The New Face of Corruption

Although the government has been extending its hand to business since last spring, business people have not seen any major changes and are still claiming that the government has failed to keep its promises and is distancing itself from business. This was heard at the press conference “Business and the Government: Partners?” organized by the Confederation of Entrepreneurial Associations. The chief message of the hour-long event was that the government should communicate with all entrepreneurs without exception.

Businessmen took a dim view of a forum held by the government on May 25. According to Viktor Khmelevsky, chairman of the Union of Ukrainian Leaseholders, they expected the State Committee for Entrepreneurship and regional administrations to report about the way they are implementing the national leadership’s directives. Businessmen wanted to discuss further steps to solve regulatory problems in this country. Entrepreneurs hoped to be given an opportunity to air their opinions to the government. But in practice, Mr. Khmelevsky claims, this opportunity was only given to business people close to the government. “There was no candid talk. And if a dialogue produces no results, it is nothing but a waste of taxpayers’ money,” entrepreneurs said in an appeal to the president of Ukraine.

Lately we have seen the rise of a paradoxical concept known as the government’s “pocketed” business, which entrepreneurs have harshly criticized. Lalita Kartoziya, head of the “Labor Community” All-Ukrainian Union of Trade and Service Employees, says that Ukrainian entrepreneurs are not equal before the law: the closer you are to the government, the easier it is to work. Among those that are “close” is the Ukrainian League of Industrialists and Entrepreneurs whose chairman is simultaneously the first vice-premier of Ukraine. According to entrepreneurs who are not part of the League, when a top official has an entrepreneurial association of his own, he will not resist the temptation of granting its members certain exemptions and privileges. This essentially contradicts one of the new government’s main postulates: separation of government from business. The point is not only that an official may not own a big business — he must not personally coordinate the actions of business circles either.

Mr. Khmelevsky says that the face of corruption has now changed and become more refined. Bureaucrats are no longer demanding bribes: they are simply actively pursuing the policy of entrepreneurship in their own interests. Entrepreneurs say that this can only stir up a new political crisis that the government, naturally, does not need and which may have an adverse effect on business.

Even the creation of non-governmental councils within state government agencies or, to be more exact, under the control of top administrators, cannot essentially help solve this pressing problem. According to Ms. Kartoziya, even the much-vaunted Council of Entrepreneurs at the Cabinet of Ministers runs the risk of turning into a body that will greatly facilitate making the “right” decision. In her opinion, these councils should include leaders from all civic organizations of businessmen as well as lawyers who could explain to the people how a certain law will affect their lives. Another action that she says may improve the entrepreneurial climate is inspection of state government agencies to be carried out by leaders of civic organizations, not high-ranking officials, as the current tradition requires. Only then will the government be apprised of the true state of affairs.

Entrepreneurs believe that large segments of the public are now simply leaving active political life. According to a press release, although the government has declared its readiness for dialogue, officials can only be reached through informational filters and private connections. Trade unions are raising similar complaints. According to Yuriy Halata, deputy head of the All-Ukrainian Union of Transport Workers, the government also needs to start a dialogue with trade unions, the only way that it will become aware of the real requirements of rank-and-file employees in various sectors.

Entrepreneurs also want some attention focused on land relations. Heorhiy Shutochkin, head of the Kyiv-based Avtoservis, an association of entrepreneurs, noted that it is next to impossible for an ordinary Ukrainian to obtain a land lease license because bureaucrats rule the roost by grabbing the most lucrative offers. Mr. Shutochkin also criticized “the single window” concept of land distribution, a favorite brainchild of the president. In his view, Viktor Yushchenko could only have received this kind of advice from a person who is completely ignorant in land issues. Explaining the gist of the matter to The Day, Mr. Shutochkin said that this faddish approach might deprive a person of the right to choose a land allocation organization and in fact make him dependent on governmental bodies.

The entrepreneurs have sent a letter to the president requesting a meeting with him. The 18 signatories, all leaders of entrepreneurial associations, want the government to continue holding meetings with businessmen (which in principle coincides with the president’s intentions — Author), but these meetings should be organized by a special committee consisting of leaders from all-Ukrainian civic organizations, as well as entrepreneurs and officials, rather than by pro-governmental organizations.

Will President Yushchenko respond to this call? So far only MP Valeriy Aleshyn, who attended the press conference, has issued a reaction. He says it is high time for the government to switch from mere declarations to concrete actions, adding that business should clearly decide who is capable of representing its interests.