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
The USAID local and economic governance program works to improve services to residents, develop independent and transparent financial planning and management strategies, attract investment, and create a better business environment in Ukraine’s cities, towns and villages.

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 5 pilot PPP projects; and 5) mitigate climate change through investment in clean energy.

Commercial Law Project for Ukraine (CLPU)
In support of commercial law reform, CLPU 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.

Supporting Urgent Reforms to Better Ukraine’s Business Environment (SURE)
The program facilitates the introduction and implementation of urgently-needed reforms to fight corruption and improve the business climate for Ukraine’s SME sector. The activity helps establish effective lines of communication between SMEs and the government, providing direct support to relevant government agencies in reducing administrative barriers to business operations, and engaging parliamentarians to push for action on a reform agenda developed by SMEs.

Leadership in Economic Governance (LEV)
The project leverages local organizations which have recognized technical proficiency and knowledge, and strengthens the capacity of those organizations to identify policy corrections and motivate concrete institutional reforms. The activity has three objectives: 1) identify legal, regulatory and administrative measures that improve the business environment for Ukrainian small and medium enterprises (SME); 2) provide support to the central and local governments in developing and implementing effective pro-SME reforms; and, 3) support stakeholders in the business community to advocate for economically sound and fiscally responsible reforms.

PROGRAM ACHIEVEMENTS

Municipal Finance Strengthening Initiative (MFSI-II)

  • PPB implementation pilot extended to 694 budgets representing all of Ukraine’s oblasts.
  • 8,130 newly trained local budget officers developed 39,000 budget programs in all oblasts of Ukraine in 2014.
  • Introduction of PPB in local budgets approved under the new Budget Code.

Public-Private Partnerships Development Program (P3DP)
In collaboration with the American Chamber of Commerce created the PPP & Infrastructure Expert Center that serves as a platform for private sector to advocate for PPP-related legislative and policy reforms. In addition, the center serves as a sustainable mechanism that unites municipal governments and investors in the development of viable PPPs in infrastructure and public services.

Commercial Law Reform Project

  • Assisted in drafting a Concept of the Law on Limited and Additional Liability Companies.
  • Assisted in drafting and promoting legislation liberalizing business activities.
  • Drafted the new version of the Law on Restoring Debtor’s Solvency or Recognizing it Bankrupt.

Last updated: August 04, 2015

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