Deputy Finance Minister Explained Why Ministers Aren’t Interested in Change in the Country

Deputy Finance Minister explained why ministers aren’t interested in change in the country

You don’t need a lot of time to break the old system, says deputy to Natalia Yaresko, Oksana Markarova. She explains what’s needed in an interview with NV

A soft smile, a steady gaze, and many English words sprinkled into her speech. NV talks with Deputy Finance Minister Oksana Markarova in one of the Finance Ministry buildings, which she habitually calls the office.

"Yes, this is a demotion," says the 39-year-old Markarova, who before public service headed her own investment company ITT and managed billions in the pre-crisis period, "but the country needs help." The newly converted civil servant specifies right away that she spends more on gasoline than her salary.

In the spring of 2015, former colleague and now Finance Minister Natalia Yaresko invited Markarova to be her deputy. She agreed and now leads the ministry’s apparatus — the structure that manages the processes ensuring its operation, is responsible for public procurement, lustration, and increasing the transparency of public finances.

Now Markarova admits she took the job essentially out of her business interests: if corruption isn’t defeated in the country, there will be no investment business. "There will be nothing to make money from," she says.

— Do you think reforms in Ukraine are moving forward?

— (Pauses.) Yes, but not fast enough.

— What is the reason for that?

— There are many reasons. The first — even reformers, broadly speaking, understand reforms differently. If you ask everyone where we are headed, the answer will be roughly the same: we all want to see Ukraine economically successful, transparent, and without corruption. But when we talk about concrete things, reformers have major disagreements. The second reason is the politicization of reforms. Unfortunately, we don’t have a clear division between politicians and civil servants. That is, ministers look at how a reform will be perceived in the next elections. And if a person thinks they have elections in a year or two, they won’t undertake radical changes.

— There’s an opinion that the main reason reforms move slowly is the lack of political will. As someone who sees all this from the inside, is that so?

— A tough question. Finance Minister Natalia Yaresko definitely has political will. I am 100% confident in both the minister’s desire and ability to advance reforms. Is there political will among absolutely all players? Probably not among all. After all, two months ago the Verkhovna Rada supported the public procurement law, which, as we hoped, would have been voted on at the beginning of summer.

— The reform of the ministry itself is proceeding very cautiously. Few people were fired.

— Indeed, the minister was very cautious about such changes in the ministry. In total we dismissed about 82 people out of almost 700 employees.

To break things, you don’t need much time. In business we used to buy many enterprises. And when you buy a company, you never change absolutely everyone, even when you understand serious transformation is needed. There are key points you need to change to have all the information.

Our task is to ensure the passage of reforms. We are creating teams of advisers to the minister, deputies who take on project development. We attract people who have already successfully implemented reforms elsewhere, for example Ivan Miklos, former deputy prime minister of Slovakia.

— Tell us in more detail how the advisers work?

— The Finance Ministry has several groups. There are high-level advisers who consult the minister. For example, Ivan Miklos, who is here almost constantly and plays a leading role in developing the tax reform.

And there are advisers who work on a permanent basis. Their work is paid for by our international partners. Such people are in the minister’s office, in the press service, and in the e-data project. We turn to our international partners with requests, for example to the EBRD, saying we need two or three people who could work on transparent budgeting and decentralization. Our partners find these people together with us, hire them on staff, and delegate them to work with us.

— You mentioned your e-data project, what is that?

— It’s a portal for monitoring public spending at all budget levels. Right now it already contains all State Treasury transactions practically in real time. From November we will add some budget fund managers. All ministries will upload documents about budget use. From 2016 we will add all municipal and state enterprises.

Anyone will be able to see this information, and it will deter many officials from corruption. For example, from buying "off-the-books" gasoline, because all transactions will be displayed with the recipient’s payment details.

It’s a tool not only for the public but also for law enforcement. After some time it will be possible to compare the expenditures of ministries, state companies of similar size, simply by selecting filters.

You don’t need much time to break things

— What other functions does the portal have?

— The project is deeper than its public part. Internally we will merge the ministry’s databases, the SFS [State Fiscal Service], and the State Treasury and create an analytical cross-agency database. This will be a fully transparent internal system of public finances. For us the goal of this exercise is more effective management of state funds. When funds aren’t available, it’s simpler — the state received and paid. But when we have planned accumulation of funds, we see that payments are due only in two weeks, say for foreign payments — those two weeks the money must work.

— In March the former head of the State Financial Inspection, Mykola Hordiienko, accused Arseniy Yatsenyuk’s government of abuses totaling 7,6 billion hryvnias. You reported on the Finance Ministry to a working group in the Verkhovna Rada on this matter — what was confirmed and what wasn’t?

— All questions regarding the Finance Ministry related to previous years. But were there violations? Definitely there were. For the most part, criminal cases had been opened even before Mykola Hryhorovych went on air and said: "Corruption."

— And what corruption schemes were in the Finance Ministry?

— You can’t say there were schemes within the Finance Ministry itself. We have questions about whether public procurement was carried out effectively in the ministry and whether there was close oversight of how other entities used budget funds. We held the first two auctions and bought everything at half the price planned in the budget. So it’s necessary not to fight specific people but to change processes as much as possible.

The article was published in NV No. 41 on 6 November