CNBC Comment: Why Kiev’s corruption problem matters
WHAT have insider trading, price-fixing, front-running financial market players got to do with the Crimea crisis we are now confronting in Ukraine?
On the surface, not a lot. But as I sit here at my vantage point overlooking the destruction and barricades in the centre of Kiev, I can’t help thinking that there is one thing that does link the two. Corruption. Whether white collar theft in London, or gangsters ripping off people in the post-Soviet world, it leads to the same thing. Undermine the system and the rot sets in. Simple.
I’ve spent most of my time in Ukraine over the past few weeks, and I’ve watched the propaganda war being waged between Kiev and the Kremlin. I’ve been lucky to have had access to the whole interim government in the Ukrainian capital. Yes, it’s only one side of the story. But if anyone in the Kremlin offered me the chance, I’d be on a plane in a shot to hear the Moscow side of this diplomatic war.
I spoke to Ukrainian presidential candidate Vitali Klitchko a few days ago. Why, I asked, does a multi-millionaire world heavyweight superstar boxer want to get involved in the murky world of Ukrainian politics? His answer was simple. “Ukraine is known as the most corrupt country in Europe. I want to change this.”
Whether he can deliver where so many have failed is debatable. Ukraine is in the mess it’s in partly due to a wasted decade after the Orange Revolution, when both pro-Russian and pro-Western governments allowed the cancer of corruption to spread through the country. And now Ukraine is weak economically, politically, and militarily. If it had become a rich, democratic country in that time, do you think anyone in Crimea would give a jot whether they were ethnic Russian, Tatar or Ukrainian?
And herein lies the point. We may hate overbearing government in Britain. Bankers may bemoan new, aggressive regulation. David Cameron may harp on about rolling back EU regulation. But having seen what I have here in Kiev, where millions would love to live in a world of EU and Westminster-type bureaucracy so they can go one day without backhanders and shakedowns, I’ll take more rules than less any day.
So to any of you out there just about to put a trade on because your mate in corporate law told you about a company takeover he’s working on, to the hedge fund chap who’s buying puts because his chum at an investment bank has given him the nod on his pay-as-you-go mobile that there’s a profit warning coming, shame on you. If we start turning a blind eye to “minor” rule breaking, who knows where we’ll get to?
Steve Sedgwick, anchor on CNBC’s SquawkBox Europe, writes from Kiev.