HFU Newsroom

Ukraine is struggling with corruption, sometimes successfully

UKRAINE is fighting two wars. One is near its eastern border, where it faces Russian aggression. The other is at its core, where it is wrestling with some of the worst corruption of any post-Soviet state. The war against corruption is only starting, and the fighting is carried out office by office, ministry by ministry.

Naftogaz, a state oil and gas firm which once epitomised the country’s misgovernment, has been cleaned up. Some of the most powerful oligarchs have been squeezed. One of the main sources of corruption that feeds the system, state procurement, has been slowly overhauled, producing some positive results.
In 2016 the health ministry launched a four-year programme to outsource procurement of medicines to international agencies. In the past, bureaucrats allied with suppliers to inflate prices. With one of Europe’s fastest-growing HIV epidemics and many other health emergencies, this was a burden Ukraine could not afford. Patients of Ukraine, an NGO, has estimated that 1,600 Ukrainians die daily from the resulting lack of medicine.

The health ministry contracted Crown Agents, a British-based development agency, and two United Nations bodies to buy medicines on its behalf. Their year has not been easy, with red tape causing delays. But when the first year’s results came back in December, they showed a 38% saving compared with 2015, without compromising on the quality of the drugs. Whereas before two or three suppliers dominated supply, Crown Agents have brought in almost 30, thus defeating the tricks previously used to corner the market.

Alexandra Ustinova of Patients of Ukraine mischievously suggested that Crown Agents had been “lucky” to win the oncology contract, since it included the drugs whose prices had previously been most inflated by corruption. But she acknowledged the agency’s success in cutting costs, along with that of the UNDP, which saved $4m out of $39m assigned to buy medicines for HIV, tuberculosis and other infectious diseases.

The auditor of Crown Agents’ figures, Prashant Yadav of the University of Michigan, said it was hard to say how much of the savings were from curbing corruption, and how much from being more competent than the bureaucrats who used to be in charge. But they were high. “We would expect to see savings like this in very small markets, in Africa,” he said. “A decade ago.”

This may be a small victory, but the fight against corruption is rarely won by tanks. As the fighting intensifies, the corrupt system is starting to push back. Some politicians are even attempting to tarnish the name of one of the country’s most respected anti-corruption organisations, the Anti-corruption Action Centre (AntAC). The group has received grants from Western donors, and pushed to create an anti-corruption prosecutor’s office, making itself plenty of enemies in the process. Alexander Martynenko, the head of Interfax Ukraine, a news agency, says AntAC’s foes, unable to ban it, are trying to discredit it in the eyes of its sponsors and cut it off from funding sources. In such a campaign, disinformation is the ammunition of choice.

Source: http://www.economist.com/news/europe/21722682-war-against-graft-hard-one-against-russia-ukraine-struggling-corruption

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