17 March 2021

On March 12, the fourth webinar within The Week of Parliamentary Oversight of the Security and Defence Sector took place, which was initiated by the Verkhovna Rada Committee on National Security, Defence, and Intelligence and organized by NAKO.

Ukrainian MPs exchanged experiences and views on parliamentary oversight of the defence budget and increased accountability of the executive branch in the security and defence sector with Ben Hodges, former U.S. Army Commander in Europe and Head of Strategic Research at the Center for European Policy Analysis, and Oksana Syroid, former Deputy Chairperson of the Verkhovna Rada and MP of the 8th convocation, Professor at the Kyiv School of Economics. The discussion took place during the webinar “Parliamentary Oversight: Defence Budgeting and Expenditure Oversight.”

Among the MPs who took part in the webinar were representatives of the Verkhovna Rada Committee on Foreign Policy and Interparliamentary Cooperation, the Committee on Transportation and Infrastructure, the Committee on Foreign Economic Relations and Effective Use of International Assistance, and the Committee on Ukraine’s Integration into the European Union. 

The introductory speech was made by the Director of Transparency International Defence and Security Natalie Hogg and the Executive Director of Transparency International-Ukraine Andriy Borovyk.

Natalie Hogg noted that the Ukraine’s Ministry of Defence budget is excessively classified compared to other European countries. “About 45% of defence procurement and 14.5% of the Ministry of Defence budget are categorized as classified. For comparison, less than 1% of the budget is classified in Germany and no more than 2% in Bulgaria,” said Neteli Hogg. She stressed that increasing transparency of the defence budget will reduce corruption risks and will strengthen parliamentary control over the security and defence sector.

Andriy Borovyk noted that “parliamentary oversight is an important element of good governance in any field. And especially in the security and defence sector in the last 7 years, when the country is at war with Russia.” Borovik added that democratic oversight involves the active participation not only of civil society activists, but also the media, the military, auditors, parliamentarians and MPs, as well as the parliamentary committee. That is, there is a wide range of stakeholders who have the right and obligation to participate in this process.

The webinar participants discussed the country’s defence budget based on the examples of the United States and Ukraine.

Ben Hodges stressed that it is “important for the government to gain the population’s trust in budgetary matters, because it is the citizens who pay taxes; it is important to show what exactly this money is used for and to show that it is used correctly.” That’s why 99% of reports on the U.S. budget are publicly available. He also noted that an important role in this process is played by independent media, which need to be able to see how taxpayers’ money is spent.

Before the U.S. budget for the new fiscal year is approved, there are heated debates and discussions between various agencies; there is a struggle between Democrats and Republicans and various departments for budget funds. The U.S. Department of Defence is also fighting for these funds. 

However, unlike the American practice of defence budget approval, which takes place only after much discussion between committees and departments, Ukraine’s defence budget is not the result of a constructive discussion and actually depends on one person – the President of Ukraine, said Oksana Syroid.

According to her, this may explain the fact that ministers often do not come to meetings of the relevant Parliamentary committees when they are invited. Syroid believes that the ministers’ absence will not effect the amount of funds allocated to their ministries for the current year. “If you can agree with one person about your expenses, why should they agree with 226 people? And if you don’t have to agree with MPs about money, then why go to them at all?”, she asked rhetorically. Thus, according to the ex-MP, as long as Ukrainian parliamentarians do not have effective tools for overseeing the expenditures of defence and security agencies, representatives and heads of these agencies will not need to attend committee meetings and report.

Syroid reminded event participants that the biggest source of corruption in the defence budget is classified defence procurement. “In Ukraine, it’s necessary to significantly limit state secrets. We can follow the path of democracies and keep secret only the purchase of innovative developments in the field of security and defence. Other procurements must be open. It is necessary to make changes to the law on state secrets,” she stressed.

Maria Mezentseva, Ukrainian MP, Deputy Chairperson of the Committee on Ukraine’s Integration into the European Union, and Chair of the Verkhovna Rada Subcommittee on the Approximation of Ukraine’s Legislation to EU Legislation, also stressed the importance of parliamentary oversight of the security and defence sector. She noted that “if there were MPs from different factions present not only today, not only on this panel, we would be able to launch the initiatives and ideas that Ms. Syroid mentioned.”

Yulia Klymenko, First Deputy Head of the Verkhovna Rada Transportation & Infrastructure Committee and former Deputy Minister of Economic Development of Ukraine, also drew attention to the defence budget’s excessive secrecy. She said that “the military budget accounts for 5-7% of GDP, which is a very large amount of money for our taxpayers. Therefore, it cannot be fully classified.”

Klymenko believes that the defence budget cannot be enacted in the same way as civilian budgets. In particular, because this budget should not be “a hostage of political budget bidding in parliament“, as it requires a longer planning period than the budget of any other agency. According to her, the military budget should be separated from the general budget and enacted separately. In particular, because Ukraine wants to develop equipment for the military, it takes an average from 3-5 years, and another 7-10 years to implement its development.

The Week of Parliamentary Oversight on the Security and Defence Sector is part of a project to strengthen the capacity of VRU committees, organised with the financial support of the British Embassy in Ukraine and the organisational support of the Lithuanian Embassy in Ukraine, the International Republican Institute (IRI), the Norwegian Parliament and the Norwegian Ministry of Defence, and the Centre for Integrity in the Defence Sector.