President of Ukraine. Volodymyr Zelenskiy, has been under pressure to fight corruption since his election in April 2019.
His government was on its knees financially after a series of scandals that saw the country’s biggest bank collapse following allegations of looting. Shortly after, it was nationalized.
Worse still, the International Monetary Fund, the US-based lender of last resort and the country’s main benefactor, was threatening to withdraw a $19 billion funding package.
In September 2019, Ron van Rooden, the fund’s country mission chief, said officials had found “gaps in the legal framework, widespread corruption and large swaths of the economy dominated by inefficient state-owned enterprises or by oligarchs. Zelenskiy promised to clean up the country’s public administration and convince the IMF that his money was safe in Ukraine.
Last year, the Ukrainian parliament passed a law targeting the oligarchs. Zelenskiy said this would ensure that the interests of society are served above those of a narrow elite of the wealthy and powerful.
According to the legislation, Ukraine’s National Security and Defense Council (NSDC) would ultimately determine whether an individual meets the criteria of having significant economic or political influence in public life – in other words, s whether or not he was an oligarch.
For the Putin administration, all these measures were further proof of Ukraine’s move westward: more transparency to end decades of oligarchic rule that followed the end of communism. As we know, Putin wanted a client state, and that meant a state run by his billionaire contacts.
Meanwhile, there were expectations inside Ukraine that the US and EU would reward Zelenskiy’s efforts. And widespread confusion when it didn’t happen.
However, there is little evidence that the oligarchs suffered under Zelenskiy. Granted, the IMF has yet to get its money back, and critics of the anti-oligarch legislation say it has given the president more patronage powers – especially over the NSDC, which he can oppose. his veto.
Critics also say Zelenskiy has struggled to distance himself from the man the US accuses of looting the nation’s biggest bank before it collapsed – Ihor Kolomoisky, often cited as the Ukraine’s most powerful oligarch. It was Kolomoisky, according to the United States, who controlled PrivatBank when it became publicly owned in 2016 after an alleged fraud left $5.5 billion missing from its balance sheet. In March last year, the Biden administration barred Kolomoisky and his family from entering the United States because of these “significant corruption” allegations. Kolomoisky has always denied wrongdoing.
The result of these developments for the war now destroying his country is that Zelenskiy, at the time of the invasion, had changed Ukraine enough to anger Putin, but not enough to please his Western allies.
He was slow to make reforms in 2019 and still faces accusations that he depends on the kindness of the oligarchs. His popularity plummeted towards the end of last year and one of the reasons was his perceived slowness in tackling corruption.
Of course, the IMF now provides funds to support the economy. He will give an update this week on his mission to save Ukraine. But there are fears in Washington that once the contracts are issued, IMF money could again disappear into the pockets of the rich and powerful.
It is often said that these reforms – including the anti-corruption laws, such as they are – were imposed on Ukraine by Western agencies, and the IMF in particular, at the cost of successive bailouts. However, Ukraine, with huge bumps in the road, has traveled a similar journey to Mexico, South Africa, Greece and Indonesia, to name a few other states.
These electorates voted for governments with a mission to fight widespread and endemic corruption. The voters in question are the ambitious middle-income groups who are most affected. It’s the small business owners who have to pay protection money, or the officials who regularly take bribes, often just to make ends meet. Their children’s access to university is limited by their status. And if they get rich, they have to live in gated compounds, with security to keep criminals at bay.
South African President Cyril Ramaphosa has been criticized, like Zelenskiy, for taking his time to propose reforms. Last week he was praised for announcing a new chief justice and MP who will give the judiciary a chance to assert its independence.
Ramaphosa has plenty of problems facing him as he seeks to rid the country of corruption, but he doesn’t have the world’s second most powerful military machine waiting at his border to invade if he starts making progress.