Ukrainian businesses listed corruption and a lack of control over public funds as their biggest concerns in the reconstruction of their country.
As an entrepreneur trying to run a small business in Ukraine during the war, things have not been easy.
Kseniia Goldovska's software development company has continued to operate, although with difficulties.
New clients are hesitant about working with Ukrainian companies during the conflict whilst old clients are struggling with budget limitations.
Nevertheless, she is determined to keep attracting new investment from abroad and support the country by paying taxes in preparation for the reconstruction process that Ukraine will have to partially fund itself.
One of her biggest concerns though is corruption: “The main issue is the amount of investment that could be stolen,” she tells Euronews.
Goldovska's not alone with those worries.
Corruption is the number one fear for citizens and business owners when it comes to rebuilding Ukraine, according to a report from Transparency International, even more than the resumption of hostilities.
The survey found that 73% of the population and 80% of businesses listed the “restoration of corruption schemes” as the main fear, followed by the “lack of control and embezzlement of public funds” at 68% and 73%, respectively.
Ukraine’s reputation as one of Europe’s most corrupt countries has also concerned donors and allies, particularly the USA and EU that explicitly stated that Kyiv needs to execute reforms in order to receive new financial aid packages.
Billions pledged in reconstruction funds
International leaders in politics and business met at the Ukraine Reconstruction Conference in London in June to discuss the monumental task of rebuilding Ukraine.
Billions of euros were pledged, on top of the hundreds of billions already promised to the war-torn country -- and whilst many Ukrainians are optimistic about the future, one thing weighs on their minds that could hinder redevelopment projects: corruption.
Ukraine needs a huge amount of money to restore itself, with the World Bank estimating in April that Russia’s full-scale invasion has caused $411 billion (€376.6 billion) in damages and assessed that $14.1 billion (€12.92 billion) is needed this year alone for a “quick recovery”.
June's London conference confirmed that support is there but both donors and Ukrainian citizens are worried where the funding will end up.
In an effort to show that Ukraine is taking these warnings seriously, Prime Minister Denys Shmyhal presented the DREAM system at the reconstruction conference, which he claims will collect, organise and publish open data for all reconstruction projects in real time.
“Anyone, anywhere, can monitor the effectiveness and efficiency of project delivery, and use these insights to mitigate risks, conduct accurate reporting and improve overall project performance,” the DREAM website states.
Transparency International found that 79% of citizens and 62% of businesses want all stages of the recovery process to be as open as possible as well as access to data on responsible individuals to ensure that money is not being misused.
The DREAM initiative will quell some of those fears and work alongside the current ProZorro system, an online portal that allows the public free access to open data on all government procurement.
Ukraine Red Cross leading on transparency
“The more we provide visibility the more donations will come, the more we grow and more people will trust us,” explains Ihor Prokopenko, the head of the Kyiv office of the Ukrainian Red Cross Society (URCS).
The URCS has supported reconstruction efforts around the country, with Prokopenko overseeing projects in the Kyiv region. The charity relies on donations to fund infrastructure repairs and equipment for hospitals and homes that were impacted during the occupation of the Bucha region last year.
Prokopenko has ensured visibility at all levels, providing receipts, documents and signatures for everything the organisation buys. Although this was challenging in the first months of the full-scale invasion, when aid needed to be distributed rapidly, Prokopenko knows that in the long run transparency is key to gain trust and further donations.
“This is exactly why stakeholders donate to us, because we have provided visibility”, he adds. “This is our number one priority: to keep trust on all levels.”
Ukraine's reforms to crack down on corruption
At face value, Ukrainian President Volodymyr Zelenskyy is supportive of the anti-corruption measures, stressing the need to transform Ukraine in preparation for the reconstruction period.
He approved a strategic plan to reform the law enforcement system last month and appointed a new prosecutor general in July 2022 amidst a cabinet reshuffle as both Brussels and Washington DC pinpointed Ukraine’s fledgling law and judicial system as a key issue.
Moreover, Zelenskyy fulfilled EU requirements by welcoming in a new head of the Special Anti-Corruption Prosecutor’s Office (SAPO) in July 2022 as well as a new National Anti-Corruption Bureau of Ukraine (NABU) director in March 2023.
Business owner Kseniia Goldovska is optimistic that the government is sincere in its intentions, particularly with EU membership on the horizon.
NABU and SAPO have been busy targeting notorious oligarchs and uncovering large scale schemes, which Ukrainian media has catapulted to the front pages. In a major bust, the anti-corruption institutions detained Vzevolod Knyazev, the former head of Ukraine’s Supreme Court, for accepting bribes amounting to €2.47 million.
“I hope that those institutions that fight against corruption will be controlled, not just by the government themselves but by the society as well,” Goldovska tells Euronews.
However, she also acknowledges that individuals will always find a way around the safeguarding systems put in place. Therefore, like many of Ukraine’s citizens, she insists on stricter consequences such as lengthy prison sentences for those caught, not only to ensure they don’t get back to systems of power but also to deter future crimes.
“Scary punishments,” she says, “ is something that is necessary” and will make people think twice.
Ukraine has seen progress in the last ten years. It currently has 33 points in Transparency International’s corruption index, a far cry from the 25 points in 2013 when the country was in the grips of former-President Viktor Yanukoych who was ousted during the EuroMaidan revolution.
Goldovska maintains optimism that corruption will continue to improve in the post-war period and acknowledges a cultural shift in attitudes towards small-scale bribes. People are making a conscious effort to take the lawful long route rather than offering money to solve a problem quicker.
“As always you have to start with yourself and then fight with others,” she says.