Speech delivered by: Sir Suma Chakrabarti, EBRD President
Event: Ukrainian Anti-Corruption Initiative
Date: 12 May 2014
Sir Suma Chakrabarti, the EBRD’s President, delivered a speech at the signing of the Memorandum of Understanding for the Ukrainian Anti-Corruption Initiative in Kiev on 12 May 2014.
Prime Minister, Excellencies, ladies and gentlemen, I am delighted to be here in Ukraine and putting my signature to this Memorandum of Understanding.
Today, in partnership, we are launching this Ukrainian Anti-Corruption Initiative. It would not have been possible without efforts from all the signatory parties, as well as the expertise of my EBRD colleagues and Dr. Mark Pieth from the Basel Institute on Governance. I would also like to pay tribute to the new government’s determination to take action, as a result of which we have been able to make swift progress on the initiative over the past few weeks.
The Anti-Corruption Initiative is an integral part of better governance, more effective institutions and an improved investment climate. All of these are fundamental to Ukraine achieving its economic potential. As we know, the economic backdrop is serious and restoring economic growth is a major challenge. If foreign and domestic businesses are to have the confidence to invest – a vital condition for building the economy – then corruption must be cut out of the system.
Why is this necessary?
Corruption is a scourge, hollowing out the economy, slowing down investment, eating away at political and economic life and undermining democracy.
Corruption is a major impediment to the transition to well-functioning markets, which is at the very heart of what we do at the European Bank for Reconstruction and Development. The EBRD was established more than 20 years ago to assist in the development of a thriving private sector in its recipient countries, to support entrepreneurship, free markets and good economic governance. As our 2013 Transition Report showed, many countries are finding themselves ‘stuck in transition’ and the pervasiveness of high-level and administrative corruption is one of the main reasons.
If Ukraine is to re-energise its transition to a modern economy and society, then it has to tackle the endemic level of corruption. I have lost count of the number of times that EBRD clients in Ukraine have complained about the levels of corruption on both a grand and petty scale. This problem is one of the most serious impediments to Ukraine’s progress. The first sign of serious intent to tackle this scourge is when political leaders begin to recognise the problem publicly and demonstrate commitment to overcoming it. That has now happened with this government, with you, Mr Prime Minister, taking the lead. You deserve our support for your determination to address the problem.
What does the Anti-Corruption Initiative do?
There is, of course, no single answer to the problem. That is why the Anti-Corruption Initiative we are signing today tackles corruption in Ukraine on a number of fronts. At its heart is the creation of an independent Business Ombudsman Institution – an independent ombudsman.
The Business Ombudsman Institution will be a focal point to which businesses can bring their complaints of unfair treatment. It will aim to examine complaints and facilitate their resolution.
In addition, it will seek to ascertain the systemic causes of corruption and unfair treatment of business – sharing its findings with the public and appropriate public authorities. The Business Ombudsman Institution will have powers to issue public reports. It will make its findings public.
As we all know, transparency is a key to the fight against corruption, and underlies much of this new Anti-Corruption Initiative. Corruption can be hindered by shedding light on previously shadowy corners. All parties, including the government, have committed, today, to increasing transparency.
As part of this, the Government and the private sector will ensure their employees and other stakeholders refrain from corrupt practices. They have also agreed to communicate their anti-corruption commitments to all stakeholders and that transgressions should receive an effective, proportionate and dissuasive response. These are all strong commitments.
Why Is the EBRD so keen to see progress? It is no longer good enough for my institution to have successful investment projects in Ukraine, as we do, but see this country – such an important country – make only stuttering progress in its transition to a well-functioning market economy. There need to be some systemic changes.
Indeed, these aspirations to tackle corruption have to become more than words on a page. An independent ombudsman will only work if that independence is respected. I am heartened that this government takes the fight against corruption so seriously.
Ukraine’s citizens deserve better when it comes to tackling corruption. Today, we have made a start but we must guard against complacency and acknowledge that it is only the start.
None of us here today are naive. Just signing this anti-corruption initiative will not eradicate corruption in Ukraine. It is an important step, but only the very first step, down a very long road. Concrete implementation, not just signatures and speeches, are required if we are to achieve the objectives of the Anti-Corruption Initiative. I know, Prime Minister, you and your colleagues, your public servants, Ukrainian and foreign business leaders, and civil society are all committed to implementation of the initiative. We at the EBRD – and our partner institutions – stand ready, shoulder to shoulder, to help in that endeavour.
Thank you very much.