A primary USAID goal is to improve Ukraine’s prospects for achieving more balanced, and thereby sustainable, economic growth. USAID’s economic growth programs include technical assistance in the following areas.

Financial Sector Reform

USAID’s Capital Markets project and Access to Credit Initiative (ATCI) are assisting financial market regulators, institutions and market participants to build capacity, and supporting Ukraine in the development of investment grade financial products, such as mortgage-backed bonds, municipal bonds, and domestic government debt instruments. The projects are helping the Government of Ukraine (GOU) to develop the legal and regulatory framework to implement a second pillar pension system, and providing technical assistance to the government, private pension funds, and market participants to implement a private pension system. The Certified International Professional Accounting (CIPA) Program is working to improve the knowledge base of market professionals and regulators in international accounting standards, practices, principles and ethics. The Western NIS Enterprise Fund is providing examples of how to develop financial markets using best international practices for corporate governance, and operational and financial transparency, as well as encouraging private equity financing and investment in Ukraine. Through the Certified Mortgage Lender training (ATCI), USAID is helping increase mortgage origination and overall growth of the mortgage market; while its Certified Leasing Specialists program is working to increase the capacity of leasing professionals and increases the volume of leased capital equipment. To reduce interest rates and collateral requirements, lower default rates, increase loan terms, and lead to more responsible borrowing and improve bank-risk management, USAID is supporting the creation of an operational credit bureau.

Energy Sector

USAID has moved into a new, key assistance area in supporting energy sector reform to address rising natural gas prices and Ukraine’s inefficient use of energy resources in both the public and private sectors. The Industrial Energy Efficiency Initiative was launched to provide solutions for low-cost financing to industrial energy consumers to improve their energy efficiency and reduce the country’s dependence on energy imports. The U.S. government has also begun a program on Consulting Support to the Government of Ukraine on Revision of Production Sharing Agreement legislation to create an environment that will allow international energy companies to develop oil and gas resources in Ukraine.

Business Enabling Environment

Ukraine still ranks low internationally in the effectiveness of its legal environment for investing and doing business. Through the Commercial Law Project (CLC), USAID is addressing the problem by supporting the development of needed legislation along with a corresponding training program and information outreach. The goal of the CLC project is to improve legislation and to increase awareness and knowledge about legislation in both the public and private sectors. Key areas being addressed include: corporate governance and shareholders’ rights, property ownership, bankruptcy, select tax issues, competition law, capital markets, certification, trade barriers, collateral law. In addition, USAID continues to strengthen Ukraine’s commercial courts through implementation of a case management system and database, and judicial enforcement of decisions. USAID’s Trade, Investment and Business Acceleration Activity (TIBA) is working with the Government of Ukraine, regulatory administrators, and the private sector on implementing regulatory reform to establish a business-friendly legal environment that encourages SME growth and attracts investment.

Trade and Investment

Integration into the global economy can be a powerful force for economic growth and poverty reduction. Membership in the World Trade Organization (WTO) is expected to lift Ukraine’s overall economic performance and significantly benefit the economy in the short and long term. Investment levels continue to be well below Ukraine’s potential due to a burdensome and non-transparent business environment. Through its Trade, Investment and Business Acceleration Activity (TIBA), USAID will support Ukraine’s efforts to integrate into the global economy through WTO accession and implementation and improvement of the regulatory environment.

Agriculture

To ensure sustainable agricultural growth Ukraine must develop a market environment. This requires completing privatization of land and government enterprises. The Agricultural Policy, Legal and Regulatory Reform Project is focusing on reforms in government taxation and subsidy policy, regulatory policy and the restructurization of Government enterprises.

Local Government and Decentralization

USAID local government programs are assisting Ukraine in establishing a democratic political system and achieving decentralization reforms. USAID is providing a balanced program for strengthening the organizational and legal basis of local self-governance by helping to define the role and responsibility of local government, and by strengthening the economic autonomy for local self-governance.

These programs are: 1) the Local Economic Development Program, which is teaching Ukrainian municipal offificials how to prepare strategic plans based on balanced economic growth, and to improve the business environment in their communities to nurture the growth of business activity, employment income, and local tax base; 2) the Expanding Training and Advocacy Services Project, which is providing support to the Association of Ukrainian Cities (AUC) to increase professional training to municipal officials, and developing the capacity to create and implement legislation at the national level to promote local government fiscal and political autonomy; and 3) the Municipal Budget Reform Project, which isdeveloping and implementing performance-based annual budget programs.

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