Policy brief

Ukraine’s unfinished reform agenda

This Policy Contribution analyses the Ukrainian economic, institutional and political reforms of 2014-17 in terms of their sustainability and complete

Publishing date
27 September 2017
Authors
Marek Dabrowski

Compared to previous attempts, especially those following the Orange Revolution in 2004, the current reform round in Ukraine (since 2014) has proved more successful. Some politically difficult decisions have been taken, such as the elimination of gas subsidies and the restructuring of the banking system. But reform remains incomplete in many important areas, such as local and regional self-government, public administration, the judiciary, law enforcement agencies, the energy sector and infrastructure, the pension system, privatisation and land ownership.

Since near-disaster in February 2015, Ukraine’s macroeconomic situation has stabilised. The economy stopped declining in 2016. However, macroeconomic stability remains fragile and the recovery of 2016-17 looks rather weak given the scale of the previous decline.

The window of political opportunity created by regime change and the mobilisation against external aggression in 2014-15 has not been used effectively as a springboard for reforming the dysfunctional Ukrainian economy and state. The window of opportunity now seems to be closing as Ukraine approaches a new electoral cycle in 2018-19.

The external players, in particular, the International Monetary Fund, the European Union and the United States, have provided Ukraine with a substantial balance-of-payments and budgetary support, along with technical assistance. In addition, the EU opened its markets to Ukrainian exports and granted visa-free travel to Ukrainian citizens. However, the macroeconomic assumptions behind the IMF programmes have been too optimistic, and the IMF and the EU have not always set the right reform priorities.

About the authors

  • Marek Dabrowski

    Dr. Marek Dabrowski is a Non-Resident Scholar at Bruegel, Professor at the Higher School of Economics in Moscow, co-founder and Fellow at CASE - Center for Social and Economic Research in Warsaw and Member of the Scientific Council of the E.T. Gaidar Institute for Economic Policy in Moscow.

    He was Chairman of the CASE Supervisory Council and its President of Management Board (1991-2011), Chairman of the Supervisory Board of CASE Ukraine in Kyiv (1999-2009 and 2013-2015), and Fellow under the 2014-2015 Fellowship Initiative of the European Commission – Directorate General for Economic and Financial Affairs. He is a former First Deputy Minister of Finance of Poland (1989-1990), Member of Parliament (1991-1993) and Member of the Monetary Policy Council of the National Bank of Poland (1998-2004).

    Since the end of 1980s he has been involved in policy advising and policy research in Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Egypt, Georgia, Iraq, Kazakhstan, Kyrgyzstan, Macedonia, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Saudi Arabia, Serbia, Syria, Turkmenistan, Ukraine, Uzbekistan and Yemen, and in a number of international research projects related to monetary and fiscal policies, growth and poverty, currency crises, international financial architecture, perspectives of European integration, European Neighborhood Policy, trade policy, and political economy of transition.

    He has also worked as a consultant in a number of EU, World Bank, IMF, UNDP, OECD and USAID projects. Marek is the author of several academic and policy papers, and editor of several book publications.

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