Publication: Monitor Volume: 4 Issue: 80

Petter Langseth, the head of the Economic Development Institute at the World Bank, told the Yale conference that Ukraine is one of the fifteen countries in which his unit is running anticorruption drives. Their strategy is to encourage pressure on politicians from NGOs, journalists and public opinion. The EDI began its Ukrainian program in May 1997, and Langseth acknowledged that they have encountered political resistance. In August 1997 Justice Minister Serhiy Holovaty, who had introduced a “Clean Hands” campaign in April 1997, was fired. Langseth reported another depressing sign for the long-run health of the economy: The surveys show that young Ukrainians are more tolerant of corruption than their elders.

Bohdan Krawchenko, the vice rector of the Ukrainian Academy of Public Administration, stressed the huge challenge Ukraine faced upon gaining independence in 1991. Old administrative institutions were allowed to continue, the most pernicious of which is the ministry of the cabinet, whose 700 officials supervise the work of the ministries. The individual ministers have no sense of personal or collective responsibility, and see themselves as bureaucrats rather than politicians. No mechanism for formulating and implementing policy exists. Plans are drafted by special task forces that sit in a villa for a week or two, “after which the task force is disbanded and everybody goes back to sleep.” Krawchenko reported that he has draft a document calling for the abolition of the cabinet ministry, which President Leonid Kuchma has said he will approve.

Equally important, Krawchenko noted, was the human factor–the lack of trained cadres, and the fact that Ukraine lacked a “political class,” because the political and economic leaders were used to dealing with Moscow but did not know and trust each other.

Serhiy Holovaty, the former justice minister, told the conference that Ukraine is still far from the rule of law. The main problem is that “lack of political will has left in power an entrenched bureaucracy which wields enormous power over daily life.” These officials have “little interest in systemic market reform since they profit handsomely from the existing environment.” President Leonid Kuchma has not made use of the decree powers he was granted in 1993 to move the country forward on the path to market reform.

Despite the introduction of the 1996 constitution, implementing legislation still has not been passed, nor have laws allowing for the exercise of the constitutional right to own land. The executive branch often ignores the provisions of the budget law. The procuracy preserves the broad supervisory powers it held back in the Soviet era, while the courts are “ill-prepared and ill-equipped” to protect human rights (of detained persons, for example). A new civil code was passed in first reading in June 1997, but opponents seem set to block its passage, proposing instead a more statist commercial code.

Holovaty has reason to be critical: During the Yale conference he learned from Ukraine that a local judge has stripped him of the parliamentary seat that he won a month ago, citing irregularities by election officials.