Kiev, Ukraine, November 4, 2011—A
study by IFC, a member of the World Bank Group, found that the system of
permits, inspections, and technical regulations in Ukraine remains a burden
for businesses, costing them nearly $900 million last year and hampering
their efforts to grow and create jobs.
The IFC study, “Investment Climate
in Ukraine as Seen by Private Businesses 2011,” surveyed approximately
2,000 businesses and found that 46 percent of them resorted to unofficial
means to resolve issues with state officials. Ukrainian companies surveyed
spent an average of 10 percent of company revenue in 2010 to comply with
“Less regulation and a transparent
economic environment will help promote growth and enable Ukrainian businesses
to attract more investments,” said Elena Voloshina, IFC Head of Operations
for Ukraine. “Ukraine has made some positive steps forward to ease the
regulatory burden for private businesses over the past year. However, poor
implementation and the slow pace of reforms remain among the key barriers
to private sector growth.”
Since 2009, Ukraine has made some progress,
particularly in the reform of technical regulations. However, the IFC study
found that local entrepreneurs have not fully benefitted from the regulatory
changes due to the low level of implementation, which significantly undermines
the reform process.
The study also recommended steps to
improve the investment climate. These steps include decreasing the number
of permits and the number of businesses subject to licensing; extending
the scope for self-certification; enforcing the use of inspections checklists;
and streamlining norms and requirements.
IFC’s Ukraine Investment Climate Advisory
Services Project is supported by the Canadian International Development
Agency; the Dutch Agency for International Business and Cooperation; the
Swedish International Development Cooperation Agency; and Switzerland’s
State Secretariat for Economic Affairs, SECO.
IFC, a member of the World Bank Group,
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, providing advisory services to businesses and
governments, and mobilizing capital in the international financial markets.
In fiscal 2011, amid economic uncertainty across the globe, we helped our
clients create jobs, strengthen environmental performance, and contribute
to their local communities—all while driving our investments to an all-time
high of nearly $19 billion. For more information, visit www.ifc.org.
To read the report, visit www.ifc.org/ifcext/uspp.nsf/AttachmentsByTitle/Ukraine-IC-Report_Nov2011/$FILE/Ukraine-IC-Report_Nov2011_ENG.pdf