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Ukraine: forget about corruption - invest!

Kyiv knows full well that Ukraine's economic crisis cannot be overcome without investments from the West. At a Berlin conference, the country is courting investors, but back home, the reform process has been slow.

"Many companies are running out of patience." Alexander Markus, German business representative in Ukraine, sums up what many managers think as they meet Ukrainian Finance Minister Natalie Jaresko in Berlin on Friday.

Markus is one of several who fear the momentum created by the pro-European Maidan revolution last year could be dying down. The reform process, they say, is moving too slow.

But this is not the time for frustration, says Jaresko. The reason companies are having a hard time, she points out, is because the toppled regime of pro-Russian President Viktor Yanukovich made arbitrary decision and stole assets.

Andriy Pyvovarsky

Ukraine's infrastructure minister hopes investors will help reform the country

"By contrast, our doors are always open for you," she says.

Everything is different now, Ukraine's infrastructure minister, Andriy Pyvovarsky, tells DW. Reforms are being implemented, he says, reforms the nation has been waiting for for 24 years. Assets can be bought on the cheap, he adds.

Stabilized national currency

In fact, the country's finance ministry and central bank have bent over backwards to stabilize Ukraine's hryvnia with the help of the International Monetary Fund. For 2016, the Finance Minister has penciled in an inflation rate of 16 percent and GDP growth of 2 percent. This would mark the first expansion of the national economy in years.

In the

crucial energy sector

, the system of intermediate gas delivery dealers was done away with – a scheme which had played into the hands of many oligarchs.

But the biggest problem persists all the same. According to Transparency International, Ukraine ranks 142nd out of 172 nations on the global corruption index. Ministerial officials keep resisting any change. "Some simply buy a doctor's certificate and calling in sick for half year," says an observer. That's because under current law, they cannot be transferred for disciplinary reasons.

It's even worse in the judiciary, with even well-disposed western officials losing patience. During a recent visit to Kyiv, Norbert Röttgen, chairman of the German parliament's cross-party foreign affairs committee, said the judiciary had widely known "structural problems," pointing out that no judges, let alone the Attorney General, had been replaced since the new government came to power. If leading positions were seen as a trophy for "merited people" from one's own network, Röttgen warned, western support for Ukraine would be strained.

Wrong priorities

Odessa provides an example of just how intact the old system still is. At a port terminal there, cargo handling companies were visited this summer by SBU intelligence people, pretending to look into reports of fraud. All accusations turned out to be groundless. But an SBU letter to the infrastructure minister seen by DW provides some insight.

Watch video 02:46

Local elections in Ukraine

The letter concludes that the state earns more in ports without any private companies involved – like in Mariupol, whereas the partly privatized port of Odessa represents a problem. The fact that private firms were investing heavily in infrastructure at the time and that this should be what matters was kindly ignored, the affected firms pointed out in a public statement.

Soviet-style thinking

What's behind such developments is Soviet-style thinking. And oligarchs may also have a hand in it, some foreign managers believe. Once foreign investors are frozen out, they may think, the old system can come creeping back.

Ukraine's domestic intelligence service currently employs 31,000 people. And quite obviously, they only partly busy themselves with defending Ukraine in the hybrid war against Russia.

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