The ISES’ propositions to the Action Plan on Priority Reforms for 2016
Viktor Mykhailiv, Svitlana Kovalivska
Experts of the Institute for Social & Economic Studies
The ISES’ propositions to the Action Plan on Priority Reforms for 2016

Viktor Mykhailiv, Svitlana Kovalivska
Experts of the Institute for Social & Economic Studies

The Action Plan on Priority Reforms for 2016 that recently was presented at the 1-st meeting of the National Council on Reforms under the President of Ukraine is a list of minimum necessary measures of reforms that must be implemented during the 2016. In general, tasks and measures that predicted in the Plan are really important and topical. Because all of them are formed in accordance with Ukraine's obligations, enshrined in the relevant agreements and are based on a number of program documents of the President, the Cabinet of the Ministers and the Verkhovna Rada of Ukraine.

In particular, the Plan is based on: the EU-Ukraine Association Agreement; the Action Plan on EU liberalization of the visa regime for Ukraine; Ukraine-IMF Memorandum; the Sustainable Development Strategy “Ukraine 2020”; Coalitional Agreement; the Plan of legislation insurance of reforms in the Parliament; the Action Plan of the previous Cabinet of the Ministers of Ukraine for 2016 and other program documents in specific areas.

At the same time, such large number of documents, according to which was proposed to work on reforms in 2016, does not guarantee the quality of their adoption and implementation. In this vein, the question arises about the place and value of these documents and of this Plan, particularly. Taking into account already existing amount of programs, road maps and action plans, it is unclear what task must complete the specified Action Plan. Judging from the fact that the nature of the tasks is the same as the others, this Plan is a reflection of inefficient state management model, where the functions are duplicated at least three times – in the direct execution body, in the Cabinet of the Ministers and in the National Council on reforms. Also, such nature of the document with the minimum of necessary priority measures proves that all other approved measures provided by other program documents are moving to ones with optional status and those that will not be completed this year.The plan brings a dilemma in the agenda about, how realistic are the intentions on the implementation of the existing program documents in the country?

Besides, such format, when the Plan is essentially a list of extracts from existing documents, is an evidence of the reaction, not proactive policy. How affective such policy can be? This is a rhetorical question.

As a result, the document looks somewhat fragmentary and unsystematic, and terms of implementation of the relevant tasks are often unrealistic. Focusing on providing a limited range of issues, relating to the regulation of certain areas, sufficient attention is not given for development of the specified areas as a whole.

For example, in the "Reform of Ecology" section are absent the tasks that are topical in the light of Association Agreement with the EU, Coalition Agreement and the Government Program for 2016. The Plan left unattended: creating a system of water management in accordance with the principle of basin; control over the use of genetically modified organisms; improving air quality, bringing legislation in this area to accordance with EU legislation; creating a single unified electronic system of access to information on permits, reports, materials of inspections on the environment (PRTR +) for the authorities and the public, which was anticipated by civil society; reforming of the environmental permitting system; reforming of the sphere of subsoil use, adopting the new version of the Code on mineral resources; reforming the State Environmental Inspectorate and creating a transparent and efficient system of supervision on compliance of the environmental legislation; restoring the complex system of environmental monitoring; increasing the area of natural reserve fund to the average European level, forming the national ecological network; reforming the exclusion zone, creating the Chernobyl Biosphere Reserve.

Also it would be useful to supplement the section "The reform of the financial sector" with new task "Development of non-banking financial sector" and settle in it the question of development and/or adoption of legislation relating to the activities of pawnshops, improve the normalization of credit unions, and the task "Improvement of the infrastructure of the financial sector” with new items on:
adoption of the draft law "On ensuring large-scale export expansion of Ukrainian producers by insurance, guarantee and export credit cheaper", Reg. №2142a regarding the establishment of Export-credit agency". (This agency will carry out support not only exporters, but also will provide support insurers that insure exporters and banks, their lending – that will act as a full participant in the financial market);
determining approaches to a model and concept of operation of the State Bank for Development, which has to provide cheap long-term loans for projects in certain sectors of the economy in the public and private sectors in line with the strategy of economic development.

Also advisable to complement task 12.2 "Establishing an effective supervisory framework for financial services markets" with new measure on the urgent formation of the Council of the National Bank composition, as the main body responsible for the development of the Basic Principles of monetary-loan policy and supervising the conduct of monetary-loan policy. The composition of the National Bank Council, based on the requirements of the Law "On the National Bank of Ukraine" was to be formed and approved by the Verkhovna Rada of Ukraine and President of Ukraine on a parity basis in the last year. The absence of the National Bank Council practically hinders determination of the National Bank policy, monitoring its performance, and the impact on the economy.

Section "Public Financial Management" to ensure the functioning of the bodies that monitor the targeted and efficient use of public funds, should be complemented with a new measure as follows: "The formation of a new composition of the Accounting Chamber". The composition of the Accounting Chamber, based on the requirements of the Law "On Accounting Chamber" had to be formed and approved by Parliament last year.

In the list of tasks in section "Health Care Reform" there is no task "Development and implementation in Ukraine of early intervention programs". It means that at an unknown period of time will be transferred prevention of deep disability of children with certain developmental disorders that can cause further replenishment of state dependents.

In addition, in section "Education reform" there is no information on measures concerning the reform boarding schools of Ministry of Education and Science, these are 575 institutions of state and communal ownership, in which in 2015-2016 academic year studied and lived 90,253 students and preschool children. Among them are 6,693 orphans and children deprived of parental care. Unknown fate of the strategy of reform initiated by the Presidential Decree №818/2015-rp "On a working group to study proposals for reforming the system of institutional care and education of children". In the list of measures there is also no information on the procedure of implementation of inclusive education in the system of secondary education.

In the list of measures "Social Sphere Reform" do not reflect measures in the context of the reform of monetization, accounting and regulation of all these groups. Also there are no proposals related to the reform of boarding schools of the Ministry of Social Policy. Instead, we know that already announced the start of the project funded by the World Bank "Modernization of social support of Ukraine", which provides for reform in five pilot regions of Ukraine.

In the section "Decentralization" there is no such important areas as: adopting laws on local referendum; on service in local government bodies, the BSP (new edition); Approval of the concept of optimization of the territorial organization of power and formation of a new territorial basis for allocation of executive and other state bodies.

Also considers it necessary to supplement the public administration and civil service reform by introducing new principles and mechanisms of service in local government based on European principles of services (provided such a task, but the content of the measures concerns only public service) and administrative services to transfer to the places. It is appropriate to introduce medium-term strategies of ministries, indexes of their activity. This will change the formal approaches to the evaluation and certification of both separately taken employees and teams as a whole and entire ministries. Setting clear objectives with indicators of performance has to transform the whole system work – are due to appear effective task, away populism, ineffective planning and forecasting inaccurate as increase accountability of civil servants for their activities. The important thing is the mechanism of implementation of this provision, as a result of the introduction of such a tool it has a positive impact on the quality of government decisions, accelerate reforms in the country.

Within the framework of the reform of the infrastructure necessary to supplement the reform of air transport carriers to simplify access to the market of air transportation, including the development and adoption of the draft order of the State Aviation Service on amendments to the order of the State Aviation Service of 24.10.2014 №686 "On Approval of Aviation Regulations of Ukraine "Procedure for granting and revocation rights to operation of airlines” in the part of elimination of discrimination in terms of barriers to entry of new companies into the Ukrainian market of air transportation, envisaging the exclusion rules concerning: the carrier need to perform regular air transportation in Ukraine; Formula number of frequencies that can get the carrier on which depends on your previous work on the Ukrainian market, including on the number of already completed scheduled flights within Ukraine, the volume of traffic, the number of aircraft in the fleet; improvement and extension of the criteria on which the Competition Commission review the application and the Commission decision maker and its powers (remove the opportunity to leave the application without consideration), which include representatives of business aviation market, experts, academics and NGOs which does not allow the existing opportunities for discretion. The new approach must take into account the different business models of airlines (network, charter, low-cost), the park and the size of aircraft and the competitive conditions that must comply with Regulation EU 847/2004, under which each state-EU member should create equal access of any EU carrier to international lines.

It should also be noted that the Plan does not include a number of draft laws that are introduced to the Verkhovna Rada of Ukraine by President of Ukraine, while important for comprehensive reforms in the country. Accordingly, the National Council as a consultative and advisory body, with responsibilities including the task of promoting the coordinated implementation of the reforms would provide introduced by the President of Ukraine to the Parliament for revision draft laws that play important in the reforms’ conduction.

This list of issues is incomplete.

Separately, it should be noted that for writing as a basis was taken the Program of the Government Activity of 03.16.2016 (the Order №184-r). At the same time, on 04.14.2016 in Ukraine began to work the new Government led by Prime-Minister Volodymyr Groysman, the same date was adopted a new Program of the Cabinet of Ministers. It is assumed that within a month after the approval of this Program, the Cabinet of Ministers will provide training and presentation of the operational plan of anti-crisis measures for 2016 and to the 01/01/2017 – the medium-term development program. In other words, a significant part of the measures that reflected in the Plan may no longer be relevant to the new Government.