International Centre for Policy Studies

[en/] Projects Publications Укр Eng About centre About ICPS Partners Supervisory Board Career and Internship Reports Contacts Research areas Foreign Policy Internal Policy Economic Analysis Social policy and human rights Activity Current projects Projects archive Periodicals (Inside Ukraine) Publications Internal Policy The draft law on Donbas reintegration: pros and cons ICPS Press 05.10.2017 Economic Analysis Bulletin of the regional transparency. Issue 5 ICPS Press 19.10.2017 Internal Policy On tolerance in the language of art, physics and botany ICPS Press 20.11.2017 Internal Policy Mariana Savka: reading-performance “I Know, You Are Different” ICPS Press 03.12.2017 Economic Analysis ECONOMIC DEVELOPMENT OF UKRAINE 2017: ACHIEVEMENTS, FAILURES, PROSPECTS ICPS Press 26.12.2017 Internal Policy Відбулося засідання Наглядової Ради МЦПД ICPS Press 28.12.2017 View More from this author More from this category Internal Policy Відбулося засідання Наглядової Ради МЦПД 11 січня 2013 року відбулося засідання загальних зборів Міжнародної громадської організації «Міжнародний центр перспективних досліджень». Його ініціювали члени загальних зборів для заслухання звіту Наглядової Ради МЦПД щодо виконання Стратегічного плану Центру в 2012 році та проведення конкурсу на посаду директора МЦПД. Одним із рішень загальні збори ухвалили включити до складу Наглядової Ради Юрія Єханурова, Віктора Маштабея, Дениса Пріймягі. ICPS Press 28.12.2017 View More from this author More from this category Economic Analysis ECONOMIC DEVELOPMENT OF UKRAINE 2017: ACHIEVEMENTS, FAILURES, PROSPECTS The year 2017 was characterized both by achievements and failures of the Ukrainian government in economic policy. Rebalancing of economic, social and resource components of the development was the main result of its activity. At the same time, Ukraine's economy continued to grow slowly in 2017 and this growth rate is not enough for the economic breakthrough in 2018. Moreover, the forthcoming year will not be easier than the current one. Achievements of the Ukrainian economy in 2017 The following achievements were the most significant in the economic sphere: 1) Obtaining the fourth tranche of the IMF amounting $ 1 billion in early April 2017. Ukraine has made the necessary reforms and was able to increase its gold and foreign exchange reserves, that made it possible to postpone the default, to stabilize the macroeconomic situation and to increase the trust of partners, investors and donors in the country. 2) Eurobond placement. Due to entering the external borrowing market in September, Ukraine for the first time since 2015 has raised $ 3 billion. This operation will reduce the burden on the state budget for repayment of government debt in the coming years. This fact also indicates a partial restoration of foreign investors` confidence in Ukraine. 3) Steps taken by the government to diversify exports in order to reduce the dependence of exporters on the volatility of traditional markets and to ensure a stable flow of currency into the country. This was facilitated by the adoption of the exports strategy “Road Map for Strategic Development of Trade 2017-2021” in the end of March 2017, the full entry into force of the Association Agreement between the European Union and Ukraine in the beginning of September 2017, the regional convention on pan-Euro-Mediterranean preferential rules of origin, the development of trade relations with Canada. Negotiations on free trade agreements with Israel and Turkey are being conducted. 4) Relative business deregulation in 2017, especially in the construction industry, and optimization of fiscal policy, along with improvement of taxpayers` service, in particular due to introduction of electronic VAT refund system, significantly increased the tax base, providing a surplus of state and local budgets, and contributed to the decrease in shadow economy. As a result, these improvements had a positive impact on the investment climate and pushed Ukraine on the 76th place in the Doing Business-2018 rating. The failures of Ukraine's economy in 2017 The following problems were faced by Ukraine in 2017: 1) Economic blockade of the non-government controlled areas. As the result there was an increase in Ukraine's dependence on imports of energy resources, primarily coal, a change in the ratio of capacities of various types of power plants, which excessively exceeded the permissible loads on some of them. Also, this event significantly influenced the economic situation of enterprises that had industrial ties with the region. According to various estimates, Ukraine loses about 1% of GDP due to the economic blockade of the non-government controlled areas. 2) Negative trade balance. Asymmetries in foreign trade, insufficient lobbying of national interests, difficulties in product certification require further reforms and capacity building to ensure Ukraine's sustainable growth. 3) Undeveloped banking sector. The tendency of reduction in the number of banks has continued in 2017. This has resulted in additional burden on the Deposit Guarantee Fund and in the increase of the number of non-performing loans. Also, the access to financial resources was still limited. 4) Strengthening of inflation processes. According to the government's forecast, the inflation rate will be 11.2% by the end of 2017. This was caused by cancellation of state regulation of food prices, by increase of minimum wages and pensions without adequate economic growth, by continuation of trends in household tariff increase, which led to approximation of recipients of subsidies up to 60%, and by delayed decision of the NBU to raise the discount rate from 12.5% to 13.5%. The questions of the future Next year Ukraine will have to solve the following issues: 1) Issues related to economic development: - The budget 2018 may have unbalanced character, in particular due to excessive pressure of spending on the security forces. In addition, further decentralization processes and the transition to three-year medium-term budget planning in 2018 will require a clearer development strategy from the government. - Insufficient GDP growth rates and high inflation due to the lack of comprehensive government measures to address these developmental issues are also the threats in 2018. - The price situation of the world market of raw materials, high-tech goods and energy resources can be unfavorable for Ukraine. In addition, the issue of stable supply of liquefied petroleum gas and mineral fertilizers remains unresolved. 2) Issues related to the repayment of debts: - The first external debt payments amounting up to $ 7 billion are foreseen in 2018. In the absence of the state's strategy of managing external and internal debt, additional challenges are encountered for the development of the country. - The Russian Federation has announced the possibility of reassigning Yanukovych's debt in the amount of $ 3 billion to another country. This event may lead to the additional debt burden on the Ukrainian economy. - The Stockholm Arbitration Court postponed its decision on the dispute between “Gazprom” and “Naftogaz”. The results on key issues of this case are expected in the next year. 3) Issues related to the energy sector: - The construction and development of the North and South Stream, the reduce of the pressure in the Ukrainian gas pipeline system increases Ukraine`s risk of losing the status of a transit state and reducing revenues to the budget. - The problem of stability of Ukraine's energy supply, especially in the context of economic blockade of the non-government controlled areas, is acutely facing the Ukrainian government. In addition, the issues of efficiency and green energy, the issues of attracting investment in alternative energy and monitoring energy consumption, the issues of further synchronization of Ukrainian and foreign energy networks also require development. 4) Issues related to reforms: - The proper implementation of pension and medical reform in Ukraine is important. The problem in this issue is the balance between the needs of society and the needs of the government to save. - The proper implementation of other reforms, in particular regarding the fight against corruption, decreasing the shadow economy, maintaining key development indicators, land reform are vital for obtaining the next tranche of IMF in 2018. Moreover, Ukraine has a chance to get macro-financial assistance from the EU after solving the issue of moratorium on the export of logs. - The regulation of the lottery market can also contribute to additional revenue to the state budget. Thus, Ukrainian government demonstrated both achievements and failures to ensure the economic development of the country in 2017. In its turn, the year 2018 will not be easier than the current one, and it will be necessary to minimize the mentioned risks to the economic growth. At the same time, the question of achieving the GDP growth at 3% in 2018, that is projected by the Cabinet of Ministers, remains unclear, while having almost twice lower growth at 1.8% in 2017 and while the absence of concrete steps to achieve such figures. The government has nothing distinctively new to offer in 2018 yet. It is vitally urgent to rethink the tasks for economic development in order to change the stagnation trends, to provide new incentives and to avoid the label of populism. Only systemic reforms and search for the drivers of economy can pave the way for more dynamic economic growth. ICPS Press 26.12.2017 View More from this author More from this category Internal Policy Mariana Savka: reading-performance “I Know, You Are Different” On December 1, 2017, in the framework of communication campaign “Reinvent respect” on promotion of tolerance and mutual understanding in the community, famous writer and UNDP Tolerance Envoy Mariana Savka held a reading-performence, “I Know, You Are Different”, which took place in Odessa. During the event, Mariana Savka spoke about her own creative work, her publishing activity, the project “12 incredible women” and the importance of a proactive social position. The text of Mariana Savka "I Know, You Are Different" is her own attempt to communicate with those, who society characterizes as different. “These texts are of a universal value. Each of the stories is about the real person who is next to us. And I am not sure whether they can be called others. For others – we all, each of us, with its unique experience, challenges, victories and personal traumas. We do not live in the heavenly valley; it is not easy for us. So let's strive for good-neighborly relations, respect each other, and then our existence will beсome a little easier”, -said Savka. Especially for this project, a well-known artist from Riga, the master of the sand show Tetyana Gavrilenko created a video with her own sand animation. The United Nations Development Program project “Reinvent respect” aims to reduce the polarization of public opinion and strengthen dialogue among various social groups, promoting respect, tolerance and mutual understanding. ICPS Press 03.12.2017 View More from this author More from this category Internal Policy On tolerance in the language of art, physics and botany On November 16, on the occasion of the International Tolerance Day, a famous Ukrainian artist Alevtina Kakhidze held a lecture «On tolerance in the language of art, physics and botany», which took place in Slavyansk in the framework of communication campaign “Reinvent respect” with the support of UN Development Program in Ukraine. According to the UNDP Tolerance Envoy in Ukraine Alevtina Kakhidze, in her works through art, she tries to reveal the notion of mutual respect to each other. “In the animal world there is a concept of murder, there are also quite aggressive species in the plant world, but at the same time it is a very vivid metaphor that helps us to distinguish certain parallels both in political and social lives. It was through the botany that I spoke about the notion of tolerance in a society”, - said Kakhidze. During the lecture, the artist also drew attention to the laws of stable and unstable systems in modern physics, among which striking parallels with modern political conflicts can be found. There was also a joint work of the artist Alevtina Kakhidze with the participants of the 7th floor Theater. During the class, the children created scenery for the performance “Prince and Predator” by Mark Twain. The events are dedicated to the International Tolerance Day and are the part of the ICPS communication campaign on promotion of tolerance and mutual understanding in the community with the assistance of the UNDP in Ukraine, the Swedish Embassy and the Swiss Embassy in Ukraine. ICPS Press 20.11.2017 View More from this author More from this category Economic Analysis Bulletin of the regional transparency. Issue 5 We present the fifth edition of the analytical and information material of the International Center for Policy Studies – “The Bulletin of Regional Transparency”, which was developed within the framework of the project “Transparency, Financial Health and Competitiveness of the local government bodies in Ukraine”, implemented by the ICPS along with Slovak non-governmental organization INEKO with financial support from the US Embassy in Ukraine. In the Bulletin, you will be able to learn about project achievements and activities, as well as various materials devoted to improving the transparency, financial capacity and competitiveness of local government bodies, as well as issues related to the reform of decentralization. The content is designed and developed by the ICPS regional coordinators. This edition provides materials related to: How much the residents of Khmelnytskyi spend for coverage of their activities by the city council; Scandals, fights and violations of law: how deputies in Odesa voted for a one-billion loan; Millions of contractors in Chernivtsi or how to do work without employees; The Executive Committee of the Ivano-Frankivsk City Council is ready to pay twice more an individual entrepreneur for computer servers; Issues regarding transparency of local budget. ICPS Press 19.10.2017 View More from this author More from this category Internal Policy The draft law on Donbas reintegration: pros and cons On October 4, 2017, the text of the draft law “On the peculiarities of state policy on ensuring Ukraine’s state sovereignty over temporarily occupied territories in the Donetsk and Luhansk regions” became available in an open access. The document (known as the draft law on Donbas reintegration) which was presented on the initiative of the President of Ukraine, aims to improve the legal regulation of the situation in eastern part of Ukraine, but does not provide a set of necessary actions for achieving this goal. “Pros and cons” of the draft law “Pros”: First, the draft law, if approved by the Verkhovna Rada, will be the first document, which at the legislative level recognizes the non-controlled areas in Eastern Ukraine as temporarily occupied territories, Russia is designated as an aggressor state with regard to the situation in Donbass, and pro-Russian militants are equated to the pro-Kremlin “puppets”. Second, the draft law on Donbas reintegration eliminates legal contradictions, in particular by allowing to abolish the ATO regime and transferring management in the front lines from the Security Service of Ukraine (SBU) to the Joint Operational Headquarters of the Armed Forces of Ukraine. Third, the draft law defines that state policy on ensuring Ukraine’s state sovereignty over temporarily occupied territories should be based on political and diplomatic means. “Cons” of the draft law: First, despite the defined objective, the draft law does not provide specific mechanisms for the restoration of state sovereignty over temporarily occupied territories. Second, the draft law does not take into account the human dimension, particularly the mechanisms for ensuring the rights and freedoms of citizens residing in non-controlled areas, such as retirement benefits, social security, administrative services etc. Consequently, serious problems can arise for Ukrainian citizens residing on these territories. Third, the preamble of this draft law refers to the evidences of Russia's aggression in Eastern Ukraine (based on the UN General Assembly resolution “Definition of Aggression”, which is a non-binding document), but ignores the undeniable facts of Russia’s aggression in Crimea. The reference to the annexation of Crimea and the inclusion of the Crimean “components” could help Ukraine achieve international recognition of Russia as an aggressor state. Four, the draft law contains a "sliding" reference to the Minsk agreements (the state authorities of Ukraine “ensure the priority of implementing the security provisions” of the Minsk agreements). Consequence, the question arises whether there is a legal contradiction in this document: the Minsk agreements recognize particular areas of the Donetsk and Luhansk regions as a conflicting party while this draft law designates Russia as a conflicting party. Generally, the main point in the Donbas reintegration draft law is that it rather resolves operational tasks, but does not contain effective mechanisms for achieving goals of the draft law themselves, in particular the liberation of DPR/LPR-controlled territories and the protection of the rights, freedoms and legitimate interests of people, who have suffered from the armed conflict. 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