2010年-世界发展银行全球_Ukraine_-_Country_Economic_Memorandum___Strategic_Choices_to_Accelerate_and_Sustain_Growth_126页_3mb

Summary of Ukraine Country Economic Memorandum: Strategic Choices to Accelerate and Sustain Growth

Executive Summary

This report provides a comprehensive analysis of Ukraine's economic performance and strategic choices for accelerating and sustaining growth. Despite significant progress in national consolidation, democratic institutions, and market economy establishment, Ukraine has not yet regained the income levels of the Soviet era. The country's growth model, which relied on external and temporary factors, has proven unsustainable, particularly after the 2009 economic crisis that led to a 15% GDP contraction. The report emphasizes the need for deep fiscal and structural reforms to unlock Ukraine's potential and position it as a growth leader in Eastern Europe.

Core Content

Economic Performance (2000-2008)

• Growth: Ukraine achieved an average GDP growth of 7% annually from 2000 to 2008, significantly reducing poverty (from 47% in 2002 to 12.3% in 2007).
• Drivers of Growth:
  • Early realignment of the exchange rate post-1998 Russian crisis.
  • Initial reforms and stabilization efforts, including fiscal balance improvements, barter reduction, and privatization of SOEs.
  • Positive terms of trade (TOT) developments, especially due to steel and natural gas prices.
  • High levels of private external debt and credit expansion, driven by commercial banks.
  • Idle industrial capacity allowed for production growth without significant investment.

Structural Challenges

• Fiscal Vulnerabilities:

  • Large fiscal deficits and quasi-fiscal deficits have persisted.
  • Public infrastructure needs are high, estimated at USD100 billion from 2006 to 2015.
  • Utility tariffs remain below cost recovery, risking the bankruptcy of Naftogaz and other utility enterprises.
  • The pension system faces sustainability challenges due to an aging population and high pension expenditures (up to 18% of GDP in 2009).
  • Public sector inefficiencies and low productivity growth are exacerbated by poor governance and corruption.

• Banking Sector Weaknesses:

  • Undercapitalized and vulnerable to shocks.
  • Transparency issues and lack of information on bank operations and ownership.
  • High levels of non-performing loans (NPLs) and weak regulation.
  • Low domestic savings and high reliance on external financing.
  • Need for consolidation and improved prudential regulation.

• Investment Climate and Governance:

  • Poor investment climate and weak institutional frameworks.
  • High entry and exit barriers, leading to low firm dynamism.
  • Limited competition and high mark-ups in the business and service sectors.
  • Low returns on education and a shortage of technical skills.
  • Weak intellectual property rights and rule of law.

Main Recommendations

1. Fiscal Reforms:

   • Tackle the fiscal crisis to restore macroeconomic credibility and create fiscal space for public investments.
   • Address pension and public sector sustainability through reform.

2. Investment Climate Improvements:

   • Improve the investment climate and reform the financial system to attract private investment.
   • Enhance transparency and trust in the banking sector.
   • Streamline entry and exit barriers to foster competition and productivity.

3. Public Sector Governance:

   • Deepen public sector, judicial, and administrative reforms to improve governance and reduce corruption.
   • Implement staffing and network rationalization in the health and education sectors to improve service delivery.

Key Constraints to Growth

Short-term Issues

• Lack of Financing: All sectors face challenges in accessing working capital and investment financing.
• VAT Refund Arrears: Affect agriculture, food processing, steel, machine building, and exporters.

Structural Issues

• High Tax Rates and Burdensome Administration: Impact all sectors.
• Inadequate Transport and Energy Infrastructure: Particularly in metallurgy, machine building, agriculture, food processing, and energy.
• High Transport Tariffs and Weak Reliability: Affect metallurgy and agricultural production.
• Poor Export Logistics: Impact agriculture, food processing, and trade.
• Land Policy Issues: Affect agriculture, food processing, and trade.
• High Entry and Exit Barriers: Limit competition and firm dynamism.
• Weak Intellectual Property Rights: Impact machine building and sophisticated manufacturing.
• Shortage of Technical Skills: Affect steel and machine building industries.

Conclusion

Ukraine's growth story over the past decade has been driven by external factors and temporary conditions. As the global economic environment changes, these drivers are unlikely to persist. The country must now focus on deep structural and fiscal reforms to achieve sustainable growth. The report identifies key areas for reform, including the investment climate, public sector governance, and fiscal sustainability, and emphasizes the need for comprehensive and coordinated action to transform Ukraine's economy.

Annexes Overview

• Annex 2.1: Poverty impact of the crisis and selected reform measures.
• Annex 2.2: Growth diagnostics framework using Hausmann, Rodrik, and Velasco (2005) methodology.
• Annex 3.1: Growth accounting and returns on capital in the real sector.
• Annex 3.2: Overview of the steel sector.
• Annex 3.3: Analysis of the non-bank financial sector.
• Annex 4.1: Firm productivity analysis and competition.
• Annex 4.2: Export concentration.
• Annex 4.3: Export sophistication and structural transformation.