Source: TV-channel “24”
The FORBIZ project was launched in Ukraine being initiated and funded by the European Union. Its main goal is to create a better business environment in Ukraine for small and medium businesses. It is planned to implement a number of initiatives that will not only support unleashing the potential of Ukrainian small and medium businesses, but also the country’s economic growth as part of the project.
European experts call an overregulated business environment, inconsistent legislation and a low level of legal awareness among Ukrainian businessmen as the main factors hampering the development of a successful and competitive business in Ukraine.
The FORBIZ project under the European EU4Business Initiative was launched to change the situation for the better.
What tasks are assigned
The project will focus on small and medium businesses. It will propose systemic changes to create a favorable business environment. The main task is to reduce the regulatory burden and reduce the risks to the business.
“Small and medium businesses in Ukraine in Europe – this is an element that maintains the economic stability in the country. And the crisis in Ukraine after the events with Russia would be much bigger if there were no small and medium business that was involved in the development of the country,” a key expert of the FORBIZ project Joshua Badakh said.
According to the expert, Ukrainian government circles understand that easening regulations and creating favorable environment for the development of small and medium businesses is essential for the country and that this field should be regulated.
“There are many laws from Soviet times that don’t work in the current context, they should be removed. And we need to consider what laws should be proposed for the business to ensure its development,” the expert emphasized.
In addition, signing the Association Agreement between Ukraine and the EU, on the one hand, speeds up the cooperation process and provides development opportunities for the Ukrainian business, and on the other hand – obliges Ukraine to harmonize its legal framework that, in turn, will increase the attractiveness of our country for international investors.
Who will implement the project
The Independent Analytical Center “Better Regulation Delivery Office (BRDO)” will support the project by a large team of skilled legal experts and analysts specializing in specific business sectors. And, of course, most relevant ministries will be directly involved in the work.
“We would like that ministries don’t see us as a ‘strange’ reform. As an initiative introduced by “predecessors”. Knowing that sometimes the “age” of a minister and his team can be extremely short. But we propose systemic changes that are not possible to implement in a few months, so we would like to become a kind of a ‘ministry of common sense’,” the head of the “Better Regulation Delivery Office” Oleksiy Honcharuk said.
Getting the “soap”
“In Ukraine, more than 70% of documents are adopted with two purposes: to fulfill international obligations and fill the budget,” Oleksiy Honcharuk explained. “If the state doesn’t want anything else, the business will treat the state as a bear in a china shop in the best case scenario. At worst – as a pirate. This is the key issue.”
“In Ukraine, the business is a criminal in the eyes of the state. Since Soviet times, it is regulated in such a way as if it is a part of the state. When Ukraine became independent, the regulation remained the same. There are still old rules that regulate the activities of all companies in Ukraine,” the BRDO expert Oleksiy Dorohan explained.
According to him, an inspector can always find some violations in the company by making a search among the obsolete legislation, which is, however, still active.
“We still have a valid decree of 1923, which is not published on the Verkhovna Rada of Ukraine website while being mandatory – there are relevant letters of ministries, and stipulates what employees should get a laundry soap,” Oleksiy Dorohan surprised us.
So, if you ask an entrepreneur whether he fully complies with all requirements and standards, a businessman will either say “not all” or have doubts – all of them or not. After all, any entrepreneur has neither the time nor the opportunity to learn a large variety of regulations and other acts existing in our country as they often contradict each other and an entrepreneur doesn’t understand why they are needed. However, it is impossible to overcome the state in this matter. Therefore, it is cheaper for the business just to do nothing.
How to achieve desired goals
The BRDO team will make a technical examination existing legislation in the priority sectors: agriculture, construction, energy, transport and infrastructure, control and supervision, international trade and information technology.
“There is no sense to adopt certain draft laws. We believe that the problems can’t be solved with the help of the “pothole repair”. We proposed a systematic approach,” Oleksiy Honcharuk said.
Experts have developed a plan to solve this situation – a system of “roadmaps” for specific business sectors.
“Let’s take some businesses: restaurateurs, taxi drivers, catering companies, in other words, very specific markets, where competitors are clear, where you can calculate the market’s volume and build a dialogue between the state and each specific market. For example, let us take a taxi: gather real taxi drivers together, talk about the problems and analyze the market with the help of experts. We will find out that the market’s volume is such and such, 45% – in the shadow economy (although we estimated that in the case of taxi services, in the shadow economy – from 70%). Why do not you pay taxes? What to do to make it better? And this work will be in cooperation with the Ministry of Transport, the tax agency and so on. It is important to make it public,” Honcharuk explained.
“So, we can quickly achieve the results – to show a success story,” the expert says.
How long the project will take
The project is designed for three years. But, as Joshua Badakh said, project objectives – to launch a system that can be used even for those laws and regulations, which will be adopted in the future, in order to define their effectiveness.
Oleksiy Honcharuk added that they set themselves a cautious task to review more than 70 markets in the above described manner during the next year and a half. However, this work will be done in cooperation with ministries and they have to decide where to start and how to develop the work.
“Working with each market is an individual market. And we offer about 70 projects of such a type. If at least half of them are successful – this will be a huge victory. However, we are cautious in forecasts because the work will largely depend also on the people, who work in the ministries,” Oleksiy Honcharuk explained.
What results are planned to be achieved
Generally speaking, the FORBIZ project has three focuses: the regulation targeted at business interests (support from the authorities at all levels to improve the regulatory policy in priority sectors), support for policies for SMEs and a dialogue with the small and medium business community.
So, the project goals: to work out clear and accurate “rules of the game” for entrepreneurs, reduce an administrative burden on them.
The work is at an early stage yet, but project leaders and participants promise interim results in the near future.