The project works to create a favorable environment for the development of small and medium businesses and to improve the overall investment climate in Ukraine.
The main objectives of the project are:
• to streamline and simplify business inspections and business permits for SMEs;
• simplify technical regulations (standardization, certification),
• monitor the business environment through representative surveys;
• conduct outreach, information and advocacy work to ensure adoption and implementation of reforms.
The Challenge
The regulatory system in Ukraine (permits, inspections and mandatory certification and standardization procedures), has been a major obstacle to opening and operating businesses in Ukraine. Thus, 100% of goods produced in Ukraine are subject to mandatory standardization requirements, 80-90% of all businesses are inspected each year, over 50% of business have to get at least one permit per year. Reforms have been slow and incomplete, and most procedures still correspond more to the Soviet 'command and control' economy than to a modern market economy. The 2006 World Bank Doing Business Report ranked Ukraine 128th of 175 countries world-wide in terms of ease of doing business.
The Approach
The project works with the government of Ukraine to reform the entire systems of business permits, inspections and technical regulations in order to bring Ukrainian practice in line with international best practice and contemporary European models. The project also cooperates with permit-issuing and controlling agencies to improve their internal procedures.
To monitor the impact of government reforms and provide concrete information on improving the business climate, the project conducts an annual survey of the SME sector to identify the main administrative and regulatory obstacles to SME development. To increase the awareness of SMEs about their rights, the project provides entrepreneurs with easy-to-understand information on regulatory procedures and on their rights and responsibilities as market participants.
Achievements to Date
Economic impact of the project’s work to streamline the regulatory system in Ukraine is estimated at $42.3 million in direct cost savings for SMEs
The project helped draft and pass Ukraine’s Permits Law in 2005 and Inspections Law in 2007
• The Law on Permits reduced the number of permits from more than 1000 to less than 200 and decreased the time needed to receive permits for one entrepreneur a year from 100 days to 60 days.
• Assisted the government to implement reform of technical regulations, resulting in a shortened list of goods subject to compulsory certification (16 categories out of 400 were eliminated)
