic states.
The Role of the International Community in Ukraine’s Reconstruction
Ukraine, like other Eastern European countries, has been plagued by corruption of historic proportions for decades. Western senior officials are optimistic about Ukraine’s reform and reconstruction, believing it to be a crucial part of the continent in securing freedom and democracy. The following are some crucial roles that the international community ought to play in Ukraine’s reconstruction effort:
Co-Financing
As discussed earlier, Ukraine does not finance its own reconstruction. This is where the international community can step in. The international community must come up with a bankable financial plan to co-finance Ukraine’s reconstruction effort and reduce the burden on the country’s resources. There is already consensus on the role of the government, private sector and other stakeholders in Ukraine’s reconstruction; all that is needed is a financial plan that fits the unique requirements of the situation in Ukraine.
Training and Education
It is important to invest in the training and education of Ukrainian nationals to enable them to operate and maintain the infrastructure once it is up and running. This could be through scholarship programs, on-the-job training, or student exchange programs. Education and training should not be limited to technical education but also include change management and leadership training to enable local management teams and leaders to oversee the reconstruction programs effectively.
Technology Transfer
Ukraine possesses a wealth of technical talent and innovation. However, innovative solutions to Ukraine’s problems are often hidden from the rest of the world, as its creators lack necessary connections or finance to develop their ideas to maturity. The international community should encourage technology transfer, especially in areas where Ukraine has a competitive advantage.
Reforming Public Procurement
Corruption remains one of the most significant obstacles to good governance in Ukraine and a threat to the success of reconstruction efforts. Public procurement practices in Ukraine have often been opaque and have facilitated public funds’ diversion to corrupt officials or businesses. To ensure reconstruction efforts are successful, the international community needs to support the implementation of procurement reform, a critical step towards transparency and accountability. The reform can include, among others, increasing procurement transparency, competitive procurement procedures and e-procurement.
Rebuilding Trust
The key to successful reconstruction in Ukraine is rebuilding trust between the citizenry and the government. The international community must support the Ukrainian government in this area by ensuring the establishment of a transparent and accountable governance system and the provision of basic public services to the population. Support can be provided through the provision of technical assistance, debt relief, and non-reimbursable resources.
In Summary
Ukraine’s ability to win the war against corruption is vital for its future stability. The UK needs to support Ukraine’s public sector reforms by rallying donor governments, private sectors, and development communities to pursue necessary action. The international community can support Ukraine’s reconstruction efforts by co-financing, training and education, technology transfer, procurement reform, and rebuilding trust between the government and the citizenry. With a comprehensive reconstruction plan, Ukraine can achieve transparency, probity, and prosperity for the long term.
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The author is CEO of Crown Agents, a non-profit development organization
Since the beginning of the spring thaw, supporters of Ukraine have been eagerly awaiting the much-heralded counter-offensive. But while Ukraine needs a decisive victory in the battle, the war for its future also depends on its ability to overhaul governance and root out corruption. Yes, progress has been made, but it must be maintained. Ukraine’s upcoming reconstruction offers the opportunity to completely overhaul the public sector and transform the country for the better.
This month’s Ukraine Recovery Conference provides an ideal opportunity to put Ukraine on a permanent path to transparency, probity and prosperity. As host, it is the UK’s responsibility to ensure that the necessary reforms of Ukraine’s public sector are incorporated into the process. The UK can lead the charge by rallying donor governments, the development community and relevant private sector actors to pursue three strategic actions.
First, donor governments must extend credit where it is due. Ukraine’s efforts to improve governance deserve approval. The transformation of the country’s public health supply system shows how rooting out corruption can save money and lives.
In 2014, government auditors estimated that Ukraine was overpaying for drugs by 40%. This money has in effect been diverted from the taxpayer to a rent-seeking oligopoly. To break the cycle, the Ukrainian Ministry of Health has engaged international partners – including Unicef, the United Nations Development Program and Crown Agents (which I lead) – to help design and implement a new supply system. The result was a boon for Ukrainians and state finances. Pharmaceutical procurement reform alone saved the state $62 million over five years. These reforms have also given more Ukrainians access to medicines they were unable to acquire before, adding years to their lives.
Second, governments must recognize Ukraine’s progress with more than just a pat on the back. One of the main threats to both the war efforts and future reconstruction is the apathy that sets in among Western electorates, whose support ultimately guarantees the funding Ukraine needs to defend itself and eventually rebuild itself. This means that allied governments have work to do on the home front: communicating Ukraine’s progress in the fight against corruption and reassuring their public that reconstruction funds will be well spent.
Fortunately, data since 2014 confirms this. In the World Bank’s Long-Term Good Governance Indicators, Ukraine’s “government effectiveness” fell from the 20th percentile in 2011 to the 37th percentile in 2021. According to Chandler’s Good Governance Index, the Ukraine ranks higher in 2023 than in 2021 – showing remarkable progress despite struggling to survive. In short, there is plenty of credible data for allied governments to publicize Ukraine’s hard-won improvement.
Finally, financial support for reconstruction must go hand in hand with training, capacity building and the sharing of technical know-how to keep Ukraine’s reforms on track. At URC, the emphasis is on private sector engagement and “unity, diversity and delivery”. But we must also continue to work through government, and with the oversight of a strong civil society, to help Ukraine put in place ever-improving governance structures.
If the UK – acting in concert with our allies – can lend support and recognition to Ukraine’s continued reforms, then the next conference could spark a cycle of greater public sector transparency and efficiency. This would provide Ukraine with the weapons to win its war against corruption, ensure successful reconstruction, and further draw this courageous nation into our community of free and democratic states.
https://www.ft.com/content/3ac00315-c8ed-40cb-8733-0e42f2014553
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