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Is Ukraine finally getting to grips with its corruption problem?

Two years of war, illness and economic pain has followed Ukraine’s revolution, and reforms are still slow to arrive.

If you want to know why Ukraine had a revolution, consider this: it has one of the world’s fastest-growing HIV epidemics, and yet officials deliberately overcharged their own health ministry for anti-retrovirals to make money for themselves. In 2013, about a quarter of the money intended for HIV medicines was embezzled, while more than half the Ukrainians who died of Aids-related conditions lacked access to drugs.

And that was not an isolated example: children lacked vaccines, haemophiliacs lacked clotting factor, diabetics lacked insulin. Patients had to bribe doctors to obtain the drugs the state was supposed to provide for free, while officials and intermediaries secretly got rich via Cyprus-registered shell companies.

Ukraine has finally moved to break the pharmaceutical mafia. Under three deals signed this month, the health ministry has outsourced drugs procurement to two UN agencies and to Britain’s Crown Agents. The drugs available should be better and cheaper – by between 10 and 25 per cent – so more can be bought for people who need them, and those that are bought will be more effective. Meanwhile, the criminals will lose out: it’s a win/win/win.

“We are drastically changing the rules of the game, we are changing a system that has been around for years and years, and which has proven to be inefficient, corrupted, non-transparent,” Deputy Health Minister Ihor Perehinets told me.

Ukraine’s revolution happened almost two years ago. Those have been years of war and economic collapse and the healthcare situation has deteriorated still further. This summer, polio paralysed two Ukrainian children after vaccination rates dropped to just 14 per cent. The only other countries in the world with polio outbreaks are Pakistan, Afghanistan, Madagascar and Guinea. Ukraine’s revolutionaries wanted to move closer to Europe, but instead got a disease found in the poorest parts of the developing world.

Anti-corruption activists have been highly critical of the health ministry for taking so long to act, but Alexandra Ustinova of the Anti-Corruption Action Centre was delighted it had finally done so.

“Of all the years of healthcare in independent Ukraine, this is the first real reform,” she said. “We have taken 2.3 billion hryvnias ($100m) from the oligarchs and given them to international organisations. It is massive.”

It is of course heartening that officials in Kiev have finally taken a step to fight the endemic corruption that has plagued Ukraine since independence, but it is depressing too. The post-revolutionary government should have been passing much more significant milestones than this long ago. This reform affects just one-third of one part of one ministry’s procurement budget. Other ministries and agencies – among them: the judiciary, the prosecutor’s office, the customs service – are not only unreformed, but are still staffed by officials appointed under the old regime. These people are not just delaying reforms, but actively opposing them.

“Corrupt actors within the Prosecutor General’s office are making things worse by openly and aggressively undermining reform,” said US Ambassador Geoffrey Pyatt in an unusually outspoken assault in September. “These bad actors regularly hinder efforts to investigate and prosecute corrupt officials within the prosecutor general’s office.  They intimidate and obstruct the efforts of those working honestly on reform initiatives within that same office.”

As the second anniversary of the revolution approaches, Ukrainians are increasingly wondering if these saboteurs are winning. Prosecutors have failed to bring any of the corrupt officials of the previous regime to trial, or to persuade foreign states to repatriate their stolen money. And they have the connivance of others. Earlier this month, Justice Minister Pavlo Petrenko accused parliament of deliberately neutering a new law intended to help bring stolen money home.

During the revolution, Sergei Leshchenko was a journalist who specialised in revealing Ukraine’s rulers’ corruption. While the president was amassing a fortune, parliamentarians cut side deals in what Ukrainians referred to as “the biggest business club in Europe”. Leshchenko decided to run for parliament and to try to improve the system from the inside, and won a seat in October last year.

“The direction of travel is correct, but it is too slow. This is a parliamentary republic, and you need consensus,” he says. We were eating lunch in parliament’s canteen, and he indicated his fellow deputies with a sweep of his head. “There are a lot of politicians here who are not motivated. Being optimistic, maybe 25 per cent of us want proper reform. In reality, it’s probably less.”

Although many Ukrainians still back President Petro Poroshenko, at least partly thanks to his response to the Russian destabilisation of Ukraine’s east, support for Prime Minister Arseny Yatsenyuk has collapsed so completely that his Popular Front party did not even stand in local elections last month. Both president and premier insist they are committed to transforming Ukraine into a European country but, when speaking privately, officials often despair of the muddle they have created. There is still no truly independent judiciary, the tax system is a mess, officials remain under-paid, and there has been no purge of the old regime’s corrupt officials.

“I am angry all the time, I feel ready to make a public statement and quit. About 90 percent of the time I think it’s all a disaster,” said one senior official, who asked to remain anonymous so he could speak his mind. “Every day I get approached through friends, through relatives, with offers of money. Any ordinary man would take it, and I’m beginning to think I’m acting like a Greek philosopher, like Diogenes in his barrel or someone. My wife thinks I’m an idiot.”

He was angry as well that European countries haven’t done more to return the money stolen from Ukraine and stashed in Western bank accounts. “They seem to prefer to have people in London buying property, or in Monaco, Austria or Slovenia or wherever, than to help us,” he said. “But then, if nothing is being done in Ukraine, it’s stupid to expect other countries to do it for us.”

Is he worried that the people will take to the streets once more?

“I would love to see that. I would join them in a second,” he said.

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Emmanuel Macron's power struggle with the military

Reminding your subordinates that you are "their boss" doesn't go as far as listening to their problems, it may seem.

This is the sixth in a series looking at why Emmanuel Macron isn't the liberal hero he has been painted as. Each week, I examine an area of the new French president's politics that doesn't quite live up to the hype. Read the whole series.

It had started well between Macron and the army. He was the first president to chose a military vehicle to parade with troops on the Champs-Élysées at his inauguration, had made his first official visit a trip to Mali to meet French soldiers in the field, and had pulled a James Bond while visiting a submarine off the Brittany coast.

It’s all fun and games in submarines, until they ask you to pay to maintain the fleet.

“Macron wanted to appear as the head of armed forces, he was reaffirming the president’s link with the military after the François Hollande years, during which the defence minister Jean-Yves Le Drian had a lot of power,” Elie Tenenbaum, a defence research fellow at the French Institute for International Relations, told the New Statesman. The new president was originally viewed with distrust by the troops because he is a liberal, he says, but “surprised them positively” in his first weeks. Olivier de France, the research director at The French Institute for International and Strategic Affairs, agrees: “He sent good signals at first, gathering sympathy.” 

But the honeymoon ended in July, with what Tenenbaum describes as Macron’s first “real test” on defence: the announced cut of €850m from the army’s budget, despite Macron’s (very ambitious) campaign pledge to rise the defence budget to 2 per cent of the country’s GDP by 2025. A row ensued between the president and the French army’s chief of staff, general Pierre de Villiers, when the general complained publicly that the defence budget was “unbearable”. He told MPs: “I won’t let him [Macron] fuck me up like that!”

Macron replied in a speech he gave to military troops the day before Bastille Day, in which he called soldiers to honour their “sense of duty and discretion” and told them: “I have taken responsibilities. I am your boss.” After the general threatened to quit and wrote at length about “trust” in leadership, Macron added a few days later that “If something brings into conflict the army’s chief of staff and the president of the Republic, the chief of staff changes.” That, Tenenbaum says, was the real error: “On the content, he was cutting the budget, and on the form, he was straightening out a general in front of his troops”. This is the complete opposite of the military ethos, he says: “It showed a lack of tact.”

This brutal demonstration of power led to de Villiers’ resignation on 19 July – a first in modern French politics. (de Villiers had already protested over budget cuts and threatened to quit in 2014, but Hollande’s defence minister Jean-Yves Le Drian had backed down.)

Macron did his best to own up to his mistake, assuring the military that, although this year’s cuts were necessary to meet targets, the budget would be rised in 2018. “I want you to have the means to achieve your mission,” he said.

But the harm was done. “He should have introduced a long-term budget plan with a rise in the coming years right away,” says de France. “It was clumsy – of course he is the boss, everyone knows that. If he needs to say it, something is off.” The €850m will be taken out of the army’s “already suffering” equipment budget, says Tenenbaum. “There are pressures everywhere. Soldiers use equipment that is twice their age, they feel no one has their back." The 2 per cent GDP target Macron set himself during the campaign – a “precise” and “ambitious” one – would mean reaching a €50bn army budget by 2025, from this year’s €34m, he explains. “That’s €2bn added per year. It’s enormous.”

Read more: #5: On immigration, Macron's words draw borders

Macron has two choices ahead, De France explains: “Either France remains a big power and adapts its means to its ambitions” – which means honouring the 2 per cent by 2025 pledge – “or wants to be a medium power and adapts its ambitions to its means”, by reducing its army’s budget and, for instance, reinvesting more in European defence.

The military has good reason to doubt Macron will keep his promise: all recent presidents have set objectives that outlast their mandates, meaning the actual rise happens under someone else’s supervision. In short, the set goals aren’t always met. Hollande’s law on military programming planned a budget rise for the period 2018-19, which Macron has now inherited. “The question is whether Macron will give the army the means to maintain these ambitions, otherwise the forces’ capacities will crumble,” says Tenenbaum. “These €850m of cuts are a sign than he may not fulfill his commitments.”

If so, Macron’s row with the general may only be the beginning.  It didn’t help Macron’s popularity, which has been plummeting all summer. And the already distrustful troops may not forgive him: more than half of France’s forces of order may support Marine Le Pen’s Front national, according to one poll. “It’s hardly quantifiable and includes police officers,” Tenenbaum cautions. All the same, the army probably supports right-wing and hard-right politicians in higher numbers than the general population, he suggests.

James Bond would probably have known better than to irritate an entire army – but then again, Bond never was “their boss.”