Notes from Brussels. Ukrainian economy: the way forward after a year of political turbulence

10 June 2019
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Notes from the public discussion that was held in Brussels on May 28 was organized by the independent think tank Bruegel in partnership with the Centre for Economic Strategy and the Ukrainian Think Tanks Liaison Office in Brussels with the support of the International Renaissance Foundation.

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Hlib Vyshlinsky, Executive Director of the Centre for Economic Strategy:

The new government must maintain macroeconomic stability, being financially prudent and guaranteeing the independence of the central bank. This will keep creditor credibility to the country. There is a necessity to take a steps to increase productivity. Land reform can increase the efficiency of use of agricultural land, privatization of state-owned enterprises will increase their efficiency, and liberalization of capital controls and simplification of customs procedures can improve the ability of Ukrainian companies to compete on the global market.

The widespread corruption and lack of trust in the judiciary are two of the most important obstacles to foreign investment and increased bank lending. Therefore, in order to establish the rule of law in Ukraine, it is necessary to restart the judicial reform.

Elena Flores, Director for International economic and financial relations and global governance at the European Commission:

Important reforms in the fight against corruption have recently been adopted. The European Commission is currently monitoring the implementation of new legislation, hoping that the Ukrainian authorities will also monitor it. As for state-owned enterprises, the current process of improving corporate governance of state-owned enterprises is moving in the right direction, but it needs to be completed. It is necessary to continue the process of privatization of state-owned enterprises, but this should be done in an orderly manner and efficiently to avoid mistakes made in other countries.

Marek Dabrowski, researcher-nonresident at Bruegel:

The current positive market attitude towards Ukraine is due to the support of the EU and the IMF, which act as lenders of the last instance. If there is any doubt about the support of these institutions, Ukraine can quickly go bankrupt. Unresolved political and military conflicts, as well as an understanding that the Ukrainian economy is on a fragile macroeconomic basis, is an obstacle to foreign and domestic investors.

Ivan Miklos, Chairman of the Strategic Advisory Group for Support Ukrainian Reforms, Member of the Supervisory Board of the CES:

The economic downturn after the Maidan has disappointed many people, and even if the actual level of corruption has decreased, citizens are still disappointed because they expected a cessation of corruption. Ukraine faces a challenge to a dysfunctional political process, where the parliament only supports 30-40% of the legislative proposals of the government. I’m encouraged by a group of young MPs who insist on real reforms and, despite the fact that they represent different parties, cooperate to adopt reform laws that bring Ukraine closer to the EU. The share of MPs promoting reforms should increase in the new composition of the parliament.

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