Deregulation in Ukraine was quite efficient at the end of 90th – at that time deregulation triggered fast increase of small and medium enterprises (SME) at the country. At the same time, seemingly similar economic policy declared in 2010 by President Viktor Yanukovicth (and presented at the Reform program) had quite opposite effect: number of SME halved from 2010 till 2011, more than 2 mln jobs have been destroyed. In our research we showed that this time deregulation did not work primarily due to half-baked and inconsistent policy measures of the government, which appeared to be at odds with the initial declarations.

Already two years have passed since the day Viktor Yanukovich announced new reformation course and presented Economic reform program 2010-2014 «Prosperous society, competitive economy, effective state». The ambitious plan outlined considerable changes in economic system and even in case the plan was partially implemented, Ukraine could reach another level of development. A Coordinative Center for Economic Reforms had been created at the President Office and active work had started. However, after two years of active changes and contradictory results a question arose – what, out of all implemented measures, was indeed for good and deserves to be called «reforms».

It is normal for all plans to be revised and improved. However, the recently approved “National action plan 2012” looks like a step back. It dilutes or postpones for the future crucial reforms, aimed at strengthening of competitive environment and property rights. Among diluted reforms appeared to be the issue of inspections, housing reform and the problem of agro-land market. Technical reforms have been distorted not that dramatically, however, still are delayed.

A year and a half have already passed since the start of Viktor Yanukovich reform. The ambitious transformation plan has showed noticeable progress on many directions. However, so far none, including the authorities’ representatives, can call the reformation efforts successful. Properly outlined priorities and action plan stumbled on financial and political interests of various influential groups, what, naturally, stipulated for a large-scale ‘correction’ of the reform plan. Apparently every plan needs to be updated with time. However, comparative analysis of the new reform action plan showed that ‘reformators’ have already skipped many initially positive initiatives.

Over the last two years Ukraine has implemented many policy changes outlined at the President Reform Program for 2010-2014. Despite the large number of bills and laws approved through 2010-2011, the program lags behind the outlined schedule and none of the reforming priorities has reached the declared goals. Some of the adopted regulations are quite positive; however, still the initiatives have quite limited effect due to existent practices for administrative pressure, corruption and poor confidence on judicial power. Large number of approved laws and regulations are simply technical, which means that the essence of the problems they addressed remains unchanged. Positive steps were observed in reformation of healthcare, education, and pension system, however, so far no fundamental changes happened at the areas. Some of the reform priorities remained untouched. For instance, in electricity sector and oil and gas sector, where business and political interests are closely interlinked, powerful business-groups simply blocked any reforms. In general, the reformation process is poorly transparent. Moreover, for many important directions the authorities ignore public opinion consulting with civil society players only formally.

Presentation was prepared for the congress “Investment in Ukraine. Challenges and opportunities”. The presentation is heavily animated, with animation being essential for understanding of the substance. Please use MS Power Point XP or later versions in the “Slide Show” mode to view them. Please wait after each click until the animation completes.

The report structure is the following. At the first part, it is suggested overview of approach applied to systematization of data and analysis. Later it is provided overview of statistics and other data, which is collected by government, international organizations and non-government analytical centers. Next part describes main problems of modern statistics and discusses lacking data for estimation of reforms dynamics. We explain the goal and fundamentals of analytical monitoring, which is proposed as complementary part of already available statistical data and surveys. Finally, it is provided generalized and detailed concept of the developed methodology.

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