Ukraine needs a comprehensive inspection reform! The BRDO Office has developed a draft resolution that provides for the creation of a nationwide IT risk assessment system in all areas of state control over businesses!
What will the state get?
We call on the Cabinet of Ministers to approve the draft resolution developed by the BRDO Office together with the Ministry of Economic Development at the next meeting! The inspection reform is a necessary step towards an effective service state.
Ukrainian legislation allows to create self-regulatory organizations (SROs) for 15 types of activities. In fact, only 20 SROs for 5 of 15 types have been established. Dozens of associations and unions (in different markets) that seek to become self-regulatory organizations can not obtain this official status, as it had not been so established in legislation.
Self-regulation is not a new institution for Ukraine. However, in our country, we have pseudo-self-regulation, since there is no definitions on what kind of phenomenon it is, there are no established and generally accepted principles of self-regulation, no single basic procedures. There is no holistic and systematic approach to the introduction and implementation of self-regulation. All this leads to occasional regulation, the diversity of self-regulation demonstrations and creates obstacles to its spread.
39 legislative acts that formed the relevant regulatory environment not allow to identify any key features of self-regulatory activities, nor self-regulatory goals, nor the unique aspects of a self-regulatory organization status.
In most types of activities, self-regulation is formally impossible due to the lack of special laws (for example, advertising, security, banking, etc.). In some cases, the creation of a SRO is allowed, but there is no appropriated procedure (for example, tourism). As a result, today:
Meanwhile, in world practice, self-regulation as a form of management and self-control of business associations significantly reduces administrative pressure on businesses and promotes higher standards of business activity, and hence better protection of consumer interests.
BRDO experts came to the conclusion that changes in the self-regulation area should start with the state policy-making instead of laws. Following discussions and consultations with all stakeholders, we have prepared a draft Concept for reforming the self-regulation system in Ukraine. Its approval will declare and give rise to a single state policy of self-regulation, as well as form the basis for further regulatory enforcement of such a policy. We call on the ministers to support the draft Concept for self-regulation at the forthcoming Government meeting.
Source: 24tv.ua
Most people are surprised or start laughing or have these two feelings at the same time when first hearing a term ‘time share’. However, for some Ukrainians, the ‘time share’ is a symbol of fraud that includes considerable amounts of money.
Why did one of the most popular travel services in the world (mostly in the USA and the EU) with the 50-year history and the annual turnover of tens of billions dollars turn into a trick to take people’s money in Ukraine?
Let’s find out what the idea of ‘time share’ is first. Imagine that you, together with ten of your friends, have purchased a common property on the Mediterranean coast or in the same cozy area in your native Odessa region.
As co-owners, you and your friends have agreed on who and when has the right to use this premise. Usually, obligations are established for a long period (for example, for 5 years), and it is assumed that during the specified period, one person can use this accommodation 1-2 times a year at specified intervals (as a rule, starting from a few days to a month).
This is a classic time share contract. In a more modern context, a time share contract usually means not a full ownership, but the right to long-term use of residential property.
Through a travel company, a time share contract can be concluded with all concerned parties individually and includes the right to exchange your own share, sell it, use related services, etc.
However, in Ukraine, due to a lack of any legislative regulation, the time share became a means of pulling the wool over eyes of trusting potential vacationers.
In Ukraine, frauds related to the time share was particularly relevant in the 90’s and 2000’s.
According to the classic scheme, a client initially responded to several innocent, at first glance, questions of some ” sociological survey” in a supermarket. If it became clear from the answers that this person liked to rest abroad, he would soon be called and got a joyful news about the winning the competition and obtaining a certificate for a long holiday for fun money (although sometimes this amount could be several thousand dollars). The deal is usually completed in the company’s office, where a person who came to take his ‘win’ was forced to sign a ‘time share contract’ with the use of aggressive marketing and psychological pressure that was supposed to be a rock-solid ‘guarantee’ of rights to a hovel in the middle of nowhere. As a rule, you could abandon the contract and get the paid money back just in theory.
However, these fraud schemes were different. Some clients thought believed that they paid for a tourist trip, although, in fact, payments were made as a club contribution, which did not give the right to a tourist trip, under such a contract.
Others were disappointed when they arrived at destination, where there was economy-class apartments offered instead of luxury hotels from the presentation.
That is, one way or another, the amount of money paid for these services one way or another exceeded their real market value a few times. At the same time, timeshare contracts formally met all the legal requirements, which created serious difficulties to bring fraudsters to responsibility.
Judicial statistics confirm that the relevant criminal cases are rare. In one of them, dated 2013, the Shevchenkivsky District Court of Kyiv considered the circumstances of activities of a group of people, who, according to the prosecution materials, seized funds of 131 citizens in the amount of almost 1 million hryvnias by taking ‘ membership fees’ for their participation in ‘tourist club’ during 2001-2006.
However, there were any final decisions taken in this case: court decided to return the criminal case for additional investigation after detecting procedural flaws in the prosecution materials. Most likely, this story ended in nothing, as well as many others that have not been brought to court at all.
Despite the fact that, since the 90’s, the time share have been largely a manipulation and deception item, this area is still out of the state’s attention. As a result, we have deceived consumers and unprotected honest businesses, which are unable to develop a real time share service in a lawful and customer-friendly environment. Accordingly, business loses potential money and is convinced once again that being honest is not profitable.
However, things may soon change for the better. The BRDO Office, together with the Ministry of Economic Development and Trade of Ukraine, is initiating work on the implementation of Directive 2008/122/EC of the European Parliament and of the Council of January 14, 2009 on consumer protection with regard to certain aspects of contracts for the use, sale and exchange of temporary residence rights (time share) and products related to long-term vacations.
the implementation of the above Directive in the national legislation of Ukraine is stipulated by the Association Agreement between Ukraine and the EU.
One of the examples of civilized regulation of time share contracts provided for in Directive 2008/122/EC is the consumer’s right to withdraw from the contract without any explanation and penalty payments within 14 days of its signing.
Only one such rule would ensure a well-informed choice of consumers and break down schemes, which are usually based on the rapid signing of contracts and the impossibility of further repayments.
We strive to protect an honest business that fully meets the interests of consumers. And every satisfied consumer is a step towards a satisfied Ukraine!
By Vlad Pinchuk, BRDO expert
This issue was discussed during the today’s open industry meeting “Safety of buildings and structures: problems of obsolete regulatory framework and counterfeit products in construction” organized by the BRDO and USCC with the assistance of the Ministry for Regional Development, Building and Housing of Ukraine.
Nowadays, the use of materials that do not meet safety and durability standards becomes the norm. Constructions and installation works suffer from low quality, while fake and counterfeit products overflow the market. Against the ineffective market surveillance and common market problem of obsolete regulatory framework, these factors constrains the industry’s development and threatens citizens’ safety, so it requires an urgent solution.
“Ineffectiveness of market surveillance mechanisms in Ukraine, no adequate responsibility of the certification authorities, inappropriate work authorization, use of defective products and services as well as the prevalence of price over the quality resulted in poor-quality products and services in the market,” the Construction Sector Head Olena Shulyak stated.
“The construction market, providing its potential for development of the infrastructure, is one of the crucial economy sectors in the country. Due to certain problems in the industry, including issues of harmonization with European construction standards, there is visible retention in design according to Eurocodes in Ukraine and as a result – a lack of international investments and difficulties with international expansion of domestic manufacturers in the EU market,” the executive director of the Ukrainian Steel Construction Center Vyacheslav Kolisnyk said.
The Deputy Minister for Regional Development, Building and Housing of Ukraine Lev Partskhaladze noted that his administration realized that it was very important to work out all the problems of the obsolete legislation and stop counterfeit irruption in the industry. According to the Deputy Minister, this would facilitate the development of the industry in general and allow Ukraine to reach the new European level of construction.
“We won’t simply acknowledge the problems. The Ministry supports a proposal to create an interagency working group and I am ready to head it. It will deal with the revision of obsolete regulations and establish a range of the necessary national standards that should be updated in the first instance. Besides, one of its priority tasks will be to develop the mechanism to restore the efficient control and supervision in the construction materials market,” Lev Partskhaladze emphasized.
Learn more about the presented agenda here.
Problems of counterfeit products in construction and Construction regulatory framework: modern condition
The Verkhovna Rada registered 4 draft laws developed with the participation of BRDO that will help reform the forestry sector. Draft laws No.8246, 8238, 8239 and 8240 are aimed at creating the State Fund for the Forestry Development.
There have been no funds allocated for the forest sector from the state budget since 2016 and only 5-7% of the needs were satisfied.
Improving the forestry financing and development as provided for in the draft laws will allow:
In case of adoption of these draft laws, contributions to the State Fund for the Development of Forest Resources out of a special state budget fund (with crediting rent payments from final cuttings) will amount to 632.8 mln UAH starting from January 1, 2019. This will meet financing needs of the forest sector to a greater extent.
As a reminder, last year, BRDO experts prepared an analysis of timber market regulation problems in Ukraine published as the Green Paper.
According to the new Law on the Electricity Market, Ukraine has to change a model of the electricity market in accordance with the requirements of the EU Third Energy Package by July 1, 2019. Its implementation should imply the free market pricing, reducing the state’s influence, competition and possibilities to sell electricity under bilateral agreements. However, in the current market conditions in Ukraine, the reform may lead to a significant deterioration of the industry’s situation and threatens to discredit the process of European integration.
Government, business and public representatives discussed the ways of solving market problems during the Roundtable “Risks and barriers to the generation market reform” on April 10. The event was arranged by the BRDO Office with the support of EU4Business\FORBIZ and the MEDT as part of the Public Dialogue #PRODialogue.
406 entities have electricity production licenses in the Ukrainian market, but a share of the 5 largest players is 92% of the total volume of the wholesale electricity market (WEM). The state controls almost all market operations distorting the market model and making the competitive development impossible. The market concentration can be decreased by importing and building new capacities. However, neither the state producing 67% of electricity nor the private sector is interested in new strong players.
” Moving to a free market under high concentration is a very risky step. Due to changing in pricing mechanisms, a final electricity price for business will increase by at least 30%, and that is not even taking into account inflation and other factors that will affect tariffs for end users, in particular, the introduction of RAB regulation. Cancelling the cross-subsidization will allow to reduce a price shock, but this will lead to a twofold increase in prices for the population,” the BRDO’s Energy Sector Head Oleksiy Orzhel says.
Importers as true competitors of the domestic energy generation can not enter the market until a series of administrative, economic and technical barriers are removed. In particular, it is necessary to synchronize stock exchanges, create conditions for import into the Burshtynsky Island and combine the UES of Ukraine with the ENTSO-E. The latter requires to upgrade generating capacities, 80% of which are worn-out, and comply with European technical requirements and environmental standards, and hence – to make significant investments.
” Ukraine has chosen the path of European development, therefore, it has to fulfill its obligations as part of the energy sector reform. There are many objective problems in the sector, however, it is possible to build a competitive market only if a full package of necessary steps is implemented. In particular, developing effective regulatory acts for the electricity market, improving an energy regulator and the Antimonopoly Committee to target the needs of consumers, as well as creating conditions for export-import exchange,” Johannes Baur, Head of the Department of assistance programs “Energy, transport, and environment” of the EU Delegation to Ukraine believes.
In the current situation, new large producers are hardly enter the market, since a payback period of such investments is more than 20 years. Moreover, the existing energy generation industry is not interested in competitors and can offer lower prices as the moment arises and, therefore, block the entry of new actors into the market. Especially, in case of extra charges to increase environmental sustainability, cover the debts of the “previous” market, etc. established for them. Such surcharges will be included in the energy transmission tariffs and, in the end, covered by consumers, creating the illusion of competitive electricity prices for day ahead and intra-day markets.
The First Deputy Minister of Economic Development and Trade of Ukraine Maksim Nefyodov stressed the need for a balanced approach: “The electricity market reform is a priority given its determining influence on the business environment in the country. Our task is not just a matter of implementing the Third Energy Package that will lead to negative consequences, but implementing mechanisms for the competitive development of the sector. There should be a joint, comprehensive work of all responsible government bodies.”
According to BRDO, the positive effect of the implementation of the Third Energy Package in Ukraine can be achieved only if:
Otherwise, with limited state intervention, the market sensitiveness to price fluctuations and abuses is increased, and this will affect ultimate consumers.
Today, the BRDO team is involved in reviewing the regulation of aerodrome environs development. It is a high-profile problem, because according to the Ministry of Infrastructure, the State Aviation Service issued 115 decisions to stop the construction of facilities, most of which have been already finished, as of March 2018, while there are dozens of lawsuits involving claims of the State Aviation Service against owners of buildings at aerodrome environs.
An expert on the Construction sector at BRDO Iryna Bardasova presented ways to solve this problem during the roundtable discussion at the Confederation of Builders of Ukraine. “Inadequate regulation leads to a conflict between construction and aviation sectors: on the one hand, in case of construction works started without approval of authorized aviation bodies and companies, there are violations of aviation safety requirements and risks for aerodromes to lose their certificates; on the other hand, obtaining additional approvals is an artificial barrier to start construction activities and significant losses of time and funds by entities involved in urban development activities,” Iryna Bardasova said.
In Kyiv, in order to comply with all the aviation safety requirements in case of a new construction, it is necessary to get 7 approvals, and it will take about 18 months. Are business representatives ready to wait for such a long period? “In order to make aviation and construction sectors working in tandem, it is necessary to remove artificial barriers to start construction activities, namely to cancel the obligation of construction project owners to obtain separate approvals, and to include aviation safety requirements in urban planning documentation as well as add the relevant development limits in the urban planning conditions and restrictions,” Iryna Bardasova said. Business and construction industry representatives and experts concluded that the laws updated in an appropriate way would improve the situation in the sector, and the society and business would benefit from a positive result.
On April 4, 2018, the Law of Ukraine “On State Control over Compliance with Legislation on Food Products, Feeds, Animal By-Products, Animal Health and Welfare” No.2042 of 18/05/2017 will enter into force. According to the BRDO Office, its implementation creates conditions for the functioning of a system of effective food safety control, but the effective implementation of the Law requires significant financial resources from the state as well as the adoption of about 30 regulations.
The Law introduces a number of positive changes in this sector. In particular, it reintroduces instruments for quality control of products imported in Ukraine within the state border line. For example, it implies the requirements set for equipping border inspection checkpoints to provide the direct control, sampling and research of products by qualified personnel. Today, the Customs officers who actually are not technically equipped carry out this control.
The Law also introduces new regulatory instruments – a general import document and a general veterinary import document, which will confirm state control procedures carried out by market operators.
In addition, the Law provisions introduce a risk-oriented approach to control in this sector and create more favorable conditions for fair businesses. Thus, state control over the implementation of a hazard analysis and critical control points (HACCP) system will reduce business costs for equipping enterprises to meet sanitary requirements.
It is envisaged to expand a scope of persons to carry out certain measures of state control with the purpose of ensuring timely control. In addition, business will clearly understand the state requirements. The Law provides for that the Ministry of Agrarian Policy should approve the forms of state control acts used by state inspectors/state veterinary inspectors during control procedures.
At present, it is necessary to focus efforts on addressing a number of key issues that threaten the effective implementation of the document. First, providing financial instruments to equip border inspection checkpoints, adequate logistics support for inspectors, etc. Second, working out the necessary regulatory framework to implement the Law. Third, providing the harmonization of sectoral laws in accordance with the EU Regulation 2017/625, which defines the phytosanitary control functions as well.
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The Ministry of Education and Science published a draft Plan for the implementation of an experiment on the electronic textbook and electronic platform introduction. The document defines the scope of work, mechanisms and sequence of activities to introduce electronic textbooks and functional modules of the National Educational Electronic Platform in Ukraine.
Under the experiment, it is planned to study the use of prototype electronic textbooks in the educational process, launch new procedures for state examination, selection and financing of electronic textbooks, introduce the National Educational Electronic Platform as a pilot project first and then make it fully operational.
According to experimental results, a strategy for developing electronic textbooks and the electronic platform as well as a package of legal documents regulating the national market of electronic textbooks will be formed.
The draft implementation Plan for the experiment will be discussed with stakeholders of the process.
The Ministry of Education and Science will accept letters of interest from software developers, providers of technical solutions and content, commercial and non-profit companies, academic and research institutions that would like to participate in the development of the National Educational Electronic Platform by March 30.
In these letters, interested parties should submit their own proposals to create modules and content for the National Educational Electronic Platform in accordance with the draft implementation Plan for the experiment on the e-textbook and electronic platform introduction.
These proposals should contain a general description of the vision and approaches, areas of implementation, specific tasks and activities, implementation stages and timing, necessary resources and an indicative implementation budget. It is important to provide an empirical experience and case studies, which argue the need to apply a proposed approach.
The Ministry of Education and Science will consider the submitted proposals and provide the public with a detailed plan of further actions not later than April 6.
Please send your letters of interest and questions about the draft implementation Plan for the experiment at [email protected].
Can a collective or single government body be replaced by artificial intelligence? Traditionally, in our country, presidential elections are the reason for political bargaining on another change of the political regime along with strengthening or weakening the president or the parliament.
At the same time, as it turns out, sometimes this pendulum can swing toward excesses such as authoritarianism. In this context, a political system is considered as a plasticine product that can be of any shape, depending on the current balance of main political players.
Such political bargaining is practically not analyzed by the academic community in detail, since neither history, nor philosophy and political studies do not provide a clear answer to the question of how to give structure to authorities. Lee Kuan Yew, whose smiling face can be found on the shelves of almost every Ukrainian bookstore, disturbs the judgment of Western liberalism supporters insistently. Meanwhile, ‘strong hand policy’ apologists require to be constantly reminded of the tragic history of the USSR formation and disappointing trends in the development of our neighbors.
However, putting aside historical parallels, solving the problem of appropriate concentration of power largely depends on the answer to the key question: who has the highest faculty (and can more likely) to make appropriate and effective decisions: a collective body or an individual?
Both ancient Greeks (for example, Aristotle believed that a group made decisions at least not worse than its best member) and the collective wisdom of the Ukrainian people (four eyes see more than two; so many men, so many opinions) also tried to answer this question.
However, the more or less reliable answer has been found only in the last few decades, when professional psychologists made the judgement. Just then it turned out that, as it often happened before, neither people nor Aristotle had any idea what they were talking about. But let me explain everything step by step.
Kraken in power
How likely is that a sole state leader will make appropriate decisions? First of all, we should immediately reject the option of a truly one-person decision-making process by such a leader. The fact is that when making a decision, one person is able to effectively analyze only a small number of factors. As the problem becomes more complicated, the analysis no longer makes sense, and here you should rely solely on your intuition. Given the complexity and diversity of areas that a potential authoritarian leader has to control, he is not able to govern the state at minimally acceptable level alone even theoretically (if, of course, this state is not an island inhabited by dozens of aborigines).
Therefore, we will leave alone assertive leaders-dictators, but take a look at another less exotic decision-making type – making decisions by hierarchical groups. The main point of such a group is that problems and possible ways of their solution are discussed by a rather wide circle of advisors, but their leader takes a decision alone after the group discussion. The aforementioned model reflects an ‘informed dictatorship regime’ more adequately in a modern complex world. So, does this model have any drawbacks?
As it turned out, it has a lot. Aside from potential individual weaknesses of a single-person leader (a lack of perception, personal development, education or experience), there are still a series of mistakes that almost all the leaders make.
To begin with: which of the advisors, in your opinion, will a leader listen to first of all? Perhaps, the most intelligent one?
Absolutely not.
Usually an advisor who demonstrates more confidence in his advice is the most likely to succeed. This rule works even when such confidence is in no way correlated with the reasonableness and value of the advice itself (that is, when confidence is groundless).
However, even an advisor who is bursting with confidence has a decent competitor. Who is this influential person? Maybe the most experienced advisor? Again no. A leader’s personal opinion has one of the most important priority in the leader’s coordinate system. As a rule, the influence of the leader’s personal opinion on making decisions is practically equivalent to the position of a professional expert. Even if such an expert has much extensive knowledge and experience in the relevant area.
There is the opposite effect when a leader doesn’t have an opinion regarding problems. In this case, leaders tend to take the advice of an advisor even when this advisor has less knowledge and experience in the relevant range of problems than the leader himself.
Another typical phenomenon is the negative natural selection among advisors of a sole leader. As researches found out, advisor’s advices, which turned out to be false, greatly limits its influence in the eyes of the leader. At the same time, the advice, which turned out to be correct, raises the advisor’s profile in the eyes of the leader just a little bit.
That is, it is too difficult to establish credibility with the leader, but one can lose it as quick as lightning. As a result, the leader accumulates advisors guided by the strategy of giving vague and dubious advices, which would not give rise to accusations in the future, around himself.
In addition, if the leader is really seeking advices, he tends to trust the advisor who previously agreed with the leader’s opinion more. And this means that over time, such a leader will inevitably fall into the warm bath of his illusions supported by the persons closest to him.
In addition, to be successful, both the leader and his team should have developed cognitive skills and consciousness at the same time. If the leader has no such qualities, it can not be compensated by any team of advisors. To the contrary, a genius with a narrow-minded team will take mostly wrong decisions.
Finally, getting the power significantly changes a person’s behavior. As Dacher Keltner’s studies described in detail, a person who receives power tends to behave more impulsively and selfishly, lie, violate the rules, which, in their opinion, other people should follow, and even… take away candies intended for children (I understand, it is funny, but that’s a fact).
It would seem that supporters of a strong parliament have something to celebrate. Their suspicions that all historical horrors of authoritarianism are not a temporary domestic specific features, but a scientifically verified pattern are confirmed.
However, are there any significant benefits of collective decision-making processes?
All power to councils?
In terms of the optimality of solutions, such advantages turned out to be not so obvious.
First, collective bodies usually not only do not remove the mistakes of their members, but, on the contrary, aggravate them.
Secondly, making decisions by a group entirely depends on absolutely random factors. For example, the position of that person who first expressed his opinion is often crucial.
Thirdly, if members of any collective leaned toward the same idea before the discussion, the result of the discussion would be only a significant increase in their confidence about such an idea. As a result, the collective is radicalized for no apparent causes.
Fourthly, groups assign high priority to information, which is known only to individual members of the collective. This disadvantage is especially obvious when the time to make a decision by the group is limited to a small period.
In addition, it is ironic that members of the group, who did not have the opportunity to discuss a problem, often make a conclusion, which is much closer to the truth than the conclusion of the group that discussed this problem.
Finally, the nearly main drawback of a collective decision-making process is its slowness. For example, a parliament rarely considers a draft law faster than in 6 months. This slowness is completely in contradiction with modern trends: in the private sector (even when it comes to huge corporations), every hour, minute and sometimes second counts to make decisions. A company that can not make decisions quickly is lost in the competitive market in the blink of an eye.
In terms of quickness, a sole leader can teach any parliament a thing or two. Although, let’s be clear here, sometimes failed states have the rulers who wait to the last minute to make decisions because of their personality features.
It is all over!
It is easy to see that both collectives of equal members (voters in the referendum, parliament), and hierarchical groups (sole leader and his advisers) themselves are imperfect and programmed to make mistakes. Therefore, in terms of accuracy and efficiency of decisions, the problem is not the one who makes decisions (hierarchical or equal group), but the way, in which the works of such groups is organized.
For example, the involvement of a person who actively advocates a position different from that of the majority has a positive impact on making adequate decisions by the group. At the same time, if the group understands that its member took such a position only due to his status as an official opponent, any positive effect of such participation is rapidly falling. Therefore, there is a lesson for the parliament: opposition factions have a positive influence on the quality of decisions made by the parliament only if the reason for their opposition is a real analysis of initiatives, but not a denial as a result of the political struggle without reference to the essence of the problem.
The general conclusion is that without adequate discussion procedures, targeted formation of groups and thoughtful analysis of the expertise level of their members, both hierarchical and equal groups will be able to make optimal decisions only by positive coincidence.
However, the problem is that groups (both with and without a leader) are able to organize themselves by their own rarely. Often the groups do not appreciate the opinion of the best expert in the group while overestimating the least-informed advisor.
I’m from Zuckerberg
If a person is pre-programmed to make false decisions, probably, it is time to replace them with something else.
It is projected that in the next decade, people may stop writing programs, since artificial intelligence is quite capable to cope with coding tasks. And here it is worth mentioning that both program codes and laws have a lot in common: the one and the other is the algorithms, rules of conduct. Moreover, a program code is even a little more complicated, because in the case of an error, any program definitely stops to work correctly. And in the case of a mistake in the legislation, there is always a chance to deviate from the literal interpretation of provisions and use many other types of interpretations (systemic, teleological, historical, etc.) that would give the meaning even to a completely inefficient law.
Indeed, in recent years, making decisions is delegated to artificial intelligence with increasing frequency. Some innovative companies are already including it into the corporate bodies, and government bodies are introducing it in the decision-making mechanism based on the processing of large amounts of data. As for the justice system, artificial intelligence can predict the behavior of perpetrators and choose appropriate penalties or evaluate the probability that suspects will not hide from the investigation. Chat bots consult and response to citizen inquiries and even deal with their recruitment for military service more successfully than people. In this case, we are talking about already working algorithms. There are even more areas, in which the algorithms are ready for use, but not yet allowed by people. They cover verifying the grounds for providing social assistance, making decisions on granting a preferential loan to a beginner businessman, issuing a visa or an immigration permit, selecting entities for inspections, etc.
The next logical question is: can a collective or single government body be replaced by artificial intelligence?
In the context of choosing the best solutions, artificial intelligence seems to be perhaps the best option. The algorithm is not burdened with obligations to party partners, does not think about re-election for a second term and is entirely deprived of human’s cognitive defects.
But humans would not be humans if they were looking for simple ways. Therefore, we have another problem – researches indicate that we, humans, do not like when algorithms make difficult decisions for us. Even if such decisions are more optimal and effective. Even if such a difficult decision turned to be false in terms of consequences, it often does not prevent people from feeling completely satisfied.
As for government bodies, it became clear from the above researches that they are not always a place for making optimal decisions. Typically, they are generators of decisions, which are a product of political (often situational) compromises. Although such decisions are not perfect, they, like any compromise, are more readily perceived as compulsory.
However, this conclusion does not mean that algorithms do not have a place in the government system. Artificial intelligence can safely take the lion’s share of responsibilities of government bodies related to secondary or preparatory works: data collection, answers to requests for information or assignment of tasks among subordinates.
But it hardly needs to be limited with these aspects. It is likely that in a few years, artificial intelligence will become a full parliament or government member in any country.
Such a parliament or government member will have a larger political significance that its ordinary human colleague has. The algorithm can act as a benchmark, deviation from the proposals of which requires detailed justification and argumentation. Moreover, discussions with the participation of artificial intelligence would be hardly limited to straightforward political fights while shifting government or parliamentary discussions from unstoppable promotions to discussing the essences of problematic issues.
In this scenario, advertising slogans of software developers such as “It works”, “Because it’s consistent”, “This hardware did not steal anything” or “Take and do” will be a clear indication of inevitable changes.
The opinions expressed in this article are just the author’s own
On March 15, 2018, the Verkhovna Rada Committee on Agrarian Policy and Land Relations held a meeting, where it was decided to recommend to the Verkhovna Rada of Ukraine to take the draft law No.5448 as a basis in the first re-reading.
The Better Regulation Delivery Office has made great efforts to improve the draft law No,5448 that will allow it to become a “National Organic Standard”.
According to the BRDO Office’s proposals, improved mechanisms of state control over the organic segment and accreditation requirements for certification bodies and their responsibility for improper implementation of functions delegated by the state as well as the more detailed provision on certification of business entities in terms of expanding business processes, which are subject to organic certification were included to the draft law.
Proposed revisions are based on the EU Regulations 834/2007 and 889/2008 and will have a positive impact on the organic products market in Ukraine.
As a result of the adoption of this draft law, the organic products market will be one step closer to successful development. This will create an opportunity for the first Ukrainian manufacturer certified under Ukrainian requirements to officially appear in the market. The state will finally be able to properly control the production and sale of organic products and protect consumers’ rights.
The Verkhovna Rada approved the draft law No.7085 in the first reading. It contains suggestions made by BRDO experts on identifying a new construction facility and assigning an address to finished facilities:
In addition, the draft law includes suggestions made by BRDO experts regarding amendments to the Law of Ukraine “On Architectural Activities”. From now on, performers of works (services) for developing architectural projects can not be denied a professional certification if they have not joined a self-regulatory organization that conducts this certification.
The BRDO has developed a novelty product in the dumplings index! From now on, this online service allows users to compare the dumplings index in Ukraine and other European countries. It turned out that our country had the lowest price of products required to make dumplings.
“In Ukraine, the dumplings are the least expensive. However, we can afford to buy the smallest number of dumplings plates. In Finland, for example, people can buy 1,482 dumplings plates with their salary, in Germany – 1,409 and in Poland – 836. With our average salary, according to the State Statistics Service (Derzhstat) and retail store chains, people can buy only 271 and 212 dumplings plates respectively,” the BRDO Head Oleksiy Honcharuk said.
In addition, we compared relevant figures for Ukrainian regions. Kyiv has the highest level of purchasing power, while the Chernihiv region is behind other regions. In the regions of western Ukraine, the dumplings ingredients are the least expensive, especially, in the Ternopil region, but this fact is compensated by low salaries. There is the worst situation in the regions near the capital region. The close proximity to Kyiv “encourages” a faster outflow of more skilled personnel and hampers a wage growth at the local level, while prices, in turn, are much higher than in the Western Ukrainian cities.
The Dumpling’s Index: Ukraine and Europe
212 plates data of retail store chains as of March 20, 2018
*calculations are based on a ratio of the average wage to the cost of a plate of dumplings with potatoes for 4 persons (according to the classic recipe) based on data from the Derzhstat and retail store chains
The online service also provides an inflation calculator that allows to evaluate how the prices have changed in the country over time.
How does it work? The online service automatically collects data from open sources (Derzhstat, the NBU, World Bank, Eurostat) and presents them in a convenient way:
The Dumpling’s Index: regions as of 28/12/2017
Ukraine 271 plates
*calculations are based on a ratio of the average wage to the cost of a plate of dumplings with potatoes for 4 persons (according to the classic recipe) based on data from the Derzhstat and retail store chains
**data for the period 11/12/2017 are used
The BRDO is planning to continue introducing new tools that will help analyze the correlation of inflation and other indicators. Soon we will launch a Housing Affordability Index. Details at https://regulation.gov.ua/inflation
The Dumpling’s Index
*Calculations are based on a classic recipe of dumplings with potatoes. For 4 persons
**Source: Online prices of Fozzy, Novus, Metro and Auchan
The total cryptocurrency market capitalization amounted to $370 billion as of March 13, 2018. The daily cryptocurrency trading volume exceeds $15 billion, and over the past 30 days, the total cryptocurrency trading volume amounted to $400 billion.
Due to specifics of the cryptocurrency market, it is impossible to determine the volumes of the Ukrainian one. Moreover, there is no comprehensive analysis of its volumes. At the same time, in 2017, Ukraine was among TOP-10 countries by the number of Bitcoin users as estimated by forklog.consulting and axon.partners. It is clear that the interest of Ukrainians in the cryptocurrency market is growing and the number of operations in the market is increasing. This is evidenced by the growth of trading volumes and trading pairs on the popular Ukrainian KUNA cryptocurrency exchange.
However, in Ukraine, this market is developing under a lack of legal clarity. This creates problems both for achieving the goals of state regulation and ensuring the legal protection of market participants. For example, in 2014, the NBU explained in its letters that Bitcoin is a money surrogate, and now the courts refer to the relevant letters when considering cases. It is prohibited to use money surrogates as a means of payment. However, in 2017, financial regulators made a joint statement saying that it was impossible to determine the legal nature of cryptocurrencies and that cryptocurrencies are not a monetary surrogate, but this joint statement was not issued as an official document and had no legal status.
Such issues as the classification and taxation of operations, accounting, licensing or other restrictions on activities with cryptocurrencies also have no clear solution in the current legislation. It can be said that the cryptocurrency market is actively developing without state regulation. In this case, the state should determine:
The BRDO Office is launching a review of the cryptocurrency market in Ukraine and encourages all those who are concerned about this topic to join.