Top diplomats joined forces with 10 leading law firms on Oct. 15 to deliver a scathing indictment of Ukraine’s bureaucratic governance system and call for a fundamental redesign of its structure.
Speaking at a conference in support of the law firms’ new white paper on legal and governance reform, U.S. Ambassador Geoffrey R. Pyatt backed their assessment that a “massive bureaucratic class” was sabotaging “any chance for Ukraine to become a modern state”. The ambassador said the country’s institutions had become an “anti-system, optimized for individual corruption and profit” and urgently needed reform to “demonstrate that Ukraine is ready to become a part of the Western world.”
The paper, jointly presented by the US-Ukraine Business Council and the Kyiv School of Economics, pulls no punches, labelling Ukraine’s current set of laws “archaic, chaotic and at times absurd”. It accuses successive Ukrainian governments of protecting a corrupt system by perpetuating the myth that Ukraine has good laws but poor implementation.
Prepared by a team of lawyers from both Ukrainian and international firms, the report dismisses proposals for gradual reform. Instead, it demands that the system is entirely dismantled and the bureaucrats enforcing it dismissed en masse.
It welcomes closer integration with the EU as a potential driving force for the necessary changes and sets out a number of high level proposals the authors consider key for Ukraine’s development into a modern democracy with a thriving market economy.
The white paper is comprehensive in its scope, addressing long-standing problems in areas from agriculture to banking. It includes broad plans, such as establishing a reduced, better-remunerated civil service corps, as well as more specific initiatives like stripping deputies of their mandate if they cast a vote on another’s behalf.
Law firms, the U.S.-Ukraine Business Council and the Kyiv School of Economics presented their “White Paper on Legal Reform” in Kyiv on Oct. 15.
Some of the proposals, such as a requirement for officials to regularly declare their income, should raise few eyebrows at the Verkovhan Rada, while others are more surprising. For instance, the report advocates sacking the entire judiciary and for new judges to be voted in by the public.
The recommendation for aptitude, attitude and performance exams for law enforcement officers is likely to play well with a nation still shocked by the police brutality meted out during the EuroMaidan Revolution and haunted by the Heavenly Hundred. However, proposals more directly linked to the U.S.-Ukraine Business Council’s primary goal – namely creating a more flexible environment for business in Ukraine – could prove unpopular.
In an effort to remove or streamline regulations that the authors consider barriers to good business, the paper suggests stripping away some of Ukrainian employees’ current protections from dismissal and removing the interest rate cap on bank loans. There are also huge question marks in the document over what should be done to legislate for the status of businesses, organisations and individuals left in limbo by the Russian occupation of Crimea – a deeply divisive topic that will prove controversial for whoever tries to take it on.
Despite the difficulties the reform programme will invariably face, Sweden’s Ambassador Andreas von Beckerath remained optimistic about its prospects:“There have never been better conditions for a European future in Ukraine. We have a reform-oriented president (in Petro Poroshenko) and a civil society that aims for reforms.”
But U.S.-Ukraine Business Council president Morgan Williams cautioned that “time is running out.” He used the white paper conference as an opportunity to warn Dmytro Shymkiv, deputy head of the Presidential Administration, that after losing up to 25% of their businesses through the conflict with Russia, international businesses had done everything in their power to stay in Ukraine but could not wait much longer for a stabilized economic system.
“Now’s the time for Ukraine to get serious – the international financial community has already put up twenty billion,” Williams said. “Twenty billion is enough, now you’ve got to do something for yourself.”
“You have to deal with all these issues at once in the next six months – the sense of urgency is critical.”
