“Toronto principles” — is the vision document that describes key Ukraine reform priorities for 2019-2013 and that was developed by a group of civil society experts coordinated by the Reanimation Package of Reforms Coalition between December 2018 and June 2019 through a series of regional and national consultations in Ukraine. Additionally, over 100 sectoral experts provided their input. It consolidates the perspectives of over 90 Ukrainian reform-minded civil society organizations (CSOs) on their aspirations for the future of Ukraine. It is anticipated that this platform will enable continued CSO dialogue and joint collaboration on implementing democratic reforms in Ukraine.
The policy brief on economic development of the Toronto principles was prepared by Hlib Vyshlinsky, Executive Director of the Centre for Economic Strategy, member of the Coalition Board, the Reanimation Package of Reforms, co-authored with Dmitry Livch, head of the analytical department, project manager of EasyBusiness. Anna Derevyanko, Executive Director of the European Business Association (EBA), has been invited to peer review the economic development brief.
According to the document, the growth of investments is a key task and a mechanism for promoting Ukraine’s economic development. An important prerequisite here is to preserve macroeconomic stability, which is impossible without a responsible fiscal and politically independent monetary policy. Is expected that the following reforms could give a nudge to investment-based economic growth:
- Open agricultural land market – the adoption of a law regulating the sale of agricultural land and thus lifting the moratorium.
- Privatization of all large state-owned enterprises which are allowed to be sold in particular, state-owned banks, and a significant reduction of the list of state-owned enterprises which are prohibited for privatization. Independent supervisory boards should be established at all large state-owned enterprises. Parliament should adopt a new law on empowerment and increase the political independence of supervisory boards.
- Simplification and optimization of customs procedures, establishment of the institute of the authorized economic operator. This will make Ukrainian companies more competitive in global value chains.
- Reform of the fiscal service and establishment of financial intelligence service which will replace the tax police and numerous crime fighting units in law enforcement agencies. The goal is to create a tax and customs service that is friendly and transparent, as well as financial intelligence service that will apply analysis rather than force. Employees of these new services need to be employed after a complete integrity check. It is necessary to establish competitive salaries for them by introducing personal responsibility, and reduce their number through processes automation.
- Liberalization of capital movement and regulation of foreign exchange transactions. New law on currency transactions was adopted in 2018, it gave the National Bank the freedom to regulate them by its decisions. This freedom should be used to make Ukraine more open to capital movements and trade in line with EU practice.
Implementation of these reforms will make Ukraine more attractive both for foreign and for domestic investments, and will also contribute to the growth of the economy by 5-7% annually over a long period of time. In addition, it will make the Ukrainian economy more resistant to crises. Together, these steps will help bring Ukraine’s welfare closer to the level of the new EU member states.