Reforms and Private Sector Development, Key Drivers of Ukraine’s Post-Crisis Economic Growth: IFC/World Bank Report

​Kyiv, Ukraine, February 24, 2021—Ukraine can boost its economy by promoting private sector investments to address challenges in key sectors, especially agriculture, manufacturing, and health, reveals a new report by IFC and the World Bank. Unleashing the potential of the country's private sector will help drive Ukraine out of the current economic crisis and onto a path of sustainable recovery.

The report—Ukraine Country Private Sector Diagnostic (CPSD)—aims to help the government with its reform efforts by highlighting the barriers that restrict private sector participation in key areas, while recommending ways to address governance and structural bottlenecks and sector-specific constraints for increased private investment. ​

The CPSD offers policy recommendations to support the swift implementation of the recently approved land reform and to promote investments in climate-smart technologies to improve agricultural productivity. The diagnostic recommends steps to boost Ukraine's exports and adopt measures to attract more foreign direct investment, thus enhancing the country's participation in European manufacturing value chains. It also proposes ways to leverage private sector solutions and investment for efficient health services. This will enable the country to better respond to future health shocks.

"Since the COVID-19 outbreak, a combination of reduced domestic consumption and a weak external demand have impacted the manufacturing and services sectors," said Jason Pellmar, IFC's Regional Manager for Ukraine, Belarus, and Moldova. "However, with bold reforms that support private sector growth, the country can bolster its economy, becoming highly competitive in international markets and improving the lives of all Ukrainians."

"In Ukraine, the World Bank Group is focused on implementing projects that improve the welfare of the people. One central way the World Bank and IFC are collaborating on this is by helping the private sector grow and prosper – which brings more jobs and greater income to Ukrainians, especially critical amidst the COVID-19 pandemic," said Arup Banerji, World Bank Regional Country Director for Eastern Europe

 Since 2004, IFC has committed over $3.4 billion—of which $1.1 billion was mobilized from partners—in long-term financing in Ukraine across a diversified portfolio of projects and implemented a wide-ranging advisory program. In addition, we have supported more than $1.2 billion of trade through IFC's Global Trade Finance program.​

The World Bank's current investment project portfolio in Ukraine amounts to about $3.2 billion in nine ongoing investment projects and one Program for Results operation. The investments support improving basic public services that directly benefit ordinary people in areas such as water supply, sanitation, heating, power, energy efficiency, roads, social protection and healthcare, as well as private sector development.

The Ukraine CPSD can be downloaded here.

About the Country Private Sector Diagnostic (CPSD)

The World Bank Group's Country Private Sector Diagnostics aim to identify sectors where private sector solutions can create or expand markets and make substantial contributions to development impact. The diagnostics use a structured approach to analyze key sectors with unrealized private sector potential in each country, select several sectors for deeper analysis, and make recommendations for policy action. The sector analyses, conducted with significant input from teams across the World Bank Group and from external partners including governments, provide valuable information on the challenges and opportunities to better leverage the private sector to achieve developmental objectives. The CPSD aligns with the World Bank Group's Maximizing Finance for Development (MFD) approach, which looks to private sector solutions to reach the 2030 Sustainable Development Goals.

 About IFC

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

About the World Bank Group

The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Working together in more than 100 countries, these institutions provide financing, advice, and other solutions that enable countries to address the most urgent challenges of development. 

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