Estado del Arte

Public administration reform and the restructuring of the civil service is hampered, above all, by inflexible structures and non-competitive salaries. The new Ukrainian Civil Service law, which regulates employment, rights, duties, and accountability of civil servants, fits with international standards and practices and is praised by European experts. But, given the current circumstances in Ukraine, it is too conservative, giving too much emphasis on protecting the rights and privileges of civil servants, and making it difficult to reform the bureaucracy. A more rigid contractual framework for civil servants – protecting them from being sacked or transferred at short notice – increases their independence, as has been seen in most other developed states in Europe. It has proven difficult to fire bureaucrats, even when they are judged incompetent. In the few ministries where people have been laid off, those affected have appealed in court. The fear of impending court cases makes ministries worry about firing underperforming staff. To prove incompetence in such a way that it can be held up in a court of law is difficult and time- consuming. And, in a situation where entire ministries need to be restructured,

04 July 2016, available at https://www.oporaua.org/en/news/42829-15-years-of-current-ukrainian-parliament- mps-submit-legislative-initiatives-but-dont-vote-for-them. 33

this is hardly possible. As in many post-communist countries, state employment was used in Ukraine as a means of subsidising people who would otherwise be unemployed. Now that officials are expected to perform, this practice cannot be sustained. However, many ministries fear that laying off surplus staff who can't be retrained would heighten social tensions in Ukraine.

Under the civil service reform, state employees will have to go through a re- admission exam every two years to ensure that they are sufficiently competent and not corrupt. If they fail twice, they will be fired. This should reduce the number of civil servants over time, but it will be at least four years until the process comes into effect. The creation of the Civic Council on Oversight of Lustration will impact on further civil service reform. Even if no other laws are created in the near future, there are now other bodies and bureaucratic structures that can block the re-admission of incompetent bureaucrats and fire people. This adds an extra layer of accountability to the system, as even if ministers try to prevent change as much as possible, there are independent bodies to ensure that they can’t.

Non-competitive salaries are one of the biggest problems of the current system. Neither civil servants, judges, prosecutors nor politicians are able to live on their salaries. In the lower ranks, they support themselves by receiving other small kickbacks for skewing decisions in favour of whoever is paying them off – in other words, they earn extra on the side through corruption. Those higher up in the system are embedded in unofficial networks of oligarchs’ money. These revenue streams are the real deciders of loyalty and the factions that operate in the political system. Such corrupt practices are fundamentally incompatible with the demands of the Maidan protesters, and any kind of political and legal accountability. As both President Poroshenko and former Prime Minister Yatesnyuk were millionaires, they benefited from the system, and no attempt was made to change it.17

For the reformers, this issue is particularly painful. An average civil servant earns the equivalent of around €100 to €150 per month. Some ministries hired young, foreign-educated, reform-minded personnel for key positions to help implementing reforms. They took the jobs living on their partners’ or parents' money, or even their savings. Two years after Maidan, their resources are running low, and it is increasingly hard to hire qualified people for government jobs because the salaries are so low. Andriy Pyvovarsky,

17 Andrew Wilson, “Survival of the richest: How oligarchs block reform in Ukraine”, European Council on Foreign Relations, 14 April 2016, available at http://www.ecfr.eu/page/-/ECFR_160_SURVIVAL_OF_THE_RICHEST-_ HOW_OLIGARC1_BLOCK_REFORM_IN_UKRAINE.pdf

the former infrastructure minister, resigned in protest against low salaries. Lacking other sponsors and refusing to engage in corruption, he had no option but to take a job in the private sector.

Both the US and the EU have put pressure on Ukraine to increase salaries for public sector employees. The US does not pay these salaries itself, with the exception of the new patrol police. The EU occasionally funds salaries, but only through projects. SIDA – the Swedish government’s aid agency — has funded reformist officials and top bureaucrats in the Economy Ministry. The Infrastructure Ministry had a similar double-structure approach: to hire new officials through international programme funds, who would then drive reforms within the ministry. This approach was regarded by many Ukrainian and international private donors as a success.

To raise the salaries at the highest level of Ukraine's administration — in the government, parliament, ministries and for heads of departments and other key players — to competitive levels, would cost an estimated €40 million per year. This sum could be raised from the EU, and by restructuring the national budget. But for the time being, there is no systematic approach to this issue – neither from Kyiv nor from Brussels. The EU is negotiating some salary top-ups as a stop-gap. The overall support package for hiring experts and programme officers is worth about €100 million – some of which will be used to increase salaries for other officials. However, Kyiv and Brussels can't agree on the delivery of this support, as the EU demands strict oversight and a say in how these funds are allocated, something which Kyiv refuses to grant. Still, to many Ukrainian and international experts, the success of the public administration reforms have been underestimated. Many steps will take at least another year to take effect, but will change the Ukrainian public administration in the long term.