After Kubrakov, Ukraine Must Reestablish Faith in the Transparency and Independence of Its Restoration Institutions

This is part of a pair of articles highlighting the two most urgent impediments to a productive Ukraine Recovery Conference in June. The other article can be found here.

The productivity of the Ukraine Recovery Conference (URC) on June 11–12 is in danger. Discussions at a pre-URC conference suggest that a recent and sudden high-level personnel move in Kyiv risks becoming a distraction and source of uncertainty that will dominate the URC. The Ukrainian government should save the top annual international conference dedicated to Ukraine from this misfortune by immediately appointing a permanent minister of restoration and having them publicly commit to transparency both at home and with international donors.

Problem: Power politics take down Team Transparency

On May 21, a conference in Berlin brought together leading experts on Ukrainian governance and recovery efforts to take stock of these issues and offer advice to the organizers of the URC. The consensus was that Kyiv’s recent decision to fire Deputy Prime Minister for Restoration Oleksandr Kubrakov and split his ministry in half—for no reason other than raw turf warfare over internal political power—was “the elephant in the room”.

Together with Deputy Minister of Infrastructure Oleksandra Azarkhina and Restoration Agency Head Mustafa Nayyem, Kubrakov’s team was doing such good work that we should call them “Team Transparency”.

The three built the Restoration Ministry and Agency as a well-governed system of strategic planning, maintenance of data ecosystems, materials procurement, and project oversight. The two crown jewels were the Liquidation Fund (featuring transparent protocols for the fair prioritization of projects) and the Digital Restoration EcoSystem for Accountable Management (DREAM, which publicly discloses all information through the project lifecycle), both co-created with and overseen by reputable civil society leaders.

It proved impossible to bribe Team Transparency. When powerful figures offered bribes to Kubrakov and Nayyem, they referred the solicitations to the National Anticorruption Bureau of Ukraine (NABU), in one case even leading to the arrest of a parliamentarian from the president’s Servant of the People Party.

And Team Transparency worked closely with G7 allies to keep export corridors alive, protect the energy grid, and more. In a notable show of support for Kubrakov on the day he was fired, the ambassadors to Ukraine from the United States, the EU, Germany, France, and other key allies posted social media messages about their appreciation for their partnerships with the newly deposed minister. This is how diplomats express concern.

One would think that transparent governance systems and partnership with NABU and the G7 would be vital in wartime and will be just as essential to attracting funding for restoration.

But apparently that is not how it was viewed by Andrii Yermak, the head of the office of the president of Ukraine. Yermak saw Team Transparency as a major power center that he did not sufficiently control. This is in a country where even before power was further centralized during the war, governance already suffered from the concentration of too much power in the office of the president, which often operates in the shadows and bypasses democratic accountability. Now, that central power has come to wipe out the team that was building a transparent system of national restoration and replace it with loyalists (for instance, a leading contender to permanently replace Kubrakov is one of Yermak’s own deputy heads of the presidential office, Oleksiy Kuleba). Azarkhina was removed from her post last week, and the next step is expected to be the removal of Nayyem—which will give Yermak control over funds that flow through the Agency for Restoration. Although the Agency is embedded within the Ministry for Restoration, it lacks formal regulatory independence.

Moreover, Yermak may have moved against Team Transparency at this particular moment to deprive them of the platform to perform well on the world stage at the URC in Berlin, the way Kubrakov, Azarkhina, and Nayyem did at last year’s URC in London. CSOs planning side events at the URC and other fora should not end collaboration just because these reformers are no longer in government, but should show support by inviting Team Transparency members to speak (leaving it to them to decide whether it is diplomatically the right thing to do).

Solution: Restore confidence through four rapid steps

Veterans of the Ukrainian governance reform struggles of the past decade know well that this is neither the first nor the last time a trusted transparency reformer was sidelined simply because they were doing good work and gaining influence, leading a powerful figure to view them unfavorably. In these times, Ukraine’s partners and allies, together with civil society, need to insist that Kyiv makes it right.

If the Ukrainian and German governments want to remove this elephant from the room at the URC and instead get down to the business of galvanizing international support for Ukraine, the presidential office needs to move quickly to restore confidence in transparent restoration plans. Four concrete steps would collectively do the trick.

First, Ukraine should install a permanent replacement for Kubrakov. As of now, Kyiv appears to be hyping up plans for their delegation to be led by acting minister Vasyl Shkurakov. The truth seems to be that Shkurakov—a capable manager who served as Kubrakov’s first deputy—is only a temporary placeholder to keep the trains running smoothly until Yermak picks a real replacement, whether that is Kuleba or someone else. As with Kubrakov’s dismissal, any government official or even entire ministries can be dropped and forgotten overnight in Kyiv, so it is not even certain that Shkurakov will still be in the job through the time of the URC. This step is far from good enough to reassure allies that transparent governance of restoration affairs is back in order.

Second, immediately after the appointment is announced, Kubrakov’s permanent replacement should publicly confirm that their top priority will be to continue to maintain and develop all the transparency tools. They should commit to maintaining good governance of the Liquidation Fund and prioritizing legislation that would make the use of DREAM mandatory for all Ukrainian participants in restoration projects. They should elevate transparency as the vital secret weapon against oligarchy and Russia that Ukrainians have been applying aggressively since 2014, and also as essential to restoration. This is the Ukrainian governance analogue to the longstanding tradition among central bankers that the only thing they have to signal clearly in their first public remarks is a commitment to fighting inflation (establishing expectations that ultimately make that job easier).

Third, Kubrakov’s permanent replacement should commit to working with international donors to make participation in DREAM obligatory on their end as well (mirroring the aforementioned legislation that would require Ukrainians to use it). This is a policy that we at GMF have been recommending for more than a year, and now donors that have had enough time to get to know DREAM and fully embrace it can help address this immediate crisis of confidence in the transparency of restoration. Specifically, donors should do their part to make participation in DREAM obligatory by immediately including in restoration funding agreements a requirement that the receiving party or implementing partner use DREAM, and eventually by integrating DREAM into donor agencies’ internal data systems to track procurement information and simplify data collection and approval processes. The two most important systems to integrate DREAM into are the World Bank’s Systematic Tracking of Exchanges in Procurement and the EBRD’s Client E-Procurement Portal. As with the legislation, this does not have to (and cannot, realistically) be done in time for the URC, but the authorities should make a political commitment that they will do this.

Fourth, the Ukrainian government should commit to ensuring the independence of the Agency for Restoration and properly regulating its regional services subdivisions. The agency is the key implementer of restoration projects, and its services direct all procurements for the recovery projects handled by the agency. It is ultimately controlled by the ministry, as its independence is not written into law. Thus far, it has worked effectively—with well-governed, transparent, and fair handling of funds—only because of the strong informal coordination between Nayyem and Kubrakov. Kyiv should pledge to enact regulations enshrining the independence of the agency and reorganizing the services to ensure more prompt decision-making and increase oversight over procurements. The EU and US governments should insist upon these changes in donor conditionality.

Kyiv must install a permanent minister of restoration and have them loudly commit to independence and transparency within the Ukrainian government and with international donors. Then we can all take advantage of the URC to bolster Ukraine’s resilience for survival and victory.

This work was produced with the generous support of the Smith Richardson Foundation.

This article was updated on May 24, 2024. The title was also changed.