In 2014, the newly elected government came to power with overwhelming support from Ukrainians across the country and high voter expectations. At the core of these expectations were two clear mandates; closer social, economic and political ties to western democracies and their principles of freedom, values, diversity and opportunity and a demand for institutional level reform to address and change systemic corruption that had existed within the system since the fall of the USSR.
Reforms are not always easy and there is often a delay between implementation of reforms and their visible results. While there is still work to be done, as of early 2017, one thing is clear:
More reforms have been accomplished in the last 3 years, than in the previous 23 combined.
In December of 2016, the European Commission issued a report on the reform process in Ukraine. The press release that accompanied this report carried the headline: “Ukraine is carrying out intense and unprecedented reforms across its economy and political system, while its democratic institutions have been further revitalized.”
Moreover, Ukraine’s reforms have begun to show results: in one year, Ukraine climbed over 30 places, to rank 24th in the world in the Global Open Data Index.
REFORMS AND BUSINESS
So what do reforms have to do with ease of doing business and facilitating investment? A lot. The reforms that have had the most impact on increasing investment and business development include:
Decentralization has focused on taking centralized power out of Kyiv, and moving it to the regions, where they will be able to be more nimble and responsive to local development opportunities.
Banking Sector reforms to strengthen and re-capitalize the banking sector have led to the closure of over 89 non-performing or at-risk banks, including the nationalization of the country’s largest bank in Dec. 2016.
Privatization creates the opportunity for the sale of hundreds of state-owned enterprises into private hands – benefiting both the government and the new buyers.
Monitoring agencies have been put in place to track and report on reform progress; these agencies provide business and investors with an understand the scope of change underway. The most recent report from the National Reforms Council can be read by clicking on the report below.
There are over 8 sectors where reforms have focused and within these sectors, there have been over 25 major reform processes started. A list of some of the major initiatives are below:
I – Anticorruption
1 New anticorruption institutions established in 2015 National Anticorruption Bureau of Ukraine and the National Agency for the Prevention of Corruption
2 Electronic system for mandatory disclosure of assets, income, and expenditures for public official and politicians
5 Access to and transparency of key government databases
6 Media ownership disclosure
7 Introduction of e-petitions and mandatory recording of municipal voting procedures
II – Decentralization
III – Financial Sector Reforms
9 National Bank of Ukraine Banking sector reforms and stabilization
IV – Economic Reforms
10 Successfully restructured sovereign debt obligations
12 Deregulation – repeal of outdated or unnecessary regulations
13 Amendments to Tax Code Designed to Improve the Investment Climate
14 Introduction of reforms regarding governance of State Owned Enterprises
V – Energy Sector Reforms
15 Reform Legislation
16 Diversification of gas imports
17 Naftogaz restructured
18 Introduction of measures to promote energy saving
VI – Justice Sector Reforms
19 Judicial reform
20 Open, transparent and competitive selection of judges to the Supreme Court
21 Introduction of civil society control over selection of judges
22 Extension of Legal Aid services
23 Creation of new police patrol service
VII- Health Sector Reforms
24 Procurement of medicines handed to three international organizations
25 Structural Reforms in Health Sector
VIII – Security Sector Reforms
26 Modernizing Ukraine’s armed forces – introduction of NATO standards