Ukraine’s Failed Anti-Corruption Crusade 

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Written by Caroline Holmund

According to Ukrainian President Petro Poroshenko, the single greatest threat to his nation remains the ongoing military conflict with Russia. Speaking from an airfield in the Kharkiv region ahead of Ukraine’s Independence Day, Poroshenko warned Ukrainians that, “we are not safe from a rapid escalation of military action.”

Poroshenko may be right, as the geopolitical instability—both in the region and across the globe—caused by Russia’s annexation of Crimea and its continued actions in Ukraine is undeniable. But as Ukraine marks its 24th year since the end of the Cold War, it is the country’s economic catastrophe, and Poroshenko’s failure to deliver promised reforms, that outrage Ukrainian citizens, draw international censure, and stifle economic development and innovation.

Nowhere is Poroshenko’s failure more obvious than in Ukraine’s unrelenting and poisonous corruption. “It is widely acknowledged that the Ukrainian state has been captured by oligarchic interests which engendered widespread corruption,” say the ever-measured authors of “How to Stabilise the Economy of Ukraine,” an April study conducted by the Vienna Institute for International Economic Studies. “Successive oligarchy-controlled governments have failed to institute economic and institutional reforms … conducive to the emergence of a more or less viable competitive and dynamic market economy.”

The headlines understandably focus on the strings attached to Ukraine’s $17.5 billion bailout from the IMF, or the compliance benchmarks necessary before any EU alliance is considered.  What gets tragically overlooked are the grinding, graft-ridden lives of the Ukrainian people, who are subject to both the daily callousness and cruelty of corruption’s effects, and the overarching long-term consequences to the nation’s prosperity and prestige. Nothing on the near-term horizon looks like hope.

Consider the inflation rate of 57.5 percent, according to the Troubled Currencies Project, second only to that of Venezuela’s death-spiraling economy and comparable to that of North Korea and South Sudan. So far this year, the hryvnia has lost 61% against the dollar, with capital controls required to halt the currency’s devaluation. Foreign currency deposits are half what they were in late 2013, and more than 50 banks have been declared insolvent since that time.

Meanwhile, Ukrainians continue to deal with the greed that’s destroying their country with the ironic, heartbreaking knowledge that the Maidan revolution to end the reign of Viktor Yanukovych’s oligarchs merely ushered in Poroshenko’s. As Mikhail Minakov points out, that same Maidan meant to defend the interests of all Ukrainian citizens also defended the new oligarchs who were able to profit from an “unfinished autocracy”, and Poroshenko has yet to align with the former rather than the latter.

Indeed, one lesson that Ukraine has constantly failed to internalize was that corruption needs to be fought justly and that the punishment must fit the crime in order for it to be legitimate. The rule of law cannot be suspended for the sake of urgency and a new, Western-minded Ukraine simply can’t emerge on shaky foundations. Take the case of Dmitry Firtash, a highly influential figure who allegedly installed Poroshenko in the Presidential Palace after convincing Vitaly Klitscho to bow down from the race. After facing down trumped up corruption charges at the behest of the FBI that were dropped by a court in Austria on the grounds of being “politically motivated”, the government in Kiev has not relented. Prime Minister Arseniy Yatseniuk has stated that “we are convinced that this Ukrainian oligarch should be held liable in the U.S”, even if the Austrian judge found there is no evidence to substantiate the claims brought by the U.S. government for his extradition.

Coincidentally, the same day Firtash walked free, a Kiev court seized 500 million cubic meters of gas that his company Ostchem had stockpiled, raising fears that the anti-corruption fight could quickly devolve into a witch-hunt. Despite the need to battle with corrupt practices, no stake is high enough to warrant a flexible application of the fundamental principles of justice, which must be held up to the highest standard of fairness and ensure each individual has access to an independent and impartial trial.

These public displays of ‘justice being served’ have managed to help Ukrainians forget that an estimated $30 billion, believed to have been stolen by Yanukovych and his associates, is still missing. Ukraine has managed to recover a laughable $362 worth of funds stolen by state officials. But there’s nothing funny about the high-profile staging of sting operations meant to convince Ukrainians that the Poroshenko government will be different—as was the case in July, when two prosecutors were arrested on suspicion of bribery. There’s nothing funny about $23 million in assets being unfrozen, because the responsible officials lacked either the skill or the will to build a case against Ukrainian Ecology Minister Mykola Zlochevsky. There’s nothing funny about a Ukrainian future mortgaged for generations by greed.

And not much has changed since March, when the National Anti-Corruption Agency became the latest iteration of Ukraine’s promise to address its rampant corruption. While the international community—including the United StatesEU and IMF—expects Poroshenko to deliver on those promises, most Ukrainians are far more jaded, and their skepticism as well as their resistance is indicated in the appallingly low approval ratings the government enjoys.

As Ukrainians celebrate their independence, they are still ranked at 142 of the 175 nations evaluated on the 2014 Corruption Perceptions Index of Transparency International. Their dubious distinction in that race to the bottom is shared by Kyrgyzstan, Tajikistan, and other nations that emerged from the end of Soviet rule—including Russia. What these nations have long demonstrated, and what Yanukovych and Poroshenko have tragically proven in Ukraine, is a shameless inability to create any semblance of a market economy that moves beyond giving lip service to principles as powerful insiders line their pockets in the background. With that lip service, they’ve also proven correct the old adage of France’s Georges Clemenceau, “if you want to bury a problem, set up a committee”. Another committee, another anti-corruption iteration, and another revolution won’t change Ukraine from within, and Ukrainians deserve a leadership that works authentically with those who will.