Despite the H1N1 fears, the majority of those that registered for the conference were in Kyiv today. We were very glad to welcome about 70 people from 20 countries this morning. Today was quite exciting with three panels engaged in very lively discussions on lessons from successful and unsuccessful transition, anti-corruption strategies, and corporate governance.
John Sullivan, CIPE executive director, set the tone for the two days with the remark that each country travels its own path; it is important that the reform process is built up from the grassroots to identify issues that are important locally and turn them into an agenda for reform.
While talking about the success factors of the Polish reforms, Mieczyslaw Bak, from the Institute for Private Enterprise and Democracy from Poland, laid out these key factors: all market-based reforms were introduced at once including interest rates that were higher than inflation and the real cost of energy.
Georgii Satarov, from INDEM Foundation in Russia, spoke about unsuccessful transformation of institutions, especially in the judicial system. One of his main points was that weak rule of law undermines overall democratic and economic development in Russia.
Ksenia Lyapina, a member of Ukrainian Parliament, noted that Ukraine still suffers from the Soviet style paternalistically-oriented population that is still seeking the wise “king” that will solve all the problems and bring social justice to all. Feeding such political expectations limits scope for economic reforms.
Boris Begovic of the Center for Liberal-Democratic Studies in Serbia remarked that potential “losers” become the obstacles to political and economic reforms.
Myron Brilliant, CIPE vice president and senior vice president for the US Chamber of Commerce, put an emphasis on the power of coalitions built around ideas that become multipliers for promoting market ideas. Such an approach wins in the face of public opinion and consumers.
The anti-corruption panel’s moderator, Alex Shkolnikov, CIPE director of policy reform, noted that rarely do anti-corruption programs include the business community as part of the solution. Sergei Leonov from Saratov Chamber of Commerce in Russia described a successful approach where the Saratov coalition of business associations eliminated inconsistencies in business related legislation, thus reducing opportunities for corruption. Todor Yalamov from Center for the Study of Democracy in Bulgaria said that the first thing that needs to be tackled in an anti-corruption program is the state of denial in the minds of politicians. Begovic also noted that corruption has a heavy price as it distorts public policies.
Andrew Wilson, CIPE regional director for Europe and Eurasia, remarked that corporate governance is an important anti-corruption tool. Igor Belikov from the Russian Institute of Directors mentioned the success of the rating system his organization developed to measure companies’ compliance with corporate governance standards. Sergei Filin from the Kazakhstan Institute of Directors noted that although his country has very good legislation for corporate governance, in reality the standards are not applied. Iraj Hashi from Staffordshire University in Britain recounted the experience in the region saying that even if institution building did not receive necessary attention in the initial phase of privatization, the global financial crisis highlighted the need for strong corporate governance.
The day concluded with Phil Truluck, CIPE board member and executive vice president of the Heritage Foundation, who presented the outlook of the region’s index of economic freedom. He noted the remarkable progress many countries in the post-communist region made in the last 15 years; however, the reforms still need to continue to bring the desired level of prosperity that economic freedom has delivered elsewhere.