The FCO and Social Enterprise in Ukraine

“Business! Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence, were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!”

In Dickens’ classic – A Christmas Carol, these words are uttered by the ghost of Jacob Marley, the former business partner of Ebeneezer Scrooge.

In the light of current events in Ukraine, with Yulia Tymoshenko still in prison,  here’s a look back at how Western government are assisting with Ukraine’s democratic evolution. I begin with correspondence from the UK Foreign and Commonwealth Office, responding to my enquiries about support for our social enterprise activities.  By this time the ‘Death Camps, For Children’ article has been widely read, as has our proposal for childcare reform and a social enterprise centre.

I’d brought up the subject of  the Holodomor because of the work that had gone into creating the awareness raising website , calling on support from UK politicians.

Thursday, 18 December 2008, 12:57
Dear Mr Mowatt

Thank you for your e-mail of 9 December. I am sorry that you have experienced difficulties in your previous contacts with the FCO. I can at least assure you that the Ukraine desk at the FCO, and our Embassy in Kyiv, are now aware about the activities of your organisation.

Perhaps I could take this opportunity to clarify a few of the issues you raised in your e-mail about project funding.

As you mentioned in your e-mail, DfID’s programme in Ukraine has now closed down. However, the UK contributes to the EU’s Assistance programmes (the EU is the largest donor in Ukraine). Most of the EU’s funding comes from the European Neighbourhood and Partnership Instrument which allocates over €124 million (around £98 million) annually to Ukraine.

As far as the UK’s bilateral assistance is concerned, this is now mainly provided from the FCO’s Strategic Programme Fund, which has an annual budget of £650,000 for Ukraine. The management of this budget is devolved to the British Embassy, Kyiv. Further details of the Strategic Programme Fund, including the type of projects covered and how to apply for funding, can be found on the Embassy’s website (link below)

The Westminster Foundation for Democracy are currently implementing a project entitled Strengthening Human Resources Development at the Verkhovna Rada in Ukraine. We are providing funding worth £150,000 in 2008/09 and £150,000 in 2009/10 from the Strategic Programme Fund for this project. Again you can find further details of this project on the Embassy website.

With regard to the exhibition on the Holdomor in Parliament, I understood this was in fact funded by the British Ukrainian Society (an NGO). I was not aware that WFD had had any involvement in it.

Yours sincerely


That same year, Terry Hallman called on  USAID and the Senate Committee on Foreign Relations for support. He drew their attention to  organised crime operations including trafficking in body parts.  Later he would raise awareness of the plight of Yuri Lutsenko with the US Embassy.   Several months later, in his final days of life, the US Embassy would inform me that Terry Hallman’s budget did not allow for any medial assistance other than the most primitive Ukrainian hospital.  Likewise in 2008, USAID had no budget for ‘retarded children’

In 2009 UK Business Secretary Lord Mandelson hosted the Social Enterprise Summit declaring that his department were ‘helping firms to help others’ . His interest in Ukraine however, was far more focussed on Ukraine’s access to the European market.

I had several exchanges of email with the British Ukrainian Society who didn’t see fit to publicise our efforts to the expatriate community.   According to Ukraine’s constitution, we and other residents had an obligation to act in the knowledge of harm being done to the vulnerable.  The best defence would be not knowing.

It’s a point made 5 years later in the Sunday Times when the story of Torez, the unnamed location of the ‘Death Camps’ article finally hits mainstream media.

The Ukrainian maxim: “I saw nothing, my home is on the other side of the village” has no place in the modern world. If by our deliberate blindness, children are allowed to suffer such depravities then, by our inaction, we are all guilty.’

In 2010  there is suddenly a change of heart with regard to funding, with the annoucement of a joint initiative for social enterprise by USAID and the British Council, an organisation in receipt of large scale funding from the FCO. We apply to solitication for partners and are disregarded.

For the like of us,  a self sustaining business paying taxes, we were effectively contributing to our own destruction.

With this in mind, I wrote recently to Immigration Minister Mark Harper, pointing out to him that if government themselves behave with the kind of dishonesty associated with organised crime, there could be little hope of tackling the problems thar organised crime causes.

Trafficking in Persons


A response today from the British Council says that part of the selection criteria for partners was their making a financial contribution.  They considered there to be no reason to respond to our application. They also say that their work did not derive from ours but a project in Indonesia in 2006/7.

They also say that the approach they use is based on concepts of social entrepreneurship developed internaltionally over 40 years.   This would be the foundation grant approach which differs from the self sustaining business approach conceived by P-CED in 2006. In essence a cause marketing opportunity for corporates.

On the other hand, the British Council website offers a definition which is a lot closer to the P-CED model descibed in all our papers since 1996. More importantly, our operational model in the UK since 2004.

“Social enterprise is a business with primarily social objectives whose profits are directed mainly at self-development, public affairs or resolving social problems. Such companies operate as business organisations do and generate profit, therefore they are non-charity. Social entrepreneurship is dynamically growing in European countries now, addressing unemployment, social protection and social inclusion. In particular, there are over 50,000 social enterprises only in the UK   “

There are very few social enterprises in the UK that are not dependent on grant funding. As recent research indicates.  funding exceeds profit by a factor of 8 to 1.

To further  illustrate dishonesty, a definition written by a UK expert is offered,  in Ukrainian.

No wonder Erste Bank went silent on us.

In comparison, our work in Ukraine began with a project for social enterprise in Crimea in 2002/3 and our investment since 2004 amounts to around £500,000 in project support and sweat equity.

This has made one thing very clear.  Social enterprise in international development will be a matter of corporations buying in and most likely avoiding the difficult social problems which might present a commerical conflict.

It would seem that Terry Hallman was right in the assertions made in his notes about the reluctance to tackle childcare reform.

Better that he died perhaps than live where moral cowardice has become de facto


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