Ukraine's Struggle: Navigating Pressures and the Need for Reform Ukraine has demonstrated immense resilience in the face of various pressures, both visible and concealed, that it has encountered over the years. From aid blockages and military casualties to infrastructure destruction and corruption, the country has remained steadfast. While some critics may attempt to portray Ukraine as dysfunctional due to corruption, the reality is far more nuanced. Corruption in Ukraine is not only a product of the old Soviet system but also a tool of Moscow's colonial rule.
Over the past two decades, numerous initiatives and movements within Ukrainian society have advocated for a change in the country's governance model, aiming to establish the rule of law and eradicate deeply ingrained corrupt practices. The Maidan movement, for example, marked a significant turning point in Ukraine's history. It was a testament to the people's desire to put an end to the rampant corruption within the government and forge closer ties with Europe. Since then, Ukraine has made strides in aligning itself with EU standards and is now an official candidate for EU membership.
However, the road to EU membership comes with its challenges, notably in the areas of government accountability and anti-corruption reforms. President Zelensky, who ran on a platform of reform and anti-corruption, recognizes the importance of addressing these issues to maintain the support of Ukraine's allies. To this end, the US and the EU have emphasized the necessity of implementing anti-corruption measures and enhancing the rule of law in the country.
The Ukrainian government has introduced the State Anti-Corruption Program, a comprehensive plan to guide various state bodies in their anti-corruption efforts. Initiatives like the Digital Reconstruction Ecosystem for Accountable Management (DREAM) have also been implemented to improve transparency and integrity in procurement processes. These structural reforms not only promote diplomatic cooperation but also incentivize domestic and international private sector investment in Ukraine.
The success of these reforms is vital in attracting foreign direct investment (FDI) and supporting the country's reconstruction. Organizations like the Center for International Private Enterprise (CIPE) have highlighted the role of both private firms and state-owned enterprises (SOEs) in supporting anti-corruption measures. By simultaneously battling for survival in war and internal reform, Ukraine faces an arduous task, but one that it is determined to achieve.
President Zelensky, while hailed as a godsend in wartime, faces immense scrutiny in his role. It is crucial for him to maintain impartiality and avoid any appearance of bias in rule of law decisions. Past associations with oligarchs have raised concerns, but it is important to note that these shadows have dissipated over time. Nonetheless, his every move is closely watched and criticized, making it imperative for him to exercise caution.
Amidst these challenges, a recent controversy involving Ferrexpo, a significant Ukrainian company listed on the London Stock Exchange, has drawn attention. The company, backed by considerable foreign investment, holds great importance for Ukraine. However, it has been targeted by multiple agencies of the Ukrainian government, leading to concerns about investor confidence. The dispute arises from legal proceedings against Ferrexpo's founder, Kostyantin Zhevago, and the freezing of Ferrexpo's assets, including a significant shareholding in its mining subsidiaries.
The Ukrainian authorities' actions, ostensibly to recover funds from Zhevago's collapsed private bank, raise serious rule of law concerns. Punishing all shareholders of Ferrexpo in pursuit of one individual is neither fair nor in line with proper legal procedure. Similarly, targeting Ferrexpo's mining chief over rubble extraction seems questionable and lacking procedural fairness. The Ukrainian government is seeking damages from Ferrexpo that exceed the company's total revenue, which sends alarming signals to potential investors.
Ukraine must exercise extra diligence in handling the Ferrexpo controversy. Upholding the rule of law, respecting private property rights, and safeguarding international investments are critical to maintain the country's resilience and attract further capital. Western partners, who have championed de-oligarchization, must be cautious of any abuse of the rule of law disguised as anti-oligarch campaigns. It is vital for Ukraine to demonstrate its commitment to improving the business environment and stimulating investment, as external support is crucial in sustaining the Ukrainian economy.
Ukraine's journey towards stability, reform, and continued progress remains fraught with challenges. However, the commitment of its society and leadership, coupled with support from international allies, has the potential to shape a future where corruption is curbed, the rule of law is upheld, and Ukraine thrives as a resilient nation.
