Ukraine's reconstruction: "Continue to apply the sandwich effect!"

Johannes Voswinkel: To which extent the anti-corruption authorities in Ukraine are well equipped for the tremendous sums of money that will flow into the country for reconstruction?

Olena Halushka: This will be definitely very unprecedented sums of money. None of the public administrations even of other countries, probably except the US, can absorb sums of money like that. So it's very important to make sure that we have all of the necessary anti-corruption safeguards in place to be 100% sure that this money is used brilliantly and that the risks of the possible abuse are close to zero. And for that, we definitely need to continue moving with the transparency and monitoring tools. We already have this very advanced public electronic procurement system, Prozorro, where state and municipal customers announce tenders to purchase goods, works and services, and business representatives compete to become a state supplier. But this is not enough. Colleagues from the civil society, together with the Ministries of Digitalisation and Infrastructure, have developed a system called Dream, which will help to monitor the implementation of all projects on each and every stage from the very beginning till after it is implemented. But we think that this is still not enough.

What still has to be done?

The stance of my organisation is that the most vulnerable part of any future reconstruction process would be procurements. So if the money is managed and administered by the international funds and the procurement is being conducted also by international partners, that would minimise any chances for any possible abuse. Also, it is very important to empower civil society and investigative journalists who are doing an amazing job even during war time. The fact that, in the beginning of this year, journalists revealed the scheme of overinflated prices at the food procurement in the Ministry of Defence is in fact the sign that different pillars of Ukrainian democracy, like public oversight, are working.

Olena Halushka is a board member of the Ukrainian NGO “Anti-corruption Action Center”. Earlier, she worked as a chief of international advocacy at the post-Maydan coalition of 80 CSOs “Reanimation Package of Reforms” (2015-2017). She advised to the Member of Parliament of Ukraine (2012-2014). Olena has experience in local-level politics as she served as the Kyiv City Council member, and deputy chair of the Council’s Commission on Housing and Energy (2014-2015). Olena is a contributor to the Atlantic Council. She also wrote op-eds for the Washington Post, the Foreign Policy, and the EU Observer. Olena Halushka obtained PhD in International Economics from the Kyiv National University in 2016.

We definitely have to make sure that local communities have the say in the reconstruction because they should actually be the owners of this process. Local civil society should monitor the activities of the local authorities. And the National Anti-Corruption Bureau of Ukraine (NABU), the Specialised Anti-Corruption Prosecutor's Office (SAPO) and the High Anti-Corruption Court should have the jurisdiction over any possible abuse or embezzlement within the reconstruction.

With the international partners administering money plus transparency and monitoring instruments and tools, plus civil society oversight and a very strong role of the local communities, I'm pretty optimistic that the recovery and reconstruction will be done in the proper way.

What has to be done to support and to encourage civil society that it will be capable of doing their part in accompanying and controlling reconstruction efforts?

I give you an example: We are an organisation of 25 people. Out of 25 people, six are right now fighting at the frontlines and three are refocused the activities from anti-corruption and domestic reforms related programs to mobilizing the world for supporting Ukrainian victory. So definitely the best precondition for any civil society organisation to be able to work on the monitoring of recovery and reconstruction would be a prompt Ukrainian victory because that would help us to free our capacity and our resources from the war related activities into what we would want to do most – democracy-building.

I think that we had a very good experience with international partners of jointly advocating for reforms in between 2014 and 2022. Here, the European Union played a very important role because they had not only sticks but also carrots. Previously this was the visa liberalisation action plan, which was linked to very clear reform conditionalities. Now you have an even much more powerful tool – I call it Leopard tank II for advocating the necessary reforms: the EU accession process. It will be linked to very clear and concrete reforms which we as the civil society will take on our flag. We will push Ukrainian government to do them because there is demand of the Ukrainian society. 73% of Ukrainian society are convinced that European Union should be demanding the reforms. We should manage jointly to continue applying this so-called sandwich effect when civil society is pushing from one side and international partners from the other side and Ukrainian government in between has to do the reforms.

But donors are in a dilemma: On one hand they want to control how the money is spent. On the other hand, there are a lot of reproaches that they act in a paternalistic or even colonialist way. How can this dilemma be solved?

We as the civil society have a very similar dilemma. How can we be demanding Ukrainian government to do real, comprehensive, transparent reforms when Ukraine is defending itself from a full scale genocide? The support for Ukrainian war efforts is definitely a top priority. That is why I think that neither donors nor civil society should be demanding something extraordinary or impossible. Doing weak reforms is much worse than doing no reforms and starting them at a later stage when conditions allow.

My recommendation would be to stick to some reforms and requirements that are not very complicated technically, but which stuck politically. The best example is the appointment of the head of the Specialised Anti-Corruption Prosecutor's office. A candidate won the competition, but, in the end, for half a year there was nearly no movement for his appointment at all. This very weird situation was unblocked by the EU candidate status where this was a reform conditionality. Before, this process was stuck politically because the president's office didn't want to move forward with the candidacy of Oleksandr Klymenko.

After Klymenko was appointed in August 2022, he literally brought the second breath to the institution. They unblocked a number of cases which were stalling. And right now, most of the new corruption cases that are being reported in media, are actually not the evidence that Ukraine is very corrupt, it is the evidence that Ukrainian anti-corruption institutions are working properly and doing their job even during war time. So I would suggest that the donors and civil society have to pick this relatively easy technically, but politically stalled reforms and be very firm on them because if you start watering them down, that might cause a bad precedent.

The status of a candidate for EU accession does have a very positive effect on anti-corruption work inside of Ukraine?

I think that was the best decision which European Union made last year with regards to our reform advocacy.

Should all reconstruction efforts go through a central institution or better be decentralised with direct contacts between donors and local communities or cities in Ukraine?

Because of the scale of the reconstruction, you should basically have all of those things in place. Some reconstruction programs have already started directly of some countries helping to rebuild particular towns. I know that Denmark is already on some projects with Mykolayiv. But definitely I think that most of money would go in the centralised manner. If donors manage this money and if Ukrainian government manages the list of needs, that would probably be the perfect match. And there is already a fund, the Trust Fund in the World Bank, which is kind of serving this coordination pool for some of the money coming from the international partners who maybe have no capacities or do not want to engage directly in some projects. And I think that that this case is pretty positive because World Bank has very rich experience in working with Ukrainian government.

But sometimes international institutions are over-regulated. So it's also important to keep Ukrainian reality in mind that we cannot allow wasting time and money for excessive bureaucracy and therefore need to adjust the regulations accordingly.

Ukraine has the reputation of being particularly corrupt. To which extent this is justified or unjustified?

It is incredibly important to assess Ukraine's corruption in dynamics. Obviously we do have corruption issues. But if you take a look at how Ukraine changed comparing to, let's say, 2013, when the president was Yanukovych, if you look at the huge progress and achievements which have been made after the revolution of dignity with regards to accountability, building new institutions for prosecution and bringing corrupt crooks to accountability, transparency tools and mechanisms, then obviously, it is very fair to say that Ukraine has made tremendous progress within the last nine years.

The tendency is positive. But which impact has the war on the fight against corruption?

Of course, it has negative impact because a number of very advanced transparency measures, like, for example, public registries, like the registry of vehicles, real estate, land cadastre are closed now. They were public before the beginning of the big war. Same regards the electronic asset declaration system, which was the most advanced comparing to other European countries. The system was rolled back when the Russian tanks were approaching to Kyiv, as it was not safe to keep this information public. Back then those things were justifiably hidden. But right now, we have to keep the very fragile balance between the security and the need to return to all of the positive best practices, with the security precautions in mind. That is why steps are being made right now in order to reintroduce the electronic asset declaration system.

On the other hand, this big war definitely has an impact on the zero tolerance to corruption, because Ukrainians are paying an absolutely huge price – the lives of our people for the chance to be living decently, have real effective democracy, respect to human rights and all what we call European values. When we are paying such a price, Ukrainians won't allow corrupt crooks to return to the worst practices. With regards to the moods of the society, we already passed the point of no return in the fight against corruption

If you look at the situation of curbing corruption inside of Ukraine in general, what is the reform that is needed the most now?

Judicial reform. We have seen that we manage to build these anti-corruption institutions and they are indeed effective. But if you have still loopholes in the ordinary courts, then corrupt crooks might try to abuse them for their own needs. Since 2014, Ukraine has done a few attempts to do the judicial reform. The most ironic thing is that from the very beginning we tried to introduce best European standards of the independence of judiciary, but they completely failed in the transitional democracy like Ukraine. If you empower Judiciary with more independence and authority over the hiring and firing decisions and disciplinary cases without kicking corrupt judges out of the system, then you basically only cement the problems and build a so-called state within the state. So we had to make few steps back and first clean judicial governance bodies, High Council of Justice and High Qualification commission of judges with the participation of international experts.

Now these judicial governance bodies need to fill around 2.5 thousand vacancies within judiciary. Something also needs to be done with the Supreme Court because the case of corruption of former Supreme Court head Vsevolod Kniaziev shows us that unfortunately this court was built based on the wrong principles, so there are corrupt judges there, and they need to be fired. And the same regards the reform of the constitutional court, because it has the veto authority over any initiative in the country. If we manage to fix the judicial system, that would be the best guarantee for the investors and their property rights. And that would be something which Ukrainian society has been demanding for almost the last ten years. That is the jewel in the crown of all of Ukrainian reforms.

Do you think that the judicial reform will be ended soon?

It is very important to manage the expectations properly because filling 2.5 thousand vacancies, that's a lot of work. But within the next few years, it is absolutely doable.

This interview was first published in German on boell.de.