DIGEST OF REFORMS 7.11-13.11. 2015. LEGISLATIVE PROGRESS

Macro-financial stabilization

Ukraine has officially completed restructuring public and publicly guaranteed debt totaling about $15 bln.  According to the Ministry of Finance of Ukraine, restructuring should result in reducing Ukraine’s debt by 20 percent and saving $8.5 billion due for payment by the end of 2018.

This restructuring is a key part of Ukraine’s program with the IMF, sets a foundation for long-term financial stability and increases opportunities to attract investment.

European integration

After several attempts, the Parliament acknowledged that Ukraine shares the principles of freedom and equality in labor relations.  The corresponding amendments to the Labor Code caused heated debate in the Parliament but rational arguments prevailed. An official declaration of non-discrimination is one of the EU’s basic values and Ukraine has now pledged to implement in the system of national law.

State purchases

There is positive news in the reform of public procurement. Ukraine joined the Agreement on Government Procurement (GPA), which operates under the World Trade Organization (WTO). The agreement operates on the principle of equal access to markets, which means more competition for public procurement and, consequently, lower prices and more transparency. After the Ukrainian Parliament ratifies the Agreement, Ukrainian companies can participate in tenders on public procurement abroad and foreign companies from the Agreement member countries will have direct access to the Ukrainian market.

Reference: the Agreement unites 45 WTO member countries, including all EU countries. It also includes 30 observer members – states and international organizations, including the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD).

Competition policy

Transparency of the Antimonopoly Committee of Ukraine (AMCU) is now enshrined in legislation. Parliament adopted a package of draft laws regulating the issues of publishing the AMCU decisions, methods of calculating fines and increasing thresholds for granting permission for concentration. This allows the AMCU to establish order in the area of ​​competition policy.

Civil service reform

While MPs are preparing to vote on the Law of Ukraine on Civil Service (expected on November 24), those responsible for civil service reform are looking for alternative solutions to boosting efficiency of public sector management. The government amended Decree 859 to allow hiring state enterprises managers on competitive terms  and on principles similar to the private sector. The contract will specify objectives and indicators determining payment of the premium.

Openness of power

Naftogaz of Ukraine, the largest public company, is a key bellwether of change for many people, both inside the country and abroad. Thus, the report on the company activity, based on the principles of transparency, specificity and accessibility to the average citizen is significant.  This step becomes particularly important in the context of the gas market reform, cleaning one of Ukraine’s most problematic sectors.

Deregulation

Ministry of Economic Development and Trade of Ukraine (MEDT) insists on introducing personal financial responsibility of officials and setting strict limits on frequency and terms of tax inspections. MEDT is also lobbying for extending the moratorium on business inspections until June 30, 2016.

Reform of the law-enforcement authorities

Despite public trust in the new police, its effective work depends not only on good will but also on a large number of regulations, the lack of which can block progressive changes. To prevent this, the Parliament amended over 140 legislative acts.

Education reform

Immediately after the higher education reform was launched last year, the reform of science and research activities began. For the first time in Ukraine all parties concerned managed to reach a consensus on fundamental issues of development and financing. Instead of four alternative draft laws, only one draft law was submitted for deputies’ consideration, which they adopted in the first reading. Key innovations: science development priorities will be approved by consensus; funding sources will be expanded, and funding principles will become more transparent and competitive.

Privatisation

Out of line with a week of successful reforms, Parliament refused to back new privatization processes. According to the State Property Fund, the proposed innovations would not only should make state property sales more transparent, but they also should attract about 30 billion UAH to the state budget.