You're reading: Foreign lenders mull supplementing civil servant salaries to decrease corruption

Some of Ukraine’s underpaid cadre of civil servants might get bonuses from international finance institutions to reduce the temptation of taking bribes. According to Ukrainian Tax Service chief Ihor Bilous, the European Bank for Reconstruction and Development is exploring the idea of setting up a fund that would provide officials with additional pay.

“Last week I had a meeting with EBRD representatives and they proposed to create a fund to pay money for people who serve the state in high positions,” Bilous told the Kyiv Post.

This idea was successfully implemented in Georgia, he adds, “we need to change the system, state salaries are very low and this situation creates some kind of temptation.”

However, EBRD spokesman Anton Usov said the idea is news to him.

“It is not a current program, it is just an idea that Bilous discussed with EBRD representatives and several other donor organizations, and he said that he is ready to support such idea,” explained Bilous’s spokeswoman Yaryna Klyuchkovska.

Usually salaries in the civil service are very low. A first deputy minister usually receives around $870 a month, the same post that Bilous occupies in the Ministry of Revenues and Duties, which is being liquidated. Meanwhile, a senior manager at an investment bank could earn more than $10,000 monthly. However, this is not an issue for Bilous. “I have my own savings,” he explains.

The idea to augment the salaries of state officials with outside money was implemented  in Georgia in 2004-2006. Then, Billionaire Bidzina Ivanishvili, who Forbes says is worth $5.3 billion, gave his support to newly elected President Michael Saakhashvili. His money was used to pay state salaries for two years.

“Officially we used (money affiliated with foundations of George Soros), but mostly it was my money, Soros’ investment was relatively small,” Ivanishvili told Forbes Russia in December 2013.

The plan to augment salaries was designed to fight corruption. Earlier, Bilous said that an estimated 40-60 percent of the nation’s gross domestic product remains hidden. “Last year, a quarter of the country’s budget was stolen only through fraudulent (schemes) involving value-added tax,” he says of the legacy his predecessor, Oleksandr Klymenko. Klymenko is now wanted for corruption and his assets have been frozen in the European Union.

According to a 2013 corruption perception survey conducted by Transparency International, Ukraine was ranked 144 among 177 countries. Ukraine is solidly positioned in the “high risk” group together with Cameroon, Iran, Nigeria, Central African Republic and Papua New Guinea.