NEWS FROM UKRAINE -HOW TO SAVE A MILLION DOLLARS, OBSTRUCTIONISM DEFEATS REFORM, MEANWHILE IN THE WAR, WHERE NEXT FOR US AND UKRAINE?

12.11.16


UD. 12 November 2016.  

By Iryna Terlecky.

Electronic disclosures and an election shock, but where will it all lead?

How to save a million dollars?

The answer appears to be to become a Ukrainian MP. 

After many false starts and attempts at legislative sabotage, Ukrainian MPs and public officials are now obliged to declare their income electronically. 

This was a key reform needed as part of the raft of requirements from the EU for visa-free travel.

The electronic system should have replaced the paper system at the end of 2015, then in April this year, then in June, but the necessary legislation was derailed at every stage. 

Then, in mid-August 2016, the National Agency for Prevention of Corruption (NAPC) launched the declaration process without the certificate that would make the results legally accountable. 

After the IMF and EU ambassadors intervened, Ukraine’s national information security agency finally provided the necessary certificate. 

However, there were two more attempts to sabotage the system with proposals from Ukrainian MPs wanting to avoid declarations being made public and softening the demands for declaring gifts and loans. 

With the intervention of the EU, IMF, and a number of civic organisations, the original plans for disclosure and public scrutiny were retained.

AROUND 60,000 Ukrainian top officials and their family members have submitted some 103,000 electronic declarations showing their monetary assets, apartments, cars, luxury items, and companies. 

Altogether, UAH 26.8 bn (over a billion dollars) is reported to have been declared, of which 6.17 bn was held in banks and 16.17 bn was in cash. This is equal to the amount of the latest IMF loan to Ukraine.

410 Ukrainian MPs declared monetary assets worth UAH 12 bn ($470.3m), according to Opora, Ukraine’s largest election monitoring group. 

In a country where the average monthly salary is a little over $200, the average MP has over a million dollars of savings. 

MP Bohdan Dubnevych topped the list, declaring $11.5m and UAH 137m in cash. 

Top officials like President Poroshenko, Prime Minister Hroysman, and Interior Minister Avakov also declared hundreds of thousands of hryvnias and dollars in cash.

THE QUESTION IS what difference this will make in the fight against corruption. 

The new system closes several loopholes which made it relatively easy to manipulate the old system, including more categories of asset that have to be declared; a requirement to declare family income, so avoiding the popular mechanism of declaring all assets to belong to a spouse; and an ability to track spending against income over a longer period.

In theory, anyone with assets acquired to a value greater than their public salary will be open to investigation. But, this will only apply to income and expenditure from 2015 – so anything acquired through corrupt practices before then is safe. 

Ukraine’s National Agency for the Prevention of Corruption (NAPC) will study the declarations, starting from the top echelons of power, MPs, judges, and prosecutors. 

As there are currently only 340 employees in the NAPC, neither they, nor the National Anti-Corruption Bureau have the resources to investigate all but the most questionable. 

Prosecutor General Yuriy Lutsenko announced on 1 November that those who had declared sums of cash or bank accounts of $100,000 or more and gifts of over $10,000 will be subject to scrutiny as a priority.

WHILE UKRAINIANS ARE IN SHOCK at the amount of money declared by their public officials at a time of austerity and war, there seems to be some agreement that this is a valuable step. 

Anti-corruption activists say that the system is a turning point because kleptocracy doesn’t fare well under public scrutiny. 

The e-declarations system provides crucial instruments – transparency and the law – to exterminate corruption. But punishment for corruption will not come immediately and civic activists believe that this fight will need to continue. 

Obstructionism defeats reform

Mikheil Saakashvili, the former president of Georgia who was brought into the Ukrainian government to set an example of transparency and clean government, resigned this week as governor of Odessa amidst accusations against President Poroshenko personally and the central government’s unrelenting obstruction of his efforts to root out graft.

In Odessa, Saakashvili and a team of young reformists tried to tackle the acceptance of bribes in the corruption-plagued customs service and to make government services more responsive and transparent. Yet, he says, government officials in Kyiv thwarted such efforts because they interfered with the various enrichment schemes that allowed many of them to amass fortunes. 

In particular, his plan to open a new customs service centre in Odessa was undone when the money allocated for its refurbishment was stolen.

Saakashvili is now the third foreign reformer who has resigned from his post. 

In February, the economy minister, Aivaras Abromavicius stepped down, saying that he did not want to act as a “smoke screen” for corruption. 

The American-born finance minister, Natalie A. Jaresko, left the Ukrainian government in April, following the government shake-up which replaced Prime Minister Arseniy Yatseniuk with Poroshenko ally Volodymyr Groysman.

THERE IS SOME DIFFERENCE of view about the significance of Saakashvili’s resignation. 

Pro-European MP and activist Serhiy Leshchenko said Saakashvili’s resignation illustrated an anti-reformist trend in the country.

“It is part of a broader development happening in Ukraine - an attack on anti-corruption fighters and people who back reforms.”

Others, however, have criticised Saakashvili for grandstanding and being unable to make the transition from populism to public office. 

He has vowed to stay in Ukrainian politics to work with the Ukrainian people to achieve a fast and clean sweep of the old political elite, saying that his only motivation is to move Ukraine forwards. 

Some, however, are sceptical, taking the view that since Saakashvili is banned from entering Georgia and his party lost heavily in recent elections there, he may be using Ukraine as a shot at a political future.

Meanwhile, in the world of war…

International monitors with the Organisation for Security and Cooperation in Europe (OSCE) have witnessed about 8,000 violations of the ceasefire in war-torn Donbas during the last week. 

According to OSCE’s Monitoring Mission Deputy Chief Alexander Hug, this is 40 percent more than the week before.

Monitors registered the most intensive shelling in the region between Donetsk airport, and in the towns of Yasynuvata and Avdiyivka. 

Many of the ceasefire violations occurred also in the western part of Luhansk Oblast – in the region between towns of Popasna, Pervomaisk, and Zolote. 

Hug noted that the withdrawal of the armed forces is vital for the civilians who live in the region.

He said that the monitoring mission had seen fresh craters on the ground, caused by the explosions of grenades, near the partly destroyed Stanytsia Luhanska bridge across the Siversky Donets River in Luhansk Oblast.

About 2,000 civilians wait in lines each day to cross the bridge, Hug said.

AT THE UN THIS WEEK, Ukraine launched a bid to condemn rights abuses in Crimea and press Russia to allow UN monitors to visit the territory. 

Backed by 38 countries including the United States, France and Britain, Ukraine presented a draft resolution that for the first time puts Crimea under scrutiny by the General Assembly’s human rights committee.

“Crimea is not just a Ukrainian territory occupied by Russia,” said Ukrainian Ambassador Volodymyr Yelchenko. “Crimea is 2.5 million people suffering from the authoritarian regime, frightened and helpless without any chance to defend their rights.”

Still reeling from their failure to be re-elected to the UN’s Human Rights Council,  Russia dismissed the measure as “one-sided”, saying it ignored Ukraine’s decision to cut off trade, electrical power and banking services to Crimeans.

Russian Deputy Ambassador Evgeniy Zagaynov accused Ukraine of “stepping up the information campaign against Russia in an attempt to exert pressure on our country.”

In the meantime, the EU has reaffirmed its support for Ukraine by adding six members of the Russian Parliament, all of whom were elected to the State Duma from the Crimea & Sevastopol regions in September, to its sanctions against Russia.

But where next for US and Ukraine?

As we go to press, the world is still reeling from the news that Donald Trump is the President-elect of the USA. 

France’s far-right leader Marine le Pen was one of the first to contratulate Trump, with President Putin adding to his congratulations Moscow’s willingness to restore ties fully and Russia’s Duma greeting news of the result with a standing ovation. 

Patriarch Kirill has expressed the hope that relationships can be strengthened through mutual Christian values. 

President Poroshenko’s message to Trump thanked the US for their support for Ukraine and took the opportunity to express the hope that the US’s support would continue, in Ukraine’s struggle against Russian aggression and for democracy, territorial integrity and democratic reform.

We will all be waiting to see whether Poroshenko’s hope is fulfilled.

 

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