Photo of the reconstruction of Kyiv's Olimpisky Stadium: ukraine2012.gov.ua

Okategoriserade The dividend of UEFA EURO 2012: Corruption in the shadow of soccer tournaments

The UEFA EURO 2012 is big business and corruption is rampant and well entrenched in all aspects of Ukrainian political, economic and social life.

Published on balticworlds.com on June 8, 2012

Four point six percent

The UEFA EURO 2012 games have already paid off – for some – in the Ukraine. The World Bank estimates that the unofficial payment to secure a government contract comprises 4.6 percent of the total value, and with more than 80 billion USD of public money invested in preparing for the games, the amount spent on bribery, kickbacks and assorted schemes will translate into more than 3.5 billion USD. To this should be added the amount extorted by public officials for licensing new hotels, food stalls and all sorts of associated businesses that need to be brought about when thousands of football fans suddenly invade the country.

Corruption in the Ukraine neither starts with the opening ceremony nor ends with the festivities when the winner is found on July 1^st. The UEFA EURO 2012 is big business and corruption is rampant and well entrenched in all aspects of Ukrainian political, economic and social life. The prospective student will more often than not pay ‘entry’ and later ‘grade fees’. Shop owners pay various fees for ‘licensing’ in addition to the ‘roof’, and patients pay to get in front of the queue at the hospital. In the parliament, many change party allegiance or vote in accordance with their sponsors, and within the central administration, policy preparations are often cleared in advance. Thus, corruption in the Ukraine stretches from everyday life to the higher echelons of business and politics.

Quite normal

This is, however, to be expected and should not come as a surprise to those who made the decision to award Poland and the Ukraine the UEFA EURO 2012 games.

The literature abounds with statistical analysis of the prerequisites of corruption, all of which point to a high correlation between the absence of corruption, democracy (in particular civil liberties) and economic development. Furthermore, other studies have pointed to the legacy of communism, during which the informal economy grew due to scarcity, the communist party destroyed the civil servants’ ethos by politicizing administration, and the transition itself increased opportunities by transferring massive wealth to private hands in a situation where the legal framework was, to be blunt, ‘somewhat unclear’ and the overseeing institutions either absent or ill-equipped for the task. Finally, sudden or massive investments, whether they derive from donations or increased domestic spending, tend to push corruption to a higher level.

Given the relative poverty of the Ukraine, its poor track record in developing democracy, its legacy and a sudden massive investment program, corruption in the Ukraine is ‘quite normal’ as it is close to the line of regression when modeled statistically.

Hand the money over

Corruption is a very real issue among Ukrainians and there is nothing ‘normal’ about the social and political consequences

Do not become sick unless you bring something to the doctor. Some 30 percent of the Ukrainians who used medical services in 2009 reported paying bribes. Take pride in your degree from the university. Some 17 percent have to pay for educational services, and in general, the educational system is perceived as being one of the most corruption prone sectors in the Ukraine. If you want public utilities such as water, sewage and electricity, you should be ready to cough up, but before even beginning the construction, make sure you grease the wheels of bureaucracy to have your land registered and construction permit in hand.

Everyday corruption is so widespread that the fellow Ukrainian football spectator you meet during UEFA EURO 2012 will most likely be able to tell you a story or two. Corruption is not a single rotten apple but the rot of a system. Between 30 and 39 percent claim that they have paid bribes to the traffic police. Some 25 percent even admit to have paid these bribes voluntarily, that is, without the traffic officer asking for it. This is solid evidence that bribing the traffic police is so normal and expected that few raise questions.

Visiting football fans are unlikely to notice everyday corruption. Much effort has gone into presenting a glittering image of the Ukraine during UEFA EURO 2012. Thus, those at the helm will be annoyed if news stories of fans extorted by the police break. Be sure that this is known in all corners of the system and for that reason few fans will notice corruption during their stay. However, UEFA EURO 2012 is likely to push street-level corruption to new heights. No less than 1.4 million fans will be present at the stadiums throughout the tournament in Poland and the Ukraine. The turnover from fans that require transport, board and lodging will be massive, and officials will want a cut. Bus companies that take fans to the stadiums will have to pay certain traffic regulation fees. Food vendors and restaurants will have to obtain licenses and pay for hygienic safety inspections etc.

The rise in street-level corruption associated with the UEFA EURO 2012 is likely to have ramifications for the future. The relationship between the briber and the bribed is based on trust, reciprocity and fear, forming a shadowy network in a mutual exchange. The opportunities given in the preparation of and during the UEFA EURO 2012 have increased these networks, and once an official is on the take, they are likely to remain on the take.

Petty corruption functions as an extra tax on the poor. The 5-dollar bribe to the traffic policeman may not matter much to the Mercedes-driving businessman, but for the average Joe, it is a sizeable share of the monthly income. The elderly lady in need of care at the local hospital will also be hard pressed to pay gratitude to the doctor and the nurses. Thus, not only are the social consequences of corruption immense, but witnessing or just expecting scores of public officials to be on the take undermines trust in the government and paves the way for legal nihilism and populist solutions.  

The politics of corruption

Corruption goes beyond the street-level bureaucrats. Readers will be aware of many European leaders’ refusal to travel to the Ukraine during UEFA EURO 2012. The purpose of the refusal is to signify opposition to the Ukrainian regime and the conviction and subsequent imprisonment of Yulia Tymoshenko – former prime minister and one of the leading characters of the Orange Revolution – on charges of abuse of office.

The question at hand here is not if Yulia Tymoshenko is innocent or not of the charges. The judicial system is subject to political pressure and tainted with corruption. About 17 percent of the households who reported with the judiciary in 2009 reported that they had to bribe their way through. With the credibility of the judicial system in shatters, claiming to know up from down in the case against Yulia Tymoshenko would be to push it. 

Julia Timosjenko’s story is, however, for better and worse, a story about an infested political system where politicians, political parties, public offices and entire packages of legislation are brought in process where corruption circumvents democracy and undermines the very institutions upon which statehood and fair treatment before the law should be built. There are enormous rents to be collected by keeping the Ukraine somewhere in between. Between the West and Russia, between a functioning market economy and state planning and regulation, between an economy in which contracts are respected and can be enforced, and a predatory system where tycoons in public offices can make you an offer you cannot afford to refuse. It is not only a question of avoiding regulation but of designing regulation to your needs and keeping others out. As long as these rents can be collected, there will be an interest in continuing to hold the state captured and make political parties serve particularistic interests.

The political parties themselves have not only filled the coffers but also discovered that allegations of corruption are a potent and powerful political weapon against adversaries. When President Viktor Yanukovych opened the case against Yulia Tymoshenko and a number of officials from her government, it was exactly with the claim of fighting corruption.  Allegations of bribery have been used by more or less all prominent politicians against more or less all prominent politicians, and it resonates with the electorate who has become distrustful of politics and, by association, democracy.  

Is there a way out?

The UEFA EURO 2012 has already increased corruption, but it also provides an opportunity to focus on the issue. The EU boycott of the regime has without question made some raise their eyebrows in Kiev as it increases the cost of continuing to play the corruption card even if such a cost is hard to measure. The boycott falls within the category of symbolic policy and symbols do matter.

However, the EU lacks the most potent card – the offer of membership. The accession process of the Central and East European countries was a game changer. With the EU offering a combination of carrots and sticks, these countries were forced, lulled and convinced to bring about functioning market economies. The rents found in the in-between state were severely reduced. The EU cannot use this in the Ukraine. Following the Orange Revolution, the likelihood of accession quickly evaporated and the support offered by the EU to the democratizing and westbound forces in the Ukraine was too small to change the game. At the following election the Ukraine thus took a swing back from the westbound course. Today some even assess democracy to be in a worse state than before the Orange Revolution.

The opportunity during the UEFA EURO 2012 is thus the massive presence of foreign journalists and news media. Some Ukrainian journalists make heroic efforts to uncover the illicit transactions at great personal costs, the murder of Georgy Gondadze in 2000 being a case in point, but if foreign journalists, besides reporting from the event, use the window of opportunity that the UEFA EURO 2012 represents to uncover stories, awareness both within and outside the Ukraine will increase tremendously. This will help curb corruption because when you are contracting in the shadow, any light is unpleasant.

Lars Johannsen