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5:52 AM Sunday, October 22, 2017
Tech
ProZorro Makes A Corruption X-Ray of Ukraine
From study of new online tendering, maps emerge of Ukraine's corruption -- oblast by oblast
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

KYIV – Dnipropetrovsk, Vinnytsia, and Chernihiv were Ukraine’s regions most active in cutting government corruption last year, according to a report from NGO Gromadsky Control.

While Western Ukrainians like to pride themselves as tech savvy and squeaky clean, three of their regions -- Chernovtsy, Ivano-Frankivsk and Zakarpattia -- ranked among the five worst of Ukraine’s 24 oblasts.

Further confounding stereotypes, Central and Eastern regions won the top five rankings for adapting ProZorro, the new transparent online system for government tenders.

The report tracked tenders by region for use of ProZorro during the website’s first full year of operation. Last August, the government made the already widely used ProZorro system mandatory for almost all procuring entities.

National Sport: Stealing Government Money

Since independence, cheating on government contracts has been a national sport in Ukraine. This has allowed poorly paid government officials to amass mysterious fortunes -- all at the taxpayers’ expense.

In the national survey, regions were ranked by three criteria: the average value of tenders which saw competitive bidding (the lowest average was ranked highest), the number of tenders with competitive bidding, and the ratio between competitive and non-competitive tenders.

The goal was a lower average value of tenders. This reflects the openness of local authorities to offer even small budget items for tender, providing more opportunities for small business.

Popular business investment destinations, like Lviv, Kharkiv, and Odesa, failed to break into the top 10 regions, scoring low in each of the three categories.

Kyiv region dominated by the number of competitive tenders, with almost double the number of runner-up Dnipropetrovsk, and had the second highest competitive to non-competitive ratio. But its high average value of tenders kept it out of the top five.

Investment Road Map?

Alexander Paraschiy, head of Research at Concorde Capital, said the rating could be useful when choosing where to invest in Ukraine.

“This rating describes well institutional readiness of local governments for fair rules of game,” he wrote in an email. “This is important for investors to select location, everything else being equal. But other factors are also important, like infrastructure, availability of qualified labor, location of potential suppliers and consumers.”

In many categories, Ukraine’s largest cities, Kyiv, Kharkiv, and Odesa have an edge over the regions highlighted in the rating.

The geographic diversity of these leading regions shows that benefits of the new procurement system are truly national, spreading far beyond Ukraine’s capital. It also shows expanding opportunities for entrepreneurs and for small and medium sized enterprises.

The original graphics and report -- in Ukrainian -- can be found here: http://gromko.dp.ua/articles/reyting-oblastey-po-otkrytosti-dlya-biznesa-v-zakupkah.


For comments and story tips, please email UBJ IT Correspondent Harvey Hinman at this address: harvey.hinman@theubj.com.

Photo: ProZorro marries nerdy tech transparency with the swashbuckling fighting image of Zorro, the fictional Mexican fighter against corruption in 19th century California.

Top Map: Each of Ukraine’s 24 oblasts, or regions, wins a ranking according to their use of the new ProZorro online tendering system. Bright red-orange and a low number are good. Faded orange and a high number are bad. (credit: Gromadsky Control.)

Bottom Map: Color coded version of ProZorro map. For investors, green means go. Red means stop. (Credit: UBJ/Andrew Sweeney)

Story posted Jan. 26, 2017
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