Mobile payments work for economic development in 93 countries around the world, covering 411 million users. Their advantage over banking financial services is in greater convenience, simplicity, 24/7 availability and independence from the availability of a bank card and POS-terminals. Everything required to settle accounts by using mobile payments is to be a subscriber of mobile operators and have an account used with your phone number.
Ukraine virtually has no such market, despite the developed network of mobile communication services used by the vast majority of Ukrainians, and only 53% of the population having a bank account – and hence the access to banking services.
The Better Regulation Delivery Office (BRDO) experts have conducted the analysis of the legislative regulation of the market, which is at the intersection of telecommunications and financial services, and identified two regulatory barriers hindered the development of the mobile payment market in Ukraine:
The BRDO Office together with the Ministry of Economic Development and Trade has prepared a draft Resolution designed to remove the barriers. After public discussion and approval of the document, on July 4, 2017, the Cabinet of Ministers adopted amendments to Resolutions No.1740 and No.295. All changes will come into force after the official publication. Thus, it is possible to use a mobile account to pay for goods and services, make cash transfers and take advantage of other financial services.
“According to our estimates, at least 15% of mobile subscribers, or 7.8 million people will use mobile payment services over two years. Under such conditions, the annual market volume could reach more than 650 million dollars or 17 million hryvnas. The service of mobile payments will significantly increase the population’s access to financial services and facilitate deeper involvement of cashless payments,” the BRDO IT and Telecom sector Oleksandr Kurbakov said when presenting the results of the relevant research during the roundtable “Mobile payments: new opportunities for everyone” in the framework of Public Dialogue #PRODialogue, which was held on 13 July.
It is important to make this service available in the most remote parts of the country, where there are no bank branches and 3G network coverage, since the confirmation of payments can be obtained via SMS.
Maksim Nefyodov, the First Deputy Minister of Economic Development and Trade, highlighted the potential of this new service: “Mobile payments are not only an affordable alternative for the population, but also new opportunities for business development: fast payments, higher bandwidth, the possibility to reduce own costs – that is, the service has clear economic justification.”
Moreover, the development of the mobile payments market will be one of the important directions in the implementation of the Cashless Economy project, presented by the NBU in 2016. “Mobile services are definitely a step towards the future. We have to create a legislative framework, which will not have unnecessary regulations, but will contribute to the civilized development of entrepreneurship, for this new market,” the Head of the State Regulatory Service Kseniya Lyapina said.
At the same time, BRDO experts emphasized that a number of issues should be addressed for the further development of the market, in particular:
– the problem of remote user identification;
– limits on electronic money transactions for identified and unidentified users;
– the right to issue electronic money.
Mobile operators, representatives of the NBU, the state Agency for e-Governance in Ukraine, businesses, experts and the public participated in this event.
We express our gratitude to the founder of iHUB Dmitry Podolyev for the partnership and support in developing the technological start-up industry in Ukraine.
Source: delo.ua.
Small and medium businesses now simply include increased tariffs into the price of their products. But the state that held a course for energy independence can and should change it. The head of the BRDO Energy sector Oleksiy Orzhel explains how to do this.
The cheapest energy is the one, which is not produced and consumed. The state should promote the actions of all categories of consumers, which increase the energy efficiency.
The Better Regulation Delivery Office (BRDO) has analyzed the Ukrainian legislation in terms of the energy efficiency focusing on small and medium-sized enterprises (SMEs) and has found that there are virtually no incentive mechanisms for them to take energy efficiency measures.
The SME sector itself is primarily focused on current business activities. It simply does not have enough time, opportunities and money for such a type of investments as energy efficiency.
Large businesses begin to move slowly in this direction, since they are able to count the money better and understand the benefits of energy efficient consumption. As a rule, large companies already have an energy office or a chief power engineer or involve a contracting organization for energy audits.
As for small and medium-sized enterprises, they do not really think about energy efficiency now. When tariffs grow, SMEs simply include these additional costs into the price of their goods or services. This affects end users – the prime costs are increased and the competitiveness of products is reduced. In general, this situation is also negative for the state, since it does not help to reduce energy consumption in the country.
In terms of state approaches and attention, it would be appropriate to give the SME sector a status of the residential sector. Moreover, they are often immediate neighbors, as it is a common practice to place the business on the first floors of residential buildings. Consequently, the state should encourage the business to be energy efficient as well and should introduce the regulation of these measures, and then, of course, control in an appropriate way. Speaking about analogy with the residential sector, the logical incentives could be separate funding from the Energy Efficiency Fund and introducing credit privileges.
Bad cop
The introduction of progressive tariffs can perform, let us say, the function of “sticks” or regulatory tools, when each new “portion” of energy for non-productive small businesses (for example, hotel business) is sold at a higher cost.
By analogy with the fact that the consumption of more than 100 kWh per year is much more expensive for the population, the same can be for non-productive businesses – it would be better to differentiate the cost by volumes depending on the business size.
On the other hand, progressive tariffs conflict with the interests of energy suppliers, who are interested in selling more products. Therefore, the state should introduce a differentiated “tariff menu” for different segments of consumers, including for SMEs, to balance its own costs and interests of market participants.
Another possible “stick” is an environmental tax imposed in case of excessing standards for using energy resources due to low energy efficiency.
Good cop
Let’s go back to the “carrots”: if we are talking about small and medium businesses as a production, then we have to offer them both customs and tax privileges for new energy-efficient equipment.
Moreover, the state can and should apply tax incentives to Ukrainian producers of such equipment. These incentives can be larger than those ones provided for imports to stimulate domestic producers. This will promote the creation of the markets for such production and, accordingly, the wider use of energy-efficient equipment.
For example, the agricultural sector, in which the SMEs have about 85%, also requires state incentives programs. As for now, there are enough investors wishing to provide funding for operational activities of agricultural producers, but there is a much more complicated situation with the re-equipment, for example, switching from gas heating to the alternative one. It implies both credit programs and the promotion to switch to more efficient and economically justified energy consumption schemes, the re-equipment.
What is currently blocking the use of such mechanisms? The imbalance of the current legislation
The Law of Ukraine “On Energy Saving” (Article 16) provides for tax privileges for:
At the same time, the Tax and Customs Codes significantly limit the scope of the above privileges. They are possible only if these goods are used by taxpayers for their own production and if identical goods are not produced in Ukraine. In addition, these goods should be stipulated in the list approved by the SMU.
The Tax Code does not provide for any cases of using higher depreciation rates of fixed funds. At the same time, the list of energy saving equipment types, to which higher depreciation rates are applied, is expected to be established by the CMU’s Order No.159-p dated 11/02/2009.
It should be noted that the Government’s Resolution No.293 dated 30/03/2016 provided for creating special (priority) conditions for the import of energy-saving materials, equipment, machinery and components based on the projects presenting Japanese technologies. However, currently, the legislation does not stipulates similar privileges for imports from countries other than Japan. Of course, this fact prevents the spread of energy-efficient and energy-saving technologies in Ukraine. In addition, Japanese technologies are also facing with a number of bureaucratic obstacles when it comes to import activates in our country.
In general, we have a strange situation today: it is easier for small and medium-sized businesses to get grants from international institutions than from their own state. Thus, the United Nations Industrial Development Agency (UNIDO), supported by the Global Environment Facility (GEF) is implementing the project “Improving energy efficiency and stimulating the use of renewable energy in agro-food and other small and medium-sized enterprises (SMEs) of Ukraine”, which some domestic producers have been already joined.
Of course, we can tell everywhere that “energy efficiency means everything for us”, but, generally speaking, we have not established the secondary legislation yet, and the provisions already provided for by laws often do not work.
I would like to hope that the recently adopted laws, in particular on the commercial accounting of utilities and energy efficiency of buildings, will give an impetus to improve the situation not only in the residential sector, but also for the energy modernization of small and medium-sized businesses. The state has to develop a systematic approach that will have a long-lasting positive effect.
Mobile payments are working for the economic development in 93 counties of the world, in Ukraine, the legislation does not allow the service to be fully implemented. The launch of the mobile payments market as a convenient payment method, which is accessible 24/7, will seriously increase the citizens access to non-bank financial services and will promote the bigger penetration of cashless settlements.
Which regulatory services will allow the mobile payments market to work well? How to avoid potential risks and protect from abuses? How to make the new market a powerful tool for the cashless economy?
The state, business and the market participants will find answers together during the Roundtable “Mobile payments: New opportunities for everyone” in Kyiv on July 13.
The participants are:
Business, public representatives, experts, media.
Considering the fact that the mobile payments market is at the intersection of telecommunication and financial services, the BRDO experts conducted a system review of regulatory acts that directly regulate the relations between all market participants. The results are presented in the analytical research – the Green Paper “Market of Mobile Payments” that will be the subject of discussion at the event.
Join the dialogue! The discussion results will be the basis to develop specific legislative initiatives at the market.
Place: Kyiv, iHub (Khreshchatyk St., 10)
Time: 10:00 – 13:00, 13 July 2017
The event’s agenda is available here.
You can register by following the link. Detailed information at: 063 440 47 07.
Media accreditation is till 6:00 pm on July 12 at 099 256 59 56.
Energy consumption of Ukrainian economy is one of the highest in Europe and exceeds the global index twice. The reason is the inefficient state regulation, a large share of energy-consuming sectors, old and inefficient technologies, wasted permanent assets.
Small and medium enterprises (SMEs) makes more than 60% of the Ukrainian GDP, consuming 27% of the total energy, but it is out of the focus of state attention and practically does not have state support when it comes to energy saving and energy efficiency.
On July 5, the government, business, public representatives and experts discussed regulation issues in the sector during the roundtable “Energy efficiency and SMEs: new regulation – new opportunities” as part of the #PRODialogue public dialogue.
While opening the meeting, the Head of the State Regulatory Service Kseniya Lyapina emphasized: “Energy efficiency is a critically important issue for the business competitiveness and economic development. But small and medium businesses have limited opportunities to implement energy efficient measures, it is very expensive investments in the future, but there are virtually no available tools. We have to develop legislative incentives for this consumer group by joint efforts.”
According to BRDO researches, 30% from 49 legislative acts that regulate the energy efficiency and energy-saving sector for small and medium business segment are outdated and illegal. State regulation in the sector does not achieve its goal in 86% of cases.
“The lack of recourses to implement energy efficient measures lead to the situation when additional business expenses are simply included in the price of goods or services for final customers in case of increasing the energy tariffs. At the state level, it means that domestic products are non-competitive in the world market and the state is energy dependent,” the Energy Sector Head Oleksii Orzhel mentioned presenting results of the rolling review of regulation quality in terms of efficiency, corruption risks, ease of doing business and practicability.
The imbalance of existing legislation is the thing that prevents moving to the more efficient and economically justified energy consumption schemes, re-equipment and the use of incentive mechanisms for energy-efficient measures. During 2011-2015, the energy consumption of the Ukrainian GDP decreased by 16%, and its capability could amount to 53% if the regulation were more effective.
The Head of the EU4business/FORBIZ Project in Ukraine Matthias Halder emphasized on the necessity to achieve the balance of interests and equal conditions in the market: “The energy efficiency has become the priority in Europe long ago, and the corresponding stimulating and regulating tools had been developing solely through the public consultations involving all parties. The practical EU experience is based on it, and we are ready to share it with Ukraine.”
Taking into account recently adopted laws, especially, the laws on commercial accounting of communal services and energy efficiency of buildings, the analysis conducted by the BRDO creates the basis to apply a comprehensive approach to develop the secondary legislation. At the state level, a system approach should be developed that will promote reducing the energy intensity of the Ukrainian economy and increasing energy safety.
According to the BRDO experts, the measures that will push to the improvement of the situation in the housing sector and the energy modernization of small and medium enterprises are the following:
The representatives of the Ministry of Regional Development, Construction and Housing and Communal Services, the Ministry of Economic Development and Trade, the State Agency for Energy Efficiency and Energy Saving of Ukraine, the Antimonopoly Committee, UNDP, USAID projects, representatives of the Entrepreneurs Council at the Cabinet of Ministers, the Verkhovna Rada, business, experts and public took part in the roundtable.
On July 5, 2017, the Union of Ukrainian Entrepreneurs (SUP) and the Better Regulation Delivery Office (BRDO) signed the agreement on cooperation within the implementation of the Regional Doing Business project.
The aim of the project is the business climate inspection in 24 Ukrainian regions and in Kyiv with the goal of further decreasing the regulatory pressure on business representatives.
Medium and large business representatives will take part in the survey. The comprehensive doing business analysis will be conducted based on the World Bank methodology in five areas:
The rating of all Ukrainian regional centers in terms of the mentioned above aspects will be formed on the basis of the obtained results.
“Ukrainian entrepreneurs are our main partners when it comes to changes. The BRDO is striving for making effective decisions in the cooperation with the business. It is important for us to know your thoughts and comments on our deregulation initiatives,” the BRDO Head Oleksiy Honcharuk said.
“The improvement of business climate in Ukraine and deregulation are the main goals of the SUP. After all, the interference of governmental authorities in enterprises’ activities very often has negative signs. We hope that the Regional Doing Business implementation will have positive impact on the activity of independent Ukrainian entrepreneurs united by the Union and will promote the improvement of the doing business conditions in the regions,” the SUP Executive Director Kateryna Glazkova said.
Energy efficiency of the Ukrainian economy is one of the highest in Europe and exceeds the global index twice. Small and medium businesses that make more than 60% of the Ukrainian GDP have no state support when it comes to the energy conservation and energy efficiency.
How to stimulate the efficient use of energy recourses? What will allow to provide the use of energy conserving technologies for SMEs and lessen the energy dependence for the state at all?
The state and the business will together work upon solutions to the problem of the energy efficiency implementation as part of the Roundtable “Energy efficiency and SMEs: New regulation – new opportunities”.
The event will be attended by:
BRDO experts conducted a rolling review of the quality of sector’s regulation, the results of which have been presented in the analytical research – the Green Paper “Analysis of the quality of energy efficiency regulation in the SME sector” that will be the subject of discussion at the roundtable. More details at www.regulation.gov.ua.
You can register here.
The event’s agenda is available here. Details at: 063 440 47 07.
Location: Kyiv, IQ Business Center (Kyiv, Bolsunovskaya Str., 13-15)
Time: 10:00 – 12:00, July 5, 2017
Media Accreditation – at 099 256 59 56 or at [email protected].
Join the dialogue! Discussion results will be used as the basis to develop particular legislative changes in the electricity market.
June 2017
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Outdated technical solutions, green-blue walls, foot-pedal toilets, huge utility rooms and small operating rooms… These are just a few examples of state construction standards in the area of design and construction of health care facilities that have been operating since the Soviet Union and until today!
The BRDO, the Ministry of Regional Construction and the Medical Constructor Project initiate a professional dialogue on the improvement of state construction standards in the area of design and construction of health care facilities. It’s time to admit that we live in the 21st century, and the regulations should be adapted to modern challenges (DBN V.2.2-10:2017 to replace the DBN V.2.2-10-2001).
One of the key features of European legislation is the predictability of processes and changes. This allows the owners of health care facilities, investors and project companies to develop their own strategic plans to reconstruct, create and manage a heal care facility. The internal culture of education and work in the medical sphere developed for decades will be taken into account when making amendments to the construction standards and regulations. However, the archaic nature of certain provisions we inherited should not be a barrier to the development of innovative design and planning decisions, the ultimate goal of which is to improve the conditions for patients and medical staff.
The discussion will be conducted in the form of electronic surveys, round tables, expert discussions. Join us to work together to transform the health care system.
The draft DBN is available here.
Fill out an electronic feedback form here.
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Contact persons:
Olena Shulyak [email protected]
Oleksandr Pugach [email protected]
Source: delo.ua.
Cement is the most common building material in Ukraine. In addition to direct use in construction, it is the main component of concrete. The cement takes about 14% in the mass of a concrete mixture, but its cost is much higher than the cost of other fillers, so a share of cement in the cost of raw materials for concrete can reach 50% and more.
Mineral reserves for centuries, but we still produce less than consume
A piece of good news is that the resources are more than enough for the growth of the industry. According to today’s production rates, our country is provided with cement raw materials for 320 years. Even if the Ukrainian cement industry reaches the record production in the amount of almost 20 million tons in 2017, our construction industry will receive domestic cement for at least the next 100 years.
The state balance of mineral reserves contained records of 47 deposits and 6 metering stations of cement raw materials, which in total have reserves of 3.2 to 4.0 billion tons. The production is already underway on 32 deposits and 5 metering stations, and three other deposits are being explored.
According to the Ukrcement association, which brings together more than 95% of cement producers in Ukraine, our country produced 9.1 million tons of cement in 2016 and consumed 9.45 million tons. The difference is offset by import. At the same time, according to the UN Economic Commission for Europe, Ukraine still ranks the second worst in Europe with the index of 206 kg in terms of the annual cement production per capita. For comparison: in Poland, it is 489 kg, in Germany – 342 kg.
Forced deficit in the cement market and surplus in the concrete market
What limits the growth of cement and concrete production volumes? A specific feature of these markets is the presence of significant barriers to enter them. The main reason is the cost of production equipment. That is why these markets are very concentrated – a limited number of mostly large players are operating there.
A factor of production expenses is also a common feature of these markets. Both cement and concrete markets are energy-consuming. The issue of old production facilities and energy efficiency in production is a limiting factor for both markets.
Speaking figures: in 2016, there were only 9 out of 27 rotary furnaces for producing a cement clinker, which is the first step in the cement production, operating in Ukraine. The market forcibly creates a shortage of products. With a constant increase in demand for cement, the level of use of even the operating facilities for the cement clinker production amounted to 88.5% in 2016.
Today, the Ukrainian cement industry mainly uses an outdated “wet” method of clinker production while being very dependent on energy prices. On the other hand, market prices for construction products significantly affect the level of prices for building materials, including cement. The industry needs the energy efficient modernization to grow.
There is another situation in the concrete market. In Ukraine – it is a surplus of concrete production. But this market is divided into segments in terms of location. Each segment represents a territory with a point in the form of a concrete mixing station (CMS) inside and a radius of up to 100 km. It is impossible to carry the concrete at large distances – it simply hardens. Consequently, the competitiveness of the market for concrete mixtures operates solely in local geographic segments, and not in the whole country. Concrete producers are very dependent on the building activity in those local regions where they are located.
Both markets are logically linked to the production chain having similar regulatory problems. At the same time, the possible solutions for the problems can be different. And not all problems can be solved by regulatory instruments.
Concrete: state programs of road construction and social housing
According to experts, it is important to promote the construction industry in order to ensure the concrete market development. A state strategy, which provides for introducing new technologies in the construction of infrastructure facilities (first of all, concrete roads required in the southern regions of Ukraine) and by creating programs for industrial construction of social housing can be a real solution. Both problems – roads and affordable housing – are already determined state priorities. It is only necessary to establish cooperation between market representatives and the government.
It is logical that with the growing concrete market, the industry will require new cement volumes. And a shortage of raw materials will be an obstacle.
Cement: stimulating new technologies and developing mini-factories
In order to increase cement production, it is necessary to provide the state support for “cement” producers, but – the market support, which will be based on mutually beneficial cooperation. And this should be the result of a dialogue and a compromise between business, the state and consumers.
The declared state priority towards increasing the energy efficiency allows us to talk about the possibility of stimulating programs to modernize cement enterprises operating in Ukraine. A goal of such programs should be the transition from energy-consuming technological processes and technologies to new, modern and efficient ones. There can be different ways of cooperation between business and the government – from favorable taxes for reconstruction to preferential projects and grants. At the same time, producers receiving the state support should guarantee the jobs growth and preventing unjustified increasing in cement prices.
The development of local cement mini-factories, the stimulating mechanisms of which should be at both central and local levels, is of current interest. This is completely in line with the SME support strategy in Ukraine. The state should establish new rules for access to raw materials that will provide small enterprises with the access to deposits and prepare programs to support small enterprises in this segment (grant programs, privileged loan programs, leasing schemes, etc.). And local authorities, which should be interested in developing entrepreneurship and creating jobs in the regions, can offer easier access to orders and tenders for such mini-factories.
Public-private partnership can overcome counterfeit
At the same time, with the development of competition, the issue, which both the Ukrainian cement industry and the world’s one is concerned about, may arise again. I am talking about a systemic issue of falsification and counterfeit production. This is the chronic issue. Both the construction, food, consumer goods industries and many others require to resolve this issue. This is a huge challenge for our government bodies requiring systematic inter-industry cooperation.
In my opinion, the first steps should be coordinated actions regarding:
Of course, introducing a counterfeit control system will require additional costs. Experts estimated that the state spent 21 million hryvnas a year to keep just the register. However, under the conditions when almost 50% of cement in the retail market is counterfeit products, the business loses huge amounts of money. This is an excellent ground for public-private partnership to overcome these problems.
The industry requires new standards for development
All mentioned current pressing issues – starting from re-equipment of production facilities to fight against the counterfeit – can not be solved effectively without solving the problem of technical regulation and standardization.
The obligations undertaken by Ukraine within the framework of the Association with the EU in terms of harmonization of technical regulation should be fulfilled. Both producers, state standardization agencies, experts, legislative and executive branches of the government should work together in solving this issue. First of all, it is necessary to implement the provisions of the EU Regulation 305/2011 On establishing harmonized conditions for the marketing of construction products to the fullest. At the same time, it is necessary to intensify the development of national standards harmonized with the European regulatory framework in order to ensure the implementation of European standards for the design of building structures (Eurocodes).
So, as a result, I think that it is important for cement and concrete markets to:
I can not claim that I provide you with a guaranteed effective formula in this short article. I share my thoughts after a systematic analysis of the regulatory environment of two markets. My goal is to initiate a dialogue between all interested groups and take the first steps towards the effective regulation of this sector and the development of modern construction in Ukraine. I appeal to everyone – let’s work and make our state stronger!
You are in the underground in Prague, without a ticket. There a ticket inspector comes! What to do – to run back by an escalator or pay a fine?… You take your mobile phone, send SMS and voila – your travel is paid and you can show the inspector the screen of your smartphone with a clear conscience.
Or imagine another situation: you came to your grandmother, decided to buy some bread, but how unlucky – a local supermarket doesn’t accept bank cards and you didn’t take your wallet. You are too lazy to go back. You take your mobile phone and… pay through it.
Today we have become one step closer to such opportunities. The Government Committee approved a draft resolution that will create a market of new services – mobile payments.
We hope that the Government will soon approve our initiative developed jointly with the Ministry of Economic Development and Trade of Ukraine, and millions of Ukrainians will be able to use a mobile account to transfer funds or pay for goods and services.
Both situations will be possible due to the mobile payment system. Today, the Cabinet of Ministers approved the resolution, which was developed by BRDO and will create a market of new services. The BRDO Office estimated that 7.9 million people will use mobile financial services in two years. The total market volume will be 17 billion hryvnas. It is expected that the amount per user will be $6.91. The monthly market volume will reach 54.6 million dollars, and the annual one – 656.6 million dollars.
This resolution will allow to use your mobile account to:
In many countries, users can pay for goods and services using a mobile account without bank cards. Apple allows paying for its services through mobile accounts in the following countries: Austria, Belgium, France, Germany, Italy, Japan, Norway, Russia, Saudi Arabia, Singapore, Switzerland, etc. In some African countries, more than 50% of the population use mobile payments. The technology has become an alternative to the banking system.
In Ukraine, two legislative provisions prevented establishing the market of mobile payments:
From now on, Privat 24 will have a competitor, and Ukrainians will get another alternative to cash.
The forest cover indicator in Ukraine is one of the lowest in Europe – 15.7%. In neighboring Poland, it is about 30%, in Belarus – 42%. Losses from illegal logging in the country has increased by 77% reaching a total of 400 million hryvnas over the last 6 years. However, a single fine for illegal logging is only 170 hryvnas, while mechanisms to bring to justice do not work.
The representatives of government, business, community and expert circles discussed the forest industry problems during the roundtable “Regulatory jungles: is forest a commodity or a resource?” as part of the Public dialogue #PRODialogue in Zhytomyr on June 8.
The Better Regulation Delivery Office (BRDO) conducted a comprehensive analysis of the industry regulation and presented it in the Green Paper “Regulation of timber market”. According to the study, 50% of instruments regulating the forest industry carry high corruption risks due to their out-of-dateness, while 6 of 44 acts are illegal. The existing legal regulation can not provide the state recording of forests and their use as well as can do nothing with illegal logging and does not provide effective mechanisms to protect forests and sell the timber in a transparent way.
“The existing legislation and the complexity of procedures provoke the shadow market. Today, there are 9200 sawmills operating legally and about 12,000 illegal sawmills in Ukraine. If they are legalized, the amount of single social contribution from them will be 101 million hryvnas even before they will start to conduct business activities. Overall, the state loses 200 million hryvnas annually because of this,” the Head of the BRDO’s Agriculture sector Andriy Zablotskyi said.
In addition, the country still does not have any development strategy in the field of forest relations that would define priority areas of forest use for the state and businesses. The Director of the Economic Development, Trade and International Cooperation Department of Zhytomyr Regional State Administration Oleksiy Shatylo also emphasized this aspect. “Zhytomyr forest resources allow to provide the sustainable economic development of the region. In particular, due to the greater efficiency of the processing industry. But we need clear transparent market operation rules,” the representative of the regional administration said.
Currently, the forest cover in Zhytomyr region is 33.6%, in total, the region provides 20% of all timber in Ukraine. “Addressing the problems of insufficient budget funding, ineffective forest protection and its recovery is an important task for the region. Now the interests of foresters, processors and the public are in the clinch. Our common responsibility is to find solutions to complicated issues,” the Head of Zhytomyr Regional Forestry and Hunting Administration Andriy Kurinskyi said.
The leader of the EU4Business / FORBIZ project in Ukraine Matthias Halder emphasized the importance of involving all participants of the process into creating the effective regulation: “The effective regulation means that it is effective for the majority of Ukrainian enterprises, in particular, for SMEs, and that they have “equal playing field” in the market. Thus, it is possible to develop effective regulatory changes only through the dialogue between the government and businesses. We are ready to share the European experience in the field of forestry regulations with Ukraine – and today with Zhytomyr.”
During the roundtable, the representative of the Environment Agency of Austria Michael Zutter presented the best practices of foresters of Bulgaria, Romania, Austria and some other European countries to the participants. “Ukraine has great potential in forestry. The key to its implementation lies in resource efficiency, strategic partnership of the state with industry representatives and building the value chain,” he said.
The representatives of the Ministry of Agricultural Development, the State Regulatory Service in Zhytomyr region, business representatives, experts, heads of forestry agencies and wood processing enterprises of Zhytomyr region and the public also attended the event.
Electricity is a critically important commodity for economic performance. However, one in four of 94 legislative acts defining the rules of the market operation is outdated and/or illegal. The current state regulation is not able to provide the balance of interests in the retail electricity market and provide the full access to the electricity supply and affordable prices for consumers, as well as the efficiency of business activities and conditions for the development of energy companies.
These are the conclusions of the analytical research “Retail electricity market” prepared by Better Regulation Delivery Office (BRDO) in the Green Paper format. BRDO experts conducted a rolling review of the market regulation quality and analyzed the rules regulating legal relations of its members with the view of the efficiency, corruption risks, usefulness for the business and practicability.
Analysis results prove that the most of regulatory instruments have been chosen improperly, and the procedures of their use have significant drawbacks, many standards are spontaneous and unstructured. Problems are aggravated by the influence of a range of political and economic factors that led to negative development trends in the electricity sector:
The proposed version of the Green Paper is aimed at searching and analysing problems related to applying regulatory instruments of the retail electricity market, including natural monopolies, in particular licensing, control over pricing, market volumes and quality of goods (services) sold there.
With the research publication, we launch online consultations as the part of the Public Dialogue on this issue. Results of consultations and a series of roundtable discussions with stakeholders in this sector will form the basis of proposals to change the regulatory rules and reform the electricity market.
Visit the Effective Regulation Platform regulation.gov.ua, learn more about the research “Retail electricity market” and join the discussion!
Your opinion is very important to create the better regulation and the favorable business environment in Ukraine!
BRDO conducts a comprehensive analysis of doing business in Ukraine “Regional Doing Business” by using the World Bank’s methodology on behalf of the Government. The goal of this research is to monitor the business climate in 24 regions of Ukraine and in Kiev on a regular basis. This will help to reduce the regulatory burden on business representatives in the future.
The analysis is conducted in five areas: Dealing with construction permits; Registering land plots for real estate; Getting Electricity; Starting a Business; Paying taxes.
The BRDO experts will create a rating for all regions of Ukraine based on these results. We invite business representatives to join the research. Questionnaires should be filled out considering a regional center, where you are doing your business.
More information about the research.
Source: nv.ua.
We still have the legislation of the Soviet Union remaining in effect
Any state that has just proclaimed its independence faces the problem of lacking its own legislation and is forced to apply the laws that were in force until its independence. For example, all former British colonies took this line having adopted reception statutes on applying the British common law. Ukraine took the similar line having proclaimed the continuation of applying the legislation of the Ukrainian SSR and the USSR on its territory.
At the same time, despite the fact that Ukraine has been an independent state with stable state apparatus for more than 25 years, we still have the legislation of the Soviet Union remaining in effect. This situation can not be considered normal and the reasons are:
The need to respect for human rights. The Constitution of Ukraine guarantees the right of everyone to know their rights and duties. The population should be informed about laws and other regulations defining the rights and duties of citizens. However, is it possible when it comes to the acts of the Soviet era? Definitely not. Even modern electronic databases of Ukrainian legislation do not always contain all regulations adopted during independence. And we can not say much about any kind of databases of the legislation of the Ukrainian SSR and the USSR – in fact, it is impossible and it can not exist. That is why there is a problem of legal uncertainty – there can be a regulatory act, which is still valid, but its content may surprise many people, in archives.
Economic considerations. Legislation of the Soviet period is based on the planned economy and state ownership of the means of production, and therefore contains rules that are not adequate for the market economy and a limited role of the state in it. Moreover, a large number of the Soviet technical acts are significantly behind the modern technologies and science.
Ideology. The modern principles of state regulation (a human as the most important value, freedom of entrepreneurship, democracy, etc.) can not coexist with many values and goals of the Soviet Union. However, although it is incredible, but the fact remains that you can read about the “collective income from self-supporting performance” (Code of Labor Laws of Ukraine), the possibility of detaining a person engaged in petty speculation (that is, small business activities) (Code of Ukraine on Administrative Offenses) or about the achievements of the “victory of the Great October Socialist Revolution in our country” (Housing Code of Ukraine) in the current legislation inherited from the Soviet times.
The excessive legislation. The more unreasonable regulation of activities of a person or business is – the higher costs of its compliance or avoidance within the law are. Therefore, the state should constantly be on the regulatory “diet” limiting own sphere of intervention to only the most important needs. Of course, the largest possibilities to reduce the number of legislative acts are among the acts of the Soviet era.
Modern principles of state regulation can not coexist with many values and goals of the Soviet Union
That is why, a draft law that proposes to suspend the effect of the Soviet legislation on the territory of Ukraine was developed and registered by joint efforts of several people’s deputies of Ukraine and the BRDO Office. The government that registered a similar draft law in the parliament joined our “club of legislative decommunizators” during this year. This aspect provides grounds for cautious optimism – probably, we will be able to separate the Ukrainian legal system from the Soviet past.
However, not everyone likes the idea to abolish the Soviet legislation completely. The main argument of the opponents of decommunization is that sometimes you may face with useful acts of the Soviet era, which should be preserved, so it is necessary to review each act separately and determine its fate on an individual basis.
However, unfortunately, this approach is wrong. First, no one is able to conduct a complete inventory of Soviet legislation. And so, without total abolition, we will be always confident that there are a huge number of Soviet acts, which have not been analyzed and, accordingly, abolished.
Secondly, any attempt to conduct the complete inventory of Soviet legislation and its assessment requires enormous resources, which would be more useful to spend on creating a new, high-quality and effective Ukrainian rather than on reviewing dusty archives of the totalitarian past.
And what to do with useful acts of the Soviet era? The answer is quite simple – to review them and approve useful provisions by Ukrainian legal acts in accordance with the procedure established by law.
In Ukraine, the connection to electricity networks takes on average 281 days for representatives of SMEs, and sometimes it is even not possible at all. According to the “Getting electricity” index, Ukraine currently takes the 130th place of 188 countries in the Doing Business ranking. The cost of non-standard connection to electricity networks in the Vinnytsya region is one of the highest in Ukraine – 8.2 ths. UAH/kW, which is an excessive burden for businesses.
Representatives of the local government, business, public and expert circles discussed the problems of the electricity market regulation at the Roundtable “Retail electricity market: regulation without thinking?” as part of the Public dialogue #PRODialogue in Vinnytsya on June 22.
“We can implement an effective strategy for the energy sector development on a competitive basis only through the quality regulatory impact assessment. The market should operate on the basis of instruments, the effect of which can be mathematically calculated regardless of lobbyist preferences. The business needs transparent conditions to access the networks, and consumers – the opportunity to choose a service provider,” Oleksiy Orzhel, the head of the BRDO’s Energy sector, said presenting the results of the rolling review of the market regulation quality.
According to the research, one in four of 94 legislative acts defining the rules of the market operation is illegal or outdated. The state regulation of the electricity sector does not achieve its goals in 96% of cases. The electricity supply quality in Ukraine is 14 times worse than in the EU and losses – 2 times more. For example, the current legislation can not ensure the balance of interests in the retail electricity market: provide an easy access to electricity supply and reasonable electricity prices for consumers as well as the efficiency of energy companies.
The Director of the Department of Housing and Communal Services, Energy and Infrastructure of the Vinnytsya regional state administration Serhiy Volkov emphasized the importance of working out joint decisions in the sector: “One of our priorities is to promote the development of small and medium-sized businesses as the basis for the region’s economic growth. In 2016, the amount of revenues to the budgets of all levels from the SME’s activities in the region was about 2.5 million hryvnas, which is 34% of the total amount of revenues. It is critical for the development of local business to resolve the issue of connection to electricity networks and access to infrastructure.”
Taking into account the Law “On Electricity Market” adopted by the VRU in May of this year and the need to implement about 50 subordinate acts to it within 2 years, the analysis conducted by the BRDO provides the basis to apply an integrated approach to the development of secondary legislation.
Olesya Danilova, the spokeswoman for the State Regulatory Service in the Vinnytsya region, is also convinced of the need for a systematic approach to regulation, taking into account the interests of all market participants: “We need to identify and review the regulatory provisions that hinder the business development. Only effective decisions will stimulate the entrepreneurship and economic growth.”
Joshua Badakh, the representative of EU4Business / FORBIZ in Ukraine, also expressed support for the regulatory reform. “European experience shows that the Public dialogue between the state and market participants is an essential element of the effective regulatory reform. Constructive exchange of ideas and targeted engagement of business owners into the process of making decisions is a way to creating effective regulatory changes,” he said.
The decisions worked out on the basis of discussion results will be used as the basis to develop particular legislative changes in the electricity market.