Is Ukraine going to shed its corrupt, post-Soviet ways, and do so in hurry? If not, many are warning that economic and political convulsions lie ahead.
Change is needed in the economy, judiciary, electoral system, energy sphere and government institutions – just about anywhere and everywhere.
Three scenarios for Ukraine’s future – Unlocking the Virtuous Circle, Lost in Stagnation and Back to the Future – will be discussed at “Scenarios for Ukraine – Reform Imperative.” It is the closing panel of the Kyiv Post’s 2014 Tiger Conference taking place at the Hilton Hotel in Kyiv on Nov.19. The panel will be conducted in conjunction with the World Economic Forum.
The panel will bring together Dmytro Shymkiv, deputy head of the presidential administration; Hanna Hopko, member of parliament and coordinator of the Reanimation Reform Package initiative; Evgeny Utkin, chief executive officer of Kvazar-Micro and co-founder of “Gogolfest” festival; and Andrew Chakhoyan, associate director of Russia and Commonwealth of Independent States Department at World Economic Forum.
One of the scenarios, Unlocking the Virtuous Circle, is about building a sustainable economy based on transparent institutions. It requires a new economic model and sweeping reforms in the hopes of significant inflows of investment. This fate would avoid the Lost in Stagnation scenario of economic collapse and the Back to the Future one that allows the corrupt system of former President Viktor Yanukovych, who fled power on Feb. 22, to get back on track.
Hopko said that Ukraine should speed up changes to avoid collapse.
“The war is not an excuse for avoiding reforms,” Hopko said. “The war is giving us a signal that we need a strong army, economic reforms, international image of a strong country, and lower dependence on Russian gas.”
There is urgent need to strengthen the security system, implement all anti-corruption laws, switch to a proportional electoral system with open party lists, give more powers to local authorities, attract foreign investment, and reduce taxes for small and medium business, according to Hopko.
Ukraine has already made a few improvement in some of those spheres.
President Petro Poroshenko approved an increase in the defense budget to three percent of gross domestic product of almost $180 billion, signed the law on creation of an anti-corruption bureau as well as another depriving the prosecutor’s office of its supervisory function.
The country jumped 16 spots in the World Bank’s 2015 Ease of Doing business and now ranks 96 among 189 countries. Major progress was made by implementing an electronic system for paying and reporting taxes in 2013 and 2014.
Ukraine also moved up eight spots in the 2014-2015 Global Competitiveness report of the World Economic Forum and ranks 76 among 144 world economies. Improvements come with better educational outcomes and efficiency of markets, but there is still a need of far-reaching reforms, including measures to overhaul the institutional framework, according to the report.
The need of fundamental re-design of the governance system is also highlighted in the White Paper on legal reform of US-Ukraine Business Council, which unites more than 200 Ukrainian and American businesses. Ukraine should develop a comprehensive e-government system, undertake thorough de-regulation, leaving only specific regulated industries, and decrease the number of civil servants, according to the paper.
When considering reforms, Ukraine has to find an example that it would like to follow, and Poland can be an interesting one, Chakhoyan said.
Shymkiv said he and his team are following the experience of several countries. “We are looking at Poland and the Baltic states regarding European integration, at Georgia – regarding fighting corruption,” Shymkiv said during a news conference on Nov. 11. “But we should understand that for implementation of reforms, we have to have parliament and government which will take decisions to reform.”
Kyiv Post staff writer Anastasia Forina can be reached at [email protected]
