Donetsk Oblast to fight corruption with independent Regional Development Agency

Jan 30, 2017

Chasiv Yar, Ukraine – Donetsk Oblast Governor Pavlo Zhebrivsky spends several minutes arguing with a contractor over the speed of the repairs going in a school in the town of Chasiv Yar. The contractor demands an advance payment to finish the construction timely. Zhebrivsky explains he can’t make one unless all the paperwork is done first.

They eventually come to an agreement, and Zhebrivsky rushes to his car and drives off to another facility to inspect the work being done there.

The governor says that finding good contractors for government procured work is a big headache in his region, which has been badly damaged by 33 months of a military conflict - and by years of economic stagnation before that.

He said last year his administration had to cancel more than 100 bids for government contracts after discovering that the contractors had lied in their applications.    

So to ease that pain, Zhebrivsky hopes that procurement tasks will be outsourced to an independent institution – the Regional Development Agency – established with international financial and intellectual support.

The new agency will prevent corruption and the misuse of public funds, which experts call a disaster for the 43-million nation.

In 2016, Ukraine was ranked 130th in the Corruption Perceptions Index ranking by Transparency International. According to a poll by Global Corruption Barometer in 2015/2016, over 56 percent of Ukrainians called corruption one of the biggest problems in the country, and 70 percent of people hadn’t noticed any decrease in the level of corruption after the 2013-2014 EuroMaidan anti-government protests.       

Foreign donors willing to help the country, affected by a conflict in the Donbas region that has taken nearly 10,000 lives, are hesitant to do so, fearing that their money might be embezzled.

Zhebrivsky said he was well aware of this. “The absence of trust is a big problem,” he said.

His first deputy, Yevhen Vilinsky, said the regional administration came up with the idea of creating an independent agency a year ago, with the aim of building donors’ trust. “We can access foreign aid only if we can show that we’ll manage the money transparently and effectively,” he said.

The supervisory board of the new agency will include representatives of UNDP, the OSCE, UNICEF and the EU. Zhebrivsky will chair the board.

UNDP also supports the Regional Development Agency in Luhansk Oblast, another Ukrainian region hit by the military conflict. But the agency in Donetsk Oblast will be unique, as it will be technically able to manage the entire electronic procurement process.  

“We want this agency to operate all procurement paperwork and all the resulting procedures. This will be done under the oversight of international organizations,” Vilinsky said. “This is our experiment.”

Over a year, it will cost several hundred thousand U.S. dollars, both government and sponsors’ funds, to get the new agency started.

If the experiment succeeds, the region might get solid funding to repair its roads, bridges, schools, hospitals, houses and pipelines, which were built predominantly in Soviet times.

“Ukraine has lots of friends, in particular in Europe, willing to give it a lot of money. But this is taxpayer money. And no European government will throw money into corrupt schemes,” said UNDP Democratic Government Advisor Marcus Brand. “That’s why the EU has a particular interest in ensuring that there are institutions in place in Ukraine that can spend this money in the most transparent and appropriate way possible.”

On January 27, 2017 the UN Development Programme (UNDP) in Ukraine, with funding from Japan, delivered office equipment, including laptops, internet infrastructure, multimedia projector, multifunction printer scanner machines and other devices to help kick start the operations of the Donetsk Regional Development Agency.

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