Reform advisory fund for the Ukrainian Government

Project description

Title: Reform Advisory Fund
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Ukraine
Lead executing agency: Ministry of Economic Development and Trade of Ukraine
Overall term: 2015 to 2017

Context
In mid-September 2014, Ukraine and the European Parliament ratified the Association Agreement between the European Union (EU) and Ukraine. This agreement provides for closer cooperation with the EU and the economic integration of Ukraine into the EU Internal Market. The key element of the Association Agreement is the Deep and Comprehensive Free Trade Agreement (DCFTA), which serves to regulate not only customs-free access to both the EU Internal Market and the Ukrainian market, but also the adoption of EU legal and economic standards. The DCFTA is moreover designed to boost the competitiveness of the Ukrainian economy.

This sees Ukraine entering into comprehensive obligations under international law which must be implemented within a clearly defined time frame and affect many policy areas. The detailed obligations and deadlines will set in motion a comprehensive transformation process as well as structural reforms in the next few years. For the Ukrainian Government, this will form the basis for a reform agenda with clear priorities.

In late 2014, President Petro Poroshenko published the Ukraine 2020 sustainable development strategy, which summarises the priority reform projects. The Ukrainian Government also published an action plan later that year detailing the specific steps for implementing the necessary reforms. This national reform agenda is closely linked to Ukraine's international obligations to the European Union, the International Monetary Fund and the World Bank.

Objective
The economic policy and public finance system are reformed, the process of decentralisation is continued. The leading ministries and parliament come closer to meeting EU standards and improve transparency, efficiency and accountability.

Approach
Commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ), the project advises above all the finance, economic development and regional development ministries. They are tasked with carrying out reforms in the fields of public finance, decentralisation and sustainable economic development in order to comply with the targets agreed with international partners. The ministries are supported by national and international experts. The public administration’s skills and delivery capabilities are continuously built up through an exchange of experiences with public administration in Germany and other countries.

Results
Since September 2015, the project has been supporting the ProZorro reform (transparency) for public invitations to tender. Using a new electronic tendering procedure, it was possible already in the first year to carry out invitations to tender below the threshold of a total of UAH 15 billion (approximately EUR 520 million). Savings for the government budget thanks to the transparent tendering procedure are estimated at UAH 1 billion. The recipe for success is the cooperation between public administration, civil society and businesses. In May 2016, ProZorro won first prize in the World Procurement Awards 2016 in London.