Business Leaders Deliver Plan for Decisive Action to President Yushchenko

KIEV, Ukraine -- A ten-point action plan for rapid economic progress has been presented to President Victor Yushchenko of Ukraine on the final day of the World Economic Forum's Ukraine Roundtable. Some 250 participants in the Roundtable proposed a framework for the urgent measures to improve investor confidence.

"The participants are impressed with the remarkable reforms the new government has already undertaken and their expectations are now high," said Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. "The Ukrainian government must seize this window of opportunity to deliver reforms in a fast, decisive and comprehensive manner."

"Based on infrastructure, location and people, Ukraine has the potential to become the key production site of Eastern Europe but the challenges are tremendous," he said. "If the Ukraine were to achieve a growth rate of 6-7% - which would require massive foreign investment - Ukraine would need 15 years to catch up with income levels of Hungary ," Professor Schwab noted.

The ten-point action plan contains broad policy issues which participants said must be driven forward by a coherent government programme. The areas participants highlighted included improved corporate governance, extensive reform of the public administration, concerns over state intervention in business - particularly regarding the issue of privatizations, clearer government policies and a strengthening of Ukraine 's international role.

The plan outlined specific steps some of which must be implemented before 1 July 2005, the planned start of the Ukrainian Parliament's two-month summer vacation, in order to push for the earliest possible WTO accession, increase foreign direct investment and improve the general business environment in Ukraine.

The ten points can be summarized as follows:

1. Enact all legal changes needed for WTO entry before the parliament's summer break.

2. Create a unit of specialists to support foreign investors.

3. Implement the foreseen one-stop procedure for starting new businesses.

4. Eliminate excessive and overlapping regulation.

5. Repeal the Economic Code and enact the Commercial Law Reform.

6. Enact the Financial Securities Law which is essential for shareholder protection.

7. Implement international accounting standards (IFRS).

8. Pass necessary tax reforms to increase Ukraine 's competitiveness and generate, in the long run, higher tax revenues.

9. Make efforts to enhance management and business skills and to encourage the transfer of knowledge and technologies from abroad.

10. Fight corruption.

Participants in the World Economic Forum's Ukraine Roundtable had other pieces of advice for Ukraine 's new government: " Stop trying to reinvent the wheel. Stop any arguments that Ukraine is different than other countries and that you need to find a specific 'Ukrainian Solution' to everything. Ukraine and its citizen are just as normal as everyone in the Euro-Atlantic world. Copy the successful reforms of the Baltics, Eastern Europe and Georgia, and use now the experience and know-how of those who have already defined solutions and already made proposals for drafting legislative reform needed for economic growth and job creation," the communiqué said.

"Also, do not accept as an excuse for avoiding tough reform measures the fact that Ukraine 's economy is already growing substantially. One essential factor for this growth has been the favourable external situation, notably the rise in commodity prices. It is only comprehensive reforms which will create sustained high growth rates."

In an earlier address to the participants, Prime Minister Yuliya Tymoshenko, sought to woo investors by detailing a raft of political and economic reforms the government is implementing. The prime minister promised to respect private property and the rule of law.

"Ukraine is ready to open the door wide to you, and I appeal to all business in Ukraine that we operate in a fair way with no conditionalities," she said.

Prime Minister Tymoshenko addressed the controversial issue of privatizations saying that they would be conducted "according to the constitution and laws". Regarding the re-privatization of Ukraine 's largest steel mill, Kryvorizhstal, Tymoshenko said it had been "returned to state hands and will be privatized again in a model way."

Energy independence from Russia is a strategic goal of the new government, Tymochenko said, and invited business leaders at the Roundtable to invest in oil, natural gas and nuclear power projects.

Source: World Economic Forum