Ukraine's opaque defense sector embraces reform

14:20, 27 October 2016
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In December 2015, the anticorruption watchdog Transparency International warned that Ukraine’s defense sector faces "a high risk of corruption", naming the country’s opaque procurement process the highest-risk area. Fortunately, this problem has not gone unaddressed, according to the Atlantic Council.

This summer the Ukrainian government adopted a comprehensive reform program for the defense and security sector, the Strategic Defense Bulletin, reads the article by Oksana Bedratenko for the Atlantic Council. 

The document is a road map for the defense sector’s overhaul, covering the overall architecture of the security sector, the structure of defense institutions, the use of resources, cybersecurity, and cooperation with global partners. The bulletin is in line with NATO standards, and received positive feedback at the NATO Summit in Warsaw in July.

RAND Corporation that had studied Ukraine’s defense sector at the behest of the country’s government found that Ukraine’s security situation changed drastically with Russia’s illegal annexation of Crimea and aggression in eastern Ukraine. The new threats put the country’s defense capability to the test and have made the need for defense and security reform more acute.

Read alsoPoroshenko signs Law on AFU Special Operations ForcesUkraine’s reform package involves all security institutions. The bulletin incorporates most of RAND’s recommendations, including clarifying the delineation of authority to ensure efficient use of resources, changing the Ministry of Defense and the General Staff’s structure to be in line with NATO standards, establishing reliable communication and logistics, and adapting the military and industrial sectors to NATO’s standards.

One of the big recommendations in the RAND study “Security Sector Reform of Ukraine” issued in 2015 concerns the outsized role played by Ukroboronprom, which owns about 120 armament companies. Its inefficient management in 2010-2012 resulted in a sharp deterioration of the holding companies’ financial situations and is often seen as one of the reasons Ukraine’s military and industrial complex was in such a poor state at the start of Russia’s aggression.

Read alsoCabinet allows Ukroboronprom to transfer less money to budgetIn the RAND study, Ukroboronprom is criticized for its lack of transparency and possible conflict of interests, as the company is both a major producer and a major importer of defense goods. In the spirit of ongoing privatizations in the non-military sector, the RAND study recommends Ukraine should conduct an audit of state-owned companies in the defense sector and perform triage on them, separating them into three groups: those which should be retained in state ownership, those which merit privatization, and those which should be liquidated. Such a transparent approach would help to attract investment and revive Ukraine’s military and industrial complex.

Ukroboronprom officials were not ready to adopt RAND’s approach in full, but they recently announced that the company will create a supervisory council, order an independent audit, and undergo a reorganization—all of which is a step forward.

Read alsoUkraine Def. Minister discusses with U.S. congressmen prospects of lethal aidIn outlining a new structure for the defense sector, RAND recommends ensuring civil control of the military by appointing a civil minister of defense and empowering him or her to operate the military command and control; the chief of staff is to be administratively subordinate to the minister of defense. While these recommendations are reflected in the Strategic Defense Bulletin, the role of the minister of defense as the major driver of reform has been weakened as a result of internal discussions.

Another area in which a more robust schedule is needed is personnel reform. The RAND study points out that with the Anti-Terrorist Operation Zone (ATO) being a high-intensity conflict, the quality of the force is more important than its numbers. Ukrainian authorities have pledged to transition from draft to a professional army this year; together with international partners, they have implemented intense personnel training programs.

Read alsoRubizh-2016 strategic command and staff exercise kicks off in UkraineBoth the government bulletin and the RAND report propose procurement reform. Ukraine’s non-military sector has made progress on this front, but the Defense Ministry lags far behind.

A separate part of the RAND study deals with improving the standards of international cooperation by Ukraine’s military. Ukraine needs the support of its international allies to overhaul its security and defense sector and be prepared to act efficiently in response to new threats. Ukraine should work to strengthen international cooperation and earn a reputation as a trusted partner by addressing the problems that its providers of help and technical assistance currently face.

Still, after two and a half years of intense military operations, the army remains the most trusted official institution in the country. Now it needs to become truly modern and efficient in order to live up to those high expectations and get a passing grade, the article concludes.

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