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«Trust must be rebuilt and then we will be able to rebuild a better future», — Vladyslav Rashkovan

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Oleksii Dorogan, Executive Director at BRDO (Better Regulation Delivery Office) and member of the Board of the RISE Ukraine Coalition, spoke with Vladyslav Rashkovan, Alternative Executive Director at the International Monetary Fund (IMF), in a new episode of the podcast "RISE Ukraine. All About Recovery". 

The experts discussed the role of civil society in the country's reconstruction and reform processes, the partnership between civil society institutions and the state, and the challenges Ukraine faces in the fight against corruption.

You can listen to the podcast on YouTube, Spotify, and Apple Podcasts. Below is the text version of the conversation. 

— Hello everyone. Welcome to the "Rise Ukraine" podcast. Today our guest is Vladyslav Rashkovan, an Alternative Executive Director at the International Monetary Fund (IMF). Vlad, Hi! 

— Hello, Oleksii!

— We have known each other for a long time, and you are even more familiar with the reforms and with Ukrainian civil society. And we often praise ourselves, saying that civil society is the engine of change, and that we are doing some really cool stuff, important work in Ukraine and that our role is very important. Vlad, you had the opportunity to look at it from the inside, actually, we were all civil society after the Revolution of Dignity and somewhat, perhaps, from the outside, because you work in Washington. Is the uniqueness of Ukrainian civil society overestimated, or, on the contrary, underestimated?

— That is an important question, and it is a bit difficult to answer, because you are putting together the words “unique” and "overestimated-underestimated." Is Ukrainian society unique? It's not unique. In many countries, civil society is also well-developed, but we should be very grateful to Ukraine, to the Ukrainian people, and to Ukrainian society for having it, because many countries don't have it. And this is also important. 

So, is it unique? No, is not unique. But is it important? It's very important. And in order to understand why it's important, or how to make the impact of civil society even greater, probably, we need to look at it from different angles. 

Firstly, what is civil society? We both understand that civil society does not equal the entire population of Ukraine, not all of the Ukrainian population is part of civil society. So, not all of those people, who are outside the public service are part of civil society. Civil society is a kind of network of institutions that are independent of the state, it is very important to use the word “institution”, not just “people” which are created by Ukrainians, citizens to defend their collective interests. Civil society has other tasks as well, but essentially, what is important here? Firstly, that these are institutions. Secondly, that they defend collective interests. And thirdly, that they are independent of the state. These three elements exist in Ukraine.

And do we have many such institutions? Organizationally, yes. I don't know, Oleksii, if you know how many non-profit, non-governmental civil organizations there are in Ukraine?

— I was told that it was more than ten thousand.

— More than a hundred thousand. Formally, more than a hundred thousand according to the register. But do you know ten thousand or even a thousand Ukrainian organizations? 

I'm sure that if we think about it, we can probably name a hundred. And this is an important story, because when we talk about civil society, you and I immediately understand the level of the state, the national level. I mean, these are people who work with the government, with the parliament, with various state institutions or, for example, even with state administrations, with the mayor's office in Kyiv.

Once my daughter said: “You know, Dad, actually, the bench, in the yard or in the park is not set by the president”. Do you understand? And it is set by, I guess, the housing cooperative that exists in a particular building. It is a small group of people, which is also a civil society. And the first sprouts or the first discussions of civil society emerge precisely at the level of the building, at the yard level, and so on. 

But, if we are going to go back to a higher level, to the level of the state, to the national level, somewhere around 2017-2018, there was talk about the so-called "sandwich economy" in Ukraine, when the authorities are pushed towards reforms on one side by international organizations, like the IMF, and on the other side by civil society. Thus, the government is practically caught between these two groups and is forced to work on the implementation of reforms. In fact, this was the case with the Prozorro digital system, which was actually born in civil society, and then the system was handed over to the state. Similarly, you are currently working at RISE with the DREAM system for recovery. Many ideas are born in civil society and then through the system of institutions, through the system of instruments, that civil society has, they pass to the state level and become systems within the state.

You specifically asked about civil society, but in fact the role of the state is really important here, because the state must have the courage to acknowledge that it can be wrong. And it must also have the willingness and ability to hear a different opinion, or to seek assistance, for example, from civil society. You know what I mean?

The state holds a monopoly on power, legislative, executive, law enforcement, the judiciary and all of them together can intoxicate the government. The concept of representative democracy implies that people actually elect smarter people to power, the most educated individuals. So, essentially, it is already a push from civil society, its best people, into public service. And it looks like a sort of elite is being created. But this virtual elitism with a state of intoxication, usually creates a deceptive sense among government officials that they are the smartest and don't really need anything from civil society. We know it ourselves, we will handle it ourselves, we will do it ourselves. You and I understand, that this is wrong, and we can all make mistakes, but the courage to admit that you might be wrong actually opens the door to communication with civil society.

When I worked at the National Bank of Ukraine, in 2014-2016, we analyzed how it worked in the European Union. Most of the regulatory acts in the European Union come out more than a month in advance to be commented on, but many international organizations conduct large surveys first, what issues should be brought up for discussion, and then they are discussed.

I would like to have something like this in Ukraine, but this is only possible when there are real institutions at the level of civil society and they will develop. We both understand that it is impossible to focus on everything, and therefore the specialization of civil institutions, of civil society will be very, very important in order to play an even greater role in the future. So civil society exists, it is not unique, but it is very important and does very important work. Thank you to all the people, who are involved at different levels, both at the level of housing cooperative and at the state level! But in fact, we need to work harder on the institutionalization and probably also on specialization.

— Thank you very much. I was interested to hear that in fact, in the context of civil society institutions, we need to talk not only about what they did, but also how they interacted. This is also a kind of institution. In my discussions with officials, I often explain that in fact, their job is to accept criticism and proposals and to understand what can be taken into account, and the job of civil society is sometimes to make changes together, sometimes to monitor, sometimes to criticize, when someone disagrees.

— But you have just said something important, you have used the word "criticize" I think, that this is where the problem lies, because it seems like we have some kind of confrontation between the state and civil society. I don't see any confrontation, I see only cooperation, and I would like to see cooperation. And it is important here, that the state has the courage to admit, that it does not know everything and can be wrong, and has the desire to listen, but it is also important to have the infrastructure to improve its hearing. That is the infrastructure, that will be able to receive this information or advice.

But it is also important, that civil society should have something to say, you know? When the state asks something – you immediately start working on an idea. If you don't have anything prepared, then, unfortunately your answers will usually be not very high quality.

That is why you need to work even without a request from the state. You should have an agenda, have your expertise. You need to develop it and especially be ready to provide it to the state when it asks you. But you don't have to wait for the state to ask. You need to push forward and you are doing it. Thank you, Rise Ukraine, for this!

— I think that this is also about responsibility, because, having the do policy work, you need to think not only about ability, you need to think not only about h ow you use them, but also to do it responsibly. 

Regarding the fact that you need to work even without a request. I spoke on this podcast with Tom Keatinge, Director of the Centre for Financial Crime and Security Studies (CFCS) at the oldest think tank in the world RUSI. He told me over coffee that the work of a think tank was like cooking soup on multiple burners. And most importantly, when a politician asks you, you should be just minutes away from bringing the soup to a boil and handing it over to the politician. And he told me that one of the key competencies in the work of think tanks was to know which soups to cook and always had the right soup ready.

A great metaphor, I will remember and write it down. I like it. I probably agree with this idea. It is a little bit simplified, but yes. It is especially important to know which soups are being made, and sometimes even influencing the menu is also important. And sometimes being the chef in other places as well.

— We also often talk about digitalization, accountability, and transparency. Ukraine is known for digital and transparent reforms, and we often discuss how important this is, how impactful it can be. Continuing with this trick, which you don't quite like yet, about "overrated or underrated", tell me, please, from your perspective, what do you think, are accountability and transparency reforms overrated or underrated in the Ukrainian communication bubble?

Once again, this encompasses several things. First of all, at the grassroots level, let's take a look at relatively speaking, any regular person who simply lives, is not a member of a party, does not participate in party life, does not attend meetings, discussions, hackathons, strategic sessions, and so on. Let's take an ordinary person

In the United States, most of these people understand, where their taxes go. So when we reach a level of self-awareness when Ukrainians are thinking abou twhere their taxes are going, I will consider this reform to be a successful accountability reform. 

At the city level, I liked that for many years we were moving towards decentralization. I really hope that we will not turn off this path and will continue to develop the decentralization reform. In fact, at the local level, the likelihood that such a discussion and such self-awareness will emerge is much more likely, it seems to me.

But in fact, when we talk about digitalization, I will remind you of the importance not only of "Prozorro", for example, which was created in 2015-2016, but also "Dozorro", which was created alongside "Prozorro," to provide easy tools for everyone who wants to analyze, look into specific contracts, because the state procures many things, and you can't see everything at once. A very important tool was not only "Prozorro", but also "Dozorro" for this kind of accountability. 

What do we see now with the reconstruction? That our international partners, for example, in the USA, created a system of inspectors general, who work, have their budget, create some reports. It is very interesting, but, that is not the only tool they have created. For example, the World Bank, Deloitt, VWC, also analyzed the expenses, which Ukraine was making through grants, coming from the USA. I think that a large part will be from the "Ukraine facility" as well. But international accountability doesn't interest me as much. I think it will work. It is necessary to have Ukrainian accountability, Ukrainian citizens should ask how the state works. We are still far from that, I think, especially in terms of awareness. In terms of tools, they need to be created. "DREAM" is one such tool. “Big Recovery Portal is another such tool, but we have to keep doing other tools.

Digitalization systems actually provide us with many opportunities to do this now. People have access via phones, computers, now with the help of artificial intelligence probably, we can create correct and easy interfaces that will actually help people work. For example, "Open DataBot, "YouControl" – these are tools created on open data and allow you to find information about company owners in just two clicks and so on. So these are important tools, they create great opportunities for us as well. It seems to me that Ukraine is using still not enough, but definitely many such tools.

— To summarize, you are talking about the "last mile". So we opened the data, made dashboards, collected tools. But how to convert all this infrastructure into people's understanding of where their taxes go, and what has the state done for them? We have not passed this "last mile" yet. And if I may say so, then the "last mile" is somewhat underestimated.

— Moreover, returning to the role of civil society, Many of these things you just mentioned, it has done. It pushed the state to open up data, but then also created systems for data analysis. This is almost not done by the state, you know? The state has created an important tool called "Diia", and I really like it. This tool greatly simplified many things for many people in Ukraine, including significantly reducing the distance between the individual and the state. And I think that we can definitely be proud of that. The more services we have, the better made, the more important for people, the more daily in use, then I think, the more trust will be built between people and the state, which we, currently lack, I will be honest with you.

But the question is who should pass this "last mile"? Should it be the state or civil society? It is a good question and I don't even have an answer. I would like to say the state, but, probably, still civil society. 

— Thank you. We have talked about transparency, about civil society, and I wanted to talk about the United States. Recently, the long-awaited package of support for Ukraine was passed in Congress with significant bipartisan support and signed by President Biden. I know that a lot of people have put a lot of effort into this, but we actually realize that this is not the last time when Ukraine will need a package of support from the United States. I know that I asked you and many other people coordinated and took steps to push this support package, that was passed. What do we need, what does Ukrainian civil society need to do, or what can be done, to get the next package passed in a year?

Thank you for your question. In fact, the war continues, and we need more finances both this year and next year. At the IMF we are working to help Ukraine, and we are doing a lot. For example, there is our $15.6 billion program, which effectively has united the G7 countries around supporting Ukraine to the tune of $140 billion. This is budget support, of which around $85 billion has already been disbursed to Ukraine. In fact, it is a crucial part of our macrofinancial stability in Ukraine. Many people are working on military aid: people from the state first and foremost, and embassies, the U.S. Embassy, for example, Ambassador Oksana Markarova, and people in Kyiv, and parliamentarians who come to Kyiv. In fact, there were many levers of influence both on Johnson personally and on Congress. There were many religious leaders who traveled to conservative states, including evangelicals and Baptists. So it was very interesting to observe the extensive campaign to promote Ukraine's interests. As we know, victory always has many fathers and I am very grateful to everyone and I don't underestimate anyone who contributed to this decision.

I don't know if your listeners know about the American organization "American Coalition for Ukraine," which actually, together with "Razom" and "Nova Ukraine," gathered in Washington twice a year, approximately 400-500 people. Almost all of them are ethnic Ukrainians, but they are U.S. citizens. They came from different states, many at their own expense, and for a few days this group of people were given lectures on what to talk about, for example, with congressmen in the U.S., with their congressmen. I was one of the teachers. It was a very systematic training. The organizers talked to both the Ministry of Foreign Affairs and the embassy, prepared special briefing sheets for people with key messages and issues, explained them, and answered questions. Then, within a few days, these people basically went to every congressman. The idea was that they would reach out to all congressmen, not just Democrats who supported Ukraine, or Republicans who supported Ukraine, but also Republicans who did not support Ukraine. And some even went to talk to people who were from the "MAGA" group in the parliament. It was very systematic. I want us to continue working on this in exactly this way. 

Right now, we have the issue of Russian assets. Russian assets are a systematically important issue that needs to be addressed. Unfortunately, I think there will not be a decision on confiscation at the upcoming G7 summit scheduled for June. But our task is (and many groups of people are already working on this) to move them away from the position of “let's do nothing and keep this money in the hands of Belgium or other countries, until the war ends and Russia pays reparations". In reality, we need to look further ahead, because we need money now, we need money to win the war, to support the economy now, not sometime in 2030. We need to work now. And that's why I would focus on this issue, because it could involve significant amounts of money. 

The second issue is military, prioritization of course. There are people working on drones, someone working on F-16s. But in the US, the issue of confiscating Russian assets is one of the most important that we need to work on and are working on. This is very well understood in the Ministry of Foreign Affairs and in the embassy. 

The United States is a democratic country. We are not even in a pre-election period, but an election year. We don't know right now who will be the president of the country, who will enter Congress after January next year. This is the essence of democracy. In Belarus and Russia, you know who will be the next president, but in the US, you don't know who will be the next president.

And so our important story is that we need to work with both parties, to get the support of both parties, receive the support of the current administration, and another administration which may come. We need to work on it. Do not oppose yourself, but to work with America as a state, with institutions as institutions, not just with people, who, of course, may be greater or lesser supporters of Ukraine.

— There are representatives of organizations who are watching this podcast right now. If they want to influence, to help Ukraine in international communication and international advocacy, they should send an email tomorrow to "Razom" and "Nova Ukraine" and ask them how they can help. Secondly, look at the issue of Russian assets and military aid, and think about whether they could join in the advocacy of these two issues. Did I understand correctly?

I would say that the issue of Russian assets is definitely a topic which needs to be addressed. And we need to work on it as well as supporting Ukraine at the level of different countries, as we have been doing for the past two years. This is an important issue in France, Germany, Italy, and even Japan. These are countries that do not strongly support the idea of confiscating Russian assets. We need to work systematically there.

What can be learned from that experience that I just described? "Razom" is one of the organizers of the process, but not the only one, and "Nova Ukraine" is not the only one. This organization is called "American Coalition for Ukraine." We can learn from them the tools and how to work with them. That is, how to be systematic: who to gather, who to go to, how to prepare, which messages to prepare, and from whom you will receive these messages in Ukraine. Because it will be the Ministry of Finance, which can formulate the messages specifically on the topic of Russian assets. Finance Minister of Ukraine Marchenko will participate in the discussion on Russian assets, he will support this at his level. 

But we both know, politicians in their countries supported Ukraine not only because Ukraine is a good country and Russia is an enemy, but because people within these countries were creating pressure, they were forming a position that Ukraine is a good country and it needs to be supported. So we need to form this position from civil society in France, Germany, and Italy. There are now over a million Ukrainians in Germany and Italy, even before the war, there were many Ukrainians. These issues need to be taken to the government, to the parliaments of these countries.

— Thank you! It seems to me very practical. I think, that many people guess, and many people know for sure, that in many capitals of Ukraine's allies and in many embassies, departments were created or significantly expanded departments, that work on Ukrainian issues. Many of these people knew almost nothing about Ukraine except what they learned in university and from the news that they followed in the global media. What would you like to say to those who recently joined such teams and are currently listening to this podcast? Maybe, give some advice? 

This is not a theoretical question, because I, actually, have talked with almost all these Ukrainian desks, that have been created in the last two years. I am a bit saddened that in many cases, these are still people in Ministries of Foreign Affairs. In some countries, a special representative is created, like in France with Pierre Elbron. He is the special representative of the President of France on Ukrainian issues today. The same representative exists in the United States, Penny Pritzker. But in most countries, these are still representatives of the Ministries of Foreign Affairs, who do some internal coordination. Usually, this is not a very high level. 

I remember my first meeting with Gert Jan Kupman. It was in April of the 2023. We met during the spring meeting of the IMF in Washington. He was advised to meet with me. And after talking for an hour, he said: "Vlad, why don't you come to Brussels to brief my team, which I am currently forming on Ukrainian issues?" I said I'd be in Yerevan and Tbilisi in a month and could come then. He said: "No, next week." I changed some plans, arrived in Brussels for two days, and sat down in an office with over 20 people at the time (now they are 100+) who formed the first group, what was called the Ukrainian desk, or rather Ukrainian department. It's now larger than all other departments together in the directorate. I had a very interesting moment when I was talking with them. I broke everything down into several presentations that I made by topics: economy, reforms, politics, reconstruction, and so on. And at one point I said the word "Kolomoyskyi" and looked them in the eye. No one even twitched an eye, you know? I asked: "You don't even know that last name?" They said: "No." I asked: "You know nothing about Ukraine?" Well, and most people didn't know. In fact, there was, I guess, one person who had worked with Ukraine before. It was really interesting. But I met with them in February, again, there were 100+ people, and even more. Many people from other countries came to work there. It is already a very powerful system, they know, they are already in the context. They understand everything and they can tell more about Ukraine than we can.

What do I usually tell these people? I have three key messages. The first one is that Ukraine is more about political economy than just economy. A lot of decisions are made on the political side rather than the economic side. And this is Ukraine's weakness, not its strength. This needs to be understood because when you are advocating ideas that are politically not supported at various levels, they may not be supported at the business level, civil society level, or parliamentary or governmental level for various reasons. It is important to understand these reasons and work with them, not just pushing ideas. Because in reality, there could be entirely different outcomes or solutions if you understand the problem you are addressing. By the way, working on this topic, we met around in 2014, when we were speaking with Oleksiy Honcharuk. I approached the issue of financial sector reforms, banking sector in particular, from that point of view, that we need to understand the problems, not just slogans. We need to understand what problems we are solving, what key problems are facing the banking sector. And that's what we were trying to understand. Back then, we also discussed the concept you were working on, how to digitize it. I really liked your tools at the time and we even tried to adopt it for ourselves as well.

Secondly, I usually ask anyone, a new ambassador whom I meet, about empathy. I say that Ukraine is a beautiful country. Yes, it may seem somewhat incapable, somewhere difficult, and so on. For example, look at the ambassadors who in 2014 passed through the Maidan every day when they were working in Kyiv. You understand that they have a different level of empathy than those who came to replace them in 2016. Or, for example, those ambassadors who fled from Kyiv in January, not February, they have a completely different level of empathy than the people who arrived in the middle of 2023, when Kyiv was living a normal life and there was no such military challenge that was in January, February, in March, 2022. So empathy is very important. I use another word, I would like other states to have “sovereign” empathy. That is we have it in many countries now, but in general, it is going down a little bit. Why? Because people actually can't live like this on adrenaline for too long, which is how we live. But if they have empathy, it will help us in many ways. 

And the third thing I tell people is not to fall into the Ukrainian trap of short-sightedness. We usually solve problems today for today or for yesterday. And tomorrow is already a different problem, which everyone needs to solve, because that's the main one. 10 years ago I said that we need to change the National Bank, we need to make reforms, and most people said "no," we don't have such an opportunity, we have a crisis. Crises will always exist, different crises, so you have to be prepared. You need to prepare your organization institutionally, you need to prepare your team specifically for crises. So you have to solve the crisis, but you have to be prepared in advance to solve it. And here is our problem, that we are heroically solving crises, but between crises we do not prepare for new ones. We have institutional capacity, which, like reforms, probably, has some negative connotation in Ukrainian realities. 

You understand that the war started and everyone said that it was impossible to forecast, impossible to plan, you had to work for today. Because you don't know if you are going to be alive tomorrow. That is true. Many people need to work on this. But someone needs to work on longer-term thinking. And if people started to work two and a half years ago on longer-term thinking, then it would have led to a solution now that would have been considered, discussed with civil society, analyzed according to international experience and implemented. But we are doing a lot for today. This is not only about civil society. 

Here I come back to your first question and your metaphor about preparing several soups. All these soups have to be cooked, and every one of them has a different cooking time. And it is impossible to live in a situation where you are only preparing the soup you need right now, in 10 minutes, because you will not have anything to eat in the evening. So not falling into this trap of short-term thinking is also something I would advise, because both reforms and war are not sprints, not even marathons, these are relay marathons.

— Let's summarize. Three things you mentioned: empathy, short-term thinking, not falling into the trap of short-term thinking. Can you remind me the first one please?

— The first was that Ukraine is more about political economy.

— Thank you! My next question is about the fight against corruption. Now there is a lot of research on how Russia uses corruption to achieve its foreign policy goals. It's also about money, agents, and buying elites in different countries. Russia did all this, in particular, in Ukraine. But in addition, Russia, by creating corruption in Ukraine and deepening this problem, used it to build a narrative abroad that Ukraine is a failed state, that Ukraine is corrupt and cannot be successful. At the same time, many public organizations in Ukraine have done a lot to eradicate corruption. And it is clearly understood and known that they were under pressure from the Russians, they were targeted by the Russians, directly and through its proxies.

A lot of people who work in the government feel uncomfortable with the fact that anti-corruption safeguards make their lives more difficult. When these realities come together in an encounter where there are reformers, anti-corruption activists, and government officials, we all come together to a common narrative that Ukraine has made extraordinary progress in the fight against corruption over the past ten years, for example, "Prozorro", declarations, but there is still much to be done.

There is also an opinion that using this narrative doesn't play up to Russia's narrative that Ukraine is corrupt, but on the contrary we counteract it and explain that we are making progress. Maybe we were corrupt, but we are not as corrupt anymore as we used to be. Some people say that we should not talk about corruption at all, because no matter what we say, corruption will still be perceived as a problem.

Vlad, can you tell me please does this narrative work or does not work? I understand that there is the way we talk about corruption and anti-corruption work internally, and there is the way it needs to be framed outwardly. I think that the narrative I'm talking about is fairly honest. But what do you think about it?

— First of all, let me reflect on your summary of this question. I was recently told that there was a study that showed that the Russians had started this information campaign against Ukraine in the early 1990s. I didn't see it, of course, because we were young and you're even younger than me, because we were in a post-Soviet bubble at that time, with Russian communication concepts and so on. But we remember cases of Russian tanks being delivered to Pakistan in the past. As for the 1994 debate about the Budapest Memorandum, people say that it is clear that the American position around the end of the 1980s was Moscow-centered. But the Russians were already working on the narrative that Ukraine could not be trusted. And it did work. For many years we proved that we are not stupid, but there were other issues. When in 2004-2005, after the Orange Revolution, there might have been changes, but they were not as good as they could have been, or in 2014 they were not as good as they could have been, then each time Russia increased this information campaign. We know that Russia Today didn't even in its best years have about 140-150 million dollars of annual budget. That's the first question.

The second question concerns the fact that Ukrainian civil servants feel uncomfortable. Okay, but who said that comfort should be felt? Going back to the first question, one of the roles of civil society is to hold the state system accountable. So in this oversight from civil society through any tools, including through investigative journalism, I don't see any particular problems.

I was definitely one of the first ones who sell that narrative that you mentioned. That is the narrative, as you said, that we had done a lot in the last 10 years, but there was still work to be done. I say, in return, and we still have a long way to go to be a conventional Denmark or Sweden. Not "but," I use "and." And this is an important difference.

This narrative is being sold and it is normal, especially between people who support us, who have worked with us over the past years. I sold it to Tymofiy Mylovanov a few years ago, four or five years ago. I said I missed digitizing it. What do I mean by that?

I heard that in 2012 someone had analyzed that corruption around Naftogaz of Ukraine was about 3 billion dollars a year. I guess, there was a "hole" in Naftogaz, which was actually financed. But in fact, this "hole" appeared not only because of inefficiency of state policies in terms of increasing potential gas tariffs and so on, but also because of the fact that when you provide it cheaply, in particular the corporate sector, to some oligarchs, it is understandable that this is being done for a reason. The amount of corruption was at the level of three billion dollars. I am sure that when the reforms were made, in particular under pressure from the IMF on the increase of gas tariffs in 2014-2016, we have never reached the full coverage of cost at that time. And reforms, which were carried out at that time, have reduced corruption. I can tell you with confidence that state-owned banks in the period between 2008 and 2014 issued approximately 10 billion dollars in loans to oligarchs. And when in 2014 we were engaged in the reform of the banking sector, in fact, all this money was not returned. And furthermore, the banks of these oligarchs, Zhevago, Bakhmatyuk, Firtash, I'm not even talking about Kolomoyskyi, have gone bankrupt. Some of these banks had to be nationalized, and we closed some of them. These were the expenses of the state. Low key policy rate of the National Bank of Ukraine, loan from the National Bank of Ukraine for five years is actually capital. 7-8 percent for five years. They used the money of the National Bank as capital for themselves, to finance their own projects. And we know that 90+ percent were loans to their companies.

It is important not only how we look at the Transparency International index, which shows the level of perception of corruption. It is extremely important, because this publicity thanks to various researchers, investigations by journalists about anti-corruption bodies, creates an impression that the level of corruption is increasing in Ukraine. In reality, corruption is decreasing. It is very important to understand this at the level of literacy, at the level of financial education of Ukrainians. And it is also important to understand this abroad. I see that Russia uses this in its information campaigns. 

If only we have even a visual history that the highest level of corruption, I think that you and I will be in agreement here, was in Ukraine in the years 2012-2013. Since then, we have grown significantly and significantly reduced the level of corruption. But how high was it in 2012-2013 in procurement? To what extent has corruption decreased due to "Prozorro"? I think on 95 percent. Or 100 percent? Definitely, no. So I miss this kind of digitalization. 

Regarding the second question, I have a concept, maybe you have heard it somewhere, or I have told you about it, I even use it in my family. There are themes that are vertical and some themes are horizontal. Usually I am more into horizontal themes. Communications is a horizontal topic for me, not a vertical one. Managing people or leadership is a horizontal topic, not a vertical one. Industry topics are vertical for me. Building anti-corruption infrastructure for me is also a horizontal topic. And it is very bad, when it goes vertical, when the anti-corruption infrastructure becomes actually its own industry. No anti-corruption infrastructure will be needed, when there is no corruption in Ukraine. Therefore, in order to fuel the anti-corruption infrastructure, we need to have corruption all the time. This is an unpopular phrase, but I understand that it is true. It is important for the anti-corruption infrastructure to remain horizontal, which applies to each industry, but reforms should be carried out vertically. For example, customs. Have we solved the issue of corruption in customs? My impression is that we have not. Have we solved the issue of corruption in the tax system? My impression is that we have not. But the experience of the National Bank, or the experience of "Prozorro", Naftogaz, and even the DREAM system made in recent years, show that Ukraine is not an "unreformed" country. 

This is something we need to work on. Anti-corruption bodies and civil society should do everything possible to make the state accountable, search for corruption, and prevent it. But vertical reforms are much more important, because they reduce the field for corruption, not just find it. In my opinion, we have done a lot with civil society in horizontal construction of infrastructure, but vertical reforms in the energy sector and other issues, like the land market, have a long way to go.

— Thank you! That is, we need a “Deep State”, a map that shows the frontline of corruption, where corruption remains, and where it is no longer there? And we need such a time machine. You scroll through and see, how the front has changed.

— Well, I guess, at least at the level of estimates. And if there is none, Oleksii, you always leave a lot of space for the Russians. And we have nothing to say except  that we are working hard. And we really are working hard. Civil society, the state, and international organizations are working hard on this.

— Thank you! I actually have 5 more questions, but I think I will skip some and choose the ones that are most interesting to me. We have to talk about cities. We had certain expectations of what the reconstruction would look like. Last summer there were expectations, and now we are talking in the summer of 2024. Tell me please what were your expectations regarding Ukrainian reconstruction? How did you understand it then and now?  And whether your expectations were fulfilled, or were they not realized?

— I have again three points. The first point is that from the very first days of the war and the very first days of the need for reconstruction, I understood this was not a one-day effort. I remember the discussion when the pandemic started, somewhere in March 2020. Then, I asked to organize a webinar with the banks. I tried to tell them one important thing: "The pandemic is not for two months, it's for a longer period and you need to prepare to work in such difficult conditions." On March 11, 2022, I had a meeting in London the day after the board meeting, which approved the first aid for Ukraine from the IMF, with Odile Renaud-Basso, the President of the European Bank for Reconstruction and Development (EBRD), regarding the need to work on rebuilding institutions for reconstruction. You and I have talked a lot about this in recent years. The reconstruction of Ukraine is a matter, if not for generations, then certainly for decades. And therefore, it cannot be created haphazardly. The idea that you simply work in a "today-for-today" format is again a trap of short-sightedness. No one is working on a longer-term idea, then you actually get to a situation where someone asked me in London, at the London conference: now we have a quick recovery, and after that there will be a reconstruction? I said quick recovery will be followed by quick recovery and then another quick recovery after that. Well, simply because you don't have a longer plan. And of course, this is the first point.

The second point is that when we met in London, when I organized the first recovery forum at the London School of Economics in May of 2022, everyone said that the reconstruction must start now, and it has already started now. I was sure of this, but it still looks like that the big reconstruction will begin only when the war is over. And now many people abroad are realizing this, who are ready to finance recovery in the future and so on. But here again it is important not to fall into another trap. I call it a trap because I want to avoid the 1948 moment. What is the moment of 1948 for me? The war ended in 1945, the Second World War. And the Marshall Plan, developed by the Americans to help Europe, was approved only in 1948. If we all read the book by Tony Judt "Postwar," that is, after the war – and you and I did not study it, at least in the university or at school if you are not a historian of Europe. I didn't study it, what a mess Europe was in, actually, after the Second World War.

I want to avoid the fact that three years after the war is over, we will be working on a reconstruction plan. And so, when I can even accept that quick recovery now is right, and full reconstruction after the war is also right, but it is also right to prepare it, to plan it, to do it, to develop ideas, to form some groups of people, consortia that will work on the first possible day after the end of the war and receiving some security guarantees. It has to be done now, and it should have been done yesterday, and if we don't do it now, we will actually be trapped in 1948.

That is, it will take many years, and we will not be able to do it from scratch. We must work on institutions, and these institutions must have their capacity, and we must think long-term, this is not short-term thinking for us. And one more point – we have also talked about this with you before – if today we were given 300 billion dollars of Russian assets and told to rebuild the country, we would not be able to process 30 from it even for a year. We have a lot of restrictions inside the country that, unfortunately, limit us in a full-fledged recovery. And it is necessary to work now to remove these restrictions as much as possible in order to increase the capacities for us – the capacity constraints they are called – in order to expand them. Because the war will definitely end; we all hope that we will win the war; but when it is over and we want to rebuild, the speed of this rebuilding may be much slower, and it may worsen people's attitudes, worsen the return of refugees from Europe, because they will see that it is a very long time. We need to work on solving these problems now, and I think we are not working on it yet. I would definitely encourage such organizations as BRDO or other think-tanks in Ukraine to work in this direction.

— I know you read a lot and think about cities. I'm not a great expert in urban planning, but when I talk to you about this, I imagine simulations. For example, I know there's Cities Skyline, and you say that in order to learn how to plan for rebuilding, we need to learn how to plan cities. Tell me, please, is it so?

Yes, I believe that the city itself is, in my opinion, is elemental  for reconstruction. In particular because most of the reconstruction needs are actually in the cities. If you read the World Bank report, it talks about housing issues and the internal infrastructure of cities which are already destroyed and need to be rebuilt. We talked about this recently. 

I mentioned it to Viktor Nestulia: if you look at the DREAM system, the elemental object is currently a house, hospital, school, residential building, private building, or high-rise building. And I think that's true, and it needs to be worked on. But if we just focus on individual objects at this level, we're going to kill the ability to build back better. Because, well, you're going to build a house – but you have a street, how do you build the house? You build as it was? As many floors as it had? As many square meters as this apartment had before? How will you do it?

If you climb a little higher and look at least by neighborhoods, or better by districts, but even better by cities – 50-, 75-, 100-thousand-people cities – then you can implement all the ideas you want there. But for this you need long-term thinking, not short-term thinking. You can implement ideas for the green economy and the digital economy, and even try to think of some new social contracts with the population that will live in this city – for example, in waste management. Because we know that this is a problem even at the household level – we don't do waste management and recycling. That's why I think it's necessary to focus on the city and here you say that you have no experience. We have many people who are urban planners, and it was very interesting for me to understand that most urban planners are architects. That is, people who studied urban planning in architecture. And I tried to find people who are economists to understand what the city is from an economic point of view. We don't have many such people with whom you can talk about it. And I was sad that it is the way. 

I will be giving a lecture next week, it's not even a lecture, it's an interactive lesson at the Kyiv School of Economics, because they opened an urban planning department. And I want to talk with the students, ask them some questions, and give them some ideas about how to work on cities. In terms of cities, they can – no, they must be rebuilt, but so far there are many cities that are difficult to rebuild because they are either under occupation, or they are mined now, or they are on the front line. And the people from these cities live either abroad or live in other cities of Ukraine as internally displaced persons. Therefore, one of the ideas that I have is to try to think whether it is worth trying to build new cities in Ukraine. As you probably know, Ukraine did not build a single new city during the years of Independence. The last city we built was Slavutych in 1988. And literally yesterday, I learned a very interesting thing, that it is very difficult to build a new city legally in Ukraine.

Why? Because the Ukrainian legislation stipulates that you cannot build a city in a field, for example; it must be some kind of settlement that has at least 10 thousand people there, and then you can build there, and it can, at least, be designed as a city. But everyone has to work, and I think that there is a possibility that now there are 100+ new cities being built in the world in different countries: in America, Asia, Africa, in South America. Therefore, I think that this is not a replacement for the construction of cities, but it is another way of looking at recovery through the construction of new cities in Ukraine. I would like more people to deal with this topic, not only architects, but also economists who can understand what a city is economically today?

— Well, I cannot omit mentioning DREAM. 

When we designed the DREAM data model, we focused on projects that should be aimed at solving a functional problem. And there may be several different alternatives to solve one functional problem. And the project should always set a model, a conscious choice of the developer, the initiator of the project, the winning project, to solve this functional problem. If we talk about access to school education, then there may be a bus or a school bus program. There may be a school or you may have two schools in a settlement, and you can choose an alternative – to build a school in the middle. Or you can get to one school in a certain amount of time, and you choose exactly that school. Such a project. And the second DREAM story is that actually, according to the DREAM concept, there should also be a product called a geo-information system, specifically for urban modeling. And it seems to me that three announcements should be made here.

First announcement is if you are interested in the topic of reconstruction, and you are ready to join the preparation and approach to urban modeling, or you have the knowledge, skills or desire to devote a significant part of your life to this – please contact Vlad. He and I did not agree on this, but it seems obvious to me that this is also a platform that should be used for this. Those who listen to this podcast are interested in reconstruction, so that's definitely a target audience here.

The second thing is: if you want to develop a technical solution for modeling a city, please contact me, because we are ready to find resources, help assemble a team including the authorities. There is a lack of a team that would dedicate its efforts entirely to it. The team that develops Dream – the public portal, the user account – they are really focused on projects right now. We are looking for a team to work on its system. You may be in Ukraine, or perhaps you are already designing a city abroad. We are looking for such cases, we are looking for such people, and we are looking for such teams. Please contact me. This is really important.

The third announcement. If you are choosing what to study, then – if I understood Vladyslav correctly – then urban planning at the Kyiv School of Economics or other university could be an interesting field, because when you finish your study, most likely, there will be a lot of work there.

There is work for many more years. That is right. Thank you, Oleksii, for this. You can contact me, and I will gladly work with you. I really read a lot about it and think about it. 

But I can further advertise that in Ukraine today there is already a formed group of think-tanks, which also work on issues of urban planning. They have projects in different cities. Somewhere they are rebuilding something big or something small, and somewhere they are still planning. There is a moment of flourishing, there is a restart, a rethink, a rebuild. Approzimately a month half ago, I tried to list all such organizations on my Facebook page. There are already many initiatives that have united civil society, Ukrainians, experts, and professionals who want to do this. There are Technologies of Progress of Max Nefyodov, Viktoriia Titova in Big City Lab, Maks Yakover, Sasha Shevchenko with their organization, Drozdov in his prime. There are many people working on it. These are professional teams, but again, a lot of them are architects; a lot of them have hands-on stories. But it is not practical today. We must also think about tomorrow, and plan and strategize on this topic. And this is very important, and learning this is also important. Therefore, I really thank the Kyiv School of Economics and Tymofii Milovanov for creating such a program where students are engaged. I hope to see many interested students when we meet next week. 

— Thank you. Join these teams. Well, Vlad, as always it was very interesting and nice to talk with you. Let me remind you that today we had Vladyslav Roshkovan, Alternate Executive Director of the IMF, and Oleksii Dorogan, CEO of BRDO and Member of the Board of the RISE Ukraine coalition.

— Thank you, Oleksii. May I add one more thing? You and I also talked about this, that usually I am a person who calls himself an integrator. That is, I try to unite people, unite teams, unite initiatives. My concept is that I want to work with the best, where I am the stupidest in the room, and when other people are much smarter than me, especially in some specific areas. And I think that one of the issues that prevents people from uniting and cooperating – and this is a big problem for Ukraine – is what I call the lack of horizontal transitive trust. That is, I trust you, but that does not mean that I trust the next person you trust.

I would like to encourage, somehow call on people who are listening to us now, to give other people a chance, to try to trust other people more, especially through transitive trust. That is, if you trust Oleksii Dorogan, then listen to those people he invites to his podcasts. He will not invite bad ones. If you are talking to other people you trust, then listen to the people they are trusting, too. We need to unite. And together we will definitely beat this… As they say, many hands make light work. We will definitely beat the enemy. And we have to win not only the war, but to win the peace after the war. And this is a large part of the reconstruction of not only architecture and infrastructure. It is a large part of the reconstruction of our society, which can actually be built on two things. The first is based on trust, and the second is based on our common vision of the future. Trust must be rebuilt and then we will be able to rebuild a better future. I am absolutely sure that we will succeed. Both with the help of the USA and with the help of other countries, and thanks to the fact that we will take Russian assets and to the fact that we will fight corruption in Ukraine. But first of all we will defeat our enemy. Thank you for everything, everyone who listens, for what you are doing on your front, whatever front it may be. Thank you!