Page 14 - UKRRptSept19

should act as a significant economic multiplier. “Elaborate a restructuring plan for Ukrzaliznytsia, in particular with a view to liberalizing the locomotive market and improving the transparency and efficiency of Ukrzaliznytsia,” Zelenskiy said.
Reform of the police and security services: the new Interior Minister Arsen Avakov has already started to dismantle the police’s Department of Economy Protection, which is notoriously corrupt. The Ukrainian Security Service (SBU) and the State Fiscal Service are also being told to abolish their “economic crimes” units, which only engender corruption. The reform of the security services and police will be one of the most difficult of all the reforms as they are home to the most powerful vested interests, however, unlike most of the other ministries, security and police fall directly under the constitutional control of the president, who doesn't necessarily need the Rada to make changes. The Rada has been tasked with preparing draft legislation for a successor agency, the Financial Investigation Service, by December 1 this year.
Budget 2020: It’s easy to forget that in the welter of tasks for the reform the government also has to do its housekeeping. The Rada has to prepare a budget for 2020 by September 1. The state’s finances have improved dramatically in the last two years and tax collection in particular has improved. Next years budget should be similar to this year’s budget and will almost certainly be IMF compliant.
Close oil and gas deals: several prospecting and production agreements have been sold off using the proZoro system this year, but the government must sign off on these deals with the winners by December 1 this year. Oleksei Orzhel, the new Minister of Energy and Environmental Protection, said: “There will be legislative initiatives to increase gas production. There will be reforms in the market, we are inviting everyone to invest,” as cited by UBN. Ukraine currently produces 1.2% of its known reserves each year, well below the global average of 4-5%. The country also produces some 20 billion cubic meters (bcm) of gas a year, enough to meet around half of its domestic needs.
Power connectivity: The Rada must reform the utilities sector to improve and cut the costs of connecting to the electricity and gas networks. This one is straight out of the World Bank’s Doing Business rating as one of the six criteria that go into that index.
Mortgage promotion: the government must “encourage the reduction of mortgage rates” by October 1. It is not clear how the government can do this as mortgage rates are a function of the NBU overnight rates and the central bank has successfully maintained its independence from government. Currently it is more focused on bringing down high inflation rates than cutting overnight rates. However, Russia followed a similar policy and the government in recent years subsidised mortgage rates over 12% in an effort to boost home-ownership. Property ownership acts as a “social glue” and tends to promote more engagement between the citizenry and the state.
E-government: Zelenskiy has already talked about his concept of “government in a phone” and intends to follow Estonia by putting as much of government online as he can. The Rada must put the 30 most heavily used government services for citizens and businesses online by January 1 next year and an e-citizen profile for all Ukrainians must be created for enrollment in a Unified State Demographic Register. Honcharuk said: “2020 will be the year of total digitalization of the country. In 2020, we will digitalize everything that we
14 UKRAINE Country Report September 2019 www.intellinews.com