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The deregulatory reform in Ukraine will reduce red tape in business

Thursday, 14 August 2014 17:54

To streamline the regulatory policy

The Presidential Administration of Ukraine along with the Ministry of Economic Development and Trade have developed the concept of deregulation – the model of simplifying the regulatory policy.

Deputy Head of the Presidential Administration of Ukraine Dmytro Shymkiv said the concept of deregulation incorporates an action plan detailing how to implement innovations.  With this reform in place, businesses will avoid many restrictions and lessen losses the enterprises incur.  «We should streamline doing a business in Ukraine. Business should be transparent, but the government, interacting with businesses, should be transparent, too.  Ukraine will become an attractive country for investments», - he said.

Civil organizations, leading industry experts, representatives of the business community, etc. have contributed to discussions and case studies analysis.

The concept comprised of 800 deregulatory initiatives, which favour business, in regard to general economic dimension, covers lessening of a number of checks, licenses, permits, regulations, certificates, false reporting and even liquidation of entire units and government regulatory bodies. In particular, this will entail redundancy of staff performing oversight or control - from 79 up to 32.

While drafting the strategy of deregulation, around 100 organizations were questioned. Within the concept framework nearly 1000 regulatory restrictions have been examined to elaborate less sophisticated mechanism.

It is expected that total economic benefit, in terms of GDP, to be obtained owing to deregulatory initiatives, will amount to around 68 billion hryvnias, the receipts due to reduction in corruption will bring around 64 billion hryvnias, curbs on government outlays – 24 billion hryvnias – as it was said at the briefing, - introduction of only 14 top priority initiatives will help liquidate kickbacks and corrupt practices saving at least 8-9 billion hryvnias a year.

Besides the economic dimension, a detailed analysis of the key industries in Ukraine has been made: food industry, agrarian sector, construction, power industry, oil and gas supplies, and information technologies.

Thus, deregulation in the food industry is aimed to adjust production processes in line with the EU’s norms and standards. It is expected that the economic benefit will amount to around 30 billion hryvnias, receipts from elimination of corruption will bring approximately 7 billion hryvnias.

As regards the agrarian sector, the core priority task is the elimination of corruption and facilitation of exports (generation of receipts, decrease in corruption – will bring around UAH 10 billion and UAH 7 billion, respectively).

The focus in the oil and gas industry is put on the increase in domestic production of oil and gas as well as reduction of dependency on energy imports from the Russian Federation. The estimated economic benefit is expected to reach around UAH 11 billion with the same amount to be saved owing to efficient reduction of corruption practices.

The deregulation in the information technology industry will tackle IT issues – to spur the integration of the Ukrainian IT sector into the world market. The economic impact will amount to around UAH 6 billion; soling of corruption issues can bring UAH 3 billion.

The concept is based on the best global practices. Efficient cooperation with the World Bank, International financial Corporation, experts of the European Union and other international partners will enable take away regulatory barriers and create the climate that will facilitate business in Ukraine.

It is expected that Ukraine will be ranked higher on the ease of doing business having implemented this reform.

The reform developers announced provided that their initiatives will be supported by the Verkhovna Rada of Ukraine, beneficial outcomes after fulfilling only the first stage are expected to be gained in just a year.

The developers accentuated that wide public discussion on the reform will contribute to its efficiency, since public support for reforms is vital. To facilitate an open dialogue, a special Easy Business platform has been created at (www.easybusiness.in.ua).

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