In 2018, more than 35 billion hryvnias were spent on Ukrainian roads. However, the vast majority of roads (about 95%) are still in poor condition, and 40% of them need to be completely repaired. Chronic underfunding of the road sector, ineffective control over the use of funds and corruption are one of the main reasons for this situation. (more…)
The methodological recommendations of the Ministry of Culture on the procedure for the development and approval of historical and urban planning rationales are no longer in effect from January 1, 2019. And although the approval procedure lost its harmful rudiment, there is still no urban happy ending in the near future.
Many hoped that the cancellation of historical and urban planning rationales would significantly change the market climate. However, in fact, no revolution happened in 2018.
We see that rules, which should have been in effect since 2011, are gradually implemented after the adoption of the Law “On Regulation of Urban Development”. This law strengthened the role of system planning.
Previously, real estate developers could adjust the master plan decisions through urban planning rationales, and many took advantage of this opportunity. The materials of general city plans became more complicated because of numerous adjustments. The same approach was applied to historical and architectural basic plans. Their provisions were elaborated at each design stage, and, in addition, historical and urban planning rationales were developed for all facilities in historic areas. Thus, construction possibilities and restrictions were determined individually for each facility, and strategic documents lost their importance.
In addition, the existing model violated the principle of legal certainty. The consequences of state regulation should be foreseeable for those to whom it applies. The community has the right to understand today and determine for the future what is basically allowed to do in the city and what is not. Therefore, the Law “On Regulation of Urban Development” of 2011 regulated the approval process, supposedly by eliminating localized construction projects.
However, the attempts to implement a quick reform failed. Situational regulation has been remained in government rules and regulations until the beginning of 2019, when the methodological recommendations of the Ministry of Culture on the procedure for the development and approval of historical and urban planning rationales lost their force.
Now, we can only guess how the system will work. As planned by the Ministry of Culture, starting from 2019, there should be a moratorium on construction in historic areas of cities that do not have an approved historical and architectural basic plan.
According to the Ministry of Culture, historical and architectural basic plans have been approved and are currently used in less than a third of Ukrainian historical cities (excluding temporarily occupied territories). Even Kyiv, Lviv and Kharkiv do not have such plans. Only 20 historical and architectural basic plans were approved in the most productive 2017, and more than 250 plans are to be approved. Even according to the most optimistic scenario, the process will take several years. A spatial planning vacuum creates tension that will result in the rapid adoption of historical and architectural basic plans in the best case and in massive unplanned construction projects in the worst case.
We have to admit that the moratorium on construction in the territories where historical and architectural basic plans were not approved has not yet been in effect. According to the data of the open system on reviewing licenses “Transparent DABI”, construction permits in the center of Kyiv, which has no historical and architectural basic plan, are issued this year. Data on the issuance of documents for construction projects in the historic area for January 2019 are available in Kyiv and Lviv registers of urban planning conditions and restrictions.
The market needs to know: whether the cancellation of historical and urban planning rationales removes the Ministry of Culture from the “management” of real estate development projects or not?
The answer is no. When developing the Green Paper “New construction in the territories of cultural heritage sites”, we found out that the Ministry of Culture had eight (including historical and urban planning rationales) instruments of influence. The approval from cultural heritage protection agencies is required already at the stage of land allocation, then they will review design plans and specifications. To carry out ground and construction works, you will need several permits from these agencies. In the case when a new facility may affect monuments of national and local importance at the same time, the procedure becomes more difficult: approvals and permits are issued by both the Ministry of Culture and local cultural heritage protection agencies. In such a way, the Ministry of Culture still has an influence on all stages of construction in historic areas.
We will finish the analysis on a note of optimism. Theoretically, the manual control through historical and architectural rationales should be replaced with basic plans, reducing the number of conflicts between the community and developers. Now it is up to local authorities that need to finalize their urban planning documentation.
It’s March, and the new honey season is starting. However, old problems with massive poisoning of bees and the negative influence of plant protection agents (PPA) still remain and unlikely to be resolved soon.
Beekeepers do not have effective tools to register bee farms, establish cooperation with farmers, and obtain compensation for losses. Legal procedure of protecting beekepers interests in courts is still complicated.
In 2018, about 46 thousands of bee colonies were destroyed, according to the Association of Beekeepers of Ukraine. This resulted in UAH 138 mln and around 1000 tons of honey with total UAH 45 mln in lossses.
Last year BRDO together with the Association of Beekeepers of Ukraine and the Ministry of Agrarian Policy developed a draft decree “On several issues in beekeeping”. It anticipates the following:
The adoption of this order is an immediate priority, since the spring farming season has already started.
When returning to its hive, a searcher bee performs a dance, showing other bees, in which direction of the hive there are honey plants. It’s a pity that bees can not warn their colony of places where dangerous PPAs were used.
Starting from 2015, Ukrainians invest more than 1 billion euros annually in primary real estate. However, one in five transactions is suspicious.
Our readers already know the story of Chernivtsi real estate developers. They cannot build an office center in the city because of a lack of licenses and permits. The waiting period is long and leads to enormous financial losses for business. This, in turn, worsens investment and business climate in Ukraine. In addition, often developers get formal refusal. Together with the business and sector associations we discussed these issues during the case study “Real Estate Developer vs State. Who is on top?”
The business-state communication should be improved. E-services for construction business will contribute to this process and become another anti-corruption step. Apart from that, they will provide analytics on expert organizations and their competence for future partnerships.
Eventually, the state would to become a service and help create an attractive investment and business climate in Ukraine. However, it takes time to achive this.
Do you live near the airport and can’t put up with aircraft noise any longer? Have you decided to re-design your flat and use it as office space?
Slow down if you live in the Boryspil district. Legal regulations are interpreted differently there. In particular, in case of alterations to flat, the city council requires to agree such works with the State Aviation Service. And this despite the fact that only certain facilities determined by the relevant resolution should be agreed in this way. And flats in Khrushchev-era apartment blocks are not included in this list.
That is because the Boryspil airport expanded the list approved by the Cabinet of Ministers to all construction works within a radius of 50 kilometers (!!!) by own letter. Just think of it, this is the whole Kyiv.
Do you think it’s a joke? No, this is a particular situation. Moreover, the Air Code stipulates that “Conditions of development, use of land and facilities and implementation of activities referred to in paragraph 2 of this article in aerodrome environs should be determined by local self-government bodies in accordance with the law as long as specifically agreed by an aerodrome operating entity and an authorized civil aviation body”.
In such a way, it is city councils who should agree on aerodrome environs development conditions when preparing urban planning documents instead of each real estate developer doing it separately.
BRDO experts have analyzed the regulatory environment in this area. So, in our opinion, an adequate chain of defining aviation restrictions should be like this: the State Aviation Service submits restrictions schemes to local authorities, and they approve them as a component of local urban planning documentation. And developers will receive these restrictions as part of urban planning conditions and restrictions instead of trying to get individual approvals.
On March 6, 2019, the Government approved a series of business decisions developed by the BRDO Office with the support of the MEDT and business associations as part of the eight Deregulation Cabinet of Ministers.
In such a way, 149 obsolete and irrelevant acts on price regulation in the USSR’s planned economy were abolished. The Government made a decision on market competitive pricing in terms of purchasing medical equipment, which is fully or partly purchased for budget funds. The cancellation of 10% limitation on medical equipment allowances will remove non-transparent schemes in this sector, reduce corruption risks and diversify products and suppliers in the medical equipment market.
The procedure for licensing business activities was also improved, because this sector was overloaded with excessive requirements and internal conflicts. For example, a ‘softer’ regulatory tool implying the suspension of a license was introduced as an alternative to the only existing license revocation tool. The license renewal procedure, which was stopped by the licensing body, and the procedure for appealing such a decision were also defined. In addition, entrepreneurs will no longer be required to provide documents to confirm their license issuance payments, which previously also served as grounds for license revocation. These changes will allow business owners to save about 960 million UAH per year.
Another significant decision is that it is possible for citizens of visa-free countries to obtain a working visa D in Ukraine. Its adoption was the result of a recent meeting of the President and the Prime Minister with representatives of the Ukrainian IT industry held on February 26. The Ukrainian IT industry, the growth dynamics of which exceeds personnel training progress rates within the country, as well as other sectors requiring the attraction of foreign specialists have been waiting for this step for a long time. The decision will have a positive impact on the country’s investment attractiveness as a whole, revive the exchange of best practices and create additional incentives for the information technology development in the country.
An important batch of Government’s decisions was the approval of risk criteria for another range of areas as part of the inspection system reform. In particular, in such areas as railway and city electric transport, tobacco products, metrology, out-of-school education, use of umbilical cord blood and genetically modified plants. In practice, this means that inspection bodies will focus primarily on inspections of enterprises with the highest risk level. As a result, businesses will more clearly understand the requirements imposed, and this will reduce the risks for consumers.
In addition, another ineffective Soviet relic such as a customer feedback book became a thing of the past. The obligation to keep it cost economic entities in trade and, consequently, consumers up to 125 million UAH per year.
“A today’s model of Ukrainian business behavior is simple: if they come, we will make a bargain. We decided to break these stereotypes and developed a state StartBusinessChallenge portal with smart and step-by-step instructions on opening own business to ensure that entrepreneurs have legal relations with the state in further activities. Our goal is obtaining all permits from a smartphone or computer in 10 days,” Oleksiy Honcharuk said during the discussion of the independent analytical study “Are Anticorruption Reforms Effective in Ukraine?” presented by the Royal Institute of International Affairs, known as Chatham House, together with the EU Anti-Corruption Initiative in Ukraine (EUACI).
He also noted that personal accounts providing already existing businesses with insight into requirements for any given business operations imposed by the state would be available soon.
In addition, the BRDO Head told the audience about the Inspection Portal providing businesses with information on when and what aspects they can be inspected and allowing to see the results of any business inspection available to the public.
The market surveillance sector head Volodymyr Holovatenko, together with the analyst of the BRDO Office Anna Palazova, continues a series of training sessions on Regulatory Impact Analysis for representatives of ministries. The second group, which learned all theoretical and practical aspects of the analysis, consists of experts from the Ministry of Energy and Coal Industry of Ukraine.
“For more than a year, our #BRDOSchool has been engaged in specialized education and training of a community of professional civil servants who began introducing a new culture and new standards of public administration in Ukraine, when returning into their offices. We are ready to continue providing the necessary support, because we are moving towards a goal, which is common to us all – to build an effective state,” the #BRDOSchool had Khrystyna Faychak said.
Source: life.pravda.com.ua
The Ministry of Education and Science has UAH 1.5 bln and almost a year to improve the quality of education.
The Better Regulation Delivery Office (BRDO), an independent expert and analytical center, created at the initiative of the Ministry of Economic Development and Trade of Ukraine and funded by the European Union, offers to use 617 million of them for providing schools with the Internet.
The Ministry of Education is now actively interested in e-learning, and BRDO helping them with that.
E-learning is definitely a promising trend. After all, we live in the 21st century.
On the other hand, technology development is far from perfect in Ukraine. We have collected statistics on the connection of Ukrainian schools to the Internet, and it is disappointing.
Nationwide, 89.7% of schools have Internet access. At the same time, the Internet connection is too slow in 78.1% of cases.
10.3% of general education institutions do not have access to the Internet at all.
While the situation is normal in municipal education institutions (3.5% of schools don’t have access to the Internet), things are worse in rural areas (13.5%).
At the same time, speed of Internet connection is inadequate in 79% of cases in cities and 75% in villages.
In such situation, even the availability of electronic textbooks, video courses and computer literate teachers don’t allow to provide the full implementation of e-learning in Ukrainian secondary education.
Pic.1
89.7% of schools have access to the Internet
78.1% with slow Internet connections
National projects to connect rural schools to the Internet have been discussed before. But now the Ministry of Education and Science has enough targeted budget funds for the project, and it should allocate them to regions.
In turn, BRDO advocates that providing each school with the Internet connection should be a separate project rather than the implementation of the national program (in most cases, with one or two “selected” operators).
This will allow to purchase a service from a local player at the lowest possible cost and with the highest possible connection speed.
According to our calculations, the average cost of one wired connection is UAH 24100 in the regions, while small providers offer substantially lower prices.
In Ukraine, along with national operators, local Internet providers work in regional centers.
As of today, BRDO obtained answers regarding the possibility of Internet connections in the regions from 30 companies. This is a small percentage, since about 2 thousand operators work in the country. But even this small number of companies can connect 51% of schools that do not have Internet access.
UAH 617 mln proposed should be enough for school internetization. According to Internet providers, connecting all schools to the Internet will cost about UAH 347 mln.
In addition, UAH 158 mln will be spent on wi-fi routers and UAH 112 mln – on connection fees in 2019.
Pic 2
347 mln UAH – to provide all schools with the Internet access
158 mln UAH – to install Wi-Fi routers
112 mln UAH – to pay connection fees in 2019
Providing all Ukrainian schools with the Internet access will cost this amount of money
We have developed Internet connection requirements for project standardization.
First, access to the Internet should be provided with wired technologies. Ideally, by using fiber optic channels that will allow to increase the connection speed in the future. Next, by using wired technologies, for example, a copper-wire cable. And they should consider the wireless connection only in remote places, for example, in mountainous areas or villages, which are too far from main fiber optic lines.
Secondly, the Internet connection speed should be at least 100 Mbps in hub schools of territorial communities and high-school institutions, and at least 30 Mbps – for the rest.
Another important component of the project that we are working on now is public monitoring, so that local administrations, which are the final distributors of funds, have no temptation to spend them for purposes other than intended.
The system will monitor what schools and administrations buy at the local level, at what cost and quality, at least formally, every month.
Currently, statistics are collected only by request. If the authorities spend UAH 10 mln, nobody will know how: whether they were evenly distributed among all schools or UAH 9 mln were spent to connect 1 school and UAH 1 mln – for the rest.
After the start of the monitoring, it will be seen by the entire country. Each school has an ID number that will be included in its connection agreement. This ID number can be automatically extracted from the ProZorro system and the State Treasury Service database, which stores all payments. Then you just need to put them together and see the cost of the service.
We have ambitious plans. BRDO expects 90% of schools will have access to the Internet by the end of this year.
There are, of course, risks of local actors.
Last year, a subvention for furniture and equipment for primary schools was provided as part of the Ukrainian School project, but many schools turned out to be with empty classrooms on September 1.
The local authorities did not know how to spend money and didn’t have time to do it physically before the beginning of the school year.
But we are optimistic about the future. According to data obtained from Internet providers, the term for providing an absolute majority of schools with the Internet access does not exceed 60 days. Even if they hold a tender in the spring, the project can be completed in autumn.
Source: LIGA.Biznes
To obtain a construction permit, it is necessary to prepare pounds of paper. Why do not electronic services work?
Sometimes it seems to me that new construction rules providing for an increase of green areas are just compensation for trees. Green plantings have become raw materials for the amount of papers that real estate developers need to prepare and submit to licensing bodies. And this is a reality of the 21st century in the center of Europe. It looks like surrealism.
(Not) transparent changes
Last year, a “Transparent DABI” system was launched. Officials demonstrated how to register a declaration for getting a construction permit online. In fact, everything didn’t turn out to be so optimistic.
Last December, an investor from Chernivtsi decided to build a commercial real estate property. According to the existing procedure, he collected all the documents (a total of several kilograms of paper) and submitted to the State Architectural and Construction Inspection in Kyiv. The documents were accepted, and he needed to get an answer through the “Transparent DABI” system. But the miracle did not happen.
First, the transparency began and ended with a “receipt stamp”, since it’s impossible to monitor the document processing procedure online. Secondly, the investor didn’t receive any public answer through the “Transparent DABI” system on time. Thirdly, the investor received a refusal signed by a person not authorized to deal with this type of permits. It was justified by comments like “the address should be indicated both in the construction title and location”.
Why do I pay so much attention to the comments? The fact is that they were made to the project that had previously received a positive conclusion as a result of the expertise that can be carried out by a state certified specialist. That is, a representative of the state reviewed the conclusion of an expert authorized by the same state and found out mistakes in it.
The investor as a representative of the market generating up to 3% of GDP was tripped, wasn’t he? And the most interesting thing is that the state is responsible neither for delays, nor for mistakes in the state expertise. These are the problems of the investor.
Is it possible to change the situation?
Is it possible to change the very system of obtaining permits in construction to help real investors, without losing the ability to ensure control over safety and prevent violations of urban planning laws? It is possible.
To do this, we need to create a unified information system that would deal with the organization of urban planning activities. The need for this system is long overdue. What would be the point of this approach? First of all, it will help to collect scattered data and registries, allow to exchange documents remotely and monitor any operations with documents. And most importantly, the system will not be focused on officials and “making bribes”, but on investors.
A framework for the implementation of such a system has been already developed. The only we need is to make it approved. Plus, to create registries of urban planning and technical conditions, construction projects (with permits and energy certificates indicated) with their further integration into this unified
system. In addition, it should be equipped with interfaces for interaction between central/local government bodies and developers/contractors. It is necessary to provide constant public access to open sections containing documents and analytics.
After their approval, the investor from Chernivtsi will not need to deliver kilograms of paper in Kyiv. And any investor will be able to monitor the processing of construction permits at any stage. And the bodies that issue licenses will be able to manage them remotely.
Over the past five years, Ukraine has experienced a declining trend in livestock production: the number of cattle has decreased by 19% and the number of pigs – by 21%. At the same time, the decrease rates are significantly lower in agricultural enterprises than in farming households. The animal disease prevalence, the ineffective market control, the capital intensity of production and active migration processes in rural locations are among the causes. At the same time, Ukraine has much lower meat consumption rates per capita compared to developed countries. For example, while a Ukrainian consumes an average of 7.3 kg of beef and 19 kg of pork per year, a German – 14 and 56 kg, respectively.
The government, business and public representatives discussed the he ways of solving the market problems during the Roundtable “Meat Market Regulation: the balance between consumer safety and business development” in Kyiv on February 19. The event was organized by the BRDO Office with the support of EU4Business/FORBIZ as part of #PRODialogue.
“The market is very promising, but the current legislation does not provide effective mechanisms to solve its problems. A quarter of rules are irrelevant, and one third of regulatory tools provoke high corruption risks. With a high prevalence rate of animal diseases, it leads to a significant reduction in the number of livestock and financial losses to the business as well as does not protect consumers from poor quality products,” the Agriculture Sector Head at BRDO Andriy Zablotskyi said.
BRDO experts conducted a systematic analysis of the market regulatory framework and found out that almost a quarter (22%) of 68 regulatory acts in the market were irrelevant and should be revised to eliminate barriers to business. Moreover, one third of 30 regulatory instruments have high corruption risks, and even more of them (40%) do not have approved procedures or procedures for their implementation.
In Ukraine, the bulk of cattle stock is traditionally concentrated in farming households – 67% compared to 33% in agricultural enterprises. At the same time, the number of meat breeds is only 1.3% of the total number, and the beef production is derived from dairy cattle breeding. In pig breeding, 54% of pig stock are provided by enterprises, and 46% – by the population.
One of the main market problems is a complicated and non-transparent procedure to identify and register animals, in particular a lack of transparent calculation of the cost of services, which leads to the reluctance of farms to undergo this procedure. As a result, there is a large number of unidentified/unregistered animals in the market, a lack of traceability along with ineffective control over the safety and quality of meat products.
Hence another significant problem related to the uncontrolled spread of African swine fever (ASF). Thus, the number of ASF cases has increased more than 10 times (from 16 to 163) in 2014-2017. Regulatory tools that could solve the problem, such as prevention, compartment, insurance and state support, do not work properly. The most negative impact of ASF is on farming households that do not have the technical capability to meet necessary safety requirements. And attempts to independently prevent diseases with antibiotics and uncontrolled use of veterinary drugs lead to the development of animals’ resistance to antibiotics and poisonings with dangerous meat products. Consequently, the market is gradually reformatted into industrial production using modern technologies and biosafety products that are more attractive for investments.
For the first time since 1995, there have been positive trends in the market. Thus, the level of industrial cattle production profitability became positive for the first time in 2017, having showed an increase of +3.4%. The breeding of market pigs also increased by 3.5%, although this figure was negative in 2016. In addition, the export rate of cattle has increased by 85% over 5 years. Mainly, due to the export of live cattle to the Middle East.
According to BRDO experts, the necessary steps for further market development are:
* improving sectoral legislation;
* developing cooperation;
* increasing state support;
* developing local agrarian markets.
The event was attended by the Deputy Minister of Agrarian Policy and Food Olena Kovaleva, the Head of the State Regulatory Service of Ukraine Ksenia Lyapina, the Head of the State Food Safety and Consumer Protection Service Volodymyr Lapa, the Director General of the Food Safety and Quality Directorate at the Ministry of Agrarian Policy Mykola Moroz, the Head of the Ukrainian Stock Breeders Association Iryna Palamar, the Head of the Association of Production and Processing of Meat Industry “Meat of Ukraine” Natalia Dremblyuha, the Director of the State Enterprise “Agency for animal identification and registration” Ihor Klymenyuk, the Head of the “Meat Industry” Association Vitaliy Pavlivskyi, the Vice-President of the Association of Pig Producers of Ukraine Oksana Yurchenko, the First Deputy Chairman of the Board of the National Association of Meat and Meat Product Makers of Ukraine “Ukrmyaso” Ivan Hrod, the EU Delegation to Ukraine, business and expert community representatives.
More information is available at www.regulation.gov.ua.
Source: biz.nv.ua
In spite of the fact that Ukraine is one of the world’s leaders in terms of the population’s education, we have one of the lowest indicators of desire and opportunity to be an entrepreneur
People have been forced to unlearn this for almost a century, and only in the last 25 years, you will not put in prison because you use your mind to earn money. And this is not all the problems. I can’t claim that there is a certain and intended state strategy aimed at hindering business activities, but, obviously, the ineffective legislation and state apparatus do not help to conduct such activities.
No one is seriously engaged in business support. Officials do not consider it as a strategically important goal, forgetting that small and medium-sized businesses form the basis of the economy and the middle class in any developed country. It turns out that the state is interested in bribes, but not in business development. If we add a tax terror, the difficulties with starting own business and accounting, we will get a dangerous “Terra incognita” inhabited just by “dirty dealers”. For example, in Ukraine, even the perception of an entrepreneur is still somewhat negative.
I believe that “louses should be crashed”, and we need to listen to no one, develop and move forward. I follow these rules in all projects I’m involved in. For the same reason, I support a Start Business Challenge project, which is an information service with step-by-step instructions on how to open a business in Ukraine. They tried to explain, on the one hand, officials and, on the other hand, many young and inexperienced entrepreneurs who are just starting out that they should move forward and work harder, if something goes wrong, because there are tools and opportunities for this.
Indeed, I myself was ready to become an entrepreneur in 2003 and started my own business only in 2005. It turns out that I have been providing employment to others, creating new projects and developing business for the past 13 years. If we explain two thousand potential entrepreneurs how to start and tell them about all opportunities in a year, in Ukraine, there will be at least 5,000 employed people and about half a million serviced clients by 2020. This is an excellent KPI for “awareness-raising” activities.
About three tips before starting
I would like to draw the attention of future businessmen to written agreements with partners. It is very important to define and register them before going into something together.
The second point is competent legal and accounting support to ensure that everything is done in accordance with law.
And most importantly: never give up. 99.7% of all startups running are unsuccessful projects and bankrupts. However, people try back and are not afraid to lose. In general, our culture does not support losers. For example, some person spent $ 1,000 to open a bakery. If this business doesn’t work out, both friends, colleagues and maybe even relatives will treat this person like muck. But a healthy entrepreneurial culture should not consider such a story as a failure. This is an experience that will allow to work even better and more efficiently in the future. And this is my third tip.
About something important
In fact, formal preparation of documents is a technical task. The most important thing is to agree on a basic business scheme. It is critical to have all agreements with partners documented in writing. Even if
it is a car wash, it is important to define who buys a sponge, and who – gloves, or who washes a hood, and who – a trunk, in writing. And who does not wash anything, working at the checkout counter. It is also important to understand how to distribute the income and with what frequency: once a day, once a week or once a month. I confess that I myself was caught into such a trap. At Comedy Club Ukraine, our arrangements with partners were not registered, and when the project became effective, it was obvious that everyone understood the arrangements in different ways. As a result, we faced with a conflict within the company and a lack of profit, then one of the partners went out of business and, naturally, the project was closed. I hope this case will help young people who want to open, for example, the same bakery to avoid the mistakes. The main thing is not to be afraid.
Maksym Bakhmatov,
Managing Partner of UNIT.City, Chairman of the Board of Radar Tech
Source: Economichna Pravda
We know how to create a paradise for investors, but many Ukrainian cities continue business as usual. If there is no paradise, there will be no money in the budget.
Registering a company in 15 minutes, obtaining construction and engineering networks permits at no charge, and as a bonus, paying 0% of income tax until 2026.
That would be a paradise for investors. The only problem is that it is about Georgian Adjara, and not about some Ukrainian region.
Today, developed cities are key sources of filling state and local budgets. They are scientific, economic and political centers.
Due to decentralization, their influence on state development is growing. The united territorial communities, cities and villages are able to manage their own funds, but priority is given to those that do everything to attract financial resources.
The intensity of competition is also increasing. While the world’s mega-cities are gaining ever greater competitive advantage, Ukrainian cities that do not work on investment attractiveness are losing their time and opportunities.
For two consecutive years, the BRDO Office has been analyzing the specifics of doing business in regions based on the World Bank’s methodology and presenting the Regional Doing Business rating.
We analyze how easy it is to open a business, pay taxes, register land plots or obtain a construction permit as well as whether electronic services are fully accessible or whether it is easy to connect to electricity networks in different cities of Ukraine.
It is obvious that the primary factors for attracting investments are private property security, infrastructure development and political stability. However, even without the above-mentioned criteria regulated at the local level, our regional centers will not be able to win competition even among the East European cities.
Our research allows us to assume what the chances of a potential foreign investor choosing the Ukrainian Rivne city instead of the Hungarian Szeged city, where the procedure for obtaining construction permits is ten times cheaper, but starting a business takes more time, are.
We not only analyze the information on procedures received from entrepreneurs, but also provide recommendations to local authorities. In 2018, some officials and deputies ignored these advices, but it helped others to implement useful initiatives.
One of the successful cases was a one-hundred-fold reduction in the share participation rate for non-residential premises in Chernihiv and accelerated procedures, which are now twice as fast in construction as in the Croatian capital of Zagreb, and far less expensive than in Kyiv. This improved the city’s position in the rating and helped attract investors.
Realizing that the transparency and business-friendly public services interface should also be implemented centrally, we have developed several tools.
Local authorities can attach their cities to these tools and simplify the process by supporting communication with start-up entrepreneurs and potential investors. We hope that they take advantage of them.
One of these tools is a Start Business Challenge state web portal, which provides guidance on starting more than 100 business types.
Adding cities to the portal through localization of instructions can help the government create a cluster of private entrepreneurs, increase revenues to the budget and create jobs. The portal will help both business owners and potential entrepreneurs.
However, not all cities are in a hurry to take this step: 14 regional centers have not yet joined the system. Instead, Vinnytsia, Sumy and Ternopil have localized all business cases.
Another web resource, with the help of which cities can improve their investment attractiveness, is a state web portal pmap.minregion.gov.ua. It contains links to all city planning documents required by investors and all citizens.
Access to such documentation is a long-standing national problem, so the Ukrainian regions now have the opportunity to publish all data online and be open. However, not all regions are in a hurry in this case as well. Only 67% of data are available online.
As part of the Regional Doing Business 2019 study, the BRDO Office is preparing proposals for improving the investment climate for regions in the Best Practices format that will help regions to adapt successful initiatives of their neighbors.
We will work not only with local authorities, but also with active representatives of the business community to increase the chances of their implementation. We hope that clear data and public communication will stimulate the government to engage experts and entrepreneurs in cooperation to build an investment-friendly country.
The views expressed in this article reflect solely the author’s point of view and do not necessarily coincide with the position of the EU Delegation to Ukraine.
Source: business.ua
During the World Economic Forum, which took place in Davos, the most important statement sounded in the Ukrainian House about readiness to explore uranium by the Nuclear Energy Systems of Ukraine, which received the appropriate license at the end of 2018.
It was stated by James Hart, the partner of Hillmont Partners.
The head of the supervisory board of the NESU is Gennady Butkevych, the co-founder of the ATB company, the largest food retailer in Ukraine, which paid taxes in the amount of nearly UAH 10 billion in 2018.
The NESU is intent on developing cooperation with the American company HOLTEC. The nuclear power industry of Ukraine is still in the state hands for 100%.
But taking into account the huge uranium reserves in Ukraine, in the case of the arrival of the Western technologies and investments, the country can make a powerful breakthrough in the development of the nuclear energy.
According to Oleksiy Honcharuk, the head of the Better Regulation Delivery Office, it is the first private license concerning uranium in the history of the independent Ukraine.
This was stated by the BRDO Board Member and Construction Sector head, Midland Development Ukraine co-owner and CEO Olena Shulyak at the Open Mind Conference.
Obtaining a construction permit is a complicated and multi-stage procedure. For the purpose of identifying its problem areas and assessing directly not a declared, but real level of favourableness of the DABI’s licensing system for real investors, the BRDO Office decided to monitor a real case: an investor from Chernivtsi tries to get a permit to build a modern cultural and business complex of CC3 class in accordance with the law and without bribes. With the consent of the investor, the Better Regulation Delivery Office publishes all steps, starting from preparing a package of documents, on its website and social media.
According to Olena Shulyak, the entrepreneur provided the State Architectural and Construction Inspection of Ukraine with a set of necessary documents weighing several kilograms to fulfill the requirements of the licensing system as required by the law. He should have been answered through a highly publicized “Transparent DABI” system on February 4.
“The fact is that the problem is not with the “transparent” or “not transparent” DABI. The procedure itself contains opportunities for manipulation and violations to be committed with impunity. If you try to automate this mess, then you will just get the automated mess. The same thing happened in our case with obtaining permits through the so-called “Transparent DABI”: the investor from Chernivtsi received a refusal with a delay of 5 days (since the refusal itself was dated February 1), and it was signed by a person not authorized to take any actions related to construction permits (according to the DABI procedure). In addition, having analyzed the refusal, we found out numerous evidences of the procedure inconsistency, from the mistakes in design documents, which already received a positive expert conclusion and, logically, couldn’t contain any mistakes, to actual comments such as “data was indicated in the wrong line”.
Such real cases and not some virtual ones characterize the level of interest in investments and investors shown by government agencies. This example is a litmus test for the reform. Changes in the country should be real and not the fictitious ones. And based on this real example, we in the BRDO Office are ready to help the state to get out of the comfort zone of the past and create modern effective mechanisms in dealing with the licensing system. And investors will give back by creating jobs, providing tax revenues and simply by promoting a country’s reputation in the business communit