Country Private Sector Diagnostic

Creating Markets in Ukraine: Country Private Sector Diagnostic

January 25, 2021

Doubling Down on Reform: Building Ukraine’s New Economy

Ukraine is at a critical juncture. In a context of both legacy and emerging challenges, including an unprecedented global pandemic, the government of Ukraine has an opportunity to unleash the potential of the country’s private sector to build the foundations of a new economy that is more dynamic and equitable. The government has moved forward with an ambitious reform agenda, reaffirming its commitment to strengthen institutional governance, unshackle market forces, and fully insert the country in global trade and investment flows. The government can build on such efforts to ensure that the private sector will be a key driver of Ukraine’s post-crisis economic growth.

The Country Private Sector Diagnostic (CPSD) will help inform the government of Ukraine’s reform efforts, especially those leveraging the power of the private sector to boost economic growth and improve the lives of all Ukrainians. The CPSD describes cross-cutting constraints that affect the private sector and underscores the imperative to address long-standing governance and structural bottlenecks. In addition, the report takes a detailed look at three sectors for which public policy actions and active involvement by the private sector could leverage the country’s natural and human capital endowments and exploit its comparative advantage. Accordingly, the CPSD offers implementable policy recommendations to: (a) support the swift implementation of the recently approved land reform and promote investments in climate-smart technologies to raise agricultural productivity and exports; (b) boost exports and ramp up the attraction of foreign direct investment to increase participation in European manufacturing value chains; and (c) leverage private sector solutions and investment to enhance efficiency in the provision of health services.

Executive Summary