Originally posted in the Kyiv Post.
Algirdas Semeta has witnessed amazing transformations in his life, especially in his native Lithuania.
The 53-year-old has seen his small Baltic homeland go from being a Soviet republic to a full-fledged member of the European democratic family of nations, joining the European Union and NATO in 2004.
“We really dreamed that we will become independent,” Semeta said. “My parents, my grandparents remember the time of independence between the first and second world war and telling us stories about that time.”
In his role in the newly created position of Ukraine’s business ombudsman, Semeta hopes to take part in another transformation that many think is impossible: a sharp enough reduction in Ukraine’s endemic corruption to spur private investment and improve living standards.
To get there, Semeta will need to muster all the discipline and talent that made him a master of sports in gymnastics while growing up in the Soviet Union. He will have a staff of 14 people and a $1.5 million budget to help him (although he would not disclose his salary during a recent interview). The Business Ombudsman Council is funded through a European Bank for Reconstruction and Development multi-donor account. The money comes from 10 governments, mostly European, but also the United States and Japan.
He can also tap into the goodwill that Ukrainians have for Lithuanians, especially its president, Dalia Grybauskaite, one of Ukraine’s most stalwart allies in taking a tough stance against Russia’s war in the Donbas and annexation of Crimea.
Semeta also joins a team of foreigners, including a handful of Lithuanians who have taken up key posts in Ukraine as part of the government’s belated drive to make a decisive break from its Soviet past and adopt democratic political and economic changes that will be accepted in the West.
Other Lithuanians in influential positions include: Economy Minister Aivarus Abromavicious; Economy Ministry adviser Adomas Audickas, a former Lithuanian deputy economy minister; former Lithuanian Prime Minister Andrius Kubilius, who serves on Ukraine’s International Advisory Council for Reforms; and Nerijus Udrenas, a former adviser to the Lithuanian president who assists in the implementation of Ukraine’s association agreement with the EU.
When asked if the fellow countrymen helped him get his new job, he quipped: “All Lithuanians are friends, there are not so many of us.” About the second part, at least, he’s right: Lithuania has only 3 million people.
Semeta is a former finance minister in Lithuania, serving from 1997 to 1999 and again from 2008-2009. But, perhaps even more importantly to Ukraine, he has broad experience as an EU commissioner, first for financial programming and budget, from 2009-2010, and then for taxation, customs, statistics, audit and anti-fraud, from 2010-2014.
During his most recent EU post, dramatic advances came in banking transparency, essential to cracking down on money laundering and tax evasion.
“During my mandate, we adopted a directive that abolishes banking secrecy in the European Union,” Semeta said. “It requires all the banks in the European Union to exchange information with tax authorities.” He said an end to banking secrecy will be pushed globally.
“This is a huge achievement which I am proud of,” Semeta said. He also cited his involvement in the EU’s adoption of a new, electronic customs code and the strengthening of the EU’s anti-fraud agency in investigating misspent public funds.
While he’s been on the job in Ukraine since December, Semeta has been waiting for adoption of rules of procedures that guide his work. Weighing in are the Cabinet of Ministers, business associations and financial institutions.
Persuasion, however, will likely be his strongest tool.
The job of business ombudsman, like its human rights counterpart, does not come with law enforcement powers. “It is not common for a business ombudsman to have such powers,” he said. But he said that the ombudsman position in other nations has been influential in improving business environments and serving as a first point of contact for companies seeking redress against unfair treatment.
“There’s a lot of work ahead. It’s clear that corruption remains one of the most important problems in Ukraine, after the war,” he said. “There have been many problems that have contributed to the level of corruption,” including cumbersome rules and attitudes of government regulators.
He said the position will be “driven by the needs of the business community.” He will work closely with business associations. Semeta will also soon begin accepting complaints online or by email on “malpractice and other violations” by government agencies or state-controlled companies. He will investigate which ones deserve his attention and will study the patterns.
“They will show us which areas, from the business perspective are the most problematic ones,” he said.
While Lithuania is not corruption-free, he said the nation’s process of adapting legislation to EU rules “reduced the level of subjectivity in the decision-making process.” With other Baltic states, “we made very significant progress in the past years” in reducing corruption, he said.
For example, in contrast to Ukraine’s tax inspection service, considered as one of the nation’s most corrupt institutions, Lithuanian businesspeople regard the tax inspection service there “as the most business-friendly institution in the country.” Keys to restoring trust and reducing opportunities for corruption include making taxation predictable, fair, transparent and automated — to “reduce the personal links,” he said.
He also said that, in Lithuania, government regulatory agencies employ more positive and less punitive methods in getting compliance. For example, he said that businesses are given clear standards and opportunities to fix problems before the government agencies resort to heavy-handed inspections and fines.
Success in Ukraine will also depend on the performance of Ukraine’s newly created Anti-Corruption Bureau in sending a “strong signal to the general public that the situation is changing.” The bureau’s success depends on how quickly it “will be able to demonstrate positive results in tackling high-level corruption,” he said.
While Semeta expects to regularly report to the public his findings, he will avoid “naming and shaming” violators in the mass media. “It’s a last resort,” he said of his preference for relying on persuasion with politicians and officials to make changes.
Regarding the war against Ukraine, which threatens to overshadow all other issues facing the nation, Semeta favors a unified response by the EU against Russian aggression. “If the EU is somehow divided, it will send a signal of weakness.”
Job: Business Ombudsman in Ukraine
Family: Wife, four children
Now you know: Master of sports in all-around gymnastics during Soviet Union
How to succeed in Ukraine: “If the political will to make reforms will remain strong…that should lead to the success. If you look at the fundamentals, Ukraine is really the country with huge potential. What one needs to do is to fix the weaknesses.”
Kyiv Post chief editor Brian Bonner can be reached at firstname.lastname@example.org