Gary Roche: Oligarchy in Ukraine is generated by corruption and lives on corruption

Gary Roche: Oligarchy in Ukraine is generated by corruption and lives on corruptionA law on electronic declaration came in force in Ukraine. It is expected that its implementation will make earnings’ reports of government officials more transparent, and this, in its turn, will keep many of them from committing corrupt acts. The European Union insisted on the adoption of this law, and now it has every reason to believe that our government has sufficient legal mechanisms to overcome this negative phenomenon.

Meanwhile, Ukrainian and international experts warn that it is too early to put an end to the operating time of the integrated anti-corruption program. According to the instructor of the International Institute of Management, the former Head of a number of World Bank projects in Ukraine and the European Union, Gary ROCHER, legal reform alone is not enough. Major changes of other aspects of the functioning of civil society are required in order to overcome corruption. We met with Gary Rocher to discuss his proposals.

- How do you evaluate the level of corruption in Ukraine?

- Do not forget that I am a foreigner, and I have a different mentality. Therefore I often notice something that you just do not pay attention to. In particular, it concerns corruption. In Ukraine, it is present almost everywhere: both on the domestic level and on the level of public policy. Often the only difference is in the level of its manifestation. The higher the level, the greater is the corruption scale.

Recently, however, I often meet people who do not want to put up with this situation. Especially their number gas been growing after the recent Maidan.

It gives hope and adds optimism for the future. Young people do not want to put up with corruption. Now they have formed the new European vision and new approaches to life. This means that - sooner or later – the corruption in Ukraine will be defeated.

- What is your opinion, why corruption has taken root in Ukraine?

- Several years ago, I began to read the history of Ukraine. And I realized that the Ukrainians for a long time wanted to live independently, to have their own state, their own culture, their own history in order not to be a continuation of Russia, Poland or Austria. But the Soviet government tried to kill the Ukrainian identity. In my opinion, this is the main cause of the current corruption. To overcome it, it is important to the Ukrainians should identify themselves as a nation. It is important to earn your own social values and principles and stick to them. And then there will not be a reason to talk about the Ukrainians without proper respect. It will be possible to grasp those involved in corruption by the hand and stop them. He can be punished by law, but even such drastic measures are not able to overcome this very negative phenomenon.

They can produce only a little effect during a short period of time. The most effective method of combating corruption is the formation of modern culture in the relations between human beings, which is fueled by a deep respect for the established traditions and high patriotism.

The Ukrainians need to define their national identity and to live in such a way that their words are followed by real deeds.

Ideological changes should affect different spheres of public life and occur in families, in schools, universities, enterprises – everywhere: people have to want to live honestly, to protect the integrity of their State and see the prospects of its development. No compromises.

Well-developed internal convictions will encourage compliance with the law. If someone dares to violate rules, the others will not allow him to do so. Public opinion is a very effective tool. Nowadays, this is the main opportunity for the Ukrainians to achieve a national identity, for which many generations have fought.

- How can we develop moral principles aimed at honest and incorruptible public service and state service?

- Education is an indispensable tool to achieve such an aim. The government, educational institutions and non-governmental organizations should give serious consideration to the question of moral development. For the formation of the new Ukrainian culture it is necessary to have and encourage cooperation between religious communities, non-governmental organizations and government agencies.

- After Maidan’s Dignity Revolution there were high expectations that the fight against corruption will increase. But this has not happened so far. Why?

- It is disappointing for many people, including me. For almost 25 years Ukraine is an independent State. But the paradox is that although the legal established framework is new, often its ideology and content resemble what has been got from the Soviet past. The current legislation has a lot of disadvantages and weak spots. It's easy to get around it if one wish to do so. And many actively used these opportunities. Formally, they are not law breakers, and they cannot be brought to justice. Thus, corruption schemes were actually legalized. It is important to note that the legal imperatives and penalties are quite limited in their sphere of effectiveness.

In Ukraine, good laws may be developed, but in the process of their creation some changes could be introduced - and this fact significantly worsen their quality. And after that we hear that they are not carried out in a proper way.

Here is an example. For a long time I was engaged in the development of agricultural insurance in Ukraine. In 2012, a law was passed on the project on which I was working too. It was intended to create a modern system of agricultural insurance, to establish tools for honest and diligent work. However, the changes have been introduced at the last minute. This did not allowed to provide transparency on the market, and made it impossible to eliminate unqualified companies.

From the very beginning a number of shortcomings have been introduced to the law, and everyone knows about them. Moreover, many continue to use them for their own benefit. Therefore, in every way they try to impede the consideration of the new law on agricultural assurance by Verkhovna Rada, which must now close the existing corruption schemes. And this bill has been swept under the carpet for a long time, without any motion in parliament.

- It is believed that the poorer the country, the higher the level of corruption...

- It would be wrong to say that poverty or lack of material resources creates corruption. First of all, the Ukrainians are not poor.

And I'm not saying that Ukraine is the country of corruption. Many Ukrainians have the highest moral values. When one says that Ukraine is corrupted, it is assumed that all Ukrainians are corrupted. There is corruption, and its scale is greater than, for example, in the United States, where I was born, or in the Netherlands, the country of my citizenship. But I have lived in many countries, including African and Asian ones. For example, in India, Sri Lanka. Everything is relative. People in Ukraine are highly capable, talented, they have a house, a job. Many people understand that corruption means stealing from the State, taking from the State budget.

And this happens not only when it comes to large financial flows. Budget is robbed when the bribes are given to officials, doctors, teachers, law enforcement officials and the others. The money is deposited directly into their pockets, and taxes, as you can easily understand, are not paid on them. And thanks to the corruption, in the country there exists the wrong redistribution of national wealth.

Most of it is eventually concentrated in the hands of a few, the ones who are called oligarchs. Oligarchy is generated by corruption and lives on corruption. Many unscrupulous officials use power for their own enrichment. In the United States there is corruption as well. But there is a vibrant civil society and a strong middle class. And then there are the laws and the system is aimed against corruption. All this works as it works. In America there is the principle that not the presence of big capital in itself is important, but the extent to which it was honestly earned.

- Some experts attributed the high level of corruption in Ukraine to the presence of enormous quantity of state property. What do you think about it?

- We cannot say that business is not involved in corruption. It also actively creates corruption schemes. Although, of course, state ownership is also involved in these schemes. But I would not necessarily associate the presence of public sector with the corruption in the country.

For example, in the same Denmark, government officials and government agencies work very honestly. And if there is corruption in this area, it is quite small. Another thing is that in Ukraine there are a lot of state-owned enterprises. They were inherited from the Soviet system, which encouraged corruption schemes, and now they often exist in order to make money in the same dishonest way.

During one meeting I heard that on some of the Ukrainian state-owned enterprises they have tried to carry out an audit. But they couldn’t do so, because it wasn’t possible to find half of the necessary information. I do not know how this is possible, but this company still continues to operate.

- Land corruption is considered to be very high in Ukraine. Our country does not dare to carry out profound agrarian reform, which involves the introduction of a mechanism of purchase and sale of agricultural land. Can a full-fledged land market reduce the level of corruption in the industry?

- The need to implement such a market has long been discussed in Ukraine. There are political aspects of this issue, but I want to talk about the purely practical ones. Let's look at the situation through the eyes of the banker. Which farmer does he want to lend credit to? Of course, the bank will give preference to large-scale farming. Because it is more reliable and has sufficient collaterals for the loan ceiling. Banks are also interested to lend to small and medium farmers, but they do not have enough collaterals. And it turns out that the possibilities to develop their business are blocked, since the land reform has not been completed.

In Ukraine, the land shares are mostly small, they are 5-10 hectares. There is not enough land area to organize a highly productive commodity enterprise and successfully compete in the market on their own. There is only one way out - to unite these fields in order to create bigger plots of 100 or 500 hectares.

After all, the business must provide adequate family income, so that young people will have the desire to go ahead with agricultural business and to live in the village. Today it is realistic to finance agricultural production through greater co-operative activities. But we do not see normal family farms, which are able to create the basis for such cooperation.

And then the question arises: who will be the participants in the land auction after the lifting of the moratorium on agricultural land sale? In my opinion, now the State should pay special attention to the establishment and development of small and medium-sized agribusinesses and agricultural cooperation.

They will be interesting not only for bank capital. They will contribute to increase of the competition in the industry, they will be actively involved in solving land issues, participation in land auctions. Thereby they will reduce the level of land corruption.

- The law on electronic declaration came into force. How will it strengthen the fight against corruption?

- A remarkable detail is that the Verkhovna Rada adopted the law, but not on the first try. Not accidentally the deputies set aside their decision in full compliance with the European Union recommendations. I admit that many of them were held back by one thing: the presence of the law provides easy and transparent access of the public to the information about the owners of the land property, its size and the ways how an owner acquired it and what financial means were used for this aim.

At some point, the situation with the law on electronic declaration of income has reached a deadlock. There were even suggestions, like, let's start with a clean slate. And let us not pay attention to what ahs already been done. But after the adoption of the law we will strictly monitor its implementation, strictly punishing its violators. But the problem is that those officials who have become rich in dishonest way, do not want to start living in new ways. After all, the maintenance of their homes, the maintenance of their vehicles, constant paying for a steady high quality of life need a lot of money. And they can get them only by using the usual corruption schemes. Therefore, officials, including some Members of Parliament strongly hindered the adoption of this important law.

I think that the European Union in this case acted very properly. It did not retreat from its principles, and insisted on taking the law. The principles laid down in it, already operate in the European Union. Where there is more transparency, there is less corruption.

The adoption of the law on electronic declaration will create prerequisites for the formation of future Ukrainian authorities exclusively from honest people. Because voters in the election will always be able to determine who is truly worthy of their support. But I still stress that the legislative reforms only give a positive result when the necessary changes will take place in social consciousness, culture, relationships. These processes require the activity of the business environment, educational institutions, families, community organizations, churches.

And we can talk about success when people are not just afraid to give a bribe, but when they do not want to do that because of their internal beliefs.

The challenge of overcoming corruption in public life is multidimensional. It is important to provide for administrative procedures and legal safeguards, but these measures cannot ensure the changes in individual and institutional behavior. Management, in fact, is based on the moral and spiritual practice, whose compass stays in the human heart.

Maxim Nazarenko,

National Press Club "Ukrainian Perspective"

Translated by Maria Kryzhanovska
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