In 2014, Ukraine unveiled an ambitious roadmap to prosperity by 2020.
The varied aims include applying for European Union membership, becoming one of the top 30 countries in the World Bank’s Doing Business ranking, overhauling the civil service and winning at least 35 medals at the 2020 Olympics in Tokyo.
Two years later, progress has been made, but a breakthrough has yet to happen. The recent resignations of top reformers from government are creating the sense that Ukraine’s corruption and hidebound Soviet-style bureaucracy are stubbornly unyielding.
The Kyiv Post looks at the main goals of the “Strategy 2020” and what has been done to achieve them so far.
Aiming for NATO
One strategic transformation by 2020 is army modernization that will allow Ukraine to seek closer cooperation with NATO. The strategy does not set a goal of NATO membership till 2020, but sees it as an ultimate goal. In 2015, Poroshenko said Ukraine’s NATO membership was still five or six years away.
A roadmap was created for Ukraine based on the country’s military doctrine and Ukraine-NATO partnership goals. It lists requirements such as improvement in military training, appointing a civilian defense minister by 2018, and establishing a transparent procurement system for military.
What has been done?
Ukraine’s parliament has approved an increase in the 2016 military budget that totaled Hr 113.6 billion ($4.4 billion) or 5 percent of the country’s gross domestic product.
It tops the strategy’s goal. The document, approved in 2014, planned that the defense spending would rise from 1 percent of GDP in 2014 to 3 percent in 2020. NATO requires its members to spend 2 percent of GDP on defense.
Defense Ministry’s Reforms Office was created in 2015 to lead Ukrainian army into NATO. It is in charge of improving the military’s organization, overseeing the transition from the army’s antiquated logistical system to a more efficient model, managing new warehouses and providing soldiers with NATO-standard uniforms.
To achieve transparency in procurement, the Defense Ministry started using ProZorro – a new electronic procurement system – for competitive non-weapons purchases.
“We’re taking small steps, but we’re getting there,” says Natalia Zeynalova, a volunteer and a member of the Committee on the Development of the Ukrainian Navy at the Defense Ministry.
According to Zaynalova, by the end of the year there a state secretary will be appointed in the Defense Ministry.
Also, a group of foreign policy advisers from the United Kingdom, Canada and Lithuania have started working with the ministry.
Energy independence
Two years after Russia’s annexation of Crimea and the beginning of the war in the Donbas, Ukraine is still struggling to achieve energy independence from its aggressive neighbor. The goal was to reduce Russian gas consumption and import gas from Europe.
The draft plan of the government’s energy strategy envisages the transition of Ukraine’s energy sector to market principles in operation and competition, and the elimination of Ukraine’s dependence on energy resource imports from monopolistic sources before the 2020 deadline.
In particular, Ukraine is planning to raise its own gas production to 27 billion cubic meters by 2020 – which would cover the household consumption.
The key steps to be implemented in the midterm include injecting liquidity into the natural gas market, the restructuring of state-run energy company Naftogaz Ukraine, and the development of a legal framework for the creation of a gas hub in Ukraine.
What has been done?
Naftogaz hasn’t bought any Russian gas directly since November 2015. In October, the country imported 1.441 billion cubic meters of gas from Europe, including 1.197 billion cubic meters from Slovakia, 122.4 million cubic meters from Poland, and 121.5 million cubic meters from Hungary. In 2013, for example, Ukraine bought 60 percent of gas from Russia.
Ukraine is also trying to boost its own production. It is extracting 20 billion cubic meters of gas yearly and the government plans to boost the production by 7 billion cubic meters by 2020.
Another goal was to complete de-monopolization of gas market.
One of the main challenges is incomplete reform of legislation governing the operation of the natural gas market, said Nataliya Katser-Buchkovska, a member of the parliamentary energy committee from the People’s Front party.
A cornerstone bill on gas market, passed in April 2015, needs amendments, according to Katser-Buchkovska. For example, to achieve competitive access to the gas distribution network, the bill needs to drop the part that imposes a mandatory fee applied for the use of distribution and transmission networks that are controlled by private regional gas distribution companies.
“Competition will allow consumers to choose suppliers of natural gas. It will affect prices and the quality of supply,” Katser-Buchkovska said.
Economic development
Ukraine’s main economic goals for 2020 include increasing the country’s sovereign credit rating from “B-“ to “BBB,” and placing Ukraine among the top 30 countries on the Doing Business rating, where it currently sits at 83rd place. Anti-corruption and judicial reforms are also the key priorities.
What has been done?
Almost 100,000 public officials have submitted their online declarations in October, revealing their wealth. This is a key element of the country’s anti-corruption agenda, a reform backed by the Ukraine’s main creditor – the International Monetary Fund. It was also one of the European Union’s requirements for canceling visas for Ukrainians.
The National Anti-Corruption Bureau of Ukraine (NABU) has opened at least 236 cases since the start of the year, according to a report issued by the National Reforms Council. However, legislation to allocate more powers to the NABU to investigate corruption cases has still not been passed.
A clean-up of the banking sector has started: Some 80 banks were declared insolvent and are in varying stages of liquidation, leaving 100 on the market.
Ukraine improved its position in the latest Doing Business that ranked the country 83rd, comparing to its 87th place in the 2015 report.
In early November, Ukraine’s parliament also passed at first reading the president’s bill on the High Council of Justice as a part of judicial reform. Judges will also receive a hike in their salaries, which aims to reduce the incentive for corruption and attract lawyers from outside the current system, according to judicial expert at the Centre for Policy and Legal Reform, Roman Kuybida.
At the same time, to implement judicial reform the country also needs to determine a procedure for the competitive selection of the prosecutor general and the judges of the Constitutional Court, as well as introduce an effective model for jury trials in criminal and commercial cases.
Culture and sports
The authors of the “Strategy 2020” also set up goals in sports, the film industry and talent-searching. Ukraine plans to win 35 medals at the 2020 Olympics and become one of the world’s top 30 countries in the Global Talent Competition Index. To achieve that, Ukraine “will attract the best specialists of Ukraine, the region and the world,” the document reads.
They also plan to release 20 Ukrainian movies to showcase talent in this area.
Another goal is to make at least 70 percent of citizens proud of the nation by 2020, which will be measured by polls.
What has been done?
In 2015, the National Olympic Committee announced that the country’s athletes preparing for the Rio de Janeiro Olympics would receive 70 scholarships totaling Hr 6.5 million or $249,886. At the same time, the average state scholarship Ukrainian Olympic athlete gets is Hr 7,500 or $288 per month. For comparison, the average salary in Kyiv this summer totaled Hr 8,550 or $342, according to the State Statistics Service of Ukraine.
The Ukrainian team won 11 medals during the Rio Olympics and the nation’s Paralympics team ranked third after China and the United Kingdom, with a total of 117 medals.
The film industry also saw improvements.
In 2014, Ukrainian sign language drama “The Tribe” made it to the Hollywood Reporter’s list of Top 10 films of 2015. It was shown at 30 festivals and became the first-ever Ukrainian movie to be shown in the United States in commercial theaters, rather than at festivals only.
The Netflix documentary “Winter on Fire: Ukraine’s fight for freedom” on the EuroMaidan Revolution was co-produced by Ukraine, the U.S. and the U.K. It was the first movie made with the participation of Ukraine to be shortlisted for an Oscar.
The 2015 biopic “Unbroken” had a budget of $5 million and was co-produced by Ukraine and Russia, and co-financed by state agencies in both countries. It was the most expensive movie ever made in Ukraine, and made $8 million at the box office.
According to the state budget for 2016, the government planned to allocate Hr 265.5 million or $10 million for the producing and distribution of the national films.
