Massive corruption scandal rocks Belarus healthcare

A massive corruption scandal has rocked the health service of ex-Soviet Belarus, leading even officials in the country dubbed "Europe's last dictatorship" to call for an overhaul of the system.

Authorities have arrested dozens of medics, drug company representatives and bureaucrats on suspicion of siphoning off millions of dollars in state funding.

Valery Vakulchik, head of the powerful KGB state security service, in televised comments last month denounced what he called a vast system of procurement of drugs and medical equipment at inflated prices.
Prices were habitually hiked by up to 60 percent and in some cases even doubled, he said.

Following his announcement, 37 top health officials were arrested and criminal investigations were opened involving 60 people including local representatives of international pharmaceutical companies.

The KGB chief acknowledged that the Soviet-style bureaucracy in the country bordering the European Union, ruled by strongman Alexander Lukashenko, helped promote corruption.

"The existing system of procuring medical equipment and drugs created the conditions for corrupt practices," he said.

"Bona fide suppliers could not rely on a positive outcome," he added, while procurements were made not directly from producers but "via numerous middlemen (and) finance companies."

Those detained in the scandal include deputy health minister Igor Lositsky, doctors at reputed clinics and leading business figures involved in producing and importing medicines.

One of the arrested businessmen is Sergei Shakutin, director of Iskamed group, who is the brother of one of Lukashenko's close associates.

Belta state news agency has published photos of searches at the home of a medical centre director that uncovered $500,000 in cash.

Officers also found $620,000 in the garage of the director of a public enterprise that imported medical equipment.

The KGB chief said bribes paid to corrupt officials amounted to millions of dollars.

"There will be further arrests since the people detained so far are just the perpetrators," Sergei Satsuk, editor of news site Yezhednevnik, who is familiar with the case, told AFP.

The chief beneficiaries in such schemes were retired law enforcement officials who set up companies to enter the lucrative medical equipment market, Satsuk said.

"In 10 years they drained all the juice out of the country's medical system," he said.

He said this involved supplying equipment that was not just over-priced, but also often lacked the necessary certification or came with faked documentation.

Some equipment was imported as second-hand, but re-sold as new.

- Powerful temptation -

This is one of the biggest corruption scandals in the history of Belarus, which is wedged between Russia and Poland and has been led by Lukashenko since 1994.

"Bureaucracy has privatised the state. We need to reform the whole system of state management, otherwise corruption schemes will spring up wherever budget funds are being spent," independent economist Yaroslav Romanchuk told AFP.

Other smaller corruption scandals have in recent years hit the sports, forestry and energy ministries as well as large companies, factories and banks.

Three ministers have been sacked and senior bureaucrats and regional officials have been arrested.

"Even if you clean out the state structures of bribe-takers, corruption won't die in Belarus for a single day," said Romanchuk.

"The very next day new people in old posts in the old system will relaunch the old corruption schemes."

The system "creates the most powerful temptation to set up schemes with kickbacks, bribes, swindling and abuses of office," Romanchuk said.

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