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22.02.2010

Ukraine loses up to 40 billion a year from corruption

   

According to international organizations, corruption costs the country up to 40 billion UAH a year. Over the last year, despite the crisis, the size of bribes not only failed to decrease, but actually became 2-10 times higher. Due to the crisis people simply pay fewer bribes and therefore officials try to compensate their losses by increasing the amount of each specific bribe.

In the MIA [Ministry of Internal Affairs] Central Department on Fighting Organized Crime journalists were told that the average bribe to an official in Ukraine in 2009 was 108 thousand UAH [1 EURO is around 11 UAH]. Transparency International says that Ukraine loses up to 40 billion a year as the result of corruption. The newspaper Sevodnya [Today] concludes that if you reduced this by even a half, the country could do without the next instalment of the IMF loan.

According to the civic organization “Hidna Ukraina” [ACTION], the biggest amounts are demanded in the construction and land spheres. Vadim K., the Director of a trading business who had been planning to expand his retail network but changed his mind because of the cost in bribes paints a shocking picture. “Just to get an official to put his signature on a document that’s already been agreed with everybody and that’s been officially paid for, you need to slip 100 dollars into the folder, or else the document will lie on his desk several months”. “When we were building our first shops in 2001, there wasn’t such a degree of lawlessness – the maximum was that you laid on food and drinks. And now just for processing a document they demand a million”.

Specialists say that in order to build housing, you now have to add up to 50% of its cost for bribes, whereas in 2007 officials wanted only 20-30%.

Curiously, last year it was not only the sizes of bribes that increased, but also the semi-official fees masked as services from State enterprises. The Head of the State Committee on Business Enterprise, Oleksandra Kuzhel cited as an example her experience in the summer. She approached the State Institute of Legal Expert Assessments asking for a simple document and received a bill for 16 thousand UAH. When she began demanding proof of the grounds for such an amount, they refused the bill to 1600 UAH. However that was an isolated case and the amount was only reduced because a high-level civil servant became involved. From normal enterprises they take incredible amounts for any action, expert assessment, permit, certificate, bill, agreement or even payment for registration. According to the Head of the parliamentary committee on fighting organized crime, Ihor Kaletnyk, the money for such services often does not reach the State coffers but is spent on the personal needs of the officials themselves or laundered.

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