More than a year after the EuroMaidan protests took the world by surprise, Ukraine’s political and economic struggles continue. Developments in the country since the new government came to power highlight the ongoing challenges of systemic overhaul following an exciting, rapid transition. These challenges clearly illustrate the link between democratic development and economic reform, so central to CIPE’s work. Accomplishing the tasks facing Ukraine, from combating corruption, to reducing the barriers to doing business, to creating space for public-private dialogue, will be no easy feat.
The success of Ukraine’s economic and democratic development largely depends on ensuring the success of the country’s small and medium-sized enterprises (SMEs). The entrepreneurial and flexible nature of SMEs makes them integral to achieving a number of the country’s goals: economic diversification; closer integration with Europe; building an adaptable economy; stimulating job growth; and boosting productivity.
Ukraine thus seeks to emulate the ways in which SMEs have helped make the U.S. economy among the world’s most successful. Boosting SMEs will require both giving the business community – and SMEs in particular – a seat at the policymaking table, and providing these firms with extensive support and training. CIPE’s partners are playing an important role in both of these processes.
CIPE’s primary focus in Ukraine has been to reduce policy barriers to business through cross-regional advocacy. Since opening the Kyiv office in 2010, CIPE has developed an extensive network of partner business associations and chambers of commerce across the country that work to represent and support Ukraine’s citizens through the work that they do.
It is when citizens are well-informed, equipped with facts, and capable of conducting independent analysis that they can better engage in the policymaking process. Access to information at every level is the backbone of an active citizenry that can come together to keep government honest, responsible, and accountable. In Kyrgyzstan, however, most journalists lack the analytical skills to report well on crucial economic issues, and citizens lack the necessary understanding of core social and economic realities (and values) that are needed to keep a democracy in place 365 days a year. This lack of information not only undermines the population’s ability to support basic market-based democratic reform, but detracts from their ability to engage in the development of their country – of their village, of the region, of the nation at large. It is with this in mind that CIPE partner the Development Policy Institute (DPI) began their work several years ago to improve mass media’s capacity to inform the public on economic concepts during Kyrgyzstan’s fragile period of transition to market-based democracy with protected property rights and rule of law.
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“Among a people generally corrupt, liberty cannot long exist.” – Edmund Burke
Until recently, corruption has been accepted and treated as a cultural norm in countries across the world. Increasingly, thanks to the efforts of organizations like Transparency International (TI) and a range of business groups, nonprofits, and government initiatives, the private sector is now openly talking about corruption. But to make significant progress, not just multinationals but also domestic companies in emerging and frontier markets need to believe in the business case for anti-corruption compliance.
As a community we are at a crossroads, as a wide range of actors have not only come to realize the destructive nature of corruption but are putting their heads together to create the conditions necessary to combat it.
TI-USA’s new report on Verification of Corporate Anti-Corruption Programs, the project of extensive research and consultation, marks an important step towards a unified vision of what successful anti-corruption compliance programs should look like. At a July 24 event presenting TI’s key findings and recommendations on corporate compliance, Andrew Wilson, CIPE’s Deputy Director for Strategic Planning and Programs, shared his views as part of a panel that included speakers from TI, Siemens AG, and Tyco.
Following months of protest on Kyiv’s Maidan, many Ukrainians have begun to address one another these days not with hello or how are you? Instead, the exchange follows the old saying from the partisan army that fought for an independent Ukraine during World War II: Glory to Ukraine, with the response: Glory to the Heroes!
Yet over the course of the events on the Maidan, a new group of heroes has emerged – everyday people who work in and own kiosks, shops and cafes, who were fighting for right to live in a more open and prosperous country, free of the corruption that has made it so hard to do business in Ukraine.
Indeed, many businesses – often coordinated by business associations – from across Ukraine took part in the Maidan movement, both in Kyiv and in smaller regional demonstrations. CIPE has heard reports that small businesses contributed thousands of dollars in cash and in-kind donations to support people in Independence Square. Business associations provided legal aid to those who were detained or put on local wanted lists for their role in the Maidan.
Given that business associations did not exist during 70 years of Communist rule, and that they are sometimes considered the country’s weakest civil society institutions, they have shown themselves remarkably dedicated and vibrant organizations during these months, capable of uniting across regional divisions. Indeed, recently, 11 new cross-regional coalitions of associations have taken shape.
On Sunday morning, CIPE Program Manager Zoia Tsybrova braved the cool, rainy weather to observe the EuroMaidan protests forming in the center of Kyiv. The Shevchenko building, where the rally was intended to be held, could not hold all the participants, and it did not take long for people to start walking, meeting friends and family, filling the streets of Kyiv. The mood, says Tsybrova, was euphoric. Not only on Sunday but today as well. Three days later, the people are still there, with a mass of students demonstrating still; the good mood remains, with people handing out hot tea and sandwiches to those on the streets. People are still dressed up for the occasion, smiling, walking with Ukrainian and European symbols, with homemade cards, signs, banners, and flags.
What was the impetus of this? The protesters were pushed over the edge by the government’s decision to suspend the pursuit of an association agreement with the European Union (EU). The association agreement could have been signed in Vilnius, Lithuania at the EU Partnership Summit on November 28-29. It is a political and free trade deal that has been on the international community’s radar for a number of months as it offered the possibility to Ukraine to begin integration into the European Union.
The deal’s suspension caused a response that was both unexpected and a turnout that was noteworthy, to say the least. Early estimates have put the number of protesters rallying on Sunday at 100,000. Ukraine has not seen a protest this large since the Orange Revolution in the winter months of 2004 leading into 2005. Following the government’s decision to suspend the pursuit of this agreement with the European Union on November 21, the people have come together in mass rallies again on Kyiv’s Independence Square (Maidan Nezalezhnosti). Over the weekend, protests sprung in other cities around Ukraine, too, from east to west.
“But wise is the man who disdains no character, but with searching glance explores him to the root and cause of all.” — Nikolai Gogol, Dead Souls
Corruption in Ukraine cuts across regions, all sectors of the economy, and almost every institution. In some sense it’s become a rallying point: since everyone is harmed by corruption, CIPE’s private sector-led, collective action approach to anticorruption in Ukraine is based on bringing the business community together to work towards common solutions.
Given that Ukraine’s business associations are among the country’s weakest civil society institutions — such associations did not exist during 70 years of Communist rule — small and medium-sized enterprises (SMEs) are underrepresented nationally in civil society and political life. Despite this fact, Ukrainian public discourse on issues affecting the business community is vibrant and relatively open. This appears to be improving on the regional level, in part through CIPE support of business associations representing SMEs, a little more notably each year. Individual business associations, as well as eight new coalitions of associations, now work collectively at the regional level.
Recently I stumbled across Andrey Kurkov’s Death and the Penguin,
a deadpan satire of a single man and his pet penguin struggling to get by in Ukraine’s capital, Kyiv. The little novel points squarely at the sometimes absurd but functional atmosphere of Ukraine, where corruption runs rampant and entrepreneurs struggle to hold their own.
The novel follows Viktor, a middle-aged aspiring writer living with his pet penguin, Misha. True to real life, the zoo had been giving away hungry animals to anyone who could feed them. Viktor, abandoned by his girlfriend, took Misha in. For Viktor, too, times were hard, so when he is offered the questionable opportunity to write obituaries for VIPs who are still living, he is quick to accept. Unfortunately, these obits turn out to be a sort of hit list: following each obituary, the subject’s death ensues, which he discovers only later in the morning newspaper. He soon comes to realize that the last obituary he will write will be his own.
Andrey Kurkov poses with a penguin. (Photo: Random House UK)
Kurkov’s depiction of post-Soviet life is lined with deadpan satire that clings to the edges of the structures of corruption that have made the country hostile to its own people. One day a commercial comes on the television: penguins in Antarctica, splashing, at home. Misha begins to throw himself at the screen. Ukrainians researchers pop into the frame.
“I appeal to private entrepreneurs and others with funds – on you depends whether our scientists will be able to continue their work in the Antarctic. Have a pencil and paper ready for the account number to which sponsor donations can be made, and a telephone number on which you can hear details of what your money will be spent on,” says a woman. Viktor runs to jot down the information. Despite his friend’s skepticism, Viktor makes a donation, hoping to send Misha to Antarctica. But when that last obit is requested, it is Viktor who takes a place among the crew – it is these entrepreneurs who have saved him.