Today’s Guest Post is from Donald Bowser. Don has worked on governance and anticorruption programs for over two decades for various donor organizations. In July he founded Support to Ukrainian Recovery Initiative, an NGO focused on implementing early recovery and stabilization projects in formerly occupied communities across Ukraine.

In “Why We Shouldn’t Be Overly Concerned About Corruption in the Reconstruction of Ukraine,” her January 9 post on GAB, Catherine Katz makes three points to back up her claim:

1. First, the baseline level of corruption in pre-invasion Ukraine was likely overstated.
2. Second, not only do measures like the CPI tend to overstate the baseline level of corruption in Ukraine, but they do not adequately reflect the significant strides Ukraine has made with its more recent anticorruption efforts, including several that have taken place since Russia’s February 2022 invasion.
3. Third, backsliding on Ukraine’s recent anticorruption progress is unlikely—and further progress is expected—given Ukraine’s long-term interest in joining the EU and continuing need to receive support from the international community.

Like Katz, I hope the war ends in a Ukrainian victory soon and that the international community commits the resources required to help Ukraine repair the damage Russia has wreaked on the country’s infrastructure. But as the title of my post asserts, I sharply disagree with her about the spectre of corruption during reconstruction. Indeed, I think the international community should be very afraid of how it might compromise reconstruction and should begin immediately to take measures to combat it.  

Katz first argues that the public perception of corruption in Ukraine is far greater than it really is. While yes there is gap between anti-measures introduced and shift in public perceptions, as well as the paradox that exposing corruption increase public perceptions, the reality of corruption in Ukraine was perhaps much worse than what was perceived prior to the February 24^th invasion. I feel secure in stating this based on more than 25 years working on corruption around the world, the bulk of it in or on Ukraine. Corruption was perceived to be and in fact is still endemic there. The first indicator is the plethora of stories by the excellent investigative journalists who report on corruption in Ukraine and the modest number of cases those reports have generated.

Yes, Ukraine has made much progress in the fight against corruption; multiple institutions have been created, and hundreds of millions of donor dollars spent fighting corruption. However, look at the actual results – the low number of public officials who have been sentenced (25 in 2022) given the loss to the state budget from corruption. Its cutting-edge public procurement platform, ProZorro, and the other transparency measures recently introduced have helped in the detection of corruption, but the litmus test for the people of Ukraine is: who is being punished?

Much remains to be done to clean up a critical area in particular need of reform, the defence sector. Ukraine’s valiant fight against the aggressor Russia would have been aided if the reforms in Ukraine’s defence production and procurement (like with UkrOboronProm the state defence production agency) had actually been carried out.

As for backpedaling on anti-corruption reforms – if backpedaling were an international sporting event, Ukraine would have many gold medals to show off. Having had a front-row seat at NABU, the anticorruption agency, at the end of 2015 — when the anti-corruption backsliding began in earnest — I have followed all the ups and downs including behind the scenes over the last years. Same cycle – donors find a leverage point to force compliance and then later things are reversed quickly to the status quo. I suspect the rash of cases in the last weeks will follow this same cycle.

So why should we be afraid of corruption in the reconstruction in Ukraine? Well, we have 8 years of experience with it. I worked (and still work) closely with Evgeniy Vilinsky, the former Deputy Governor of the Donetsk Region 2014-19. During his tenure we tried to develop measures to mitigate corruption risks in reconstruction (here). As valiant as those efforts were, the ingenuity and persistence of corrupt actors to pilfer the modest funds provided for reconstruction were tireless.

As mentioned, ProZorro helps in detection, but collusion and fraud in procurement require full-time monitoring. With the enormous flood of money promised for reconstruction ($750 Billion USD is bantered around) the amount of oversight and monitoring needed will require enormous resources and expertise. Something that in previous reconstruction efforts has unwisely and short-sightedly proven limited. We need only look at the pilfering of humanitarian and military assistance exposed in last months to see that there are no limits to the malfeasance of corrupt actors in the country.

So as Ms Katz correctly points out – there is a need for a SIGAR (Special Inspector General for Afghanistan Reconstruction) type body to be established now to monitor and mitigate corruption risks but on a much broader scale. Many Ukrainian voices have come out negatively on this citing sovereignty and other issues (this is not Afghanistan), but it is external funding and external actors that can provide oversight.

There is surely some good news on the corruption fighting front with the appointment of Mustafa Naiem to head up the new reconstruction agency. Mustafa has been a force in governance reforms since calling everyone to Maidan in late 2013. Will he be given the support and power to go after the “grey cardinals” still active in misdirecting government resources for their private benefit? For as long as I have been engaged with Ukraine I have seen that these “shadow actors” are quite capable of throwing a wrench into work on reform.

In short – we have been through this during the first phase of the war with corruption in reconstruction and the events of the last weeks/months have shown that the pilfering of the Ukraine was not stopped by the full-scale Russian invasion. We should be very afraid and take real action today and after victory to make sure corruption is curbed. One of the lessons I have learned from being In Ukraine most of the last 11 months is that there is a new cadre of voices who are serving on the frontlines in Ukraine who won’t accept passively sitting by while the country is looted again. That’s great news for Ukraine.

To reduce the level of fear about the reconstruction of Ukraine, the international community should wholeheartedly back them.