From the outside, the state of affairs in Ukraine seem easy to summarize. Peaceful protests for closer ties with the EU in Kiev’s Maidan Square provoked a brutal crackdown, which in turn, led to the ousting of incumbent President Viktor Yanukovych. After that, Russia annexed Crimea. There have since been violent tremors in cities such as Odessa, and Russian-backed separatists in the self-declared Donetsk and Luhansk People’s Republics continue waging brutal insurrections.

An end to all this death and destruction would bring some measure of respite to the new government of Ukraine, led by President Petro Poroshenko. However, upon a closer examination, it is clear that this alone will not be enough to place the country on a truly new path. To do that, Ukraine must overcome its self-inflicted problems, in particular rampant and pervasive corruption.


Traveling through Kiev and Odessa, it is hard to believe that some 500 miles to the east, a war is raging. A few tents remain in the Maidan, and civilians collect money for volunteer units created to support the under-equipped Ukrainian army. The receptionists at Kiev’s Ukraine Hotel break down when asked to recall what they witnessed as their hotel’s lobby was turned into a makeshift field hospital for protestors wounded by gunfire. Memorials surround Odessa’s Trade Union House, where 48 people died in a tragic conflagration. Everywhere in Kiev and Odessa, Ukrainians want the unseen war to end.

Beyond that, two themes prevail. The first is a feeling of disappointment and, for some, betrayal at Europe’s lack of support for Ukraine. For a people who ousted their president and shed blood in pursuit of the European ideal, the delay on the part of EU leaders in backing their strong words and threats against the Kremlin with any sort of meaningful sanctions is inexplicable. The second is a longing for the new president to address the issue of corruption. According to a poll conducted by the International Foundation of Electoral Systems in late 2013, 47 percent of Ukrainian citizens identified corruption as a serious issue facing the country.

The most striking portrayal of Ukraine’s culture of corruption and graft is perhaps Mezhyhirya, the former residence of Yanukovych, with its chandeliers, inlaid wooden flooring, acres of plasma TV screens, a spa facility that would shame any five-star hotel, a zoo, and a vintage car collection. For a man who had no business dealings, and was a post-Soviet career politician with a salary of $100,000 per year, the mansion stands as a testament to graft.

If only one corrupt leader had been the problem, though, his overthrow and the election of a new head of state would have been a reasonable solution. But it wasn’t. Transparency International’s 2013 Corruption Perceptions Index ranks Ukraine at 144 out of 177 countries, on par with Nigeria and the Central African Republic, and 16 rungs lower than Russia. At the heart of such deeply ingrained corruption are a number of factors -- an unhealthily close relationship between business and politics, a complex and opaque taxation system, low salaries for state employees, and a mismanaged resource extraction sector.

To address its corruption problem, Ukraine will need a thorough restructuring of its political, legal, and law enforcement framework, and business systems. Poroshenko will have to make difficult, and no doubt unpopular, decisions such as weeding out and -- where appropriate, prosecuting -- powerful individuals with vested interests from the nation’s political class; dramatically reducing the national bureaucracy, which lends itself to abuse; imposing a zero-tolerance policy regarding corruption in the public sector, particularly within the police force; and demanding financial transparency from all senior elected or appointed officials, including himself.

At least Ukraine has made a start. In March, investigative journalist Tatiana Chornovol was appointed head of the National Anti-Corruption Committee, and international and local anti-corruption NGOs such as Transparency International and the Anti-Corruption Action Centre, are monitoring the new government’s progress. But there is more work to be done. For example, in April, the journalist, activist, and leader of political party Volya Iegor Sobolev was appointed head of a Lustration Committee, with the intention of screening the activities and assets of newly elected or appointed officials. Despite the popular appeal of this initiative, it seems to be gathering dust. Sobolev describes himself as “the head of a committee that doesn’t exist.”


There is hope. For many in Ukraine, the case of Georgia is well known and instructive. In 2005, it ranked 130 out of 158 in Transparency International’s Corruption Perceptions Index. But thanks to appropriate and decisive reform including a zero-tolerance policy in government affairs, a strong political will, new staff, the use of new technology, and most famously, the dismissal and rehiring of the entire police force, the vicious cycle has been broken. Georgia now sits at number 55 in the Transparency International index, ahead of a number of EU countries, including Italy, Romania, and Greece.

Georgia is certainly far from perfect, and challenges to democracy and good governance remain. For example, senior and influential officials continue to operate with low levels of accountability and scrutiny. Even so, the benefits of robustly addressing corruption have been immense. The country has seen a rapid rise in its ranking in the World Bank’s Doing Business index, from 112 in 2005 to eight today, and foreign direct investment has flowed into the country as the economy has grown by an average of six percent over the past decade. Meanwhile, although it has risen in the ranks over the last few years, Ukraine is currently languishing at 112 on the World Bank’s Doing Business index due to underdeveloped commercial legislation, a poor environment for operating business, and above all, corruption.

In this regard, the international community can help. In the course of previous EU accession negotiations with countries such as Bulgaria, Romania, and Croatia, the EU has learned important lessons about using the attraction of EU membership as a way to push candidate countries to tackle corruption. For example, it can explicitly tie greater integration and benefits to clear progress regarding anti-corruption initiatives, and provide monitoring and research support to locally led anti-corruption initiatives.

Further, consistent with the UN Convention Against Corruption, the international community should be offering “the widest measure of cooperation and assistance” in recovering assets stolen from the state by the former, kleptocratic regime. Financial centers such as London must also ensure they are not used to shelter ill-gotten assets or the proceeds of illicit business.


According to the 2013 Transparency International Global Corruption Barometer, 36 percent of Ukrainians were ready to take to the streets to fight corruption. The trigger for the recent Ukrainian revolution was Yanukovych’s failure to sign the EU Association Agreement in November 2013. Failing to tackle the rampant and deep-seated corruption plaguing the Ukrainian people could quickly reverse any optimism that the revolution and the recently signed EU Association Agreement herald a better future. As Chornovol, head of the government’s National Anti-Corruption Committee has noted, the Maidan revolution “changed a lot…in public perception, destroying the widespread tolerance of corruption that existed before.” It is therefore critical that the Ukrainian leadership re-establish the confidence of its people in the integrity of the government. Ukrainians have taken to the streets and died for change, and it would be a tragedy if they felt the need to do so again.

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  • TOM KEATINGE is a former investment banker at J.P. Morgan and an associate fellow at the Royal United Services Institute. Follow him on Twitter @keatingetom.
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