Over the past year, the Cabinet of Ministers has made a number of breakthroughs in various areas of reforms; however, not all the promises have been fulfilled, while in some spheres there are still more problems than solutions. Such opinions were expressed at the forum “The Government under the Microscope: Yearly Results and Challenges.” On the eve of the first anniversary of the Government, the Reanimation Package of Reforms has brought together the Prime Minister, the government officials, the most influential experts, representatives of the international institutions and businesses, as well as public figures and journalists to assess the work of the Cabinet of Ministers and to identify major challenges for 2017.

As the Ambassador of Sweden to Ukraine Martin Hagström said, the role of civil society in the process of reforms is no less important than the role of the government.

“It is civil society in Ukraine that is pushing for changes, suggests specific solutions, and holds the authorities accountable. There is no doubt that this civil society is a real source of power and stability for Ukraine. During my stay in Ukraine I was happy to learn – and today’s event is a bright example of this – that the civil society is highly appreciated by the President, the Government, and the Parliament as an important partner in the dialogue on reforms in Ukraine,” stressed Mr. Hagström.

As for the reforms in Ukraine, Prime Minister Volodymyr Groysman said that the Government’s goal for the first year was stability.

“In general, we have reached this goal. There were some successes and some failures. However, we are planning to implement five reforms next year to ensure macroeconomic stability and economic growth, as well as to change the approach towards governmental services. First of all, we have to reform the pension system which should become fair and deficit-free and lead to the increase of pensions. Second, we have to tackle the issue of sale of state-owned enterprises… The only way out is a public and transparent sale of these assets. Third – introduction of land turnover in Ukraine. The model we have developed in partnership with the World Bank can be implemented as soon as in 2018. There are also two sectoral reforms of great importance. These are the educational and the healthcare reforms,” stressed Mr. Groysman.

The public experts call for preventing the rollback of those reforms which have already been implemented. In particular, Oleksandr Sushko, research director of the Institute for Euro-Atlantic Cooperation, member of the RPR Board, said that despite the progress in a number of areas, the processes still have a lot of drawbacks, while some spheres, such as the energy sector, are starting to raise concern.

“The Government has initiated a new culture of policy-planning: since the very beginning it has offered its action plan, even a short-term one, for public discussion… It is obvious that there are a lot of drawbacks which have to be addressed… At the same time, new, progressive tools have not been working effectively right from the start. Even if a certain instrument looks perfect on paper, different unsatisfactory things spring up once they are used in practice. Even those who initiated them, are dissatisfied, let alone third-party observers. Therefore, it is necessary to inspect the results carefully, to analyze what is effective and what should be fixed, and prevent the rollback of the reforms,” said Mr. Sushko.

To retain the achievements and to prevent the rollback of the reforms is important for the Ministry of Finance as well, said the Minister of Finance Oleksandr Danyliuk. It is good news that the IMF has granted another tranche, however, this money is intended not for the reforms, but for the gold and foreign exchange reserves of the National Bank of Ukraine.

“These funds go to the foreign exchange reserves of the National Bank of Ukraine. They are not used in the budget. We are forming our own resource that will help us to become a self-sufficient state…I am sure that in 2019, when the program with the IMF is completed, our economy will be self-sufficient. As a sovereign state, we will have access to the foreign markets without insane risks, and our economy will generate the necessary revenue. At the same time, we have to live according to our income,” said the minister.

There is still a need to optimize budget expenditures, said Hlib Vyshlinskyi, member of the RPR Board, executive director of the Centre for Economic Strategy. However, he stressed that Ukraine did manage to achieve a number of positive indicators.

“There was macroeconomic stability; we have managed to reduce the rate of inflation to the level established by the National Bank. The budget deficit has decreased, although the level of VAT redistribution through the budget is still too high and there is a need to optimize budget expenditures. The fact that two tranches from the IMF have been obtained means that the Government is doing right things in this area. As for the taxation and customs policy…it is noteworthy that the draft law No. 1797 was adopted, as it implements most of the tasks we set in the Roadmap of reforms: reduces the opportunities for corruption within the SFS, reinforces its service function, and simplifies tax administration. Implementation of the draft law No. 1797 is the key process we will keep an eye on this year,” summed up Mr. Vyshlinskyi.

The civil service reform should have become one of the most ambitious reforms of the new Government. According to Oleksandr Sayenko, Minister of the Cabinet of Ministers of Ukraine, experience and planning, strategy and separation between political and administrative offices were the key achievements in this sphere.

“Ministers used to be responsible for all administrative and personnel decisions. They tackled financial issues and managed property. At the same time, the key task of a ministry is to perform policy analysis, shape the political agenda, analyze and understand area-specific problems, look for the most effective solutions, communicate with the stakeholders, and offer solutions to the Government. Separation between political and administrative offices means that a minister deals with political issues, while a professional manager, a state secretary, builds an effective roadmap for the state apparatus,” said Mr. Sayenko.

The civil service reform is moving so slowly, because it is being implemented for the first time ever, believes Ihor Koliushko, chairman of the board of the Centre of Policy and Legal Reform. He thinks that Ukraine has not yet abandoned the Soviet stereotype about administration, when the party did all the thinking, while the ministers were responsible for putting it in practice. To overcome this “syndrome of orders”, the process of policy analysis should be launched.

“We have only a few ministers who think for themselves, while all the others are waiting for the orders… In 2016, the Government had a task to take advantage of a unique moment and implement the reforms as soon as possible. The start was optimistic. Yet, when it came to decision-making. the reform has come to a halt. … Today, we should start from reforming the ministries, establishing new units, recruiting reformists and engaging them in policy analysis and strategic planning,” stressed Mr. Koliushko.

Energy efficiency and energy-saving should also be important for the Government. Hennadiy Zubko, Vice Prime Minister – Minister of Regional Development, Construction, Housing and Utilities of Ukraine, said that all the laws from the “energy efficiency package” are being considered in the second reading, and the Government hopes that they will be adopted shortly.

“The entire package of draft laws on energy efficiency is consumer-oriented. Each of the draft laws aims to guarantee the rights of consumers and encourage them to cut down expenses.   Altogether, they will improve the comfort of housing, increase its cost, and provide an opportunity to manage one’s property and receive high-quality housing and utility services. The goal of our reform is to do it all in a cost-efficient and quality manner. The instruments are available and we expect the parliament to vote for these laws shortly…. The mechanism of monetization of subsidies is expected to facilitate investments into energy efficiency. As to the specific measure, 50 UAH per month for five years will save up to 20% of resources,” said Mr. Zubko.

However, a draft law on energy efficiency has not been developed yet, stressed Sviatoslav Pavliuk, leading expert of the RPR on the energy sector reform.

“It is positive that the NGOs and the Government have established a remarkable level of cooperation…At the same time, I would like to refer to the Coalition Agreement. Introduction of the draft law on energy efficiency is item number one in that part of the Agreement which concerns energy efficiency. Three years have passed, but the draft law is yet to be developed… When it comes to energy efficiency, the issue of personnel – of professionals in the ministries capable of forming and implementing policies – becomes important. The problem is that even on the very top there is a lack of experts capable of policy-making. Moreover, there is no local energy management. The issue of access to the governmental construction regulations is also pressing. Monetization of subsidies is no less important,” summed up Mr. Pavliuk.

In general, according to the opinion poll conducted by Ilko Kucheriv Democratic Initiatives Foundation, the experts have given mostly average scores to the Government for the first year of its activity: the average score is 2.7 points on a five-point scale.

The experts singled out the following key successes of the Government: introduction of e-declaration of property and income of civil servants and the launch of the healthcare reform. Transition to public procurement through the electronic system “Prozorro”, raising the minimum wage, progressive changes in tax legislation, overall macroeconomic stabilization, and continuation of decentralization have also been marked as positive achievements.

The failure of the energy sector reform and the delay with the land reform and the introduction of agricultural land market have been named the key failures in the Government’s first year. The situation with the increase in the minimum wage is controversial, as some experts consider it as the Government’s success, while others – as its failure.