The 17 participants of the 3rd Kyiv Post CEO Dinner on Sept. 28 debated the question: “How to maximize value from international donor assistance in transforming Ukraine?” The event was organized by the Kyiv Post and sponsored by Deloitte Ukraine.
The two-hour discussion provided no easy answers. Some at the table strongly favored direct assistance to people — not government — as the most effective use of money. Using the U.S. example, programs such as the Edmund S. Muskie Internship Program, the Future Leaders Exchange Program (FLEX) and the Fulbright Program. The investment in people should take place in Ukraine’s private and public sectors, with market salaries to achieve better results, some said.
Others stressed the need for Ukraine’s government to closely count and coordinate the aid, as well as to provide donor countries with clear priorities and plans, accountability and results to maximize the effectiveness of the financial assistance. Governments need to show their political leaders and public that the aid is bringing tangible improvement.
Ukraine has received at least $9 billion in international assistance since national independence 25 years ago.
The strength and vibrancy of Ukraine’s civil society, frequent recipients of foreign aid, were seen as a showcase success story while some other programs became seen as feeding grounds for professionals who brought little benefit to the Ukrainian people. When neither donors nor recipients clearly define their goals, aid is ineffective.
Two other standout success stories include the new patrol police and ProZorro, the online bidding system designed to make public purchases more transparent and competitive. However, both of these examples come with limitations and flaws. ProZorro, for instance, will not help if the technical specifications of tenders are written to achieve a pre-determined winner of a bid.
One way of tracking 214 programs worth $5.1 billion is through the Economy Ministry’s Open Aid Ukraine website. The U.S. government, for instance, has provided $3 billion in loan guarantees to Ukraine since the 2014 end of the EuroMaidan Revolution and more than $500 million in direct assistance. Many other nations run assistance programs, both through the European Union and other international institutions and also on a bilateral basis.
This year, the Danish government is coordinating the EU’s anti-corruption programs in Ukraine.
The participants debated whether Ukraine’s government has modernized or clings to archaic ways of doing business. Whether Ukraine’s current government representatives are simply saying the right things, but doing business in the same old ways was another topic.
There was also discussion about taking Ukraine’s realities into account in creating privatization programs, regulations and other features, rather than simply adopting foreign models, which can be abused in Ukraine.
Others questioned whether loan programs, such as multibillion-dollar lending by the International Monetary Fund, merely extend the lives of corrupt governments if the right conditions are not attached. In transformation, one dinner guest mentioned the success of South Korea’s transformation, achieved because of a clear national strategy that Ukraine lacks. That strategy, some said, might only come from the private sector, which has a stronger impetus to employ market principles.
Consequently, donors have shifted to putting conditions on aid, while underscoring that foreigners can’t transform the nation, only Ukrainians can do so.
One national strategy to attract investors is to define clear, compelling reasons for them to commit to Ukraine. Many such reasons exist, including an educated workforce and inexpensive labor, but devising a national strategy is difficult when so many people are focused on simply day-to-day survival. One person noted how China is investing in bringing technology to villages and said Ukraine’s government could take a similar approach. In the end, investors will look for profit while donors will look for progress.
The obstructions of oligarchs, through their representatives in parliament and government, was noted. Ukrainians are growing impatient with the slow progress in improving their lives, but the country has a budding generation of reform champions who show potential for leading the nation’s transformation in the future.
Participants in the Sept. 28 Kyiv Post CEO Dinner in the Hyatt Regency Hotel were:
Oksana Syroid, deputy speaker of the Verkhovna Rada in Ukraine;
Sevki Acuner, country director of the European Bank for Reconstruction and Development;
Mykolaiv Mayor Alexander Senkevich;
Danish Ambassador Christian Dons Christensen;
Joanna Wagner, assistance coordinator at the U.S. Embassy in Ukraine;
Sabine Mueller, regional director of GIZ;
Andrei Pivovarsky, former infrastructure minister;
Volodymyr Omelyan, infrastructure minister;
Marcus Brand, governance adviser for the United Nations Development Program;
Olena Tregub, director of international aid, Ministry of Economic Development and Trade;
Igor Smelyansky, CEO of UkrPoschta;
Holger Tausch, director of Swiss Cooperation Office;
Andriy Bulakh, managing partner of Deloitte Ukraine;
James Horner, leader of international development opportunities sector for Deloitte;
A. Kishore Rao, strategy and operations principal, Deloitte;
Greg Fishman, senior advisor of Deloitte;
Brian Bonner, Kyiv Post chief editor; and
Kostyantyn Chernichkin, Kyiv Post photographer.
This was the 3rd Kyiv Post CEO Dinner this year.
Read coverage of the first two events here: