Kyiv, Ukraine, October 22, 2009—
A survey by IFC, a member of the World Bank Group, finds that the existing system of permits, inspections, and technical regulations cost Ukrainian businesses some $1.55 billion in 2008 and remains a burden for their operational activities, though some progress toward reform has been made.
The report,
Investment Climate in Ukraine as seen by Private Businesses 2009,
is based on a survey of about 2,000 businesses around Ukraine. The survey was conducted by the IFC Ukraine Investment Climate project from December 2008 to March 2009. It examined the local business environment from the viewpoint of private businesses and focused on key regulatory obstacles, including permits, inspections, and technical regulations.
The survey registered some progress against a comparable report conducted in 2006; however, the pace of reforms remains very slow. For instance, an enterprise now requires 54 days to obtain all permits necessary to operate, compared with 60 days in 2006. The number of inspections also has dropped—75 percent of businesses were inspected in 2008, compared with 95 percent in 2006.
“Though we see some positive signs, Ukraine needs to advance its reform pace further to improve the country’s competitiveness and attractiveness as a business-friendly investment destination,” said Vyacheslav Bykovets, acting President of Ukraine’s Union of Small, Medium-sized and Privatized Enterprises.
Sanjar Ibragimov, Project Manager, IFC Investment Climate project, said, “The survey helps identify the focus areas for further regulatory reform and IFC will continue advising our partners in the reform process.”
Key survey recommendations include defining an exhaustive list of permits, adopting a principle of silent consent in the permit process, moving to a control system based on market surveillance, making most standards optional, keeping only safety requirements as mandatory, and reducing the number of mandatory certification.
The IFC Ukraine Investment Climate project is supported by the Canadian International Development Agency, the Swedish International Development Cooperation Agency, and the Dutch Agency for International Business and Cooperation.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
.
About the Investment Climate Advisory Services of the World Bank Group
The Investment Climate Advisory Services of the World Bank Group helps governments implement reforms to improve their business environment, and encourage and retain investment, thus fostering competitive markets, growth and job creation. Funding is provided by the World Bank Group (IFC, MIGA, and the World Bank) and over fifteen donor partners working through the multidonor FIAS platform.
