How to reinvent a country for the digital era

This post is written by Oleksii Sobolev, CEO at Ukrainian state-owned IT company Prozorro.Sale.

• The problem: The state and cities do not always effectively manage their property, and during the selling or renting of it, abuse is possible.

• Why it matters: Inefficient assets are losses for the budget, and due to non-transparent sale or lease of property the state and communities do not receive money.

• The solution: Digitalisation of processes and online auctions allows to effectively sell and rent out property: owners get money, and businesses — opportunities for development.

In late December 2021, Ukraine was recognised as the winner of the Open Government Award 2021 in the OGP Impact Awards nomination. This is the most prestigious award in the field of open government, which concludes the 10th anniversary of the Open Government Partnership, an international organisation that combines government leaders and civil society advocates all over the world to promote transparent and accountable governance. Overall, projects from 21 countries in Europe were competing for the first place Award. The winner was the Ukrainian state-owned IT company Prozorro.Sale, which conducts transparent online auctions for the sale and lease of public assets and property. Only five years ago, the Open Government Award 2016 was awarded to the Prozorro e-procurement system, which specialises in public tenders and also originates from Ukraine. So, we want to share Ukraine` experience and tell more about how we have reinvented a country for the digital era.

People

In Ukraine, universities provide a good basic level of technical education, but their approaches are still quite conservative. A whole generation of IT specialists did not stop at this level of knowledge and increased their skills through additional courses and projects. The experience gained by Ukrainian IT specialists in the 2000s resulted in a surge in the emergence of product companies over the past 10 years. They work for many outsourcing companies and create their own product companies. The whole world knows about Gitlab (a web-based Git repository that provides free open and private repositories, issue-following capabilities, and wikis), MacPaw (an advanced writing assistant) and Grammarly (an online service for checking texts in English based on artificial intelligence) founded by Ukrainians. The latter is valued at $13 billion. Such a high level of competence allows the creation of products of different levels of complexity for both private and state-owned companies.

IT infrastructure

In the period from 2016 to 2020 alone, the total amount of exports of IT services from Ukraine exceeded $16 billion. It has become possible thanks to the efficient infrastructure, which is developing rapidly in the country. Business creates modern training courses that allow to train professionals for IT companies. Ukrainian IT specialists have the opportunity to work on a simplified tax system. Demand for IT services over the past few years is growing by both business and government, creating opportunities for IT companies. Online registration, electronic signature and online services for entrepreneurs in the Diia application (an app of e-governance in Ukraine) means in the country, you can now register a startup in a day.

Historic juncture

The Maidan Revolution (The Revolution of Dignity) set the course for the recovery of the whole country, creating a window of opportunity for systemic change. The stakes were high: the war in eastern Ukraine started, as well as the global economic crisis. The state brought order to critical areas: procurement, the banking market, and the management of state-owned enterprises. This required a rapid renewal in power, the involvement of technocrats in the state bodies - specialists with the best market expertise, with experience in creating and managing large and complex projects. Such teams have appeared in almost every ministry and department, first on a volunteer basis and later in the status of civil servants and consultants of the Reforms Delivery Office of the Cabinet of Ministers of Ukraine. Furthermore, in recent years, civil society activists have gained considerable expertise and experience and become a real watchdog in the public sector. They expose violations, influence regulation and help create useful and effective projects together with government agencies and business representatives. It is thanks to this “golden triangle of partnership” (business-public-civil society) that projects such as Prozorro.Sale are born.

"The state had a clear request for quick and effective solutions. That's how Prozorro.Sale appeared - a system of transparent online auctions for the sale and lease of public assets and property."

Moving the state online

Under conditions of internal and external pressure within the state, creative and bold decisions were born, including the digitalisation of as many areas of public activity as possible. The state had a clear request for quick and effective solutions. That's how Prozorro.Sale appeared - a system of transparent online auctions for the sale and lease of public assets and property. Starting with the most urgent task - the sale of assets of bankrupt banks, we had proved effective and received the “green light” for the development of other areas. Transparent auctions of small-scale privatisation, bankruptcies, subsoil licenses, and leases of state and municipal property soon followed, as well as land sales and leases this year. Today Prozorro.Sale is actively cooperating with all branches of government, relying on the support of ministries, government, parliament and the president.

Digitalisation continues to cover more and more spheres of public activity in Ukraine. “The computer does not take bribes,” says President Volodymyr Zelensky, who initiated the total transfer of public services to the online domain. A separate new ministry is working on this task - the Ministry of Digital Transformation, which has set itself an ambitious goal: to transfer 100% of the services provided by the state online by 2024. Much of this plan has already been implemented: today the innovative service “Diia”, offers dozens of electronic services.

International support

Without international technical assistance, the Prozorro.Sale project would not have started, because in times of crisis and war, we would not have been able to raise a powerful IT system at public expense. The assistance was not only financial. We received expertise, management standards, and support in advocacy. This is one of the most powerful partners who help us today.

So, what is the phenomenon of the Ukrainian IT miracle in the public sector? Well, how to put the answer in one sentence? Apparently so: the secret is in a unique combination of talents, support inside and outside the country, circumstances and historical moment, multiplied by the initiative of a dedicated team.

We at Prozorro.Sale are very inspired by this international recognition. For us, this is a confirmation that we are moving in the right direction. As well as an incentive to make other areas of state assets transparent. Believe me, Ukraine will surprise you more than once.

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(Image Credit: Unsplash)