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.
Business Investments and Loans
Since its inception in 1994, the Western NIS Enterprise Fund has invested $165 million in 118 companies employing 23,700 people, as well as provided training to hundreds of young local managers in finance, international accounting, marketing, sales and management.
Financial and Private Sector Development
Financial Sector Development and Capital Markets Projects
· Supported the passage of the Law on Securitiesand the Stock Market, an internationally compliant legislative framework for the capital market, the Joint Stock Companies Law, which introduced enhanced shareholder protection, corporate governance norms and disclosure principles, and key banking law provisions which require the disclosure of owners of banks, setting the stage for consolidated supervision of financial institutions.
· Supported the Ministry of Labor and Social Policy, Financial Services Regulator, Parliament and market industry professionals to develop pension reform legislation; organized a series of high-level debates, conducted a public opinion poll on proposed reforms, supported a hot-line on pension issues, and conducted a series of op-ed interviews on pension reform in local and international press.
· Supported the development of a private, market-participant owned securities depository system in Ukraine, which safeguards Ukrainian assets and processes securities transactions.
· Developed and implemented the Electronic Disclosure System, which introduces modern disclosure requirements for public companies, and promotes transparency, accountability, and disclosure of financial and business information.
· Trained Ukrainian regulators on capital markets oversight and enforcement, and risk-based supervision of private pension funds.
· Supported capital markets participants in establishing strong self-regulatory organizations, and improved licensing requirements for operation on the market.
· Supported Ukraine’s Deposit Guarantee Fund to enhance its pay-out efficiency and to transition to an organization with enhanced powers of bank liquidation and resolution.
· Assisted in developing a market for repurchase agreements on government securities, which helps governments and corporations manage liquidity, and helped build a yield curve that serves as the benchmark for the pricing of other fixed-income securities in Ukraine.
· Conducted Financial Literacy Survey (2,000 respondents and Focus Groups discussions in six cities), distributed financial literacy materials (including 27,000 copies of the Pension Investment Glossary), and designed an electronic Financial Toolkit.
· Sponsored a national bank transparency study surveying the top thirty Ukrainian banks, which provided a benchmark to compare Ukraine to international norms of disclosure and corporate governance.
Since 2008, the project:
• Drafted and assisted in the implementation of the landmark corporate governance law, On Joint-Stock Companies,
• Helped Verkhovna Rada committees, the Cabinet of Ministers and the National Bank of Ukraine draft and promote legislation that facilitates reconciliation of the Civil and Economic Codes and liberalizes business activities.
• Helped the Ministry of Justice and the State Land Resources Committee draft and improve legislation that regulates property relations and ownership rights.
• Assisted the Ministry of Economy and Verkhovna Rada in drafting and passage of a Public Private Partnership Law that contributes to the development of the necessary legal framework for the implementation of large investment projects.
• Helped the Ministry of Regional Development and Construction assess the potential impact of legislative amendments on the construction sector’s development and proposed amendments to construction laws to improve the investment climate.
• Helped the State Agency of Ukraine for Innovation and Investment improve investment and company legislation.
Municipal Finance Strengthening Initiative (MFSI)
Working with 37 cities in the Autonomous Republic of Crimea, and Zhytomyr, Lviv, Kyiv and Luhansk oblasts, the Institute for Budgetary and Socio-Economic Research has:
• Built a network of trainers/consultants at the local level to provide consulting support on implementing innovative financing technologies;
• Trained about 2,000 specialists of finance departments and key spending units in PPB method and its implementation;
• Provided Budget Process software and ongoing technical support to the Ministry of Finance;
• Supported activities of an Interdepartmental Working Group at the Ministry of Finance to develop Program Performance Budget methodology and establish a National Advisory Board; and
• Developed a system to monitor and evaluate execution of local budget programs in pilot cities.
Cooperation in Research and Education in Science and Technology (CREST) Center for Energy Efficiency
The official opening of a new CREST center for Energy Efficiency Technologies was held in the Vasyl Stefanyk Precarpathian National University in Ivano-Frankivsk, Ukraine on May 13, 2009. The new CREST center - “Nanomaterials in Energy Generation and Accumulation Devices” – carries out scientific research to develop improved and cost-effective solar cells, electrodes, and energy storage devices.
Municipal Heating Reform Project (MHRP)
• Assisted the GOU in drafting critical laws for municipal heating reform: on the National Communal Services Regulatory Commission (passed by the Parliament and signed by the President); on the Housing Code; on Lease and Concessions; on Energy Efficiency in Buildings, and on Condominium Development (passed in the first reading by the Parliament).
• Assisted the GOU in establishing the legal basis for a new Regulatory Authority (National Communal Services Regulatory Commission) that will bring transparency to the tariff setting process and decrease tariff associated corruption at the local level.
• Worked with 36 cities, including five in Crimea, to build their capacity to plan, manage and fund activities that improve municipal heating systems operations and services.
• Completed 10 energy efficiency and heating improvement projects in six cities with expected energy savings of 46 million cubic meters of natural gas over five years.
• Leveraged $1.34 million in public and private financing to implement 21 energy efficiency demonstration projects in district heating. Signed two PPPs, with the Donbas Fuel and Energy Company (DTEK) and Contour Global (U.S. Investor and Operator of heating utilities), to implement projects in the cities of Kurakhovo and Kramatorsk.
• Trained and certified representatives of 25 Energy Service Companies (ESCOs) on how to conduct an Energy Audit in Buildings (EAB), and trained representatives of 36 pilot cities in municipal energy management. This work resulted in the improvement of the cities’ capacity in energy planning and the improvement of local ESCOs’ ability to conduct professional energy audits.
• Prepared investment projects catalogues for six cities to attract IFIs and private sector financing. As a result, EBRD committed €30 mln to improve the municipal heating system in Lviv.
• Partnered with the Donbas Fuel and Energy Company (DTEK) to implement three municipal heating energy efficiency demonstration projects in the city of Kurakhovo (Donetsk oblast).
• Developed and broadcasted six TV Public Service Announcements (PSAs) about Ukraine’s energy dependence and heat conservation in multi-story buildings on regional and nation-wide television channels.
• Designed the Energy Efficient Schools Program to educate children on responsible and efficiency-conscious consumption. The program was successfully introduced in 12 schools and then officially approved by the Ministry of Education and Science for use in all educational establishments in Ukraine.
Local Investment and National Competitiveness Program
Since 2009, the project:
• Assisted local and regional governments to create a better business environment using strategic planning tools and building public-private partnerships to demonstrate how such improvements can increase investment;
• Worked to accelerate the development of a more transparent land market by designing and presenting a concept for a unified property registry, essential for attracting investment.
• Helped new investment promotion and regional development agencies provide effective information and services to domestic and international investors through a series of foreign direct investment trainings and advice.
• Streamlined import/export processes at the Odessa Commercial Seaport and assisted the State Customs Service to implement valuation procedures consistent with international norms.
• Assisted “one-stop shops” in Crimea to decrease time and cost of permit issuance for businesses by introducing simplified procedures, improving operations, and increasing access to information.
• Promoted strong procurement legislation through legal advice and training.
• Assisted the National Codex Alimentarius Commission of Ukraine in drafting and adopting HACCP system implementation guidelines, to improve food safety in Ukraine.
• Connected Crimean fruit and vegetable producers and traders with domestic and foreign buyers, which has resulted in sales of $7.8 million.
• Assisted the Crimean tourism sector to increase information available to tour operators, improve service standards, and encourage more domestic and international festivals in Crimea.
• Completed strategic planning in 14 cities and three regions. Fourteen cities adopted their economic development strategies ;
• Selected an additional 14 cities and three new regions and commenced economic strategic planning process.
• Trained 212 local officials in attracting investment.
• In partnership with the ARC Council of Ministers prepared and launched a Republic-wide program to build capacity of 25 permit one-stop shops. The project assisted with development of internal procedures and regulations and opening of one-stop shops in Simferopol, Sevastopol and Feodosia. It also provided assistance in increasing information openness and transparency to 26 one-stop shops in ARC and Sevastopol.
Development Initiative for Advocating Local Governance in Ukraine (DIALOGUE) Project
Since project’s inception it:
• Successfully lobbied for the adoption of the Cabinet of Ministers Resolution on setting up Regional Advisory Boards;
• Adopted Law-Making Procedures for the Association of Ukrainian Cities (AUC);
• Developed a database of lawyers in local governments;
• Launched the zMISTOvna Ukraina TV program series on success and problems of local self-governance.