Ukraine’s transition to a market economy has been a difficult process. While dismantling a command economy deeply integrated with the Soviet system has presented serious challenges, USAID programs have made a substantial difference in several key areas.

Financial Sector Reform

In the past year, the Certified International Accounting Profession (CIPA) program has attracted the attention and recognition of the world’s leading accountancy bodies. USAID/Ukraine established Global Development Alliances with industry leaders to ensure the long-term sustainability of the first internationally recognized, Russian language, accounting certification. The International Accounting Standards Committee Foundation (IASCF) entered into a Memorandum of Understanding with USAID, which allows the use of its International Financial Reporting Standards (IFRS) logo on the CIPA certificates, training, and marketing material. The CIPA certification is the only professional accounting qualification that bears the prestigious IFRS logo.  

Recognition and demand for CIPA training, examination, and certification has grown dramatically over the past year. Since May 2002, CIPA-EN has administered nearly 10,000 exams in Ukraine, with a record 2,000 exams administered in November 2004 alone. Nearly 1,000 accountants have earned first level certification as Certified Accounting Practitioners (CAP).

Banking Supervision 

With USAID assistance, the National Bank of Ukraine (NBU) has adopted and is implementing a "risk-based"  approach to banking supervision recommended in the Basel Core Principles of Bank Supervision. The NBU can now regulate banks not only on the quality of loan portfolios, but on measurement of their performances in internal risk management.  Better bank supervision contributed to an increase in investor confidence that resulted in a 40 percent  increase in personal banking deposits in 2004. USAID also assisted the Bank Supervision Department to implement a certification program so that NBU bank supervisors could include a systematic assessment of risk-management practices in their examination of commercial banks. 

Legal Reform

USAID’s Commercial Law Resource Center provided assistance to draft and support recent enactment of Ukraine's national mortgage and national leasing laws. Even in the very short term these laws had a profound impact on Ukraine's economy in 2004.

Agriculture

USAID’s programs to accelerate agriculture in Ukraine, accomplished through its seven projects in 2004, increased the volume of fruits and vegetables (F&V) traded by 41,330 million tons of processed, value-added F&V with an estimated value of $7.1 million. Nationally, USAID contributed to a 25 percent increase in processed F&V. USAID’s agricultural programs also created 3,000 new seasonal and full-time jobs in 2004 with a net gross wage value of $1.5 million. Leading into the 2004-2005 agricultural season, USAID's agriculture projects impacted about 26 percent of Ukraine's F&V processing industry, and our producers accounted for approximately 14 percent of the total commodities processed. The result of the significant success of our agricultural extension program was parliamentary adoption of a legal framework for the Government of Ukraine (GOU) to provide federal budget support to sustain and develop a national agricultural extension service. USAID's Grain Warehouse Receipts program improves credit access for the entire grain and oilseeds market. 

Environment

USAID increased the effectiveness of policies at the local level and empowered citizens to affect environmental decision-making in seven community demonstration projects. Local environmental action plans were developed and vetted through public hearings in each of the seven demonstration communities. Pilot communities raised environmental awareness, promoted public participation in environmental decision-making, and stimulated citizen involvement in directly solving local environmental issues. 

Pilot communities improved solid waste management and drinking water quality and quantity, expanded and improved green areas, and eliminated obsolete pesticides. Public awareness of environmental issues doubled in most pilot communities, and the number of people who believed that NGOs and citizens had an important role to play doubled as well. Ukraine now has a cadre of 14 lead trainers available to train communities across the country, who are now providing training and coaching to 15 new communities.  

For flood monitoring, USAID assisted the selection of four new sites for installation of automatic monitoring stream gage stations with satellite telemetry and near real-time processing capability in addition to two existing sites in hard-to-access flood-prone zones in the Tysa River basin of Transcarpathia. USAID trained Ukrainian specialists in the operation and maintenance of the equipment, and in data processing needed to process and interpret monitored data via the Internet and radio communication networks.

Small Business Development

USAID has directly and indirectly assisted more than 130 cities across Ukraine in moving forward with improved procedures for business registration. Seventy thousand enterprises have used BIZPRO Hotlines to get critical information on regulatory issues, taxes, registration, and other issues. The average cost of business registration has decreased by 55 percent on average. The average time required to register and obtain business licenses and permits has decreased by about 50 percent; and, the average number of visits to government agencies has decreased by four times. On average, corruption related to business registration has decreased by 84 percent. Over 378 regulations that constrained business development in the regions were changed. Consequently, 12 percent of BIZPRO’s business training beneficiaries started new businesses; the survival rate of new enterprises increased by 18 percent, and 25 percent of training beneficiaries reported an increase in personal income. 

Business Management Education in Ukraine (BMEU) assistance enabled 50 Ukrainian educational institutions offering business and management education to establish and staff MBA and undergraduate programs that are gradually evolving toward international standards of quality. In 2004, Ukrainian businesses assisted by BMEU faculty and alumni of BMEU programs increased their sales by 19 percent.    

USAID expanded access to modern information technologies in seven rural and underserved areas of Ukraine through its assistance in developing a network of Business Internet Centers (BICs).

In 2004, six USAID technical assistance projects increased access to credit in Ukraine with 97,507 loans valued at $298 million. A total of more than 215,000 loans with a cumulative value of $1 billion - and with default rates of no more than 5 percent - have been made with USAID assistance. Generally, these loans were made to micro enterprises, SMEs, and agriculture.  Mortgage and financial leasing loans increased rapidly in the third quarter of 2004 due to the enactment of mortgage and leasing laws, achieved with USAID legal assistance. In 2004, $97 million worth of direct investments occurred through USAID's support to the West/NIS Enterprise Fund. 

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