How corrupt is the Yanukovich government? Extremely, says Anders Åslund of the Peterson Institute for International Economics:
The Ukrainian government’s budget deficit of 6 percent of GDP or $11 billion is driven by what is commonly called the “Yanukovych family” siphoning big money from the state budget. Because everyone knows about this corruption, the International Monetary Fund (IMF) and the European Union have refused to aid the Ukrainian government.Billions of dollars have disappeared from the Ukrainian government each year, equivalent to an amount sufficient to cover the $30 billion budget deficit run up during President Yanukovych’s term in office. Ukraine’s independent media has reported how the money has been embezzled and who has benefited, but the exact details are important, and I abstain from naming names.
Some of those schemes Åslund and others have identified include ripping off the tax and customs authorities, overpaying for construction projects like soccer stadiums for the 2012 European Championship, and reselling natural gas at inflated prices. “These three sources of embezzlement and corruption alone have probably generated $8 billion to $10 billion a year to the ‘Yanukovich family’ during the last three years.”No wonder Yanukovich is shopping around the centers of wealth in Eurasia, trying to get the best deal he can out of the EU, IMF, Russia, and China: a hole that big in the national budget must be getting difficult to paper over. His love is for sale, and whoever comes knocking with the biggest check in hand may well be able to secure his allegiance.