LOCAL AND ECONOMIC GOVERNANCE

A visitor browses through materials at a municipal one-stop shop for registering a business.
A visitor browses through materials at a municipal one-stop shop for registering a business.
THE CHALLENGE
Economic governance - the institutions and systems that support economic activity - is necessary for broad-based economic growth. Without secure property rights and accessible and fair legal systems there is no incentive to save and invest. Economic governance in Ukraine must advance the interests of small and medium enterprises or average citizens to achieve stability and prosperity.

Local governments need to attract domestic and foreign capital investment and to learn to manage their budgets effectively, while becoming more responsive to the issues of citizens.

PROGRAM OBJECTIVES

  • Improve the business climate for small and medium enterprises in Ukraine
  • Help Ukrainian cities to attract investment, promote business development and create jobs.
  • Improve the delivery of essential communal services.
  • Promote a public-private partnership model of collaboration between local governments and the private sector.
  • Reduce barriers to trade and harmonize regulatory environment to integrate with European and global markets.

OVERVIEW
USAID local and economic governance program enhances governance at all levels to provide better services to residents, develop independent and transparent financial planning and management strategies, attract investment, and create a better business environment.

OUR PROGRAMS
Municipal Finance Strengthening Initiative (MFSI-II)

To advance local social and economic development, MFSI-II promotes a more efficient and transparent implementation of local financing. Specifically, MFSI-II provides technical assistance to central and local government bodies to expand Performance Program Budgeting (PPB), builds the capacity of 15 selected cities to implement multi-year development strategies that foster energy efficiency and increase public awareness of the budgeting process, revenues and expenditures.

Public-Private Partnerships Development Program (P3DP)
P3DP promotes PPPs as a model of collaboration, with a focus on accessing private sector investment and expertise to improve infrastructure and the quality of public services in Ukraine. P3DP activities 1) promote legal and institutional reforms to enable PPPs; 2) strengthen the national public-private partnership unit within the Ministry of Economic Development and Trade (MOEDT) that supports use of PPPs; 3) train government and private sector representatives on PPP design and implementation, and communicating the benefits of PPPs to the public; 4) work with municipal governments to implement 10 pilot PPP projects; and 5) mitigate climate change through investment in clean energy.

Commercial Law Reform Project (CLRP)
In support of commercial law reform, CLRP assists the Government of Ukraine (GOU) to draft laws and secondary legislation on issues such as deregulation and business liberalization, bankruptcy, corporate governance and protection of investors’ rights.  Current CLRP activities build on previous accomplishments that assisted the GOU to develop modern legislation and market-oriented policies.

PROGRAM ACHIEVEMENTS
Municipal Finance Strengthening Initiative (MFSI-II)

  • PPB implementation pilot extended to 692 budgets representing all of Ukraine’s oblasts.
  • 5,233 newly-trained local budget officers developed 38,000 budget programs in all oblasts of Ukraine.
  • Implementation of budget programs enabled local governments to achieve budgetary savings, on average, of UAH 330mln in 2013 and reallocate these savings to provide better services to their constituents.
  • Simplified local borrowing procedures and lifted restrictions on local borrowing, facilitating implementation of PPPs and energy performance contracts in the municipal sector.
  • Partner municipalities secured UAH 18.35mn from IFIs to improve energy efficiency.

Public-Private Partnerships Development Program (P3DP)

  • Improved, amended and clarified a framework of PPP laws and regulations governing the development and use of PPPs.
  • Successfully integrated PPPs into Ukraine’s National Economic Reform Program for 2010 – 2014.
  • Helped establish a PPP Unit within the MOEDT.
  • Enhanced the knowledge and skills of PPP unit staff and government officials at national and local levels.

Commercial Law Reform Project

  • Drafted and assisted implementation of the landmark corporate governance law, On Joint-Stock Companies.
  • In cooperation with the State Agency for Investment and Management of National Projects and Ministry of Economic Development and Trade, drafted a new law on limited liability companies.
  • Assisted the Verkhovna Rada (parliamentary) committees, the Cabinet of Ministers and the National Bank of Ukraine to draft and promote legislation that liberalizes business activities.
  • Drafted and improved legislation that regulates property relations and ownership rights with the Ministry of Justice and the State Land Resources Committee.
  • Assisted the Ministry of Economy and Verkhovna Rada to draft and pass a Public Private Partnership Law that provides a legal framework for implementing large investment projects.
  • Supports implementation of newly adopted amendments to the Public Procurement Law which aim to make government tenders more competitive and transparent.

 

Last updated: August 18, 2014

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