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University College London

School of Slavonic and Eastern European Study

2012-2013 Countries Corruption Report

Myanmar, Russian Federation and Ukraine

This report is part of SEESGS09: Causes, Consequences and Control: Corruption and Governance

Candidate Number: 12082842

Course Tutor: Professor Alena Ledeneva

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Table of Content

Country Profile Russian Federation 1

Country Profile Ukraine 2

Country Profile Myanmar 3

Overview 4

International 6

National Government 11

Private Sector 15

Civil Society 18

Conclusion 25

Bibliography 26

Appendix 26

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RUSSIA

TICPI 2012 : Rank 133rd

Score 28/100

Global Corruption Barometer: Russian Perception of corruption toward institutions (1=not at all, 5=extremely corrupt)

Institutions Political parties

Parliament Police Business Media Public officials

Scores 3.5 3.6 3.9 3.4 3.2 3.9 Institutions Judiciary NGO Religious

bodies Military Education

Scores 3.7 3.1 2.5 3.5 3.7

Global Corruption Barometer: Change in level of corruption in the past 3 years Government action in fighting against corruption Institution most affected by corruption

39%=same 53%=increase ineff =52% eff=26% Judiciary

The Failed States Index 2012 83rd of 177 countries Score 77.1

- Criminalization &/or Delegitimization of the State

8.1/10

- Suspension or Arbitrary Application of the Rule of Law and Widespread Violation of Human Rights

7.9/10 (0=most/10=least stable)

Economist Intelligence Unit Democracy index 2010 6.30 rank 67th of 167 Freedom House, Nations in Transit, “corruption” indicator 2010

6.50 (1=highest/7=lowest democratic progress.)

Global Integrity Index 71/100 (Moderate) Bribe Payers Index Rank 28th/ Score 6.1 Area 17,075,400 km2 (total)

Water 13% (including swamps) Population 143,369,806 2.02% of world Government Federal Semi-presidential

Constitutional Republic - President Vladimir Putin - Prime Minister Dmitry Medvedev

Official Language Russian official throughout the country; 27 other languages co-official in various regions

Major exports Oil, natural gas, metals,timber

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UKRAINE

TICPI 2012 : Rank 144th

Score 26

Global Corruption Barometer: Russian Perception of corruption toward institutions (1=not at all, 5=extremely corrupt)

Change in level of corruption in the past 3 years Government action in fighting against corruption

63%=same 30%=increase ineff=59% eff=19%

Institution most affected by corruption Judiciary The Failed States Index 2012 113th of 177 countries

Score 67.2 Criminalization and/or Delegitimization of the State 7.7/10 Suspension or Arbitrary Application of the Rule of Law and Widespread Violation of Human Rights

5.4/10 (0=most/10=least stable)

Freedom House, Nations in Transit, “corruption” indicator 2010

6.0 (1=highest/7=lowest democratic progress.)

Global Integrity Index 58/100 Main issue of concern Torture and ill treatment

detention. Hostility to asylum seeker, hate attcks on ethnic minorities.

Area 603,628 km2 (total) Water 7% (including swamps)

Population 45,539,121 0.64% of world

Government Unitary Semi-presidential Republic

- President Viktor Yanukovych - Prime Minister Mykola Azarov

Official Language Ukrainian and 18 recognised regional languages

Major exports Oil, natural gas

Institutions Political parties

Parliament Police Business Media Public officials

Scores 4.0 4.1 4.3 3.7 3.2 4.1 Institutions Judiciary NGO Religious

bodies Military Education

Scores 4.4 3.2 2.3 3.5 4.0

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MYANMAR

TICPI 2012 :

Rank 172

Score 15

The Failed States Index 2010 (FSI) 21th of 177 countries Score 96.2

- FSI : Criminalization and/or Delegitimization of the State

9.4/10

- FSI: Suspension or Arbitrary Application of the Rule of Law and Widespread Violation of Human Rights

8.6/10 (0=most/10=least stable)

Area 676,578 km2 (total) Water 3.06%

Population 49,120,000 0.69% of world

Capital Largest city

NayPyiDaw Yangon (Rangoon)

Currency Burmese kyat : 1 USD = 888.494 MMK

Government Unitary Presidential Constitutional Republic - President Thein Sein

Official Language Burmese ; recognized regional languages : Jingpho, Kayah, Karen, Chin, Mon, Rakhine, Shan

Ethnic Groups 68% Bamar 9% Shan 7% Karen 4% Rakhine 3% Chinese 2% Indian 2% Mon 5% other

Economic activities

Agriculture, Tourism

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Overview: Russia – Ukraine – Myanmar

Corruption cannot only be defined as ‘misuse of public office for private gain’

Corruption is culture. The study of corruption as contextualized into social values and

norms explains variations of corruption practice among countries1. This report

investigates corruption convention in three hierarchical societies: Myanmar, Russia and

Ukraine. The investigation explores corruption climate during 2012-2013 and presents

corruption related events conferred on countries’ background such as economic level,

ethnic make-up, political legacies and social structure. Overall picture of corruption in

the three countries can be summarized with 3P- Politics, Pressure and Progress.

Critical roles of politics in the three countries are evidenced from long

established authoritative regimes. Political figures have been taking part in laying down

economic foundation. This phenomenon fabricates close tie between politics and

business sectors. Most forms of activities can run more smoothly with Approval from

officials. Corruption is not only accepted but also expected.

Growing dependency on global and regional level puts pressure toward these

countries in adjusting their political and economic structure to meet international

standard. Although the outcome is far from success, some adjustment obviously has

been made. Myanmar and Ukraine are relatively leaning toward harmonization with

1 Model of social theories with behavioural tendencies, psychological factors, social norms, social sanction see

Akerlof 1980; Benabou and Tirole 2003; Lindbeck et al. 1999; with reference to corruption see Andvig and Moene 1990; Abigail Barr and Danila Serra 2006; Hauk and Saez Marti 2002. 2 Country Data Report for MYANMAR.http://info.worldbank.org/governance/wgi/pdf/c146.pdf

3 Country Data Report for RUSSIAN FEDERATION. http://info.worldbank.org/governance/wgi/pdf/c187.pdf

4 Country Data Report for UKRAINE. http://info.worldbank.org/governance/wgi/pdf/c226.pdf

Worldwide Governance Indicator 2011

(Published, July 2012)

Myanmar2 Russia3 Ukraine4

Voice and Accountability 2.3/100 22.5/100 46.5/100

Political Stability/Absence of violence 13.7/100 20.8/100 41.5/100

Government Effectiveness governance indicator 2.4/100 42.2/100 21.8/100

Regulatory Quality Indicator 1.4/100 38.9/100 31.8/100

Rule of Law Indicator 4.2/100 25.4/100 23.0/100

Control of Corruption 0.5/100 13.3/100 17.1/100

Transparency International Corruption Perceptions Index

Rank 172

Score 15

Rank 133rd

Score 28

Rank 144th

Score 26

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their regional grouping and the United States than Russia who seek regional

domination. Myanmar is going to chair ASEAN in 2014 and Ukraine is expecting to sign

a comprehensive Free Trade Agreement with the EU in September 2013. In December

2012, Russian Foreign Minister stressed the importance of the independence of Russia's

foreign policy and that Russia simply cannot exist as a subordinate country of a world

leader5. The speech marks a contrast between Russia intentions and its action. In 2012

Russia ratified OECD anti-bribery convention as well as agreed to join the WTO. The

growing importance of economics over politics in international arena is well

pronounced.

During 2012-2013, Progress has been made as corruption condition shows its

effect on economies societies and international reputations. From January 2012 to the

present, anti-corruption campaign remains one of the top agenda of the elected

governments of the three countries. The improvement in economic and social condition

is also a drive toward combating corruption6.

Economic overview of the three countries is shown below. GDPs remain positive

even during period of economic recovery, with a remarkable growth for Myanmar.

Myanmar economic has been through the second year of openness, with increasing flow

of investment resulted from western sanction easing. Unemployment reflects

problematic picture of economic and social especially for Ukraine.

5 Sergei Lavrov speech at the 20th Jubilee Meeting of the Council on Foreign and Defense Policy, December 1,

2012, Moscow. http://dlib.eastview.com/browse/doc/28399318 6 For the study on what effect corruption see for example Daniel Treisman (2000) The causes of corruption: a

cross-national study.

Myanmar Russia Ukraine

GDP per capita

Real GDP

Import growth

Export growth

Unemployment

Rank 157th $835

6.3%

16.1%

6.1%

4.0%

Rank 47th $14,247

3.4%

5.3%

3.0%

6.0%

Rank 106th $3,877

0.1%

2.0%

5.2%

8.0%

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International

International platform can serve as an incentive or a pressure for national

governments to meet international standards. The improvement in corruption

condition is not only done through direct attempt to address the problem but also

through improvement in political and economic conditions.

The direct attempt to tackle corruption has made substantial progresses in

Myanmar and Russia. On October 29, 2012, Myanmar Director-General of the Bureau of

Special Investigation U Aung Saw Win shows intention to comply with United Nation

Convention against Corruption (UNCAC). Myanmar signed the convention back in 20057

and is working toward its ratification. The next step for Myanmar is to adopt Anti-

Corruption Law, one which is under drafting process at the moment8. Both Russia and

Ukrine ratified UNCAC convention in 2006.

Russia takes another step in dealing with corruption on international platform

by ratifying OECD Anti-Bribery Convention on February 17,2012. The convention aims

at preventing active forms of bribery, making it illegitimate for international business to

engage in foreign bribe payments9.

Ukraine agreed with European Bank for Reconstruction and Development in

February 2013 to launch anti-corruption initiative, in respond to concern about the

effect of corruption on investment climate in the country10. The initiative will stress on

the implementation of anti-corruption law at all level of politics.

The Council of Europe's anti-corruption monitoring body GRECO provides a

positive feedback on Ukraine’s progress on its anti Corruption program implimentation

on March 22,2013 at the 59th GRECO plenary meeting. The progress includes etical

7 “Joint Statement by Mr. Jason Eligh, UNODC Country Manager and Mr. Toily Kurbanov, UNDP Country

Director on the International Anti-Corruption Day, 9 December, 2012” http://www.unodc.org/documents/southeastasiaandpacific//2012/12/anti-corruption-day/AC_Day_joint_statement_-_Myanmar_-_UNODC_UNDP_09_Dec_2012_.pdf 8 Myanmar prepares to join UN anti-corruption framework. 2012.

http://www.unodc.org/eastasiaandpacific/en/myanmar/2012/10/uncac/story.html 9 Russia - OECD Anti-Bribery Convention. [online]. Available-from: http://www.oecd.org/corruption/russia-

oecdanti-briberyconvention.htm 10

Economic News.February 18, 2013. EBRD Steps Up Cooperation with Ukraine in Fight against Corruption. [online]. Available-from: http://dlib.eastview.com/browse/doc/28661920

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training of officials, adopting the legislation regarding confiscations, legal entity crime

and financial control11.

Indirect encouragement from international platform for improvement in

corruption climate for these nations engages the broader political economy context of

the regions. The development of social and economic issue is collateral to development

of transparency and rules of law. The indirect encouragement from international

organization can be seen in three forms, as incentives, as sanction and as cooperation.

A conditional foreign aids has plays an essential role in being an incentive for the

countries to improve their corruption quality. The loan improves corruption conditions

in three folds. First, they are incentives for the country to perform in accordance with

preliminary criteria. Second, the process of loan structuring renders how loans should

be managed. Third, the condition on how the loan must be spent can restructure the

sectors in the country. Myanmar has received new loans from The World Bank and

Asian Development Bank12 at $952 million, as well as Japan overseas development

assistance at $18 billion13 in the second half of 2012 alone14. The loans are only allowed

to be spent for road, energy, irrigation and education15. The lenders are expecting the

loan as an investment for sustainable growth. Ukraine is receiving aids mainly from the

EU and the US. The funding package from the EU lasts from 2011-2013 totaling $682

million with the requirement to be spent on energy cooperation, strengthening border

controls, bolstering the judiciary and the rule of law, and addressing environmental

concerns16. The US requirements for 2012 annual funding to Ukraine totaling $113.878

million do not differ substantially from the EU. The funds are requested to be spent on

11

United Business Media. 22 March 2013. GRECO Approves Ukraine's Anti-Corruption Progress. [online]. Available-from: http://www.belgamediasupport.be/pressrelease/detail.do?pressId=31838&type=thisweek&searchKey=48613da9-935d-11e2-a59e-95aac39bb42f&languageId=EN&pageIndex=1 12

Radio Free Asia. 1 August 2012. Development Banks Back in Burma. [online]. Available from: http://www.rfa.org/english/news/burma/world-bank-08012012180923.html 13

Stephani Chow. 6 December 2012. Japan Sprints to Myanmar’s Aid. [online]. Available from: http://globalprosperity.wordpress.com/2012/12/06/japan-sprints-to-myanmars-aid/ 14

Myint Thin. 6 February 2013. The Prospects for Burma’s Economic Development. [online]. Available from: http://www.irrawaddy.org/archives/26198 15

New Statesman. 28 January 2013. ADB And World Bank Grant $952m Loan For Burma. [online]. Available from: http://www.newstatesman.com/business/business/2013/01/adb-and-world-bank-grant-952m-loan-burma . 16

Europa Press Release. 2 March 2011.Commissioner Štefan Füle signed today a Memorandum of Understanding on the National Indicative Programme for Ukraine. [online]. Available from: http://europa.eu/rapid/press-release_IP-11-250_en.htm

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Economic purpose, Health program, Foreign Military, nuclear facilities and improving

governance, accountability and effectiveness of the judiciary.

Russia accused USAIDS grants as embodied political motives and called for the

operation of USAIDS to ceased in October 201217. The event reveals how vulnerable

Russian feels toward interference in its democracy and election, as well as perception

toward the importance of the grants as a method to bring about practicable change.

Consider foreign aids incentives as carrots for countries to perform accordingly,

the sticks have been used to press for desired behaviors. Myanmar faced sanction from

western nations since its civilian crackdown in 1988. The sanction blocked the

opportunity of investments for Myanmar, which would have generated positive

spillovers by bringing income, technology and better working conditions. 2011 election

coupled with 2012 by-election and political reforms prompted western countries to lift

sanction against Myanmar. US led sanction lifting in April 2012, authorizing US business

to deliver financial services to Myanmar, followed by several easing packages in July,

November and recently in February 2013. The US restriction still exists when it comes

to businesses with ministry of defense officials’ ownerships. A list of names of

businessmen and companies with close tie to military junta has been publicized and

updated on regular basis. The notorious name removal was one in September 2012

where Myanmar president Thein Sein is no longer on the US Treasury Department

watch list18.

On April 22, 2013, The European Union announced to void the last set of

sanctions against Myanmar19. Series of sanction lifting has let a controversial debate on

the consequences. Critiques say premature easing would lead to sustenance of the

established connection of the regime. On the other hands, supporters see flows of

investment would bring in western liberal ideas to the country and support

improvement of equality, democracy and gradually destabilize the domination of the

regime.

17

BBC. 19 September 2012. Russia expels USAID development agency. [online]. Available from: http://www.bbc.co.uk/news/world-europe-19644897 . 18

Center for Strategic and International Studies. 26 February 2013. U.S. Further Eases Sanctions Against Myanmar Banks. [online]. Available from: http://csis.org/publication/us-further-eases-sanctions-against-myanmar-banks 19

BBC. 22 April 2013.EU lifts sanctions against Burma. [online]. Available from: http://www.bbc.co.uk/news/world-asia-22254493

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The last set of indirect anti-corruption encouragement associates with

cooperation on international platform. Similar to foreign aids, cooperation prompts

development for corruption in three levels. The first level would be pre-cooperation

incentive. The European Union has proposed its cooperation with Ukraine on a

condition of political reform. During the 16th European Union-Ukraine Summit on

February 25, 2013, President of the European Council shows the willingness to sign a

comprehensive Free Trade Agreement with Ukrine by november 201320. Upon the

agreement, foreign minister of several EU members shows concerns that Ukraine

Jurisdiction could be an obstacle if no reform had been taken by then regarding its

detention of the ex-prime minister Tymochenko. A German-EU parliamentarian,

Rebecca Harms also expressed concern that Ukraine’s preparation for UEFA European

Football Championship 2012 might involve corruption21. Ukraine willingness to tighten

its relationship with the European Union has clearly provided European Union an

opportunity to demand some change in certain political condition in the country.

Pressure has also been placed on Russia for the case involving Sergei Magnitsky.

Magnitsky was an auditor at Firestone Duncan, a Moscow law firm. He was arrested and

jailed after revealing document related to corruption and fraud in government state-

owned enterprised. Paradoxically he was accused of tax fraud and was arrested and

died in prison in 2009. On April 18, 2013 the United States publicized Magnitsky

blacklist, a list banning Russia officials believed to be involved in bringing injustice to

the case from investing or acquiring entry to the US. The list is responded to Magnitsky

act which was signed on December 14, 2012. The effectiveness of this pressure is

contested. The Russian law already banned officials from holding a foreign bank

account. Russian respond to the act has only been to release Dima Yakovlev law, which

prohibit US citizens from adopting Russian Orphan. The foreign minister further

published a blacklist of US official they believed to be engaged in human rights

violation22.

20

EEAS Press and Media. http://eeas.europa.eu/top_stories/2013/250213_eu-ukraine_en.htm 21

Interfax. 15 June 2012. EU Lawmaker: Ukraine’s Euro 2012 Preparations Involved Big-scale Corruption.

[online]. Available-from: http://dlib.eastview.com/browse/doc/27287204 22 The Moscow times. 18 April 2013. A Smarter Way to Fight Corruption.[online]. Available-from: http://dlib.eastview.com/browse/doc/29412424

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On the second level, becoming a member require compliance of the nation to the

organization rules. Russia joined World Trade Organization in August 22, 2012,

committing itself to another step of economic development. The rules contain several

points related to corruption, such as transparency, free and fair competition on the

business platform.

The third level places the country on the position with high responsibility.

Myanmar is preparing itself to be appointed as chair of Association of South East Asian

Nations (ASEAN) in 201423. Likewise, Russia is currently holding G20 presidency. One of

its priorities is to boost growth through trust and transparency by fighting corruption24.

The position would require the country to be the driving force in managing relationwith

external partners25. It is therefore important for the country to maintain good

reputation.

23

World Report 2012: Burma. [online]. Available-from: http://www.hrw.org/world-report-2012/world-report-2012-burma 24

The Russian Presidency of G20.[online].Available from: http://www.g20.org/docs/g20_russia/outline.html##13 25

ASEAN Secretariat News. 28 March 2013.Myanmar Prepares for ASEAN Chairmanship in 2014.[online]. Available from: http://www.asean.org/news/asean-secretariat-news/item/myanmar-prepares-for-asean-chairmanship-in-2014

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National Government

Governments’ attempts to fight against corruption can be seen from the

legislation and its enforcement. As for legislations, Myanmar is working toward the

drafting of anti-corruption law in preparation for the ratification of United Nations

Convention on Anti-Corruption26. Russia has been on Medvedev’s Anti-Corruption

scheme since 2008. This federal anti corruption law has been through series of

amendments as part of a drive toward Russian anti-corruption milestone 27. On

November 23,2012 anti-corruption legislation was passed requiring officials and their

family members to justify their spending if its exceed declared family income28 which

compliment the existing law requiring disclosure of officials’ income and property. On

April 24, 2013 Russian lower house passed a bill prohibiting officials from possessing

foreign bonds, stocks or bank account29.

The implementation of the law has also been tougher than 2011. Many high rank

officials have been taken onto court. The most notorious case is probably the

Oboronservis Case, a large-scale fraud in ministry of defence strategic Missile Forces

upgrade program, involving more than $17 million30. The case is still on going, on March

28 2013 Defence Ministry’s property department, Yevgenia Vasilyeva, accused of

embezzlement shares in the 31st State Design Institute of Special Construction of $6.1

million31 adding up as a new convict to the case. Ministry of Health and Social Policy was

exposed as engaging in embezzlement of HIV drug deal worth $689million32.

26

See more Myanmar corruption related law (translated) http://track.unodc.org/LegalLibrary/Pages/home.aspx?country=Myanmar 27

Debevoise&Plimpton LLP. Anticorruption Compliance Programs Under Russian Law: Article 13.3 and the FCPA/UKBA Experience. FCPA Update. April 2013. Vol.4, No.9, Pp 7-11. [online]. Available from: http://www.debevoise.com/files/Publication/bc8b847b-01c4-4e86-ae97-f32b428a28ed/Presentation/PublicationAttachment/0f59599f-a837-45b1-905f-0e80f3f134dc/FCPA_Update_APR_2013_proof_3.pdf#page=7 28

The St.Petersburg Times. 28 November 2012. Duma Passes Legislation to Curb Expenses Fraud. [online]. Available from: http://sptimes.ru/index.php?action_id=2&story_id=36609 29

Rianovosti.24 April 2013. Duma Bans Overseas Accounts for-Public-Officials. [online]. Available from: http://en.rian.ru/russia/20130424/180826527.html 30

Rianovosti. 24 January 2013. Russian Police Probe $17 Mln Missile Forces Fraud. http://en.rian.ru/crime/20130124/178995853.html 31

Rianovosti. 28 March 2013. New Charges Pressed Against Suspect in Oboronservis Case. http://en.rian.ru/russia/20130328/180295285/New-Charges-Pressed-Against-Suspect-in-Oboronservis-Case.html 32

Interfax. 13 November 2012. Officials with former Health and Social Development Ministry suspected of corruption. http://dlib.eastview.com/browse/doc/28092985

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The effort has been questioned for its political will33. Many doubt that the

program has been used as propaganda for Putin to rebalance his support from the

public. Each of the corruption case is reported by the Investigative Committee and the

prosecutors’ office. Both of the offices rely directly on the President. The cases are also

publicized via Kremlin-controlled media.

The war against corruption is also seen as a political tool to signal the dominant

role of the president among his team and to dispel political opponent34. Gennady

Gudkov, a former deputy in Russian State Duma was voted out from parliamentary

mandate on September 15th, 2012 for engaging in profiting from a construction firm

called Kolomensky Stroitel while he was in the position. Alexei Navalny, former member

of Russian United Democratic Party and a popular anti-corruption activist and blogger,

has been put on trial in April 2013 for embezzlement of $500,000 with National Timber

Company and two other fraud cases.

These events would have been marked as an improvement in investigating

corruption cases against politicians, had it not aimed to people who had been active in

opposing the regime. Both politicians claimed the trial aims to dismiss them from

political venue. Gennady Gudkov is known for his active role against Putin and his

domination35. Navalny is known as a corruption activist blogger36, he led protests

against the government including one against Putin’s re-election on 5th march 2012.

Interestingly, both have regarded United Russia, the current government’s party as

‘crooked’.

Similar occurrence found in Ukraine with the case of former Prime Minister Yulia

Tymoshenko, a political rival to Viktor Yanukovych, the current president. Tymoshenko

has been sentenced to prison for 7 years for abusing office when engaging in a gas deal

with Russia in October 2011. The charge on gas deal has been regarded as selective

33

The Russia Monitor. 7 December 2012.War on Corruption – What to Make of the Latest Scandals? [online]. Available from: http://therussiamonitor.com/2012/12/07/war-on-corruption-what-to-make-of-the-latest-scandals/ 34

Centre for Eastern Study. 21 September 2012. War against corruption the Russian way: Putin versus his inner circle. [online]. Available from: http://www.osw.waw.pl/en/publikacje/eastweek/2012-11-21/war-against-corruption-russian-way-putin-versus-his-inner-circle 35

Bloomberg. 29 August 2012. Russia’s Corrupt Crackdown on Corruption. [online]. Available from: http://www.bloomberg.com/news/2012-08-29/russia-s-corrupt-crackdown-on-corruption.html 36

BBC. 16 April 2013. Profile: Russian opposition leader Alexei Navalny. [online]. Available from: http://www.bbc.co.uk/news/world-europe-16057045

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prosecution by the European Union and the United States. On April 30, 2013 European

Court of Human right ruled that her pre-detention in 2011 had been arbitrarily37.

Instead, Tymoshenko is currently being brought through an investigation of a murder of

a businessman in 199638. This recent accusation makes it appears as if the regime is

trying to keep her out of politics.

Ukraine election on October 28, 2012 evidence the success of President

Yanukovych’s party in coming back to the position with 45% of the votes. During the

election Tymoshenko underwent hunger strike in prison. International observiers

including Organization for Security and Co-operation in Europe (OSCE) condemn the

election as full with abuse of power39. On the day to follow Svoboda nationalist party

Oleg Tyagnibok warn the government to hold a protest against the election fraud40. The

protest finally broke out on November the 5th 201241. The resulted continued to be

finalized and implemented.

Strong and competitive opposition can limit the span of corruption. Anna

Grzymala-Busse (2007) discuss robust competition of opposition party, the condition in

which the opposition is idenfifiable, compatible as an alternative government, and

ceaselessly monitor and criticize government wrong-doing. These characteristics seems

to be absent from politics of Myanmar, Russia and Ukrine. Domination of government

party and subordinate role of opposition conduce to difficulty in questioning public

policies and hence, intensify corruption. Myanmar is known for its long established

regime. Political will, as a fundamental contribution to anti-corruption policy is

practically absent from the country. The current ruling party has made it secured for

them to keep their supremacy. Myanmar national by-election on April 1st 2012

attempted to show its generosity for opposition party by allowing the National League

37

The Wall Street Journals. 30 April 2013.Court Ruling Favors Ukraine's Ex-Premier. [online]. Available from: http://online.wsj.com/article/SB10001424127887323528404578454672265982776.html 38

The independent. 22 MARCH 2013. Yulia Tymoshenko could face murder charges at any moment. [online]. Available from: http://www.independent.co.uk/news/world/europe/yulia-tymoshenko-could-face-murder-charges-at-any-moment-8546509.html. 39

BBC. 29 October 2012. Ukraine election 'reversed democracy', OSCE says. .[online]. Available from: http://www.bbc.co.uk/news/world-europe-20120888 40

ITAR-TASS Daily , October 30, 2012. Ukraine nationalist leader threatens protests in case of election fraud. .[online]. Available from: http://dlib.eastview.com.libproxy.ucl.ac.uk/searchresults/article.jsp?art=2&id=27943435 41

Reuters. 6 November 2012. Ukraine leadership blocks recount, election protest stalls. http://www.reuters.com/article/2012/11/05/us-ukraine-election-protest-idUSBRE8A40BI20121105

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of Democracy, the party led by Aung San Su Kyi to participate in the election. The

government also called for western observation to ensure its fairness42. It should be

noted that the election only allowed the opposition to challenge 48 out of 600 seats, and

the voice of government is not at all threatened.

Ukraine opposition shows to be more active. Although the strong domination of

the governing body is obvious from the case of ex-premier, the Ukraine opposition was

able to discuss Government Issues. On November 28, 2012, Batkivshchyna, opposition

party accused Ukrainian President Viktor Yanukovych and other high raking officials for

deciding on the investment to build a liquefied natural gas terminal in Odessa with

Spanish company Gas Natural Fenosa43. The effect from the accusation is marked to be

minimal. The companies and the accused officials denied and the case had to be

dropped.

42

The NewYork Times. 21 March 2012. Myanmar Invites Americans and Europeans to Monitor Vote.[online]. Available from: http://www.nytimes.com/2012/03/22/world/asia/myanmar-invites-western-election-monitors.html?_r=0 43

Interfax, November 28, 2012. Ukraine opposition demands president, PM be punished for alleged fraud. .[online]. Available from: http://dlib.eastview.com/browse/doc/28162298

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Private Sector

Economics and Business claims to be the driver of many aspect of development

including corruption. Daneil Treisman (2000) suggests that economic growth plays an

even more essential role in combating corruption than democratization. Business

serves as the supply party of corruption. It is no longer customary to comply with

transaction tradition of the society without any reservation. Businesses hold the ability

to negotiate with legislators and can be a driving force in demanding fair competition.

The ability for the private sector to fight for corruption displays in three facets.

The private sector can invest in improving corruption condition in the society, it can

directly tackle corruption problem by for example negotiating with the government or it

can reveal the inappropriate transaction with government officials.

With regards to preconditions appropriate for combating corruption in the

society on March 22, 2013, Google chairman gave a statement addressing Myanmar’s

necessity to allow private business to engage in development of telecommunication

infrastructure of the country44. The country poor information related infrastructure

reflects the era of government information control. Only 1% of the population have

access to the Internet at the current according to World Bank data. The situation makes

it utterly difficult for corruption to be tackled. Lack of information infrastructure

prevents the circulation of information, provides people with limited portal to voice

their experience toward corruption and support government to engage in public

activities in confidentiality.

An entrepreneurial initiative can take on corruption. A former senior editor of

Russian magazine called Afisha introduced an iPhone application in October 2012,

aimed to raise awareness about corruption. The application allows people to easily

report corruption activities, right when they happen to be engaged with one. Only a

week after the launch of application, bribery worth of $45,000 has been reported45. The

initiative has gained a lot of attention. The application shows the potential of tackle the

44

FoxNews. 22 March 2013. Google chairman urges Myanmar to embrace free speech and private sector telecom development.[online]. Available from: http://www.foxnews.com/tech/2013/03/22/google-urges-myanmar-free-speech/#ixzz2SDxXm4NQ 45

The Moscow Times. 10 October 2012. Corruption Fight Gets iPhone App. [online]. Available from: http://dlib.eastview.com/browse/doc/27808612

SEESGS09 12082842 18

problem more seriously. By shifting the aim from raising awareness of corruption, now

the corrupt official can be taking on to the legislation process as well.

The major setback for corruption in the private sector for the three countries is

common, the strong partnership between ministry officials and local companies. The

easing on state ownership in Myanmar has provided opportunities for business to

invest in various sectors. Those with good informal relationship often manage to gain

the bid. This is evidence in infrastructure and energy sector. Parami Energy Group, the

leading energy company states their close tie with the ministry of energy and the

Myanmar Oil and Gas Enterprise clearly in the CEO interview46. The company has

successfully been selected to lead oil and gas exploration project in the country. The

need for investment to the country might shake its long established stability as on

March 6, 2013 Energy of ministry announce access to Myanmar deep-water oil block for

foreign firms starting from April 201347. The current bidding for telecom infrastructure

in Myanmar involves 18 telecommunication companies is being watched for fraud and

bribery. Former telecoms minister Thein Tun is under investigation for corruption,

causing the bidding result announcement to delay to mid 201348.

While the government is trying to fight corruption from the gainers side, sacking

officials engage in corruption in the country, Gazprom, Russian Energy Company was

found to be offering ‘bribery’ in Cyprus in March 2013. The company negotiate to bail

out Cyprus from its debt in exchange for access to the nation’s natural gas field. The

offer is a strategic move of Russian government. The former offer it made was to the

government of Ukraine. Rejection from Ukraine government led to the cut off of gas

shipment in winter. Cyprus president said to reject Russia offer in March49.

The same company, Gazprom accuses Ukraine of fraud in the reverse shipments

of Russian Gas from Europe. The company is taking a hard stance to receive a desired

response from Ukraine. As Ukraine seek supplies of gas from central Europe to replace

the expensive gas from Russia, Russia has reacted with a dispirited stance stating the

46

Myanmar Upstream. Parami Energy. http://www.cwcmyanmar.com/parami-energy/ 47

AFP. 6 March 2013. Myanmar loosens grip on oil sector.[online]. Available from: http://sg.news.yahoo.com/myanmar-loosens-grip-oil-sector-192407515--finance.html 48

tmt finance. 31 January 2013. MTN and Bharti join Myanmar bid. [online]. Available from: http://www.tmtfinance.com/news/mtn-and-bharti-join-myanmar-bid 49

Pacific Standard. 19 March 2013. Geography Note: Russian Energy Company Tries to Bribe Cyprus. [online]. Available from: http://www.psmag.com/blogs/the-101/russian-energy-company-tries-to-bribe-cyprus-54127/

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implausible of the plan50. The two events illustrate Russian Businesses’ rationale. It is

obvious that Russia will keep a hard grip to protect its interest. Although Ukrainian try

to play around the alternatives, the fact that the country has to depend on Russia makes

the compromise seems unlikely.

50

Reuter. 31 March 2013. Ukraine's gas buys from Europe "fraudulent", Gazprom says. http://www.reuters.com/article/2013/03/31/russia-ukraine-gas-idUSL5N0CN0AD20130331

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Civil Society

Consider the definition of corruption ‘abuse of public office/entrusted power, for

private gain’. A following assumption would suggest civil society as the most exposed

player in the corruption field. Civil society lacks of concrete power such as authority and

resources. It is compensated with subjective power such as judgement and acceptance.

Only in societies where these powers can be expressed can civil society be recognized as

an important player.

This report explores the role of civil society and corruption in three levels – the

fundamental structure of relationship within civil society, relationship between civil

society and authorities and lastly, civil society’s role in campaigning against corruption.

Structure of relationship within society lay out a background for corruption

condition. Conflicts among groups in society repeatedly cited as pretext for political

leaders to escalate pre-eminent role of the regime in national policies. These excuses

are known as national security, which are only alternative terms for lack of

transparency.

Conflicts among ethnic groups in Myanmar have been on going since it’s gaining

of independence from the British rule in 1948. The 2012 Rakhine State Riots, the clash

between ethnic Rakhine Buddhists and Rohingya Muslim induced state intervention to

the region. Myanmar government declared state of emergency on 10 June, followed by

sending in government troops, which resulted in extensive casualties on both side51.

The government action received scepticism as discriminately targeted Rohingya during

the clash52. The criticism arose on the ground that the Rohingyas have been disregarded

as Myanmar citizens prior to the conflict. The conflict between the two ethnic groups

raised an opportunity for the government to heighten their role in managing ethnicity in

the country.

51

The guardians. 14 June 2012. Both ethnic groups suffered in Myanmar clashes. [online]. Available from: http://www.guardian.co.uk/world/feedarticle/10289108 52

Democratic Voice of Burma. 28 June 2012. Burmese authorities targeting Rohingyas, UK parliament told. [online]. Available from: http://www.dvb.no/news/burmese-authorities-targeting-rohingyas-uk-parliament-told/22676

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Problem of insurgency also encourages higher level of national security and

increase military spending. In the regime where government officials are rooted from

the military, large scale spending on defences often been misused.

From August to October 2012, clash between the government and Kachin

Independence Army claimed lives of more than 200 soldiers. The soldiers were

appointed to occupy jade mine in western Kachin state, which is owned by companies of

high rank military official of the previous regime. One of the companies appears to be

Kyaing International, a firm owned by Daw Kyaing Kyaing, the wife of the former

statesman Than Shwe53. The event can be marked as an example of conflict of interest in

the country and the appointment of public official for private business.

The endeavour to stabilize the region endorses large public spending which

could be difficult to monitor for act of corruption. Continual terrorist incidents in North

Caucasus have often been cited as an example of Russian aggressive-yet-fail attempt to

establish stability in the region. In respond, Russia government agreed to allocated $80

billion on the region in the next 13 years54. The budget would allow large-scaled

economic investment, including the construction of hotel and resorts. The investment

would be supported by private companies scheme. The government has cited the

investment of $140 million by LUK oil, a privately owned oil company in Budyonnovsk

and an investment by another state-controlled oil firm Rosneft in Grozny55.

Relationship between civil society and government are reflected from degree of

freedom of speech. Media, NGOs and Academic community traditionally represent

certain causes or interest groups in the society. Civil society organizations manage

movement of issues concerning people interest and express diversity, strengths,

weaknesses and desires of the citizen. The past year has marked the growing role of

individuals through the use of social media as well.

53

Kachinnews. 10 October 2012. KIA says 211 army soldiers die in two-month fighting in Hpakant. [online]. Available from: http://www.kachinnews.com/news/2418-kia-says-211-army-soldiers-die-in-two-month-fighting-in-hpakant.html 54

Business and Economics Report. 14 December 2012. Russia to lavish $80 bln on North Caucasus by 2025. [online]. Available from: http://dlib.eastview.com/browse/doc/28265903 55 Business and Economics Report. 17 December 2012. Russian big business to rebuild North Caucasus.

[online]. Available from: http://dlib.eastview.com/browse/doc/28265908.

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Progress has been made for Myanmar when the government finally put an end to

48 years old media censorship to all publication on August 20, 2012. The journalists

now does not have to submit their writing for approval prior to printing56. The change

was significant, but the journalists are still left with repressive law, which require them

to self-censored their publication, coupled with 16 guidelines from Press Scrutiny and

Registration Division (PSRD), which have been passed around after censorship lifting57.

A lawsuit has been filed on September 20, 2012 against a magazine called The Voice.

The article was about alleged corruption in the mining ministry58. The Yangon court

eventually dropped the case on March 31, 2013, after Myanmar Journalist Association

persistently protested against the charge59.

The next step for the government is to launch new legislation to ensure the right

of journalist. The media law has been drafted since the beginning of 2012 and is

expected to be adopted by the end of 2013.

Another major freedom of speech reform is when the government repealed its

anti-dissidents law, which had been in placed since 1996 on January 15th, 201360. This

law has put hundreds of people in jail for publicly compromising national security

including Aung San Su kyi. People in Yangon have reported that they feel free to say

something about the government for the first time in decades.

While an easing toward freedom of speech is apparent in Myanmar, Russia steps

back on the issue. Human Rights Watch, Transparency International and Amnesty

International official in Moscow has reported unprecedented investigation from

government official in April 2013. The government recently target foreign agents or

International non-government organization that has been engaged in political activity61.

The surveillance occurred in accordance with the enactment of several legislations in

56

Reporter without border.20 December 2012. Burmese Media Spring. [online]. Available from: http://en.rsf.org/IMG/pdf/rsf_rapport_birmanie-gb-bd_2_.pdf 57

See appendix 58

BBC. 20 September 2012. Burmese editor and publisher charged with libel.[online]. Available from: http://www.bbc.co.uk/news/world-asia-19659294 59

Mizzima. 01 February 2013. Mining Ministry drops defamation case against The Voice[online]. Available from: http://www.mizzima.com/news/inside-burma/8838-mining-ministry-drops-defamation-case-against-the-voice.html 60

Guardian.16 January 2013. Burma repeals law used by junta to jail dissidents. [online]. Available from: http://www.guardian.co.uk/world/2013/jan/16/burma-repeals-law-jail-dissidents 61

The Moscow times. 25 April 2013. NGOs: Crackdown on Civil Society 'Unprecedented'[online]. Available from: http://dlib.eastview.com/browse/doc/29548565

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2012 that restrict civil society activities from the organizations that receive funds from

abroad62. Putin said the law could protect Russia from external influences63.

The law affects future of several US funded UGO. USAID has been closed down in

October 2012. Several other NGOs such as The National Endowment for Democracy, the

National Democratic Institute, the International Republican Institute and others face

uncertainty on its operation64. Election watchdog Golos was the first NGO to be fined

under this law on 25 April 2013 for $9,500, failing to declare itself as foreign agent. The

law was brought to discuss at UN Human Right Council on April 29th 201365.

One of the key measure reflecting the independence of civil society from the

government is provided by Levada-center. The center researches into the topics such as

public opinion polling during elections, effective public relation strategies for NGOs,

interviews on xenophobia and nationalism66. The recent research polling are such as

Endosement of Putin and Medvedev, Approval of Premier and Government and

Governors’ Approval. The polling is done on monthly basis and receive wide acceptance

from public67. The Levada polling agency was threatened by the government in 2010

but continue its operation to date. The polling shows that the government is losing its

popularity.

On March 22, 2012, Russia’s then President Dmitry Medvedev addressed the

media as an essential part to fighting against corruption. The statement seemed positive

and promising had it not further suggest that the media should work more closely with

the government68. His argument was that many of the government attempts to fight

against corruption has not been reported to public. Hence media could participate in

62

National Endowment for Democracy. 16 November 2012. NED, Freedom House issue International Statement of Concern for Russian Civil Society. [online]. Available from: http://www.ned.org/for-reporters/ned-freedom-house-issue-international-statement-of-concern-for-russian-civil-society 63

RT. 31 July 2012. NGO law protects Russia from foreign influence. http://rt.com/politics/putin-seliger-forum-power-496/ 64

Rianovosti. 21 December 2012. US Funding of Russian NGOs Faces Uncertain Future. [online]. Available from: http://en.rian.ru/politics/20121221/178299803.html 65

Premium Times. 30 April 2013. UN members criticise Russia for NGO crackdown.[online]. Available from: http://premiumtimesng.com/news/131993-un-members-criticise-russia-for-ngo-crackdown.html 66

Official Center website : http://www.levada.ru/eng/ 67

a blogger wrote in favour of Levada straightforward and reliable polling result in his public space http://austereinsomniac.info/blog/2013/3/13/ahh-the-levada-poll-again.html 68

RT.22 March 2012. Media has key role in war against corruption – Medvedev.[online]. Available from: http://rt.com/politics/medvedev-corruption-big-government-190/

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working in that division. The kremlin has already gain reputation of dominating the

society.

Individual level

Social media has provided a platform for each individual to express themselves

to public. Many Russian bloggers succeed in gaining popularity writing about Politics

and Corruption. Among them is Alexey Navalny, a anti-corruption activist who success

in organizing a number of protest against the government through his blog. Navalny

recently received support from Alexander Lebedev, a Russian Businessman and

obligarch, the owner of Russian newspaper Novaya Gazeta and four other UK

newspapers. Their call is to engage the public to protest the repression on Internet by

the kremlin69. Politicians also use social media as a way to gain popularity. Valery

Fedotov, a member of the United Russia party calls for public attention on combating

corruption through his blog70.

This kind of individual level expression is not prevalence in Myanmar, where

Internet access is severely limited.

69

Guardian. 11 July 2012.Alexander Lebedev launches new project against Russian corruption.[online]. Available from: http://www.guardian.co.uk/world/2012/jul/11/alexander-lebedev-russian-corruption-internet 70

Vzglyad newspaper. 10 August 2012. Corruption in Russia can be solved given the will.[online]. Available from: http://rbth.ru/articles/2012/08/10/american_experience_may_help_russia_beat_corruption_17255.html

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Conclusion

Occurrences circulating around corruption require a thorough and

comprehensive analysis. Each of the events involves parties in different levels and can

make up a close tie to different sectors.

Corruption in Russia is often found in forms of bribery, nepotism and extensive

use of authority to private domain. Russian government shows acknowledgement of the

issue and launched National Anti-Corruption Strategy with harsh implementation. The

effort however shows to be inconsistent and full with other agenda. What is obvious

from the Russian fight against corruption is Kremlin’s strong will to maintain its

stability.

Similar climate is found in Ukraine, the differences is the condition in which

Ukraine operate in. Ukraine lacks of financial power in comparison with Russia. It also

depends a lot on external partners. The major partner pressing Ukraine at the moment

is the European Union, which push for political and judiciary reform. Ukraine also relies

on energy supply from Russia, which place it on a subordinate position.

Myanmar is another former stubborn country, which seek global acceptance at

the current. The fact that the country has only in recently been exposed to global arena

makes it obligatory for the country to rush toward reform.

By analysing the events relating to corruption in the three countries. The

borderline between section of International, National government, Private sector and

Civil Society become blurry in many circumstance. A corrupted deal can involve the

foundation of the legislation from the government, the corrupted official, and

businessman from private sector as the supply side of the bribery. The event may

receive attention from civil society, which lead in international pressure. These entire

events also bind to cultural background, such as religion belief, ethnicity and

hierarchical perception in the society.

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Bibliography

Abigail Barr and Denila Serra. March 1,2006. Culture and Corruption. Centre for the Study of

African Economies. Oxford University. http://economics.ouls.ox.ac.uk/14043/1/gprg-wps-

040.pdf

Andvig, Jens Chr and Moene, Karl Ove. 1990. How Corruption may Corrupt. Journal of Economic

Behavior & Organization. Pp 63-76. http://ideas.repec.org/a/eee/jeborg/v13y1990i1p63-

76.html

Daniel Treisman.2000. The Causes Of Corruption: A Cross-National Study. Journal of Public

Economics, 76, 3, June 2000, pp.399-457.

http://www.sscnet.ucla.edu/polisci/faculty/treisman/Papers/causes.pdf

Steven Woehrel. January 31, 2013.Ukraine: Current Issues and U.S. Policy.

Congressional Research Service Report for Congress.

http://www.fas.org/sgp/crs/row/RL33460.pdf

Jim Nichol. December 21, 2012. Russian Political, Economic, and Security Issues and U.S.

Interests. Congressional Research Service Report for Congress.

http://www.fas.org/sgp/crs/row/RL33407.pdf

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Appendix

INDICATORS

Transparency International Corruption Perception Index The Failed States Index provides snapshots of state vulnerability or risk of

violence for one time period each year. The data used in each index are collected from May to December of the preceding year. The 12 indicators are: Demographic Pressures, Refugees/IDPs, Group Grievance, Human Flight, Uneven Development, Economic Decline, Delegitimization of the State, Public Services, Human Rights, Security Apparatus, Factionalized Elites, and External Intervention. For each indicator, the ratings are placed on a scale of 0 to 10, with 0 being the lowest intensity (most stable) and 10 being the highest intensity (least stable). The total score is the sum of the 12 indicators and is on a scale of 0-120.

Transparency International’s 2011 Bribe Payers Survey asked more than 3,000 business executives worldwide about their views on the extent to which companies from 28 of the world’s leading economies engage in bribery when doing business abroad.Countries are scored on a scale of 0-10, where a maximum score of 10 corresponds with the view that companies from that country never bribe abroad and a 0 corresponds with the view that they always do. Available at : http://bpi.transparency.org/bpi2011/results/. Accessed 4 February 2013.

The Global Integrity Report is an essential guide to anti-corruption institutions and mechanisms around the world, intended to help policymakers, advocates, journalists and citizens identify and anticipate the areas where corruption is more likely to occur. The Report evaluates both anti-corruption legal frameworks and the practical implementation and enforcement of those frameworks, and takes a close look at whether citizen can effectively access and use anti-corruption safeguards. http://www.globalintegrity.org/report/Ukraine/2011 National Integrety System Country Report : Ukraine 2011. http://issuu.com/transparencyinternational/docs/2011_nisukraine_en?mode=window&printButtonEnabled=false&shareButtonEnabled=false&searchButtonEnabled=false&backgroundColor=%23222222

MYANMAR

1. Press Scrutiny and Registration Division (PSRD) 16 Guideline

Political

Do not use the three cardinal rules on the duties of citizens in an inappropriate way.

Do not write about or comment on the government and its policies in a negative

SEESGS09 12082842 28

way. Do not write article that could harm Myanmar’s international relations. Do not write about corruption, illegal drug production and trafficking, human

traffic, forced labour or child soldiers without reliable sources of information. Do not write articles supporting individuals or organizations that act against the

state.

Economic

Do not write insulting articles about the government’s economic policies. Do not publish articles with economic data or photos concerning the economy

without reliable sources of information.

Social

Do not show parts of thehuman body that are contrary to Myanmar’s culture or clothing style or show an obscene posture.

Do not promote gambling or predict results. Do not write about ghosts, vampires or treasure hunts and do not write other

kinds of mystery stories. Do not disseminate irrational ideas that could create confusion in children.

Do not publish alcohol or tobacco advertisements. Do not write articles or show photos about crimes committed by minors. Do not show or publish photos or articles that could scare the public. Do not employ Buddhist usages and words from the literature of other religions.

General

In any article critical of government or private-sector procedures, give the exact time, place, name and organization. Have reliable sources of information and proof.

The appropriate Burmese translation should be applied in expressing the headline and the titles of the books rather than using their English names.

SEESGS09 12082842 29

RUSSIA

1. Bribe Payer Index

Since 2009, Russian officials have been working with the OECD Working Group on Bribery to

strengthen Russia’s legal framework against bribery of foreign public officials in international

business transactions. Legislation passed in Russia in May 2011 criminalises foreign bribery with

monetary sanctions for companies and individuals who bribe foreign public officials. Russia was

formally invited to join the convention at the 50th anniversary of the OECD in May 2011.

“The position of Russian business in the 2011 Bribe Payers Index is not of any surprise since Russia in

general is still struggling to find the proper way to confront systemic corruption. It would be strange

to expect business to do better than public office does. Unfortunately, as far as the spread of

corruption is concerned, there are no islands of integrity in Russian public and business life. But

there is hope that the strict enforcement of new national anti-corruption legislation and compliance

with international commitments will help to change this situation in the coming years.”

Elena Panfilova, Director,Center for Anti-Corruption Research and Initiative Transparency

International Russia