Francis Fukuyama giving a lecture about case study methodology at the Leadership Academy for Development in Ukraine.
Ukraine is a resource rich country, an entrepreneurial country, a country filled with talented individuals who work hard for their families, but why do so many Ukrainian people live in poverty? The answer, perhaps, is public governance, or more precisely, a lack thereof.
To be clear, allow us first to define the words “public governance,” as we understand them. Simply put, public governance is the relationship of power among the government, civil society, and the market. Given the strong skepticism concerning democracy in nations near Ukraine, without improvement in the standard of living of Ukrainians, the Ukrainian people may soon lose their excitement about their own bustling and fledgling democracy. In short, Ukraine’s democracy must begin to deliver tangible benefits to its citizens.
In Ukraine, thousands of companies are still owned and operated by the government — a legacy of Soviet central planning that bleeds money from the already strained state budget. With the country in economic crisis, there have been renewed calls for Ukraine to speed up its privatization process and sell these firms to private owners who can restructure them and run them more efficiently.
Ukraine’s former Minister of Economic Development and Trade, Aivara Abromavicius, recently made a well-reasoned argument for faster privatization on the Atlantic Council’s blog. Similarly, the IMF has also urged Ukraine to speed up the pace of privatization.
However, focusing on the pace rather than the quality of privatization will likely result in a botched privatization process — which will undermine the little bit of faith Ukrainians have left in the free market and state institutions, potentially leading to the growth of populist movements and destabilizing the current government.
Ukrainian state-owned enterprises (SOEs) remain a drag on the national budget. They serve as incubators for corruption and gray market deals and in some cases serve as piggy banks for Ukrainian politicians. While I agree with Abromavicius that “simplicity, clarity, and transparency,” must be maintained in order to successfully privatize Ukrainian state owned enterprises, his concept of creating a simplified privatization procedure (without advisers) through an online auction of over 1,000 smaller SOEs will likely lead to public anger over a process that would surely enrich insiders.
Without independent advisors overseeing the due diligence process and hiring independent auditors, bidders will not have transparent access to information about the companies listed. This would, in effect, be like buying from an unrated seller on eBay with only a vague description of what is for sale – something that would not inspire confidence in potential buyers.
A lack of independent advisors–and the transparency and investor assurances they would bring to an auction—can lead to lower realized prices for the Ukrainian government, attracting only those bidders with inside knowledge of the true status of the enterprises for sale.
Join us for the #Storymakers2016 Twitter chat on May 4
On May 4, CIPE is partnering with Democracy International and Devex for TechSoup’s 24-hour, around-the-world #Storymakers2016 Twitter chat. We’ll dig into how civil societies are using traditional and emerging storytelling tools to empower individuals and shift democracy, governance and human rights conversations around the globe.
Join us for this one-hour live Twitter chat on May 4, 2016 at 4:00pm EST, 10:00 pm Johannesburg time.
#Storymakers2016 Twitter Chat: Storytelling: a tool for change makers in civil societies around the globe
Curious about this topic? Tune in by following along at #Storymakers2016 to hear from global development leaders and civil society experts to discuss these questions:
- What is working in #DemocracyRightsGovernance #communications + #storytelling? How are int’l orgs supporting #HumanRights advocacy + #CivilSociety?
- What is not working when #GlobalDev orgs try and support #CivilSociety or #HumanRights activists in developing countries or repressive regimes?
- What risks do activists and #CivilSociety organizations face when they utilize storytelling and other #comms tools?
- Can storytelling and #communications counter the trajectory of countries with closing democratic space, turbulent politics, or even conflict?
- How can int’l orgs, NGOs, CSOs, and activists overcome these challenges and improve #GlobalDev outcomes through better #storytelling?
Participants will include:
- CIPE — The Center for International Private Enterprise (CIPE) strengthens democracy around the globe through private enterprise and market-oriented reform.
- Democracy International — Democracy International (DI) promotes democracy, human rights, good governance, peace, and international development around the world.
- Devex — Devex is the media platform for the global development community. We connect & inform 700,000+ dev professionals worldwide.
Follow the organizations on social media:
Twitter: @CIPEGlobal, @DemocracyIntl, @Devex, @TechSoup
Facebook: Center for International Private Enterprise, Democracy International, Devex
Did you know that public procurement — goods and services bought by governments — accounts for around one-fifth of global GDP? Or that in most high-income economies public procurement takes up a third of total public spending, and in developing countries even more – about half?
These figures represent a significant share of national wealth. If channeled properly, public procurement provides indispensable benefits to a society, such as infrastructure, hospitals, and schools. Yet, if squandered, public procurement can set back the economy and contribute to massive corruption. In fact, the Organisation for Economic Co-Operation and Development (OECD) estimates that corruption drains 20-25 percent of procurement budgets globally, which amounts to staggering $2 trillion per year.
The World Bank’s recent report, Benchmarking Public Procurement 2016, goes beyond the aggregate numbers to compare data on regulatory environments that affect the ability of companies to do business with the government in an open and transparent way.
More than a week ago, the city of Beirut ceased trash collection when the landfill stopped accepting deliveries. It turns out the city’s biggest landfill is, well… full. Since then, the streets of this beautiful capital on the Mediterranean Sea have been filled with piles of garbage, rotting in the summer heat– 20,000 tons and counting. This creates obvious health hazards, and undercuts the city’s peak tourist season. Many residents are wearing masks to deal with the stench.
The Lebanese people are rightfully outraged. They see the garbage crisis as a manifestation of larger institutional failures. The country has been without a president for more than a year, and the parliament has extended its own mandate until 2017 without holding elections. The political deadlock breeds institutional paralysis, which in turn exacerbates corruption in a destructive cycle. Essential services like electricity, water, and, sure enough, waste removal are disrupted. CIPE’s longtime partner and Lebanon’s leading anti-corruption watchdog, the Lebanese Transparency Association (LTA), is not sitting idly by.
CIPE’s long term partner Riinvest Institute for Development Research is celebrating their 20th anniversary this year. To mark the occasion, Riinvest held a conference on May 15 and 16 titled, “Activating the Sources of Economic Growth in Kosovo”. The conference brought together an impressive audience— the President and the Prime Minister of Kosovo*, the Deputy Minister of Finance, the World Bank Country Manager, other high level public officials, academics, business people, NGO leaders, the donor community, and members of the media.
*Kosovo’s newly-elected Prime Minister, Isa Mustafa, is the former President of Riinvest.
Riinvest leaders presented awards to a number of partners, individuals, and organizations who have supported the organization since its inception. CIPE had the honor of being presented the first two awards, one for Executive Director John Sullivan and one for the organization as a whole. CIPE Senior Consultant Carmen Stanila kindly received both awards on behalf of John and the organization.