Page 69 - BNE_magazine_12_2019 dec19

bne December 2019
• The “Roof” – The examples of lower-level corruption almost always involve payments by those who took the bribe, to individuals in the middle or upper levels, known in the post-Soviet world as the “Roof.” Proceeds from bribes
paid to get building permits, to take one example, must be shared with superiors. Proceeds from bribes paid to tax inspectors go up to regional tax inspectors, some of it to fund political activity that serves to perpetuate the system.
The importance of the progress Ukraine has made in improving transparency inside government, the Middle Board, is making it more difficult for perpetrators of graft to move proceeds of graft between boards. To take one example, the nationalisation of PrivatBank cuts off a major source of graft for its owners. However, without judicial reform and secure property rights, there is still substantial opportunity to move money from the lower level to the upper two levels.
Ukraine needs to move against the Top Board, which is why the new IMF conditions are so important. Ukraine also needs to continue to improve transparency in government, especially although not exclusively judicial reform, that will reduce the ecosystem for corruption in both the upper and lower boards.
Opinion 69 “Ukraine needs to move against the
Top Board, which is why the new IMF conditions are so important”
The new Anti-Corruption Court only has jurisdiction over top government officials. It is left to the regular judiciary, much of it corrupt, to punish lower-level violators.
Corruption in Ukraine is dynamic. For corruption to be attacked successfully in Ukraine, it needs to be viewed holistically. Western experts looking only at the top level won’t be effective in helping Ukraine attack corruption at all levels. In other words, they need to begin to focus on graft associated with recycling of used motor oil, and theft of funds meant to replace ageing elevators. This isn’t sexy, but it is, as we say using a term from American football, learning how to block and tackle. To put it another way, the most important person in this process is the old lady with limited mobility, who must walk up and down stairs in our building when elevators don’t work.
Event information:
WWW.RAEX.EU
Media Partner:
International Forum -
Responsible investments in the CIS region Frankfurt am Main 17-18 December 2019
Comparison of RI practices in the CIS countries and Germany:
● Market regulation for RI and green bonds: EU and CIS experience ● Pioneers of issuing green bonds in the CIS countries
● ESG factors in investment strategies
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www.bne.eu