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Ukrainian Reform Bulletin
21 December 2015 01:54


Key achievements of the Government: December 2014 – December 2015

New security policy

  • Expenditures for security and defence reached 5% of GDP (UAH 90 bln)
  • Sanctions against the Russian Federation were introduced
  • 4 interstate lawsuits against Russia were filed in the European Court
  • Ukraine abandoned the practice of non-alignment policy and resumed its course for Euro-Atlantic integration
  • New police was established. By spring of 2016 new patrol brigades will patrol the streets of 29 Ukrainian towns
  • The police rapid response unit (KORD) was established
  • The Defense Ministry introduced a new e-procurement system, thus over UAH 176 million of public funds was saved
  • The European Rampart project is implementing, defensive facilities have been constructed on the Ukrainian-Russian border in Chernihiv and Kharkiv regions
  • The procedure of issuing a passport for the citizen of Ukraine with contactless electronic chip for travel abroad was introduced
  • Multimedia foreign broadcasting platform of Ukraine UA|TV was launched


New public governance policy

  • During 2015, the planned reduction in the number of executive officials made up 20% on average
  • Expenses for the state apparatus were cut by 30% as compared to 2014
  • A Government Law ‘On the State Service’ was adopted, which envisages de-politicization, efficiency and independence of the civil service in Ukraine. The law will allow to set up a Fund to increase salaries for civil servants, which is planned to be filled by the EU funds and by support of other international donors
  • The process of unification was initiated in over 6 thousand communities, which makes up over a half of existing communities. 159 associations of communities were established
  • Budget decentralization was held. Revenues of the local budgets raised by 42.5% (over UAH 24 bln)
  • 662 administrative service centers were set up and launched activity
  • E-data resource was launched to ensure full transparency of all government spending (www.e-data.gov.ua)


New anti-corruption policy

  • National Agency for Corruption Prevention (NAPC) was established. Transparent competition with participation of international organizations to elect members of the competition commission was conducted. As of December 2015, two of the five members of the NAPC were selected.
  • The data list on the lustration check was filled with 48 425 current civil servants, as well as with 37 960 applicants and appointed civil servants. The Unified State Register of persons, whom are applied the provisions of the Law ‘On Cleansing Power’ to, was filled with information about 840 persons
  • 100 centres providing free legal assistance all over the territory of Ukraine (except from the temporarily occupied) were established
  • Access to state property registers as well as full information on the land plots was opened. Over 300 registers and databases are in the process of opening
  • E-data resource was launched to ensure full transparency of all government spending (www.e-data.gov.ua)
  • E-services for the citizens are introduced: over 20% of the documents are available online


New economic policy

  • Business in Ukraine can be registered within 24 hours. Online registration was added
  • The number of taxes and fees were cut from 22 to 11
  • The number of controlling bodies was reduced from 56 to 28. The number of permits was reduced from 143 to 84, licences from 56 to 30
  • Compulsory certificates for 13 items of products were abolished
  • The Law ‘On Ensuring Transparent Activity of the Antimonopoly Committee of Ukraine’ was adopted
  • The number of public tax inspections was reduced by 50%
  • Electronic VAT administration was introduced
  • The moratorium on inspections of small-sized business was introduced for 2 years
  • Taxes and rents on the so-called oligarchic types of business was raised, such as: gas extraction, ore production, bio-ethanol production
  • The Law ‘On Transfer Pricing’ was adopted
  • The first stage of deregulation and simplification of procedures for cargo registration in seaports was completed
  • The Open Sky Agreement was signed with the USA


New state assets management policy

  • For the first time, financial statements of the 100 largest state-owned enterprises were prepared and a financial audit was mandated to carry out
  • A competitive selection of 277 heads of state enterprises was implemented
  • A list of state-owned property of strategic importance to the economy and security was approved
  • A list of 345 companies subjected to the privatization was passed
  • A list of 913 state-owned enterprises, which are not subjected to the privatization, was approved and submitted to the Parliament
  • ProZorro e-procurement system was launched. Total savings from the pilot project of ProZorro will reach UAH 500 mln by the end of 2015
  • The corporatization process of the PJSC ‘Ukrainian Railways’ was completed


New food policy

  • Food markets were diversified to overcome effects cause by the Russian embargo. The share of products exported to the Russian market decreased to 2%. Markets of 9 countries for more than 80 dairy and meat industry are opened
  • 238 enterprises got permissions to supply products to the EU markets within the year
  • The first stage of deregulation in the agricultural sector was held: 14 certificates, 6 licenses were cancelled and more than 50 amendments to the legislation have been made
  • Licenses to conduct land evaluation works were cancelled
  • The licensing of import turnover for plant protection products in 2015 was cancelled
  • Term for extract issue from the normative monetary land valuation was reduced from 7 to 3 working days


New policy of energy independence

  • The energy security of Ukraine was strengthened, the routes of supplies were significantly diversified; the gas supply from Europe was increased in 2.5 times and it was reduced by 53% from the Russian Federation
  • Natural gas consumption was reduced by 20.4% to 23.4 bln m3
  • A Government bill ‘On Natural Gas Market’ was passed
  • The Plan of measures to reform the gas sector agreed with the World Bank and the Energy Community was approved
  • Lawsuits in the Stockholm arbitration court were filed to review contracts with the Russian ‘Gazprom’
  • Market based rate for gas was set. A broad system of subsidies for low-income citizens was implemented. More than 4.8 mln households received the subsidies
  • Energy efficiency program was implemented. 64 981 so called ‘heat loans’ have already issued on UAH 43 mln
  • An independent financial and economic audit of the NJSC ‘Naftogaz of Ukraine’ was conducted. For the first time in about 10 years, the NJSC ‘Naftogaz of Ukraine’ operates without loss for the first 9 months of 2015


New social policy

Social services

  • Pensions, salaries, social payments to citizens are paid up
  • Privileges and special pensions to MPs, Ministers and other officials were revoked
  • Living wage was increased by 13.1%, respectively – salaries, pensions and social payments
  • A Law ‘On External Labour Migration’ was passed, which for the first time enshrines at the state level social rights of labour migrants as well as their family members

Education and science

  • The Parliament passed a Government bill ‘On Scientific and Scientific-Technical Activities", which modifies the process of scientific researches
  • The Horizon 2020 Agreement with the EU has been signed and ratified
  • 1600 values of industry reporting documentation were cancelled
  • 84 training and practical centres of innovative technologies (in accordance with sectors) were created
  • 80 higher education institution and branches, which did not provide proper quality of education, were closed 

Youth policy

  • A Reform roadmap in the sphere of physical culture and sports and a Memorandum on supporting the roadmap was developed
  • The Ministry of Youth and Sports of Ukraine and state-owned enterprises subordinate to it switched to e-procurement. This afforded to save about UAH 6 million
  • A new automated and transparent formula of funding the Olympic sports was introduced. The sporting events in which the sportsmen suceed on the international arena are financed


New cultural policy

  • Decommunization: 4 laws were adopted, by-laws were passed, implementation is in progress
  • Archival information of the communist totalitarian regime repressive organs was opened
  • A long-term strategy of Ukrainian culture development was worked out
  • Ukraine joined the EU Creative Europe programme opening up additional opportunities for cooperation between Ukrainian and European artists
  • Expenditure on protection of museums, libraries and nature reserves became a protected budget item for the first time in Ukraine
  • The functioning and public funding of the Ukrainian Institute of National Memory were ensured
  • The JSC ‘National Public Broadcasting Company of Ukraine’ was created and keeps on its activity


New policy of international aid

  • The parliaments of all the EU member states ratified the EU-Ukraine Association Agreement. 23 states have fully completed the internal procedures
  • The Action Plan on the liberalization of the EU visa regime for Ukrainian citizens is at the stage of completion. The 6th report of the monitoring mission to be released on December 15, 2015
  • The Agreement on a four-year cooperation program with the IMF (USD 17.5 bln) was concluded
  • Additional international support in the amount of USD 7.2 bln from official and multilateral partners was reached
  • Restructuring of public and publicly guaranteed debt was completed: commercial external debt of Ukraine decreased by 20% or USD 3 bln and payments in amount of USD 8.5 bln were postponed until 2019
  • The implementation of a joint international technical assistance project ‘Financial development of NGOs’ with the US Agency for International Development (USAID), totalling USD 2.09 mln, was launched
  • A number of international conferences were held: the International Support for Ukraine Conference (Kyiv, April 2015), the first U.S.-Ukraine Business Forum (Washington, DC, July 2015) and the Ukrainian-German Business Forum (Berlin, October 2015)


Government’s performance

  • International credit rating agencies upgraded Ukraine's sovereign rating:
    • Fitch: from 'Restricted Default' to 'CCC';
    • Moody's: from 'Ca' to 'Caa3';
    • Standard & Poor's: from 'Selective Default' to 'B-/B'
  • Ukraine rose by 29 points in the Doing Business ranking relative to 2014, and in the area of business registration – by 40 points
  • The World Bank forecasts the growth of Ukraine’s GDP in 2016 by 1%, in 2017 – by 2%, and in 2018 – by 3%
  • According to the Global Competitiveness Index of the World Economic Forum, Ukraine improved the following indicators:
    • Government’s efficiency – by 11 points as compared to 2014
    • Transparency of public policy – by 32 points as compared to 2013
  • Ukraine ranks 58th position in the rating for the public data openness (Global Open Data Index) among 134 countries, 34% of openness
  • In the third quarter of 2015, moderate growth of the economy to be mentioned: 0.7% in comparison with the second quarter.
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