- How much does the budget lose due to the lack of good governance?
05.12. 2018The lack of the rule of law in Ukraine has been repeatedly called as one of the main reasons for underinvestment, hence the slow economic growth in the country. The positions of Ukraine in the international ratings remain extremely mediocre: according to WJP Rule of Law index Ukraine holds 77th place out of 113 countries with the score of 50 points; according to Corruption Perception Index (CPI) Ukraine is at 130th place among 180 countries with 30 points; according to Rule of Law WGI dimension Ukraine with -0.77 score points holds 160th place among 209 countries; according to Control of Corruption WGI dimension Ukraine with -0.84 points holds 168th place among 209 countries. Corruption and lack of trust in the judiciary for three years in a row remain the main obstacles for foreign investors. We obtained the same results during a survey of strategic and portfolio investors conducted ... Read more
- Which model of agricultural sector support does Ukraine need?
25.10. 2018Ukraine has been actively subsidizing national agriculture since the beginning of its independence. At that, according to OECD calculations, before 2017, a major share of state support for agriculture was transferred to enterprises not in a form of direct budget subsidies, but in a form of tax allowances. In addition to the tax allowances, the state was using direct subsidies per ton of output as well as general subsidies. In 2017, in response to a request from IMF and World Bank, the state abolished the special tax regime and switched to direct subsidies. In 2017, distribution of such support was performed pro rata to paid VAT, while, in 2018, the state divided 6.3 billion UAH of the support funds into special “resource subsidies”. Currently, new payments are directed at: Development of farm enterprises — 1 billion UAH Partial compensation of expenses on construction ... Read more
- Ukrainian banking and finance: major changes and challenges
23.10. 2018Many years of fixed exchange rate together with expansionary fiscal policy created huge external imbalances. The report describes the following key issues of Ukrainian banking and finance: Inflation targeting instead of defending the currency peg ‘Moral hazard’ aftermath – fewer banks of better quality Strengthening of the supervision State-owned banks ruled by the market New currency law paves the way to future FX liberalization The report was presented in Vienna during the panel discussion “Ukraine’s Economic Development and the EU Association Agreement”. This report was produced under the Ukrainian Think Tank Development Initiative (TTDI), which is implemented by the International Renaissance Foundation (IRF) in partnership with the Open Society Initiative for Europe (OSIFE). TTDI is funded by the Embassy of Sweden in Ukraine. The views and interpretations expressed in this report are the authors’ and do not necessarily reflect those of the Government of Sweden, IRF and OSIFE. Read more
- Privatization: Regional context
23.06. 2018The Centre for Economic Strategy is carrying out the project on support of the transparent process of the state enterprises privatisation in the regions. The fair and transparent privatisation devoid of corruption would become a source of investments, which is a requirement for an economic growth, which, in its turn, would result in increased well-being of population, and creation of new jobs. We are confident that liberalisation of the state enterprises from corruption and politicians’ control is possible through privatisation by a strategic investor. A fair and transparent privatisation would also boost performance levels of the Ukrainian enterprises as well as strengthen the positive social effect of their sale. Therefore, project’s purpose is to create a public demand for a fair and transparent privatisation of the Ukrainian enterprises to strategic investors among the population. To that end, the Centre for Economic Strategy shall ... Read more
- Europeanization Beyond Process: Ukraine
20.06. 2018After Euromaidan followed by Russian aggression in 2014, the Ukrainians see European integration as the only path for Ukraine. Support of EU membership grew from 42% of Ukrainians in 2013 to 57% in June 2017 (“Democratic Initiatives” Foundation poll). Now only 8% prefer closer ties with Russia, Belarus and Kazakhstan. This change took place too fast to be accompanied by a deep europeanization of the Ukrainian society. A good example of this is a fight between Ukrainian civil society and deeply entrenched corrupt system, which took its roots from the Soviet regime. While corruption is perceived as #1 domestic issue, tolerance to corruption throughout the society is still very high. Centre for Economic Strategy, in partnership with RPR, with the support of the Open Society Foundations, initiated the project “Europeanization Beyond Process: Ukraine”. The objective of the project is to initiate a discussion ... Read more
- Subvention for socio-economic development: how to stop public funds allocation according to political preferences
06.06. 2018The very first time when subvention for socio-economic development appeared in the Budget was 2005. The total amount of subvention for the period of 2007-2017 is 25,6 billions of hryvnias measured in 2017 prices.First and foremost aim of the subvention is economically reasonable support of infrastructural projects on the regional level. However, in practice subventions are transferred to regions where local branches of parties that belong to governing coalition are in power. Moreover, amount of funds provided for subventions increases prior to parliamentary or local elections. This what we have found as a result of statistical analysis of the subvention on socio-economic development allocation for the 2007-2017 period. At the same time, there is an alternative mechanism for the subvention on socio-economic development – Regional Development Fund. The fund’s functions are in similar fashion to subvention, while transfers from ... Read more