10 December 2009

Corruption is still a BIG problem in Ukraine

During the past week, many international diplomats in Ukraine have been voicing their opinion on the continual problem of corruption in many government organisations.

Unfortunately, corruption has got worse in the six years I have been in Ukraine.
It's a sad fact that the majority of employees in government organisations, consider that they are 'entitled' to a form of extra reward for providing a service.
Personally I NEVER pay bribes to anyone. This includes the police, who have stopped me on many occasions for speeding or minor motoring offences. I simply refuse to pay anything, which results in me being kept waiting for a long time at the side of the road until they decide how to deal with this 'foreigner who is being difficult'. They always just get frustrated and finally let me proceed. I always ask for things to be done the correct way, expecting to get a speeding ticket in the post, but it never happens.
Strange as it maybe to foreigners living here, the majority of Ukrainains just accept that corruption is a way of life. So when a policeman stops a local person driving a car, the driver fully expects to just give the policeman a cash payment and he will soon be on his way.

But its not just small cash payments we are talking about. Many international companies get hit hard by government agencies like the fire department and the whole range of others who have the powers to grant a certificate or not as the case may be. Some examples from my experience include:

1. A friend who works for a major airline based in Kyiv, told me that they were contacted by the local fire brigade. The fire brigade senior staff were demanding a large discount off the price of air tickets for themselves anywhere in the world. If the demands were not met, then maybe the airline would have many problems with its fire and health and safety certificates. Maybe the airline would be closed due to fire risks at its head office. So senior fire brigade staff now get big discounts on air tickets. (Can you imagine the Head of the London Fire Service calling a senior manager in British Airways and demanding the same?)

2. I was personally involved in helping a company obtain a bank loan from Cyprus. (Bank lending in Ukraine is still very expensive and many Ukrainian companies now borrow from abroad).
However in order for a company to obtain a foreign loan, a certificate must be obtained from the National Bank of Ukraine (NBU). As usual in Ukraine, the paperwork trail is a lengthy process and agreements have to be approved in bi-lingual format by the NBU. The bank employees are only looking for 'problems', so that they can then 'help you' solve this problem in exchange for a bribe. I was informed by an employee from another local bank that most applicants for loan certificates just pay whatever is required in the brown envelope, when meeting the NBU employee in some private location. The NBU employee in our case was asking for 2 percent of the loan value. This represented Euro 5000.
I advised not to pay anything and use a lawyer to process all the documents and do things in the correct way. My choice of process delayed the granting of the certificate by 2 months and the NBU employees still tried to cause problems as they knew they were not getting a bribe.

Its a sad situation. I also think that Ukraine should forget about any possible EU membership.
Until corruption is controlled, I think Ukraine does not deserve to become a member of the EU.

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