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Kyiv

03.11.2022

Digital tools for the recovery of Ukraine. Key points of the Conference

On Friday, October 28, the Kyiv School of Economics (KSE) hosted the conference "Digital tools for the recovery of Ukraine". Representatives of civil society, authorities, businesses, and international organizations gathered to discuss existing approaches to digitization of reconstruction and to find a unified vision of these processes.

The participants of the conference noted the importance of leadership of the Ukrainian state in matters of reconstruction, strengthening of the capacity of state institutions, and the continuation of reforms. The scope of the reconstruction of Ukraine is unprecedented, but it is important to learn the lessons of the reconstruction of other countries, in particular, in matters of the speed of projects’ implementation, the horizon of planning, prevention of corruption, and active involvement of the civil society and local authorities. 

All reconstruction stakeholders — both in Ukraine and abroad — must join forces to implement large-scale changes based on mutual trust, transparency, and accountability. That is why the use of digital tools and systems, disclosure and use of open data is important. These principles are laid down in the Electronic Reconstruction Management System, the concept of which was presented by the RISE Ukraine Coalition. The system is built on the "umbrella" principle and combines both digital platforms that are already successfully functioning (Prozorro, e-road, the newly created Register of destroyed and damaged property, etc.) and new modules, the development of which is carried out in cooperation with authorities. 

The representatives of the international partners assured of their readiness to support the ambitious plan of recovery and modernization of Ukraine and emphasized the importance of clear coordination of international aid from Ukraine, as well as building trust between all participants of the process. Through the use of digital tools and open data, the involvement of civil society is critical to the success of reconstruction.

As part of the event, KSE presented a study on approaches to the reconstruction of Ukraine, prepared with the assistance of GIZ. The study covers 144 global disaster recovery cases over the past 10 years. This experience contains many lessons important for the recovery of Ukraine. In particular, as noted by the head of the KSE Institute Nataliya Shapoval, four key reasons for unsuccessful reconstruction attempts can be identified. The first is a failure in the export of expertise, the second is a short planning horizon, the third is insecurity from military and criminal risks, and the fourth is grassroots and top-level corruption.

Nataliya Shapoval, the head of the KSE Institute

Corruption is a separate big challenge of global reconstruction. "It arises not only at the top levels, or in grassroots initiatives, but also among many organizations that implement these projects," noted Nataliya Shapoval. According to her, the recovery infrastructure should use all the best tools to prevent corruption at all levels. Anti-corruption reforms are still a relevant issue for Ukraine, so Ukraine should have specialists in the government in highly paid positions.

Maksym Fedoseyenko, head of KSE strategic projects, formulated 5 key principles of successful reconstruction based on KSE research and the experience of global cases of country recovery:

  • Reconstruction should be done by the state bodies of the country where it takes place, this helps to create strong institutions within the state;
  • The recovery of the state must be based on the reconstruction of the economy to create jobs and fill budgets with funds, laying the foundation for further growth;
  • Recovery projects should be fast and start as early as possible. In the case of Ukraine - already during the war; 
  • The involvement of local authorities and the public plays a decisive role in the effectiveness of reconstruction and the sustainability of positive changes;
  • The use of digital tools makes it possible to fight corruption and use resources more efficiently.


Maksym Fedoseyenko, head of KSE strategic projects

Digital solutions should be aimed at creating an integrated digital platform with a combination of existing digital registers, which allows tracking cash flows "from the donor to construction" according to the principle of "everyone sees everything". At the same time, the most expedient is the implementation of the modular principle of deployment of digital systems, which will allow the integration of various initiatives for recovery and transparent public administration on a single digital platform. And will contribute to faster deployment of the platform due to the parallel implementation of various modules and projects.

During the recovery of Ukraine, it is important to effectively use all available funds, regardless of their sources - both internal and external. Therefore, it is important to implement digital tools in the processes (from receiving to distribution and use of all types of resources, including external assistance from partners), in the management of state property of Ukraine, and distribution of state and private property resources (sale, auctions, lease, etc.). Digital tools make it possible to fight corruption and misuse, and prevent risks of inefficient use of resources.

Oleksiy Dorohan, executive director of BRDO, spoke about the concept of the RISE Ukraine Coalition regarding the Rebuild Ukraine Digital Management System. He emphasized that reconstruction is a complex process that includes thousands of individual projects. "Is it possible to manage them on paper? No, it is not possible. Is it possible to manage them without corruption? No, if there is no open access to data. Therefore, our task is to combine many digital tools in one ecosystem where everyone can see everything. For this task, the public's help is needed, " said Oleksiy Dorohan.

He is sure that the Electronic Reconstruction Management System should not be just a reporting system. Actually, the entire reconstruction process should take place within this system. It should work transactionally and cover all stages of the reconstruction process: starting with the register of damaged and destroyed property, creation and approval of projects, financing, procurement, and up to implementation and evaluation of results, reporting, etc. 

Oleksiy Dorohan, executive director of BRDO, member of the board of the Coalition RISE Ukraine

It is extremely important that, regardless of the source of funding for each individual project (it can be a state or local budget, an international grant, or a private investment), all projects should be entered into a single register, evaluated, and approved. And each project should go through a full cycle in the Electronic Reconstruction Management System. 

Since there will be tens of thousands of projects, it is important to create a certain bank of projects, kind of templates, that will help reconstruction customers quickly draw up their own projects’ estimates based on already existing modules. 

Maksym Nefyodov, co-head of the KSE Institute project "Russia will pay" (Damaged.in.ua), spoke about modern methods of assessing destruction and damage. He noted that the main task of creating the Register of Damaged and Destroyed Property is to assess which objects were destroyed and how to properly replace them as accurately as possible. "Together with numerous partners, we analyze satellite and drone images. This is a huge amount of data that needs to be properly processed. The result of this work is information that can be used not only in the Register of the Damaged property but also in all other modules of the Electronic Reconstruction Management System," he emphasized.

The result of this work will be interactive maps with great detail, on which you can see every destroyed house. "Any successful project starts with data. After that, you can proceed to a more in-depth analysis. As a matter of fact, our task is to provide these data," added Max Nefyodov.

Maksym Nefyodov, co-head of the KSE Institute project "Russia will pay" (Damaged.in.ua)

Viktor Nestulia, Open Contracting Partnership, RISE Ukraine, noted that the Electronic Reconstruction Management System should be created according to the "umbrella" principle. "It is important to immediately build a two-level transaction system so that the data of all the modules integrated into it are collected and made available in a single consolidated data center, a kind of "single window". Through this "single window" it will be possible to see what is happening with reconstruction both at the state level and at the regional and local levels," he said.

Viktor Nestulia, Оpen Contracting Partnership, RISE Ukraine

According to Viktor Nestulia, the quality and quantity of reconstruction projects is a huge challenge. Not all the "customers" of the reconstruction currently have the ability to provide high-quality project support, especially in those regions of Ukraine most affected by military aggression. A transactional reconstruction management system will help to strengthen this ability because it will accompany the user and tell him exactly what he should do at each specific stage of the project life cycle.

Reconstruction is a ten-year project, not one or two years, Viktor Nestulia emphasized. The scale of restoration and modernization is unprecedented. "That is why the transactional nature of the system must be ensured, it must work not only for reporting but also for improving the quality of all these projects," he added.

Viktor Nestulia reminded that the RISE Ukraine Coalition is already working on the development and implementation of the Electronic Reconstruction Management System. "We are already developing joint solutions with the ministries and the President's Office. We hope that together we will come to a consolidated vision," he said.

Khrystyna Zelinska, project manager of the Ministry for Communities and Territories Development of Ukraine, noted that in matters of reconstruction management, it will be important to determine the scale of each object, its accessibility, the presence of client demand, etc. 

Khrystyna Zelinska, project manager of the Ministry for Communities and Territories Development of Ukraine

"We have to invest in the restoration and development of communities, but do it intelligently and in a coordinated way. First of all, apply the balance in the financing of housing and municipal infrastructure objects, she emphasized. It is no less important to gradually disclose public information about the recovery process after martial law. Because international partners and taxpayers, who will fund this recovery, must understand this process."

Oleksandra Azarkhina, Deputy Minister of Infrastructure of Ukraine, noted that since the first days of the war, the state recorded all damage to the infrastructure — and these data will be the basis for the systematic launch of the reconstruction process after the victory.  

"Everything starts with verified and accessible data. When the full-scale invasion started, we began to count everything. "The Government immediately decided to create a Register of Damaged and Destroyed Property - it enables all further steps, in particular regarding compensation or further planning of reconstruction," she said.

Oleksiy Sobolev, director of Prozzoro.Sale, and Oleksandra Azarkhina, Deputy Minister of Infrastructure of Ukraine

"We hold meetings with international partners almost every day. They, like us, are most interested in building a modern digital management system in Ukraine. This is exactly what we are working on together with the RISE Ukraine Coalition, which has already received support from the Government of Great Britain for the development of the first phase of this system," Oleksandra Azarkhina added.

Oleksandra Azarkhina emphasized that it is important to remain realistic. Only with an understanding of the extent of the destruction, all possible risks, and the pace required for reconstruction - only then should all subsequent decisions be made. Digital tools are irreplaceable in these processes. This is the only guarantee of transparency of processes and maximum efficiency of the use of funds, both for Ukrainian and foreign taxpayers, investors and donors.

Of course, in times of war, the requirements for disclosure are different. It is simply dangerous to disclose some data because the defense capability of our country depends on them. But determining exactly which data should be hidden for security reasons is a task for experts, including USAID auditors.

Deputy Minister of Economy of Ukraine Nadiya Bigun noted that the recovery process has several important components, in particular, the stage of managing needs, the tender process, and contract management.

Regarding the tender process, Ukraine has done its "homework". The Prozorro e-procurement system has been built and is successfully operating. New procedures for procurement in wartime conditions have been developed, which indicates that the procurement system is ready to adapt to work in new circumstances, including the needs of international partners in matters of supplier selection procedures, etc.

Nadiya Bigun, Deputy Minister of Economy of Ukraine

Regarding the needs management stage, Ukraine could apply progressive approaches that already exist in the civilized world. We need to find a way to make the work of buyers as simple as possible. "Our task is to reduce the administrative burden on the participants of the process, as well as to actively involve Ukrainian business in reconstruction," emphasized Nadiya Bigun.

Farid Safarov, Deputy Minister of Energy for Digital Development, Digital Transformations and Digitalization, said that the life of the energy industry of Ukraine this year was divided into three stages: before February 24, from February 24, and after October 10. "Understanding that they will be defeated on the front line, from October 10, the russians began massively shelling the civilian energy infrastructure. They are trying to cause maximum damage to various energy supply chains and intimidate our citizens on the eve of winter," he said.

Farid Safarov, Deputy Minister of Energy for Digital Development

The Ministry of Energy is involved in all processes related to reconstruction. "Meetings are being held with potential investors who are interested in projects to rebuild the Ukrainian energy industry. Our vision is not the restoration of old energy facilities that were designed according to Soviet models, but the construction of a new stable infrastructure using the most modern technologies that will meet the world standards of energy efficiency and energy saving," said the Deputy Minister.

 

According to him, the Ministry of Energy is already working with donors on projects to rebuild the energy infrastructure in certain regions of the country according to new standards. At the same time, an important challenge remains the impossibility of opening up to the public all the registers of destruction and reconstruction needs in the energy sector for security reasons.

Representatives of international organizations spoke about their vision of the principles and challenges of rebuilding Ukraine. Klavdiya Maksymenko, Senior Country Officer, World Bank, emphasized the need to learn the lessons of previous international cooperation, in particular, in matters of technical assistance. 

Klavdiya Maksymenko, Senior Country Officer, World Bank

According to her, in the past, the government of Ukraine was not a full-fledged leader of this process, although it is extremely important. The Ukrainian state needs to build an effective donor aid coordination system, and this cannot be done on a volunteer basis, because sooner or later enthusiasm ends. "Let's invent a mechanism for coordinating this support," she urged.

Sadig Elamin, UNDP Information Management Officer, noted that the key to successful recovery is the availability of solid evidence. "We have to make sure that all collected data is systematically processed and stored. When we collect it all, we will get the overall picture," he emphasized.

Of course, some of these data are sensitive, but access to it should be ensured as much as possible, Sadig Elemin believes. All initiatives need to be discussed in detail, and a single catalog of reconstruction projects will greatly facilitate this process. This should be the basis of reconstruction: coordination, government leadership, and the use of digital tools.

According to the UNDP representative, decentralization can complicate the implementation of reconstruction projects. Sadig Elemin believes that priorities should be determined centrally, as well as the design of procedures. Therefore the "umbrella" method should become the basis of reconstruction management in Ukraine. All participants in the reconstruction process should cooperate and not compete, he added.


Sadig Elamin, UNDP Information Management Officer

Julda Kielyte, Economic and Fiscal Reforms Team Leader, Support Group for Ukraine, European Commission, noted that trust and transparency are extremely important for reconstruction. At the same time, Ukraine itself should be the owner of the reconstruction process — and not only its government, but also business and civil society.

Julda Kielyte, Economic and Fiscal Reforms Team Leader, Support Group for Ukraine, European Commission

Decentralization is a key reform, the representative of the European Commission believes. "I appreciate the efforts of civil society and its initiatives. It is necessary to join forces for a common goal because it was this kind of cooperation that made it possible to implement such successful cases as Prozorro. Let's coordinate, not compete. The recovery plan presented in Lugano is a good basis for this," she said.

William Turner, Deputy Head Political and Economic Team, British Embassy Kyiv, noted that the scope of Ukraine's needs is huge. "We are talking about hundreds of millions of dollars, so we need good coordination, as well as trust and transparency. It is important to get the maximum benefit from every dollar and euro for the recovery of Ukraine," he emphasized.

William Turner, Deputy Head Political and Economic Team, British Embassy Kyiv

Jay Michael Totte, Anti-Corruption and Rule of Law Team Lead, USAID, emphasized that USAID is already actively providing support to Ukraine. "Obviously, we support Ukraine's efforts to plan and prepare for reconstruction," he said. 

At the same time, USAID relies on the previous experience of rebuilding countries after the war. It is important that the government of Ukraine plays a leading role in the reconstruction process. "It is Ukraine that is rebuilding Ukraine for the sake of Ukrainians," emphasized Jay Michel Totte. At the same time, he added, civil society must be a mandatory participant in this process.

The USAID representative also noted that although digitization is very important, it is not enough: digital control is also needed. And also the commitment to continue the implementation of reforms that should take place in Ukraine in parallel with reconstruction.

Jay Michael Totte, Anti-Corruption and Rule of Law Team Lead, USAID

Tymofiy Mylovanov, president of KSE, said that the RISE Ukraine Coalition has proven through its actions that civil society can achieve concrete results.

The KSE president also noted that state and private organizations are ready to support Ukraine and invest in its economy. But the barrier for them is the historical sense of the risks of corruption in Ukraine and the need for management practices that meet the expectations of Wall Street and London City.

Tymofiy Mylovanov, president of KSE


The conference "Digital tools for the recovery of Ukraine" was organized by the Kyiv School of Economics (Kyiv School of Economics, KSE), the RISE Ukraine Coalition and the state system of electronic auctions Prozorro.Sale. Partners of the event: BHP Foundation, Transparency International Ukraine, GIZ, BRDO Effective Regulation Office, UKAID, Open Contracting Partnership, EU Project "Let's Go Together", Damaged.in.ua Project, Abt Associates.

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