Analysis by Walter Prochorenko, PhD
The resignations and upheaval in President Yushchenko’s government, as the allegations of corruption mount, come as no surprise to the many that have been doing business in Ukraine for the past several years. This was as inevitable as was the “Orange Revolution” itself.
My own contacts with business associates and friends in Ukraine, albeit limited, show that the two main factors that remain as impediments to progress were and remain bureaucracy and corruption. Both are firmly in place and are seemingly impregnable in Ukraine’s government hierarchy.
Changes in the Ministries and other governmental bodies are laudable in one respect but very destabilizing in many others. Business and investors do not like radical changes. They abhor them. This is why the Bush administration has been so strong and cohesive despite a multitude of problems and accusations and why the US economy has not suffered any major setbacks over the past several years.
Since corruption in Ukraine appears to be a fact of life (as it is in many other countries -- including our own United States), perhaps there should be practices in place that can actually make it work for the benefit of the country. Everyone agrees that corruption is disruptive, but US style lobbying, special interests, “pork barrel” programs, and compromise have legitimized US’s own “corruption” methodologies. Charles Lewis concluded his article entitled “U.S.A.: Corruption Notebook” which was published in Global Integrity with the words: “There is something rotten in the United States, but it is legal, and no one will dare call it corruption”. China too, was and remains one of the most corrupt nations on earth and yet they have controlled it so effectively that it has enabled the country to grow at an unprecedented rate.
Ukraine finds itself “between a rock and a hard place” in that the West demands that it solve its corruption practices before the country is accepted into any Western alliances while its own cultural, social and ideological structure prevents it from doing so. Most experts agree that 85 years of corruption habits on top of several hundred years of self-preservation practices learned while being under various foreign occupations, will not be eliminated in 10 months or perhaps even 10 years. Yet this is what Ukraine must learn to do if it wants to become a market economy, part of the European and Western trading partner nations, and if it wants to attract the much needed capital investments to rebuild itself.
Tackling corruption in such an environment is a monumental task but if Ukrainians can learn to look outside their own borders and limitations rather than constantly trying to reinvent the wheel, they may find solutions that can be adapted to their needs. Researchers and experts from Susan Rose-Ackerman to Vito Tanzi to the numerous associates of the World Bank have written volumes on reigning in corruption and legitimizing it. However my observations have been that Ukraine has been reluctant to apply even the most basic principles, which have worked well in other countries, to its own problematic situation.
Corruption -- if properly managed or legitimized -- can actually help a country to achieve its goals and to attract foreign investments. If Ukraine could learn to adapt some of the principles that have succeeded so well in the US and elsewhere, then it could well be on the way to exceptional development success. The key is superficial transparency combined with publicly perceived legitimacy.
Poroshenko may very well be innocent of Zinchenko’s corruption allegations but if he is “perceived” to be corrupt, then he may as well be guilty in the eyes of the media and the public. In a study by Inna Cábelková the “perception of corruption” is as critical as corruption itself. If the public is consistently bombarded with issues of bribery and corruption, then even legitimate success by brilliant business people can be perceived as corruption and the result, as we have already seen, can be disastrous. Many writers and several researchers on corruption in the US have linked Vice-President Cheney to possibly corrupt practices because of his association with Halliburton, but since he has isolated himself so well and since all such dealings have been legitimized, there is little or no political fallout from such an association. Poroshenko would have done well for himself had he learned this methodology.
In his book “The Politics of Corruption in Contemporary China”, Ting Gong explains how the Chinese have legitimized corruption and bureaucracy from the imperial days of the Qing Dynasty where the bureaucrats supported themselves and their “children citizens” through a variety of solicitations and extortion schemes, to the denial practices under Mao Tse Tung’s regime based on the Marx -- Engels and Lenin theories and teachings that persists even to this day. The latter is a brilliant combination of denial and acceptance that only the Chinese could conjure up. However, while overtly fighting and dissuading corruption the Chinese continue to surreptitiously practice it and prosper from it.
Although I don’t want to be too skeptical and jaded, it is my firm belief that Ukrainians will someday settle on their own versions of “legitimized corruption” which will satisfy criteria set down by the IMF, the World Bank, and foreign investors as well as their own social and cultural needs. Hopefully it will not be too late for them to continue to enjoy the fruits of economic success and national independence.
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