Corruption is a big problem in Ukraine. The country is at place 146 out of 180 countries in Transparency International’s 2009 Corruption Perceptions Index alongside Cameroon, Ecuador, Kenya, Russia, Sierra Leone, Timor-Leste and Zimbabwe. The trend isn’t good: between 2004 and 2006, Ukraine climbed from place 122 (out of 145) to place 99, but has since declined steadily. You can argue about the significance of the ranking (congratulations to New Zealand, by the way, top in 2009), but the situation is undoubtedly bad. Ukrainians tell me they have to bribe people to secure treatment in hospital, to get a place at university, or to escape the unwelcome attentions of the traffic police. Foreign investors complain that backhanders are demanded from fire inspectors, tax authorities and planning authorities. Whatever the precise scale of the problem, the bottom half of a corruption league is not where any country wants to be when it’s seeking to attract inward investment. Rather, Ukraine should be striving to be the kind of country where the proverbial international investor sitting in a Cafe in Shanghai says “Hey! I’ve heard Ukraine welcomes investors; the rule of law is good; and the court system is independent and incorruptible. Let’s invest there!”
How can Ukraine achieve this? Corruption is famously difficult to tackle, so it’s worth looking at what has worked elsewhere. One of the most successful examples was the establishment in 1974 of Hong Kong’s Independent Commission Against Corruption, or ICAC. The key word there is “Independent”. When I was dealing with Hong Kong from London in 1995-98, the ICAC was literally a “law unto itself”. Once it got its teeth into a case, no-one in the government or business community had any hope of influencing it. I’ve often advocated the ICAC to contacts in Kyiv as a model (typical response from a top law-maker: “How are we going to find anyone to run it who’s not corrupt?”). So I was intrigued to see that this week, to coincide with International Anti-Corruption day on 9 December, the government has announced the establishment of a new “Independent Anti-Corruption Bureau” to tackle the issue. This will, we are assured, be independent of other government agencies.
The announcement is good. But it’s easy to announce the establishment of something (eg the famously oft-announced Commonwealth of Independent States); much harder actually to set it up and make it work. So iron-hard government commitment to the new Bureau will be vital. Support from whoever is elected president in February wouldn’t hurt, either. ICAC took about eight months to set up, from June 1973 to February 1974. Let’s hope in July 2010 I can report that the Ukrainian Anti-Corruption Bureau is working, effective – and beholden to no-one. And maybe next time Transparency International publishes its index, Ukraine will be on its way back towards the top of the league.