Ukraine reforms bulletin 11-15 December 2017
The last week (11 – 15 December) has brought a significant progress in the spheres of energy efficiency, defence sector and decentralisation. Certain developments happened in the spheres of deregulation, agriculture, tax reform and public administration.
Ukraine received positive assessment over the progress of reforms, improved its macroeconomic ratings and attracted additional financing for the implementation of priority reforms:
- The ambassador of the EU to Ukraine, Hugh Mingarelli, has asserted the Ukraine’s progress in the spheres of ecology, energy, sanitary and fitosanitary requirements, and in the sphere of consumers’ rights.
- Federica Mogherini, the High Representative/Vice-President, at the 4th Association Council has complimented the progress of Ukrainein reforms of the past two years, especially in the healthcare and pensions reforms, laws on privatisation, land reform and energy.
- The international rating agency Moody’s has forecasted the Ukraine’s GDP increase by 3.5%, the inflation decrease, and the further economy renewal in 2018 after the deep recession of 2014-2015;
- Norway has issued the additional EUR 950.000 for the realization of Council of Europe projects in Ukraine, among which are the support of the constitutional reform, functioning of the democratic institutions, judicial reform, police rform and penitentiary system, and also gender equality.
- Ukraine has joined the Danube Transnational Program and The Agreement on financing the EU “Support for the East of Ukraine” project that will facilitate the development of the Ukrainian part of Danube region and the economic growth in Donetsk and Luhansk regions.
Energy efficiency reform
- In November 2017, the transit of petroleum products through the territory of Ukraine has increased by eight times, in comparison to the same period in 2016;
- A Memorandum of Understanding was signed between the Ministry of Energy and Coal Industry of Ukraine and the Ministry of Energy of the Republic of Lithuania on strategic cooperation in the field of energy;
- The government of Ukraine has officially started the procedure for the selection of international partners for joint management of the Ukrainian gas transportation system.
- The EU is ready to join the Fund on Energy effectiveness of Ukraine, which aims to modernize the Ukrainian energy sphere, and will become active in January 2018;
- Ukraine as a part of the “Mayors’ Agreement – East” (CoMEast) has approved 82 strategic Sustainable Energy Development Plans till 2030, and has attracted more than EUR 4.6 million of energy efficiency investments from extra-budgetary sources.
- The Lithuanian company in solar energy is interested in starting the production of solar modules in Ukraine.
- The Lithuanian investors have intention to invest in the production of heat and electric energy received from biomass in various cities of Ukraine.
Defence sector reform
- One of this year’s monumental achievements was defining Ukraine’s NATO membership as a strategic goal, and reaffirming it in the relevant legislation by the parliament.
- According to the project of The State Budget of Ukraine, 5% of the GDP will be allocated for needs of the Ministry of Defence of Ukraine, including further reform of the security and defence sector;
- The State Emergency Service of Ukraine received from the Government of Japan the operational pyrotechnic machines and georadars-detectors, necessary for the demining units.
- Canada lifted the restrictions on the sale of firearms to Ukraine by inclusion of Ukraine in the Automatic Firearms Country Control List.
- Ukraine is about to establish the system of strategic communications in the sphere of security and defence.
- The Organisation for Economic Co-operation and Development positively assesses the results and progress of the decentralization reform in Ukraine and pledges to provide support for its implementation;
- In 2017 the government will finish the development of the human development index and the regions’ competitiveness index – two important strategic planning instruments for the evaluation of decentralisation;
- In 2017, the regions have launched implementation of over 2,800 infrastructure projects, thus making it possible to assert the new quality of education, infrastructure, medical and social provision in communities and rural areas. In 2018, Government support for the development of regions would amount to UAH 18.5 billion, whereas in 2014 it had amounted ещ only UAH 500 million.
- The Government liberalized relations with the business in part of pricing checks, by easening the periodicity of the state control.
- The National Bank of Ukraine expanded the list of cases, when business can repay credits and loans in foreign currency received by residents from non-residents.
- Startegy on the Forestry Development of Ukraine is under development by the Ministry of Agriculture and the professional unions.
- The State Budget Program for 2018 envisages increase of support for the small and medium producers of agricultural products, in particular, farms and cooperatives associations.
Public administration reform
- The public administration reform was identified as one of the priorities for the Ukrainian government for 2017. Hence, this year the reform has started by the creation of directorates general in 10 ministries, and the competitions for the positions of the directorates’ heads were held. Ukraine and the EU continue the cooperation in this sphere.
- Ministry of Finance presented the Roadmap for the implementation of standards of transparency and exchange of information “Tax transparency: EOIR / AEOI CRS” in Ukraine.
- The government is about to decrease the cost of taxes for the electric cars import to Ukraine – without VAT and excise.
- The EU and the EBRD have issued EUR 160.000 for innovative projects on climate issues in Ukraine.