Mikheil Saakashvili, governor of Odesa Oblast and former president of Georgia, has unveiled a plan to deregulate Ukraine's economy and revamp its civil service in an effort to reduce corruption and attract investment.
Ukraine has been excruciatingly slow at changing in the 19 months since the EuroMaidan Revolution. The authors of the Odesa Reform Package say that their plan may be the last chance for genuine change, starting locally and moving nationally.
Sasha Borovik, adviser to the Odesa governor, unveiled the package at the Kyiv School of Economics on Sept. 16 and at a news briefing on Sept. 17.
Borovik said on Sept. 16 that Saakashvili’s team had come up with legislative proposals after seeing that many of its initial plans in Odesa Oblast could not be carried out under current legislation.
The Odesa team will meet with parliamentary factions next week and is planning to submit the proposals to the presidential National Reform Council in two weeks, Borovik said.
The sponsors aim to have the bills passed during parliament’s fall session, Vladimir Fedorin, a co-founder of the Bendukidze Free Market Center, one of the co-authors of the package, said at the Sept. 16 presentation.
“This package, which was drafted by reform-minded people, is based on the idea that Ukraine’s success is only possible if it stems from the free creativity of free people,” he said.
Borovik said that members of Saakashvili’s team were “worried that a year-and-a-half after the revolution all these changes have not been made. We are liberalizing the market and downsizing government, and all functions that can be carried out by private businesses must be carried out by them.”
Borovik told the Kyiv Post that, so far, he had not seen any reaction to the proposals from top officials.
Below is an outline of the Odesa team’s legislative proposals:
Labor law: Regulating relations between employers and employees through bilateral contracts rather than through government rules for businesses with up to 1,000 employees.
Civil service: Introducing employment contracts for civil servants, a transparent hiring and firing process, outsourcing government services and allowing international organizations to finance civil servants’ wages.
Government services: Providing registration and other government services without lines within one day, preferably within 15 minutes, introducing the electronic provision of government services, allowing Ukrainian citizens from other cities to use government services in Odesa, and introducing competition between agencies that provide government services.
Urban planning: Issuing urban planning permits within 15 days, public access to the land cadaster, allowing the private sector to control urban planning; making it easier to commission buildings, and public oversight over urban planning through electronic monitoring.
Winemaking: Abolishing the Hr 500,000 license for the wholesale trade in alcoholic beverages and for the import and export of alcoholic drinks.
Water use: Abolishing permits for using up to 20 cubic meters of water per day, cutting red tape for water use by 50 percent, issuing water-use permits within 10 days, compared to 30 days currently, increasing the validity of water-use permits to 10 years.
Waste disposal: Abolishing permits for the disposal of waste other than hazardous waste, and reducing the period for issuing waste permits to 10 days, down from 30 days.
Air emissions: Abolishing air emissions permits for some businesses, cutting red tape for air emissions by 50 percent, and reducing the period for issuing air emissions permits to 10 days, down from 30 days.
Utilities: Cutting red tape for businesses hooking up to utilities, and making the process faster.
Immigration: Making it easier for foreigners to get visas and residence permits, canceling the rule under which a foreigner’s financial position has to be checked, allowing foreigners to get Ukrainian documents abroad, and introducing a 365-day visa-free regime for 115 countries.
Investment: Abolishing the mandatory registration of foreign investment and investment agreements.
Privatization: Privatizing state assets at transparent electronic auctions, and reducing the list of state assets that cannot be privatized by 80 percent.
Land use: Allowing owners, rather than the government, to determine the zoning category of their land, making it easier to register a new land category, unifying urban planning, land and real estate registers into one, and transferring the land under buildings to their owners for free.
Land sales: Selling state land only at electronic auctions, with the automatic registration of land plots after such auctions.
Customs: Customs clearance within one hour 24 hours per day without days off, removing customs brokers, withdrawing law enforcement agencies from customs offices, customs clearance based on an automatic risk management system, and equalizing customs tariffs in different regions.
Electronic public procurement: Making all government purchases electronic, using the ProZorro electronic procurement platform, ensuring civil society’s control over public procurement, and cutting the prices of government purchases by 30 percent.
Economic Freedom Act (based on the Georgian act with the same name of 2009): Increasing taxes and introducing new ones only through national referendums, except for 3-year temporary tax rises; abolishing capital controls; setting budget spending at no more than 30 percent of gross domestic product (GDP), the deficit at up to 3 percent of GDP and government debt at no more than 60 percent of GDP – except during economic recessions, a state of emergency, or during times of martial law.
Taxation: Merging the personal income tax and payroll tax into a single 25-percent tax in 2016, cutting it to 20 percent in 2018, and abolishing environmental, road and tourism taxes and parking fees.
Kyiv Post staff writer Oleg Sukhov can be reached at [email protected]
