Letter from our Executive Director about the conflict in Ukraine

Russia’s brazen invasion of Ukraine and attacks against civilians is a shocking act of aggression against a population that has shown great commitment to open government and open budget reforms. With these actions, Russia’s leadership makes clear that it will continue to openly punish its neighbors for aspiring toward a more free and democratic future.

These authoritarian moves cannot be met with indifference. We, as a community committed to advancing open, inclusive and just societies, must stand up unequivocally to denounce these attacks and support Ukraine. We must support the brave activists, journalists, pro-reform officials and so many others that have pushed despite all odds to root out corruption and advance a more transparent and accountable way of governing in Ukraine.

It is also our job to point out when countries are advancing a transparency agenda as a box ticking exercise and that is indeed the case in Russia. This year, we released regional reports to dig into regional trends we see in the Open Budget Survey and our Eastern Europe and Central Asia report delves into what we see as a worrying trend of controlled transparency measures in several countries of which Russia is the most emblematic case. Its score of 73 in transparency must be contextualized, and we encourage readers to also consider its score of 28 in participation. Russia’s budget process is firmly institutionalized and controlled, in that there are laws and regulations governing the budget process. The relevant key budget documents are published routinely in accordance with the legislation, but these documents lack critical information on classified (secret) and/or extrabudgetary funds – items that the Survey does not cover or covers inadequately.

There are at least three fiscal practices in Russia that are not adequately assessed in the Open Budget Survey and that impact the high transparency score received by the country. One, a fairly large and growing proportion of the Russian national budget is classified as secret. Two, more than one-third of public procurement contracts were classified as secret and therefore not subject to open and competitive tendering procedures. Secret items in budgets and public procurement transactions are not assessed in the Survey. Three, the Open Budget Survey inadequately assesses the governance of extrabudgetary funds, including Russia’s large sovereign wealth fund, which is used to directly finance certain activities, such as infrastructure projects and lending to foreign countries. These ‘hidden corners’ of public finance cannot be easily assessed by civil society organizations through instruments like the Open Budget Survey. Instead, they are best undertaken by specialists from international financial institutions or government insiders with access to information that may not be in the public domain.

We want to state unequivocally that advancing an open budget agenda is about opening up budget processes to public dialogue and indeed scrutiny. It is about advancing the public discourse and the role of watchdog groups in ensuring public monies advance public interests and are not beholden to elite capture. Reform champions in Ukraine, Georgia, Moldova and throughout Central Europe and the former

Soviet Union must be supported to continue on their path to good governance and accountability, which includes advancing open budget practices. We must also denounce when we see these efforts and values under threat as in Ukraine’s brave battle for freedom.

We hope that by reading this report, our partners and allies in the open budget community will walk away committed and energized to support those who are pursuing paths to progress despite all odds in all corners of the world. I also urge that we remain steadfast in condemning and countering authoritarian forces that seek to challenge open societies and their ability to thrive—the threat to freedom anywhere is a threat to freedom everywhere.

Warren Krafchik
Former Executive Director