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As US Sends Billions To Ukraine’s Gov’t, One Expert Is Sounding The Alarm On Rampant Corruption

  • The U.S. has donated billions in direct support for Ukraine’s government since the start of the war with Russia.
  • The extent of economic devastation combined with government corruption and Ukraine’s strained welfare state means governments should carefully direct aid, Nataliya Melnyk told the Daily Caller News Foundation.
  • “We don’t want to rebuild Ukraine as it was—we want to build a much better country, because right now we are paying a really high cost for the chance to have this future,” said Melnyk.

Western countries are distributing billions in political and social aid to Ukraine, but the money sent to Ukraine could end up lining the pockets of corrupt officials and creating a populace financially dependent on the state, an expert told the Daily Caller News Foundation.

Ukrainian President Volodymyr Zelenksyy outlined a $750 billion recovery plan last week, asking Western governments to foot the bill for both physical reconstruction and social and political development, according to the blueprint published in July. But the war-torn country has far to go before it becomes a free and open society, Nataliya Melnyk, a researcher at the Kyiv-based Bendukidze Free Market Center, told the DCNF.

Some of the concerns involve the individuals Zelenskyy has surrounded himself with since the invasion. Melnyk said that after the Zelenskyy administration reformed land policy early in his administration, the progress away from corruption stalled.

“He built a team around himself that he really trusts, and some of these people should not be there, especially not if we will be rebuilding the country with a lot of money that will be coming in,” said Melnyk.

European Union leaders granted Ukraine candidate status in June, Reuters reported, but the nation will not formally accede for another five to 10 years, said Melnyk. She worried that in the interim, corrupt officials would attempt to maximize their personal gains before EU anti-corruption regulations make it more difficult to launder money from government accounts.

The World Bank predicted in April that Ukraine’s economy could shrink by almost half in 2022 due to the Russian invasion, losing almost $4.3 billion in the agricultural sector, according to Forbes. Ukrainians have fled, taking manpower and valuable intellectual resources with them, according to Melnyk.

“We are in a very tough spot right now because of the war, because when it’s over, we will see a lot more people who are actually going to be very dependent on the state,” said Melnyk. “People who lost their homes, they kind of expect to be given a new home.”

“The broad public in Ukraine is not necessarily pro-market,” said Melnyk.

The U.S. has provided $2.3 billion in direct support for the Ukrainian government, on top of its military assistance, since the start of the Russian invasion, a State Department official confirmed to Voice of America (VOA) on Saturday.

The funding goes to support government salaries, maintain critical infrastructure and keep schools running, according to VOA. It also backs Ukraine’s pension system, ensuring government obligations to elderly and retired citizens continue.

“We see that a lot of necessary and quite painful changes are needed … and these painful changes, they have to do with the welfare state,” said Melnyk, citing the pension system.

While Ukraine is continuing to dole out pensions even to individuals who have fled because of the war, Ukrinform reported, retirement payments could dry out for future generations. Ukrainian Prime Minister Denys Shmyhal said in 2020 that the government only had pension payments to last 15 more years, according to Open Democracy.

The Heritage Foundation Economic Freedom Index for 2022 gave Ukraine a score of 54.1, “mostly unfree,” while Freedom House rated Ukraine “partly free” at 61/100. Government integrity is “severely compromised,” according to Heritage.

“We don’t want to rebuild Ukraine as it was—we want to build a much better country, because right now we are paying a really high cost for the chance to have this future,” said Melnyk. “One of the things that can be done in order for this rebuilding effort to be successful is … to have this help [be] conditional in a way that ‘you need to do this, this and this, and then you will have the funding.’”

For now, Ukraine is focused on survival, said Melnyk. Reform will come later.

The U.S. Department of State and the Verkhovna Rada, Ukraine’s parliament, did not respond to the DCNF’s requests for comment.

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