Ukrainians routinely complain about paying extra fees for expedited processing of documents, or to have a plumber repair their toilet. Kyiv is littered with unfinished apartment buildings because developers skim so much from the construction funds that the structure cannot be finished.
Doing business in Ukraine is challenging and it’s not just because of the illegal Russian invasion. For decades corruption has been a reality.
Is corruption inevitable in post-soviet countries? What effect could corruption have on Ukraine's recovery and rebuilding after the war? And how can it be eradicated?
Find out on this episode of the Decentralists.
Ukrainians routinely complain about paying extra fees for expedited processing of documents, or to have a plumber repair their toilet. Kyiv is littered with unfinished apartment buildings because developers skim so much from the construction funds that the structure cannot be finished.
Doing business in Ukraine is challenging and it’s not just because of the illegal Russian invasion. For decades corruption has been a reality.
Is corruption inevitable in post-soviet countries? What effect could corruption have on Ukraine's recovery and rebuilding after the war? And how can it be eradicated?
Find out on this episode of the Decentralists.
00:00.00
Henry
Okay, we're ready to go hey everyone it's Henry Mike and Jeff of the decentralists and welcome to our latest episode business in Ukraine old school problem with new solutions. So anyway, Mike you've been there a while. And you've been dealing with um, a whole bunch of facets in Ukraine's society dealing with the business there as well. Um, however, my understanding most people's understanding is there is an old-school problem that a rears its ugly head and of course most people call it corruption I'd like to.
00:22.44
Mike
My.
00:39.33
Mike
That.
00:39.35
Henry
Like to hear your take on it. Ah because you've been dealing with it for for for over six months yet so so so why is it such a problem and can you give us ah an example of of what you've experienced.
00:44.25
Mike
Right.
00:54.59
Mike
Sure? Well um, okay Henry so it's it's one of these things where I think so there's this There's this concept of corruption. Let's just let's just see what exactly we mean by that word. Okay, because it's a little bit different. Um. So generally speaking if you think of the word like corruption. It's usually it usually applies to something involving government. Okay because it's some kind of you know there's this There's this gray area between say government being responsible for um.
01:15.79
Henry
Yeah.
01:28.72
Mike
Procurement contracts right? We need to build a bridge. We need to build an airport. You know things that are big ticket items right? Governments spend big ticket money and the awarding of the contract to a particular business or person or whatever.
01:30.58
Henry
Ah.
01:43.88
Henry
Her her.
01:46.31
Mike
You know? so you've heard this happen I mean there was what was the snc lavelin got nailed in Quebec but remember a couple years ago big 1 right for for paying basically bribes to people in you know Congo or something like this in order to.
01:50.20
Henry
Oh man. Yeah, so. Well, let's face it Mike the biggest projects in the world. That's always a component no matter how clean it tries to be.
02:05.58
Mike
Well, okay, yeah, and so and so what you end up having right is in in some of these things it just happens because you have um, skill deficits at all levels of their of the say government. And you potentially have um you know like kind of let's say ethics deficits on the on the end of the people that are bidding for contracts. So essentially what what happens here in Ukraine just like anywhere else. Frankly um, is that you have a a.
02:32.30
Henry
That's.
02:40.31
Mike
Um, a government that is responsible for keeping the country running for procuring things like military supplies or eggs for the army and um.
02:51.71
Henry
Ah.
02:53.57
Mike
You know they award contracts to supply eggs and they find out that the eggs were 3 times as much as you could buy them at the grocery store and somebody loses their job. Okay, and so what? what's happening here in Ukraine and how this why this is kind of an issue is is if you. The un and all these folks they have these kind of corruption indexes for doing business in the country and before the war I think Ukraine was like 126 out of like 190 countries.
03:23.52
Henry
Um, yet where where number one is the least corrupt. Oh Jesus.
03:28.35
Mike
Released corrupt and 94 is the most corrupt and the old and Russia was like one thirty or something okay, and so so what you have is is you basically have this kind of um this this eastern bloc soviet. Kind of bureaucracy that still exists because Ukraine's only a thirty year old country right? It's a thirty year old country so before that in kind of the soviet era um, you know, manpower and and kind of money didn't mean anything right.
03:46.46
Henry
A mindset.
04:03.51
Mike
So you would just you would you could employ as many people as possible. You could build as inefficient kind of steel Mills or or you know, plants or factories or whatever as as you wanted because all you needed to do was keep everybody kind of working right? at some point and see to totally.
04:17.56
Henry
Right? right? because that was the old soviet way based on Communism everybody has a job.
04:23.36
Mike
Totally so everybody has a job and everybody and there so what happens is they built these huge processes where you know and it's kind of sounds like a joke right? but it used to be that you would. You know as as a citizen of a former former soviet republican this is not just Ukraine and Russia but like even you know Czech and Poland and all these places is you would you would have this thing where you as a citizen you wanted to say I don't know let's say you wanted to get a driver's license. Well you would walk up.
04:43.97
Henry
Um, oh yeah.
04:53.89
Mike
To the to the driver's license office and there would be some matron sitting at a desk outside the door and that matron would have to get a piece of paper from you that was requesting the ability to go inside to apply for a driver's license and then stamp that thing with some official stamp.
05:10.99
Henry
And get in the line.
05:11.20
Mike
Just so you could go in the door and get and no, but then you had another person to stamp where line you were in and then you had another person to stamp. You know when you could move and stamp and stamp and stamp and stamp because they just basically needed to keep people employed and so you have this system where you have this kind of. A whole bunch of people who've gotten used to their livelihood being connected to being employed by the government. Okay, and this is trend and this really hasn't changed in in Ukraine. All that much. It's only been thirty years and so what you got is is you got this.
05:38.00
Henry
There.
05:50.52
Mike
Kind of Archaic um system where um, you know there's you don't even know where the the process starts or where it ends or how many people are involved. You just know it's a lot right? and and contracts kind of pop out one end. For a new bridge for a billion dollars. Okay, and nobody really knows if that bridge actually costs a billion dollars right? The government bids says says they're willing to pay $1000000000 for it.
06:17.70
Henry
The.
06:25.92
Mike
But that doesn't necessarily mean that it's going to cost $1000000000 to build okay and so so you have this machinery that generates this number and nobody knows where that number came from and nobody knows where that billion dollars is going to go okay and then you have these people who bid on these contracts.
06:27.50
Henry
Right.
06:45.45
Mike
And whoever wins that contract. Um, why did they win it. Do they win it because they took somebody's kid on vacation to you know some ski resort they bought somebody a Ferrari or by virtue of just an open bidding process. Well, that doesn't exist.
07:03.12
Henry
Her hair.
07:06.38
Mike
And so so what you have is this is this kind of society where the the um kind of construction awarding of contracts and the bidding and kind of fulfillment of things. Is completely in a grey area in the dark and nobody knows what's going on and so what's happening is that is now where um, that is now the mechanism that is kind of being contemplated as being in control of a trillion dollars
07:40.22
Mike
To determine and rebuild all of the civilian homes and infrastructure in Ukraine so you can imagine um the concerns over when a trillion comes in the top end of this thing. What's coming out the bottom end.
07:41.32
Henry
Um, yeah, yeah.
07:54.69
Henry
Yeah, exactly and and it's it's actually fascinating Mike and and Jeff um, it just struck me because we were speaking about this a little bit earlier. Um I guess if if you as a person in Ukraine have have been used to. You know generations your family generations of the communist system. Um it. It would be extremely tough I would think to even understand and start to use a more capitalistic system where there's more efficiency. Yes, there's some problems as well.
08:25.25
Mike
Oh.
08:31.15
Henry
But I mean to us it might seem obvious how a capitalist system would work and how proper proper bids are are evaluated and such. But maybe it isn't.
08:41.00
Geoff
Well, that's exactly right? and and I think when we throw around this term that Ukraine is only thirty years old you you also need to set another marker which is they've really only been a democracy like it really isn't until Zelinsky that you know that they were.
08:54.25
Mike
So.
08:59.75
Geoff
Properly a democracy and and if you want to you know if you want to eliminate Corruption. You need you know both a culture but you also need things like rules and the rule of law to enforce those rules. And the trust of that rule of law that things are going to be applied fairly that if you refuse a bribe then the guy in the cubicle next to you will also refuse the bribe or if he's arrested for accepting a bribe. He'll be charged and so on and so forth so you need that entire. You need that entire framework in in place as Well. Which in the former Soviet Bloc Nations. You know, never existed where they went from you know tsarist to soviet to Post-soviet to whatever.
09:38.28
Henry
Yeah, yeah.
09:39.41
Mike
So.
09:56.63
Geoff
You know, whatever nightmare Russia is in now and and nations like Ukraine and Latvia and so on have struggled their way out and nations like Belarus have collapsed their way back in so it is. It's almost unfair to say.
10:07.74
Henry
Oh yeah.
10:14.57
Geoff
30 years because in in reality it's it's really only 5 years and and I I or less and I think the other complication is the western world. It's very easy for you know for.
10:16.61
Mike
Correct.
10:17.38
Henry
Yeah.
10:30.78
Geoff
The west to point fingers and then for countries like Ukraine to point right back and and and sort of a recent example is Donald Trump tried to extort zelensky tried to get him to to dig up dirt on.
10:41.54
Mike
Correct right.
10:43.30
Henry
Um, he asked? yeah.
10:47.46
Geoff
Not makeup dirt on the Biden family in exchange for Trump releasing funds that the US congress had already approved so so Well well he didn't but it's it's difficult for America or the west to say.
10:55.70
Henry
And he didn't do it.
11:04.91
Mike
Um.
11:06.89
Geoff
Hey you got to clean up your act when there is the president of the strongest nation in the world trying to extort Ukraine right trying to not for cash but for for favors in in exchange for cash by any other measure. You know that is you know that is.
11:18.83
Henry
Oh yeah.
11:24.54
Mike
Um, and.
11:26.76
Geoff
Corrupt behavior um, and even in canadian history. You know we're Canadian Mike mentioned s and c level and there are stories where the you know the Olympic stadium was being built in Montreal not that long ago where you know the same.
11:36.69
Henry
Oh yeah, oh oh.
11:39.35
Mike
Um, right.
11:42.97
Geoff
Concrete truck drove through the gate 10 times and got its chet sign 10 times for one deliver of concrete and you know they were still paying that thing off thirty years later so you know so it's it's I think it's very easy for.
11:46.43
Henry
Yeah I was in the 70 s yup.
11:54.75
Mike
Writes.
12:00.28
Geoff
You know for the west to be holier than now when you know when in reality it's taken us decades if not centuries to get our act together and in some cases. Um, we're still you know we're still getting our act together and.
12:16.10
Henry
Ah.
12:17.72
Geoff
You know? So so I think when you're saying to that you know that lowly Ukrainian clerk or the guy who's awarding that building contract or the police officer who's pulled you over for speeding or whatever you're not allowed to take that bribe. Um.
12:27.59
Mike
So ahead.
12:33.67
Geoff
It's hard for him to say but you know the president of the US can do it. But you're not allowed to and yeah and and so I think all you can not all you can do. But I think what's key is to you know set benchmarks. Ah, and.
12:36.52
Henry
Now that's an excellent point. Absolutely excellent point Jeffrey.
12:37.15
Mike
Right.
12:52.20
Geoff
And then hold you know hold the Ukrainian people to those benchmarks when the time comes and and basically help them help them understand how to put these things in place as they. You know, attempt to claw their way to democracy and to the rule of law when they finally shake off this this invasion.
13:10.97
Mike
Um, right right? but.
13:16.89
Henry
Yeah, absolutely a great point. Um, so so Mike you also you you would explain the history for large contracts of of corruption and and and it happens in the soviet box and it happens in Ukraine that sort of thing. But.
13:21.80
Mike
Are.
13:31.25
Mike
Um, but.
13:34.77
Henry
Have you encountered any ah corruption and and and if so what's it like at at at the low level of someone having you know, lived in Kiev for um, for six months now does it does it manifest itself in in everyday ways.
13:45.57
Mike
Um, but um, okay so for me myself personally no I have not encountered it. Okay, um, directly um. Okay, but I guess you could say one degree of separation. You know I have encountered so the first time was I went out to Borodyanka in August when we were here when I first got you? That's the the what this is the one it was early in the war and literally was one of these.
14:12.63
Henry
Oh that's that town that had been heavily shelled.
14:21.30
Mike
Buildings like you now see sadly all over the place where it's one of these 9 story buildings where there's a left side and a and a right side and the middle's been blown right out of it exactly and so you know we went out there and we were talking with ah one of the residents of this building.
14:21.57
Henry
All over. Yeah, hole in the middle.
14:37.80
Mike
So there was 350 people living in this building 35 people died in the basement sheltering when the bomb went right down the middle and the other 300 and some people um have been living in their brother's garage or in a temporary shelter or in whatever.
14:41.73
Henry
No.
14:55.49
Henry
Um, okay.
14:56.54
Mike
For six months and nothing's happened nothing and they couldn't even get approval to tear down the wreckage of the building so that they could even you know like even put up a shack on that piece of land because the mayor of Borodyanka wanted Baksheesh in order to issue a demolition permit money and oddly enough. Um you know, just two weeks ago there was a french um, ah journalist crew here.
15:17.20
Henry
Do you want money.
15:32.24
Mike
And they were going out. It was funny and completely unprovoked the the journalist went out when the one of the french journalists was telling me that they were going out to Borodyanka and he said they called the mayor's office to do an interview and they said yes seventy five bucks right and he said screw you I'm on.
15:45.67
Henry
Who what.
15:51.79
Mike
Paying you know I'm not paying baksheesh and they ended up going out anyway and while they were there. They called him again. The guy said seventy five bucks he said screw you and then they said okay fine. We'll come and do the unit you know so it it it. It happens right.
15:52.98
Henry
Yes.
16:05.51
Henry
The.
16:10.40
Mike
But it's it's it's very funny right? like 1 of the it's kind of I almost kind of giggle a little bit because let's let's talk about kind of day to day corruption in effect in canada. Okay, um, so you know and let's take let's take a plumbers coming to you know, do some work on your house.
16:30.60
Mike
And you you know you call up somebody plumber gardener. Whatever they come and do work the bill's two hundred and fifty bucks and in Canada they'll be like you know, maybe the guy says oh it's 2 50 um with an invoice plus gst or two hundred bucks cash right
16:43.89
Henry
Right? Yes, you're right.
16:48.56
Mike
Two hundred bucks cash no invoice giddy up right? whereas you know it which is which is basically the funniest thing because the corruption in Canada is in effect the person offering to take less money right? take less money.
17:01.32
Henry
Yeah, yeah, he.
17:06.76
Mike
In order to pay taxes whereas the corruption here if you're the plumber is you call a plumber my toilet's broken. Can you come and fix it. The guy says yeah it six months and you're like it's busted today. Can you come fix it today. Yeah for an extra fifty bucks so it's to make more money.
17:19.17
Henry
Right? Okay, yeah.
17:23.84
Mike
And this is why basically every Ukrainian is a plumber and a carpenter and can fix cars and do all of these things because they just don't They can't afford to or don't want to pay the back. She.
17:29.87
Henry
Yeah, they have to be have to be.
17:31.58
Geoff
Well to be fair that Canadian plumber is making more money he's making more money by not giving his 30% to the taxman. so so yeah it isn't coming out of your pocket.
17:38.30
Mike
The correct correct.
17:47.72
Mike
Well it is it is in effect but my my point simply is right is that he's offering to the person standing there you writing your check to this guy right instead of writing a check for two hundred and fifty dollars plus you know, 14% gst or hst or whatever it is.
17:47.79
Geoff
But he is still making more money and.
18:05.87
Mike
You're giving him $200 in cash. So you're out of pocket less whereas in Ukraine you're out of pocket more right? um.
18:08.45
Henry
Right? Yeah, yeah, so Mike what I mean what can be done to fight corruption in in Ukraine because let's face it. We know that Zelenskyy has made a huge effort.
18:23.68
Mike
The.
18:25.75
Henry
Um, certainly the media has has has ah grabbed onto this and he has removed a ton of high level folks. Um to me it seems like he's got to get this happening ah and very seriously so that people around the world will realize that that.
18:38.53
Mike
Next.
18:44.37
Henry
Ukraine can be trusted with western money.
18:44.82
Mike
Well and and and I think that's for sure that's the motivation. Okay, um, and as and I think the reason why you're seeing it now is because it's getting closer to some kind of reality where there may be some western money coming in.
18:59.85
Henry
Yeah.
19:01.19
Mike
Right? So now. It's more important to deal with it. But there's there's some interesting facts. So basically there's an anticorruption um division or department of the internal affairs. Okay, so this is kind of like the Fbi right? and um, the internal security and that. Group that is responsible for investigating corruption at the government levels in Ukraine is actually run by the Fbi like it it. It. It actually is like us Fbi agents. Yes, like.
19:26.55
Henry
Oh.
19:36.44
Henry
Ah, what do you mean.
19:38.84
Mike
They're actually in Ukraine running the anticorruption investigations. Yes, yes, right? because they just they can't they can't even they because they just don't even trust the you know the the people who work in the anticorruption department right? yeah.
19:41.78
Henry
The American Fbi Personnel wow
19:53.60
Henry
Wow is that right.
19:57.93
Mike
Um, you know, um, there's been. You know there are a lot of initiatives that are aimed at assuring. Um, you know western kind of um audiences and in governments and donors and things that there are measures being taken you know there's ah, there's a. A transparent government procurement platform that the Ukrainians are very proud of it's called Prozzoro and it's being touted by one of these groups that is rebuilding that is doing some of the rebuilding efforts as a way to to control corruption. Okay. Because the theory is is that once the contracts are rewarded then you know there's this open platform where anybody can go and access. You know who's got the contract who won it what's happening where is it in the stage of construction of construction. What's being spent blah blah blah blah blah right so that that's ah, that's a that's a step forward. Unfortunately, unfortunately.
20:50.64
Henry
Oh for sure.
20:54.95
Mike
Um, the thing that doesn't get mentioned about this platform is it. It only kicks in once the contract's been awarded so is the bridge worth $1000000000 or worth $1000000 um you know that still is up there. Okay, um, but in.
21:02.16
Henry
Ah.
21:11.21
Henry
Ah.
21:13.87
Mike
In truth you know the the you know you kind of have two ways to deal with it one. Well 3 ways one you don't do any business in Ukraine which is not reality right? right? Especially right when it's going to need to be rebuilt. The second thing is that you you um.
21:22.22
Henry
No, it's not especially now.
21:32.33
Mike
Say I'm not going to give you any money until you sort everything out until I have been assured in my own level of whatever assurance that you have weeded out all of the corruption and potentially put in the proper legal um and regulatory system. Right? Like as Jeff was talking about to account for and ensure that corruption is punished say ah rooted out and punished but you can imagine how long that's going to take 1 totally and or the third way is you do something.
22:01.76
Henry
Oh yeah, and nothing's perfect and it never will be.
22:11.42
Mike
Creative with technology which is kind of what we we are going to try to do.
22:17.15
Henry
Well, that was my next question. Um.
22:19.61
Geoff
I'm gonna I'm just going to interrupt and say that in my mind, there's also a fourth way for a nation overall to to deal with corruption and and again you see this with Ukraine and and Zelenskyy is is also making it a matter of national pride of of.
22:22.20
Mike
Okay.
22:33.81
Henry
Yeah, yeah.
22:34.58
Mike
And without doubt.
22:37.15
Geoff
Um, of yeah you know of patriotism and basically saying look Russia is this despotic corrupt hellhole and we want to be everything they are not. We want to be we want to pivot.
22:50.56
Henry
Yep.
22:53.69
Geoff
Unlike Belarus pivoting to the old way we want to pivot to Western Europe um so we want to be proud of who we are and 1 of those things is is getting rid of corruption and and making that you know making that part of. Part of the culture and and and and part of what you know what makes people proud to be Ukrainian and and I think that is that is essential as well is just I remember I was on I remember a friend of mine went on vacation to Cuba.
23:13.75
Henry
Um, yeah, the new Ukraine.
23:32.36
Geoff
And he was at a baseball game and some guy tried to steal his camera and all the other cubans chased down this thief and grabbed him and you know pushed him to the ground and held him and gave the camera back to this guy because it was a sense of pride to them.
23:50.65
Henry
Ah, yeah.
23:51.61
Geoff
That this tourist could come to I don't realize crime is different from corruption. But this tourist could come to a baseball game have a good time sense of pride to them that they were ah a safe place right? and so they they grabbed this guy and I think if you could get that culture going for corruption as well. Where.
23:58.22
Mike
So right.
24:01.79
Henry
Wow.
24:11.40
Geoff
Becomes a sense of national pride then that's 90% of the battle right? there.
24:13.94
Henry
Absolutely.
24:16.14
Mike
Ah, and with without a doubt without a doubt if you you you have nailed exactly the way it it should be and it in fact will be okay in especially amongst the young. Okay.
24:25.67
Henry
Yeah.
24:32.70
Mike
Like the young people in in Ukraine the 20 s and thirty year olds that you know I talk to and stuff like this. They are all um, they're like well if you know we're not going to pay a bribe, We're not going to do any of this stuff if somebody starts to ask for cash or whatever the case may be. We're just going to vote them out.
24:47.71
Henry
Did it.
24:49.41
Mike
You know what? I mean we're just going to. We're gonna we're not going to deal with this. This is this is to your point. This is Russia this is the east this is what's wrong, right? Um, and so without a doubt the the future from the kind of grassroots level is definitely not. Um, in this in maintaining some kind of corrupt petrostate type of type of thing. The problem is is that that is a generational solution right? It's it's going to take a generation for all of these old.
25:09.54
Henry
Um, yeah.
25:16.84
Henry
Yep.
25:24.60
Mike
Stodgy I've been I've been making money in government. Um people to be gone right? Well, it's it's it is will it and and and and in fact, you know this is another point about the corruption thing and then I'll I'll let you kind of take that.
25:27.27
Henry
Um, yeah, yeah, but that's that's nature. That's the way it works you know change takes takes generations True change.
25:43.47
Mike
Let you kind of bring you saying Henry but you know the other thing that is weird about the the kind of the corruption in places in in places like Ukraine and the east right? is that generally speaking people do not get involved in politics. In Canada the Us the Uk whatever to make money now. Sure you may retire as the president and write memoirs and do speeches and make millions. But when you're the president you're making like 300 grand right? when you're an mp you're making maybe 80 grand and you get some kind of pension.
26:04.54
Henry
Right.
26:20.59
Mike
Right? You don't get a job at government in order to make money whereas. It's the exact opposite here. So the people that the people that have the fanciest cars. The biggest houses you know all of this type of stuff. They're the politicians. Okay.
26:25.39
Henry
Good point.
26:35.29
Henry
Yeah, yeah, understood.
26:39.18
Mike
So anyway, so they just it just gives you an idea right in in terms of you know when you're sitting there going I want to be a rich guy in this in Ukraine and depending on how old you are. You've been. You're you're looking at kind of I want I have to get on the political ladder then right? so.
26:53.63
Henry
Wow. Okay, yeah, absolutely um I was going to ask you Mike about technology because let's face it. We're the des essentialists here and I think you've got a pretty in an innovative idea of ah regarding technology and perhaps helping.
26:58.82
Mike
Move? Yes, no.
27:10.20
Henry
The cause of anti-corruption.
27:12.97
Mike
Yeah, so so I mean it's not my idea. It's our idea but primarily it's Dr. Jeffrey Goodell who's our one of our good friends and um as Jeffrey calls as as other Jeff calls him clap and Jeff um, but we what it what it is Henry is is that we've been talking a lot about.
27:19.59
Henry
Um, yeah.
27:29.16
Mike
As part of the whole decentralization thing. There's these you know there's the the kind of the digital currency thing and I'm not talking about crypto I'm not talking about bitcoin or Ethereum or any of this type of stuff I'm talking. Basically so think of.
27:40.42
Henry
Ah, you're talking about true digital currency.
27:46.75
Mike
Um, you know think of having the bank of Canada and the bank of Canada has a billion Canadian loonies like actual physical coins sitting in a box somewhere right sitting on a palette and what they do instead is they issue a digital loony and and they issue a billion of them.
27:55.50
Henry
Yep.
28:04.75
Mike
So for every one billion digital loonies. There's a real loo. Okay so this is what's called a central bank digital currency. Okay, and so the idea is is. It's backed by an issuer could be the central bank. It could be a royal bank of Canada it could be anybody but the idea is is. It's it's.
28:07.24
Henry
Right? Yeah yeah.
28:24.50
Mike
Every dollar or euro or whatever has a real one and so one of the things that we thought about when we were going through this process is is okay so the biggest concern you have is is you've got let's say it's going to be a trillion and a half dollars to rebuild the country. Okay. So in order to get this trillion and a half dollars if you imagine some future where that money is coming from western governments western donors in effect western taxpayers right? Um, oh sorry a Looney Jeff just prompted me a looney is ah is a Canadian dollar it's it's got ah it's got a.
28:58.92
Henry
It's a slang for a dollar coin anyway. Ah.
29:00.26
Mike
It's a slang for a Canadian dollar coin that's got a loon which is a bird on it. Um anyway, um, but you know ah so the idea is is that um. You know you're you're going to have potentially all of this western donor money that's going to come in. It's going to be a trillion dollars that's a big pile of money that's going to tempt anybody and when you have um as we talked about I think in the last episode the most corrupt sector in the country of ukraine before the war was construction.
29:29.88
Henry
Right.
29:32.58
Mike
Okay, and that's basically what you need is a lot of construction. How do you write? How do you basically take money from western donors so that they know that when they put $1000000000 in to rebuild homes. They get a billion dollars worth of homes out of it. That's the first right.
29:35.13
Henry
And almost nothing. But.
29:51.96
Mike
Not a billion dollars gets 100000000 worth of homes and $900000000 worth of yachts. Okay, and the second point is is that how do you then when that billion dollars is used to build homes. It's in effect say a thousand say 10000 people that each get $100000 to build a house right. And so how do you ensure that those people don't get shaken down for their money right? You know some guy comes up and goes some to some baba or give me the hundred thousand I'll be here tomorrow and I'll build your house and she doesn't know and she gives him the 100000 the next thing you know he never shows up. Okay, so how do you How do you deal with this right? So one of the things we thought of.
30:14.98
Henry
Um, yo.
30:22.92
Henry
Right? Of course.
30:29.46
Mike
We said why don't we take 1 of Geoffrey Goodell's ideas for a digital privacy preserving currents a token-based currency that basically in effect works like cash. Okay, and why don't we just try it in this rebuilding process in the.
30:44.38
Henry
The pilot project that we spoke about.
30:48.36
Mike
Project. So we're going to rebuild 2 villages. Okay, and Dr and Kozarovychi there's about in both places combined there's four hundred homes that need to be rebuilt. Okay, so that means 400 people are going to get a claim that's going to be say whatever hundred thousand bucks each fifty thousand I don't know whatever the house costs. Okay.
30:55.78
Henry
Who.
31:07.30
Mike
And we were sitting there thinking. So how do we deal with this process so we can get everybody on side. Well, we're never going to get the laws changed. We're not going to what are going to do have cops walk around and make sure that you know people aren't getting ripped off no that doesn't make sense so we just thought why don't we do it this way instead of paying everything out in real Hryvnia. Let's pay it out in what's we're going to call a ah a digital rebuild horrific. So we're going to take the money that's necessary. It's going to cost about $26000000 to rebuild these 2 villages and we're going to put it into a bank account that sits outside of Ukraine. Okay, and then when we when we.
31:40.37
Henry
Who.
31:44.22
Mike
Fulfill these $26000000 worth of claims and we give all these babas and and didos and people in the villages. You know their claims for their houses to be rebuilt. We pay them in a digital Hryvnia. Okay, now that digital Hryvnia a they can take it to a bank. And they could say I would like real and they can exchange it and they can get real. They could take one hundred Thousand digital give it to a bank get 100000 real and and they're off the races and if you're a builder you can get paid but it's in digital. Okay, so you're the builder.
32:09.68
Henry
Ah.
32:12.78
Henry
Right.
32:17.70
Mike
You you can you could build all 400 of these homes and make yourself a billion dollars right? building these homes all you need to do is agree to um, certain standards you have to apply to be a vendor.
32:21.48
Henry
Her.
32:32.00
Mike
You have to agree to have you know a transparent process to have an auditable process blah blah blah and then you could go to this village. The Baba can give you you know 100000 digital Hryvnia you can use that to build the house. You can then take that to the bank exchange it for real Hryvnia.
32:32.94
Henry
Yeah.
32:50.24
Mike
And your 100000 comes back to you as 80000 because there's a v at of 20 so it guarantees they gotta pay taxes so there's um, exactly so what happens now is think about it. You've basically taken it where at any point along this process if the builders if the builder is corrupt.
32:55.33
Henry
Um, oh they got to be taxed So the government wins too.
33:09.30
Henry
Yeah, simple, he's got nothing.
33:09.86
Mike
Cut him off and now all of a sudden. He can't exchange his digitally goes to the bank and says I want to exchange don't bank back. You know your card has been declined if if if something happens along the way bank If the bank is is is playing funny business if somebody's not paying taxes if the people who are doing the claims.
33:28.56
Henry
Yeah, they're complaining.
33:29.48
Mike
Are Not getting their houses built or built property anywhere along this chain any place where this digital currency gets exchanged for real. You have the ability to cut it off or suspend it or whatever and and that is that is literally we were thinking. That is basically the only way the best way and a creative way to do something simple with technology and so potentially solve a very big problem for society and so that's what we're going to try.
33:51.88
Henry
Yeah.
34:02.60
Henry
Yeah, yeah, you know like that is fantastic and we have to give credit to of course. Ah Geoffrey Goodell our financial partner and in in London um brilliant and he's a bit of an expert on this stuff as well. Yeah, um.
34:16.20
Mike
Um, yes, that's his thing.
34:19.23
Henry
Ah, Michael thank you again. It seems like we're able to do you know recordings more often. Your your connection seems to be better and and and everything seems to be working out. Um, ah we'll do a couple more in the in the very new future. But but thank you for spending time on this because.
34:25.80
Mike
Yeah, yep.
34:38.82
Henry
I Found this absolutely ah fascinating I had never really thought about corruption in that way and you've experienced it and watched it. But there is there's hope.
34:43.29
Mike
Yeah.
34:50.48
Mike
Absolutely and you know Henry there hasn't been and we've had we haven't had any power outages for at least last couple weeks um and you know so everything is good and it's the day before the anniversary. So.
35:00.81
Henry
Oh my goodness.
35:04.36
Mike
So let's just let's just hope that this we don't start all over again with Brownouts and all this other kind of stuff. Um, you know and missiles and drones and all this other kind of stuff So I'll ah I'll make sure that I'm on the roof with the Germans as witnesses so that I don't get arrested again. Um, try to yeah exactly anyway.
35:08.69
Henry
And Missiles Yeah fingers crossed.
35:19.95
Henry
Ah, you've got an event there tonight. Okay, all right? Thank you so much Mike and Jeffrey fantastic.
35:23.83
Mike
Ah, right.
35:25.90
Geoff
That's great Mike well thank you Henry and stay safe Mike and we'll talk again soon by.
35:27.49
Mike
Thank you very much. Thanks guys.