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CORRUPTION
CORRUPTION IN UKRAINE NYT OPINION: Ukraine Is Weakened by Corruption, So How Is It Stymieing the Russians? 
Credit...Illustration by The New York Times; images by CSA Images via Getty Images Original article: https://www.nytimes.com/2022/10/10/opinion/ukraine-corruption-war-russia.html Peter Burgess COMMENTARY I have been bothered by corruption since quite early in my career. Back in 1978 I was recruited for a World Bank project evaluation assignment in India. One of my conclusions was that corruption in the small project village sector would make this component of the project unsuccessful. and that it would be the larger components of the project that would drive the success of the overall project. A few years into the implementation of the project, I had the opportunity to look at the actual performance of the project. To my surprise ... and to some extent chagrin ... I learned that the small project village level initiatives were doing very well and the larger components were going very slowly. It turned out that the small scale corruption at the village level which was endemic served to make everything go smoothly and get done ... it was a modest cost of 'doing business'. On the other hand the large organizations whether State Owned Enterprises or Private spent an inordinate amount of time negotiating advantage ... and after several years (around three years as I recall) most of the big projects had still not started. After this experience, I was more careful to look at the structure of corruption, better to understand the damage that was being done to the economy and to society. As I look at this article, I see an important pattern. During the 1990s after the collapse of the Soviet Union I did some consultancy work related to government financial management through the World Bank and KPMG related to the former Soviet Republics of Kazakhstan and Ukraine. My work was not appreciated by either KPMG or the Governments concerned ... or more specifically by certain people in the Governments concerned. After the collapse of the Soviet Union, there was an opportunity to introduce better systems of accounting and accountability in government throughout the former Soviet Union and there was a consulting bonanza in response to this. Frankly, I was unimpressed with many of the consultants I was expected to work and collaborate with, many of whom were insufficiently experienced (though usually well qualified) to do the work. Maybe that included myself. I knew something about Soviet style accounting from some work I had to do many years before. Specifically I knew that the record keeping was well done and very rigorous, while the use of these records delivered very little that was useful to an analyst from the West. I saw an opportunity to mobilize all ... literally all ... the existing data in a way that would be understandable and useful to Western consultants. By the mid-1990s, electronic data processing had emerged and where I was working in Kazakhstan, the Government accounting records were in an electronic form. I was able to start a process of reformatting reports so that they were automatically translated into English and structured in a way that was more useful to Western analysts. What I did not realize was that certain individuals in high places had zero interest in accountability ... rather they had an interest in keeping everything as opaque as possible. No problem with documenting the detail in a rigorous manner, but a massive problem if these data ever got summarized in a useful way. This was, of course, the emergence of the Russian oligarch class which was just starting its takeover of everything of value in the former Soviet Union (FSU). Clearly, someone like myself needed to be removed ... and this was done with the collaboration of KPMG. This oligarch class is, to all extents and purposes, a class that is essentially untouchable and above the law ... both local law and international law. While most are Russian and live and work in Russia, many are Russian with their business interests located in other parts of the world. There are many business oligarchs who are Russian that have interests in Ukraine which is not surprising since Ukraine has been a very important part of the industrial core of the FSU for a very long time. Until quite recently, these oligarchs have been responsible for a lot of the grand corruption attributed to Ukraine. I think it is also fair to say that Russian business oligarchs have also set up shop in a variety of places outside Russia and the FSU, like New York, London, Monaco, Miami to name just a few. Sadly, there is a class of people in modern society that see wealth as being good, no matter the origin of the wealth. There is a big community of professional firms that serve the oligarch class around the world, no matter their behaviors ... as long as there is money to be made. Hopefully one of the outcomes of the Ukraine War will be a realization that massive wealth and power should be assessed for what it really is, and how it came to be accumulated. Peter Coy raises a useful issue ... but in my view does not dig very deep. The problem is serious! Peter Burgess | ||
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NYT OPINION: Ukraine Is Weakened by Corruption, So How Is It Stymieing the Russians?
Written by Peter Coy, Opinion Writer ... Peter Coy is a veteran business and economics columnist unpacks the biggest headlines. Oct. 10, 2022 Corruption undermines society as surely as termites undermine houses. Ukraine suffers from corruption. So how has Ukrainian society nonetheless managed to stymie a Russian invasion, and even turn the tables on its invaders? I asked experts inside and outside Ukraine for their answers to this pivotal question and heard several interesting theories. The most intriguing is that it’s possible in certain situations to be simultaneously corrupt and patriotic. Here are some of the explanations:
Corruption is worse than ever; we just don’t know about it. With rivers of aid pouring into Ukraine from the United States and Western Europe, it would be easy for high- and low-level crooks to skim and not be caught. By this theory, corruption is badly sapping the war effort but fortunately is being more than offset by the volume of foreign aid and the heroism of individual Ukrainians on the front lines. Certainly weird things keep happening. In July President Volodymyr Zelensky fired the prosecutor general and the leader of the domestic intelligence agency. Last week The Financial Times reported that the recently resigned central bank governor was said to have fled the country as anti-corruption investigators served “a notice of suspicion” for a senior official matching his professional description. My colleague Thomas Friedman wrote in August that “there is deep mistrust” between the White House and Zelensky, “considerably more than has been reported.” Ukrainians are rallying around their flag. “Corruption is less because the survival of the nation is at stake,” said Brian Bonner, who was chief editor of The Kyiv Post from 2008 to 2021 and is now an editor at Geopolitical Intelligence Services. “We’re at a higher level of unity and selflessness than I’ve seen since I’ve lived here.” Prince Michael of Liechtenstein, who founded Geopolitical Intelligence Services, agreed: “People stuck together. There was a strike from outside and they came together.” War has interrupted the oligarchs. Low-level corruption was never the problem. The problem was, and is, the oligarchs in Ukraine and Russia who operate international networks of large-scale theft and money laundering. Now that the nations are at war, it’s harder for them to move money seamlessly between Kyiv, Moscow, London, New York and offshore tax havens. Bribe-takers don’t want to lose the war. Some people who have carved out comfortable niches in government and business worry that if the Russians take over, they’ll be booted out of office, speculated Andrii Borovyk, the chief executive officer of Transparency International Ukraine. In such a situation it would be prudent to forgo opportunities for short-term self-enrichment to make sure Ukraine wins the war. “If the Russians come, who knows what those rules are?” Borovyk said. “I’m sure there were some people among the civil servants who were thinking through this process.” Ukraine is corrupt and patriotic. “Who said the corrupted crook cannot be a patriot?” Borovyk told me. He said his countrymen who are corrupt don’t necessarily perceive themselves as bad people. They don’t dwell on the fact that the bribes they take represent money that’s not going to, say, hospitals, he said. When the Russians invaded their country, their patriotism kicked in. Mostly likely, Ukraine’s surprising success can be chalked up to several of those explanations. If Ukraine does manage to rid itself of the Russians, the next step after the war will be to rid itself of the kleptocrats. Peter Coy ... A veteran business and economics columnist unpacks the biggest headlines. ... Peter Coy has covered business for nearly 40 years. Follow him on Twitter @petercoy You're reading the Peter Coy newsletter, for Times subscribers only. A veteran business and economics columnist unpacks the biggest headlines. Get it in your inbox. Quote of the Day “Success does not lie in sticking to things. It lies in picking the right thing to stick to and quitting the rest.” — Annie Duke,
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