| 
Point of VIEW.
A
purely analytical perception...
Continued
from page 1 Poland is a neighbor of the Ukraine
and at one time was their conqueror. Historically,
there have been more similarities than differences between the cultures.
However, where Poland facilitates the ability to do business, the Ukraine
government literally blocks it with bribes, bureaucracy and theft.
This is exemplified by the fact that Poland with a population of 38 million
people has two million small businesses, while the Ukraine with a population of
52 million has only about 100,000. Does anyone here really care?
The World Bank conducted a seminar on corruption in Kiev at the behest
of Ukrainian President Leonid Kuchma, which was called an “integrity workshop.”
Kuchma failed even to show up, and
various people that were known to be anticorruption fighters were banned from
the event. As an example of how tough things
have gotten, in the eastern Ukraine nine mineworkers cut their arms and threatened
suicide unless they received their back wages.
In Luhansk and Lviv, the miners would not return to the surface until they
were assured of at least some of the money owed to them, and in the grandest gesture
of them all, two mine workers immolated themselves when told that they were not
going to be paid. No wonder that things are in a state
of chaos, for this is a country where crime is literally the only industry still
functioning, and the only people that aren’t stealing are retired.
In a country of approximately 52 million people, 15 million are retired
and are getting a pension from the government.
They receive between $27 and $30 per month in a country where the cheapest
rent for a hovel is about $50 per month.
Eighty percent of the population is substantially below the poverty line. The army hasn’t be paid in months, and people are very concerned
about the old Ukrainian axiom which goes, "If you don't pay the Army, the
Army will find someone else to pay them.”
Teachers in higher education and schools have not been paid for three to
four months. Even government officials have not seen a paycheck in some time.
Fortune Asia
did a story on the subject on 6/12/2000 by Mankiw N. Gregory:
“In
this world there are two ways to get rich. No. 1: Produce something valuable and
sell it to others. No. 2: find people pursuing the first strategy, and steal from
them. On a recent trip to Kiev, I was reminded that a nation achieves economic
prosperity only when it makes the first strategy more profitable for its citizens
than the second. . Corruption is a large part of the problem. The police regularly
shake down foreigners for cash. Doctors won’t provide the supposedly free health
care unless patients make side payments. Businesses hide much of their sales to
avoid paying the country’s high taxes. As a result, the government finds itself
without enough revenue to make good on all its commitments. Many government workers
go for months without being paid, except for the bribes they receive on the job.”
.
Bribes have become so pervasive in
the Ukraine that a survey was taken of 150 businesses in five Ukrainian cities
to see how much that each item cost:
$1,250
to install a telephone line
$ 390
for an import license
$ 295
for a border crossing
$ 125
for every visit by a tax inspector
$ 60
for every visit by a health or fire inspector.
Interestingly enough, the survey
did not hesitate to point out that the average bribe for the same services in
Russia is roughly similar, according to a poll of 50 Russian enterprises.
Even ordinary citizens must pay bribes.
“One-fifth of ordinary Ukrainians say they had to pay bribes for basic
government services. Police and customs officials most commonly required bribes,
but they were necessary for health and education service, too.
Corruption is directly linked to the heavy burden of regulation and inspection.
At least 25 different Ukrainian agencies have unlimited powers to inspect
businesses; many can seize assets, freeze bank accounts, remove financial records
and even shut down a business. High taxes are another major cause of corruption.
Taxes in Ukraine can exceed 130 per cent of a company’s revenue.
The country has 37 different types of taxes and obligatory fees.”
Corruption in Ukraine operates somewhat
differently than anywhere else in the world. It beings at the very top and works
it way down by example. Recently Mikola Melnichenko, a Ukrainian citizen who worked
in President Leonid D. Kuchma country’s office as part of his senior security
detail for a number of years has released a series of tapes that leave little
to the imagination. “He charged in
a long interview that Mr. Kuchma had pocketed at least $1 billion for personal
or political use, and that the full transcript of recording made since at least
1998 in Mr. Kuchma’s office would establish that “there is no greater criminal
in Ukraine that Kuchma.”
Now a billion dollars anywhere is a lot of money, but in the Ukraine where nobody
has anything you are talking about in inconceivable number. As these tapes start
being played on television, radio and the Internet, we would tend to believe that
Mr. Kuchma’s days as President of the country would be severely numbered.
“Protests
calling for the resignation of Ukraine’s President Leonid Kuchma turned violent
yesterday with clashes between protesters and riot police erupting on the streets
of the capital, Kiev. After an estimated 10,000 people took part in a march to
the presidential administration building in the center of the city, demonstrators
tore down two rows of barricades and hurled them at riot police, sparking a vicious
half-hour brawl. Protesters threw rocks, bricks and at least one Molotov cocktail
at the police. The police responded with truncheons and tear gas.”
There are no taxes being paid by
eighty percent of the workers in the Ukrainian market, because if they pay taxes,
they won't be able to work, and if you don't pay taxes, then there is hope that
you won't get caught. Another game
being played is that businessmen manage to work for three years, close their companies
and open new ones, and the tax inspectors don’t catch them in just three years.
Today, one hundred percent of the proceeds that come to organizations are
paid out as salary. The taxes that
are paid are very slight. It is a
mystery how they pay any taxes at all. The
unfortunate result, however, is that these enterprises cannot plow revenues back
into production. Ukrainian health care is in a catastrophic
state. They have abolished free meals
in practically all hospitals. People
have to bring their own food, and for the last two years, patients have to buy
their own medicine. Ukrainian leaders
have admitted that without a health care reform and without an education reform,
they will not be able to continue funding for both health care and education in
the budget. A senior Ukrainian Minister pointed
out that: “For the past year, I have been designated the chairperson of the National
Auditing Committee in Ukraine. The
purpose of creating this committee was to control the use of State money, to see
that it is used effectively. In the
last eighteen months, the Cabinet of Ministers has been doing everything to prevent
our committee from working efficiently. They
do not allow us to exercise control. We
just twice were invited in when two of the Ministers had to be removed, and it
was obvious to everybody that they would be removed.
But in our country very often when we remove a Minister from his position,
he then becomes an advisor to the President.” While the miners were out cutting
their arms, suffocating underground and burning themselves to death trying to
get paid, Pavlo Lazarenko, former Ukrainian Prime Minister, was picked up by the
police in Switzerland for money laundering, wanted by the Ukraine for grand theft
and for escaping the Ukraine and entering the United States with fraudulent travel
documents. The Ukrainian government has identified millions of dollars looted
by Pavlo, who was elected to his post on an austerity plank.
What he must have meant was that everyone else should skimp while he walked
off with the loot. “There
is no limit to how high the corruption goes. News reports indicate that Pavlo
Lazarenko, Ukraine’s Prime Minister until 1997, allegedly transferred more than
$250 million from public funds to Swiss bank accounts before leaving the country
on a Panamanian passport. According to these reports, he is now in the U.S., fighting
extradition on charges of money laundering and embezzlement. After arriving here,
Lazarenko bought a 41-romm house from actor Eddie Murphy for $6.75 million. Most
Ukrainians, meanwhile, live in the small, crowded, decrepit apartments built during
the Soviet era.”
This type of act was not limited
to Lazarenko alone. General Ihor
Smeshko, the National Security and Defense Council of Ukraine's director for strategic
planning and analysis, indicated to a congressional committee in Washington that
the "new democracies clearly were not prepared for the problems of crime”
and that organized crime is "like a cancer" which, if unchecked, continues
to expand. He continued that the
Ukraine did not have either the resources or the knowledge to effectively fight
this problem. He indicated that the
"level of corruption of some government bodies is very high and that the
level of crime is increasing." What is worse, the criminal elements are using high tech methods
to enhance their ability to launder money.
One of the principal methods is to buy the State’s privatized assets and
flow their criminal funds through seemingly legitimate businesses.
The General seemed to sum up the problem succinctly when he was asked why
there has never been an indictment for corruption.
His answer was simply the fact that there is no clear law on the subject. The United States Department of State
put out a little treatise entitled "Ukraine Country Report of Democracy,
Human Rights, and Labor“ dated January 30, 1997.
We will paraphrase their report: Police and prison officials regularly
beat detainees and prisoners, and the Government rarely punishes officials who
commit such abuses. Prison conditions
remain poor, and lengthy pretrial detention under poor conditions is a problem.
Significant societal anti-Semitism, violence against women and discrimination
against women, ethnic groups and religious minorities persists. The Government's inability to stem
economic decline and check the growth of violent, organized criminal activity
has had major repercussions. Politicians
continued to be the victims -- whether through killing or kidnapping -- of organized
criminal groups, aided in a few cases, either actively or passively by corrupt
officials. The number of contract
killings of members of the business community, often managers of state-owned enterprises,
remained high. The undermining of
governmental authority was particularly serious in Crimea.
The central Government in Kiev lacks institutional control over the peninsula,
and the Crimean authorities are widely alleged to be compromised by ties to organized
criminal elements. The Constitution prohibits torture;
however, police and prison officials regularly beat detainees and prisoners, and
there is no effective mechanism for registering complaints about mistreatment
or for obtaining redress. Human rights
groups claim that there are isolated cases of abuse of psychiatric diagnosis for
economic reasons relating to property, inheritance, or divorce-related disputes.
Conditions in pretrial detention facilities routinely fail to meet basis
human rights standards. Inmates are
sometimes held in "investigative isolation" for extended periods and
subjected to intimidation and mistreatment by jail guards. Overcrowding, poor sanitation, and
inadequate medical care are all problems in the prisons.
Human rights groups have complained of being refused access to some prisons.
Although the concept of providing attorneys from the state system remains
in principle, public attorneys often refuse to defend indigents for the low government
fee. General Prosecutors and defense
attorneys by law have equal status before the courts.
In practice, however, prosecutors are still very influential because court
proceedings are not conducted in an adversarial manner and the procuracy, in its
pretrial investigative function, often acts in effect as a grand jury.
Many serving judges and prosecutors
were appointed during the Soviet era, when political influence pervaded the criminal
justice system. Human rights lawyers
claim that the judiciary is not free from government influenced, particularly
at the regional and local levels. Criminal
elements routinely use intimidation to induce victims and witnesses to withdraw
or change their testimony. Human
rights groups contend that judicial processes are sometimes affected by the biases
of expert advisers, who answer to government investigative and prosecutorial bodies.
The judiciary is inefficient and
lacks sufficient staff and funds. While the defendant is presumed innocent, conviction
rates have not changed since the Soviet era.
Nearly 99% of completed cases result in convictions.
Judges frequently send cases unlikely to end in convictions back to the
prosecutor's office for "additional investigation." Bail does not exist.
It is commonly believed that suspects frequently bribe court officials
to drop charges before cases go to trial.
Consequently, conviction rates are a somewhat misleading statistic.
According to the Justice Ministry, in the first half of the year 35.2%
of convicted defendants tried on criminal charges were sent to jail.
Present and former member of the Parliament, members of local councils
and judges enjoy immunity from criminal prosecution unless the Parliament or the
respective council gives its consent to criminal proceedings.
Consent is rarely given in practice.
Militia personnel have the right to stop vehicles arbitrarily and need
no probably cause to initiate extensive document checks and inspection of all
parts of the vehicle. Citizens who
have committed no violation, or only a minor one, often prefer to pay a bribe
to avoid a time-consuming inspection. Reporting on organized crime and
corruption in the Government, including misconduct by high-ranking cabinet and
administration officials, is becoming increasingly bold.
Journalist's content that they have been subject to threats, including
the treat of arrest, and violent assaults for aggressively reporting on crime
and official corruption. Academic freedom within universities,
however, is an underdeveloped and poorly understood concept.
University administrators are traditionally conservative establishment
figures and possess the power to silence professors with whom they disagree by
denying them the possibility to publish or more directly by withholding pay or
housing benefits. This atmosphere
tends to limit the spirit of free inquiry.
The constitution, law and government
regulations impose significant limits on freedom of association, and the Government
uses onerous registration requirements to circumscribe this right. Freedom
of association is circumscribed by an onerous registration requirement that lends
itself to abuse and bureaucratic manipulation.
Groups must be registered with the Government to pursue almost any purpose,
whether commercial, political or philanthropic.
The Ministries of Justice, Economy and Foreign Economic Relations as well
as the Committees on Religion and Broadcasting and others, all have registration
functions, which they have used at one time or another to prevent citizens from
exercising their right of free association. The government enacted a regulation
imposing limitations on the establishment of regional political parties through
restrictive registration requirements. Unregistered
groups are prohibited from having bank accounts, acquiring property or entering
into contracts. Furthermore, the
registration law gives the Government an unlimited right to inspect the activities
of all registered groups. Registered
groups may not duplicate any function or service that the Government is supposed
to provide. For example, human rights
lawyers who wish to represent prisoners are prohibited from establishing an association
to do so because the Government is supposed to provide lawyers for the accused.
Religious organizations are required
to register with local authorities and with the Government's Committee for Religious
Affairs. Local officials have occasionally
impeded the activities of foreign religious workers.
Freedom of movement within the country is not restricted by law; however,
regulations impose a nationwide requirement to register at the workplace and place
of residence in order to be eligible for social benefits, thereby complicating
freedom of movement by limiting access to certain social benefits to the place
where one is registered. Because
the current election law requires a minimum of a 50% voter turnout for elections
to be valid, over 30 seats of the 450-seat legislature remain unfilled.
During several parliamentary by-elections, human rights groups received
complaints of irregularities, especially in rural constituencies.
The new Constitution prohibits discrimination on the basis of race, sex
and other grounds; however, due in part to the absence of an effective judicial
system, the Government has not been able to effectively to enforce many of these
provisions. While comprehensive information measuring
the extent of violence against women is not readily available, survey results
suggest that the problem is pervasive. The
law prohibits discrimination against the disabled, but, especially with the economic
crisis, the Government has been unable to support programs targeted at increasing
opportunities for the disabled. The
Constitution and other laws contain occupational safety and health standards,
which are frequently ignored in practice. In theory, workers have a legal right
to remove themselves from dangerous work situation without jeopardizing continued
employment. In reality, however,
independent trade unionists report that asserting this right would result in retaliation
and perhaps dismissal by management. The Ukraine also ranks second only
to China in the sale of human organs. This
grisly business in China is usually performed on unwilling convicts who forcibly
become part of the nations commerce. In the Ukraine, things are different: people donate organs
because it is all that they have left to sell.
That isn’t the only thing that brings in money: baby smuggling has also
achieved some substantial notoriety as a way of bringing in hard currency, and
this industry has received substantial attention. Countless children have been pilfered in the Lvov region of
the Ukraine. “Police allege the adoptions
were achieved by fraud, using fake death certificates, falsification of adoption
papers and other illegal means. Parents
were often led to believe that their newborn babies had died, then the infants
were smuggled out of the country.”
Previous
| Next Top
| 
