Posts Tagged ‘Corruption’

Passport to Nowhere

Passport to Nowhere

May 13, 2010  |  Comments Off

When my Ukrainian friends respond to news with a mixture of laughter, embarrassment, and disbelief, I know it’s worth taking note.

Recently there was just such a story on the evening news. The company responsible for the printing of Ukrainian international passports-a serious job that has national security implications-said that it could no longer continue to produce them since it was owed several million US$ for work performed in 2009. They had not been reimbursed a single kopek and could no longer pay their workers.

The spokesman for the company said that they regretted the action, and they recognised the disruption it would cause to people waiting for their passport to be issued, but they had exhausted all lines of communication with the relevant government department. Hundreds of passport applicants were affected: students wishing to study overseas, fiancés due to get married in foreign places, Ukrainians intent on seeing the Winter Olympics in Canada, and so on. Many had bought air tickets, enrolled on foreign study courses, and made other financial commitments. A smorgasbord of emotions, financial commitments, and worries about the future was a potential tinder box.

The spokesmen for the administration criticised the company for their lack of responsibility and insensitivity to their clients. But it was what followed that elicited the mixture of laughter, embarrassment, and mild disbelief of my friends. The administration spokesman said the printer had put the government in the embarrassing situation of having to appoint another printer, a task that would not be easy given the specialised nature of the work.

The obvious question is, what happened to the passport fees collected by the administration? But the story highlights the more deep seated issue, which is, why should companies invest in Ukraine when there is no confidence that they will be paid a return for that investment?

Presidents and the People

Presidents and the People

February 17, 2010  |  Comments Off

Making the Chapter:

It’s hard not to be disappointed at the lack of progress that Ukraine has made in the last twenty years towards a better economy and greater social justice. The expectation was that Ukraine – as the most industrialized and resource-rich country of the former Soviet Union – would be the first to emerge from the rubble of Communism. In Presidents and the People I see this view for what it was: plain wrong. Ukraine was not starting from where everyone thought.

Faced with internal corruption and incompetence, the determination of Russia to return Ukraine to its jurisdiction and the West’s growing ambivalence towards its eastern neighbour, Ukraine has been a political circus. In Presidents and the People I follow the path since independence and look at the expectations of the people, and just what has been achieved, what hasn’t, and what the future holds.

Excerpt:

By most accounts Kuchma started off reasonably well. He brought into positions of influence some of his friends from Dnipropetrovsk, but others did not change, including Viktor Yushchenko, who was head of the National Bank. Having used the coinage of intruders for a millennium — the grosh of Poland and Lithuania, the thalers, ducats, and florins of their western neighbours, and since the eighteenth century, the Russian rouble — it was his responsibility to reintroduce the currency of Kyivan Rus, the Hryvnia (pronounced Grivna).

As it happened, all the former Soviet states introduced a new national currency much sooner than Ukraine, where a lack of local expertise combined with the obfuscation of politicians caused significant delay. With inflation raging, but without the power to print roubles (which was the prerogative of Moscow), Ukraine was forced to adopt a transition currency called the coupon-karbovanets, a sort of monopoly money that bore the brunt of the budget deficit, hyperinflation, and currency devaluation. By the mid-1990s when one million coupon-karbovanets was worth approximately four dollars, Ukraine could rightly say that every citizen was a millionaire.

“I knew I was rich,” remarked one friend. “I would reach across to the gas stove, light a coupon and use it to light my cigarette.”