Projects

2019 CUSUR CALENDAR
 
Upcoming Events 2019
US-UA Security Dialogue X
Washington, DC
February 28, 2019
 
UA HES Special Event:
Sobornist' at 100
Ukrainian Museum
May 4, 2019   
 
US-UA BNS Special Event
Washington DC
May 23, 2019
 
US-UA WG Yearly Summit VI
Washington, DC
June 13, 2019

US-UA Energy Dialogue VI
Kyiv, Ukraine
August 29, 2019 
 
UA HES Special Event:
UA-AM Community at 125
Princeton Club/NY
September 21, 2019 
 
UA QUEST RT XX
Washington, DC
October 10, 2019
 
UA HES Forum VII:
LT-PL-UA Relations
Chicago
November 9, 2019   
 

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CUSUR 2016 - Project I
US-UA “Working Group” Initiative

The US-Ukraine “Working Group” Initiative was launched in 2007 in order to secure an array of experts in "areas of interest” for CUSUR and its various forums/proceedings; at the same time, it was hoped that the ‘experts’ might agree to write a series of ‘occasional papers’ to identify “major issues” impacting on US-Ukrainian relations.
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CUSUR 2017 - Project II
Publication Efforts

Recognizing the urgent need to set up proper channels for the maximum circulation of the information/analysis CUSUR possessed or had at its disposal, the Center long focused on having ‘a publication presence’ of some form or another.
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CUSUR 2018 - Project III
DC Occasional Briefings Series

CUSUR did not turn its attention to having a DC presence until summer 2012. Borrowing space when the need arose (particularly for various forum steering committees meetings) from the American Foreign Policy Council, its longest abiding partner, seemed to suffice; an Acela ride from the Center’s NY office did the rest. If there was a concern, it was to open an office in Kyiv.
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Ukraine & Economic Requirements for NATO Membership

Ukraine's Quest for Mature Nation Statehood Roundtable VII:
"Ukraine and NATO Membership"

Ukraine & Economic Requirements for NATO Membership

Edilberto Segura

Plenary remarks by Dr. Edilberto Segura, Director and Chief Economist SigmaBleyzer Private Equity Investment Group/The Bleyzer Foundation, delivered during Ukraine's Quest for Mature Nation Statehood Roundtable VII: "Ukraine and NATO Membership" Ronald Reagan Building and International Trade Center, Washington DC, October 18, 2006.

Despite the political uncertainties that Ukraine has faced over the last two years, its economy has continued to perform very well. In fact, during the last five years, from 2000 to 2005, few countries in the world can match the following combination of economic achievements of Ukraine:

  • (i) a high average rate of economic growth at about 8% pa;
  • (ii) a low average annual inflation rate of less than 7% pa;
  • (iii) a low average fiscal deficit of about 1% of GDP;
  • (iv) an average current account surplus of about 6% of GDP;
  • (v) fairly stable foreign exchange rates,
  • (vi) increasing Foreign Direct Investments,
  • (vii) high international reserves in excess of three months of imports; and
  • (viii) a very low ratio of external public debt to GDP of about 20%.

Even in 2005, when political uncertainties were high, the economic performance of the country was much better that originally expected.

[1] First, GDP performance in 2005 was reasonable. Although the official statistics indicate that in 2005 GDP grew at a relatively low rate of 2.6%, the actual rate may have been higher, possibly around 5%.

This is because in 2004, the rate of growth of exports was probably overestimated due to some irregularities in the statistics of free economic zones.

This "high base" for exports in 2004 led to poor results in 2005, with exports declining by 11%. Although some export decline did take place in 2005 (particularly metals), it was probably not as high as reported in the official statistics.

On the other hand, in 2005 the major component of GDP, private consumption, expanded by a significant amount of about 16.6% - which encouraged banking and retail trade -- while investments declined only slightly by 0.3% due to political uncertainties.

[2] Second, the fiscal budget performance in 2005 was also better than expected: At the beginning of 2005, many analysts had feared that the fiscal deficit in 2005 would be as high as 5% of GDP. These fears did not materialize.

Despite sizable increases in fiscal expenditures, the record high growth of budget revenues, backed by elimination of tax privileges and exemptions and the elimination of free economic zones, made it possible to end the 2005 fiscal budget with a reasonable fiscal deficit of -1.8%, in accordance with IMF recommendations.

[3] Third, the Current Account showed a reasonable surplus of about $2.5 billion (3.1% of GDP).

[4] Fourth, the current account surplus and high growth of foreign direct investments resulted in a more than twofold increase in the National Bank's (NBU) foreign reserves, which reached $19.4 billion at the end of 2005. As a result, the national currency appreciated by 4.8% from UAH/$ 5.31 in 2004 to UAH/$ 5.05 by the end of 2005.

[5] And fifth, sound monetary policy made it possible to keep inflation on a lower than initially expected level of 10.3% yoy.

Outlook For 2006

The year 2006 is also showing better economic performance than initially forecast. Even thought the January 2006 increase in the price for imported gas may have dampened the rate of growth of GDP in 2006 by about 2%, GDP in 2006 is expected to grow by a reasonable rate of about 5.5% yoy.

The GDP increase in 2006 is due to a strong recovery of industrial growth, construction, transportation and trade. Within industry, the most dynamic sectors are machine-building, chemicals, metallurgy and food processing.

Furthermore, the successful implementation of plans to introduce energy saving technologies may boost GDP growth further and compensate partly the effect of gas price increases.

In fact, Ukraine badly needed the incentives to save energy as the country consumes almost 3 times more energy per unit of GDP than Western Europe.

The fiscal budget performance in 2006 is also expected to be reasonable: during the first eight months of 2006, despite increases in public expenditures, the consolidated fiscal budget showed a surplus of 0.8% of period GDP.

This surplus occurred because consolidated budget revenues continued to increase rapidly, while expenditures were below targets.

VAT, profit and income taxes continued to generate the lion's share of the budget fiscal revenues (about two-thirds of consolidated budget revenues), supported with surging retail trade, growing household incomes and improving financial performance of enterprises.

For the entire 2006 year, the fiscal budget is likely to show a manageable deficit of about 2.5% of GDP, in line with IMF recommendations.

The postponement of gas price increases (originally expected in July 2006) will also result is a lower rate of inflation for 2006. The annual inflation rate in August 2006 was around 7.4% yoy. By the end of the year, inflation is likely to remain in single-digits, at about 9.5%.

The merchandise trade account deficit is another indicator which is improving. Although the trade account is still negative, the deficit has been narrowing since March 2006. As a result, the cumulative current account deficit for the first half of 2006 was about 2% of period GDP.

For the entire year, the current account deficit is likely to be less than 2% of GDP, a number that can be easily financed by foreign direct investments and manageably increases in foreign debt.

Outlook Beyond 2006

Over the next year or so, the Ukrainian economy is likely to continue perform reasonably well. However, there is a growing realization in the government that future high rates of economic growth will depend on the ability of Ukraine to improve the country's Business Environment to encourage higher levels of foreign and domestic investments.

The agenda of economic reforms to achieve improvements in the business environment is now well-known by most people in Ukraine. The problem is not in defining or understanding "what" needs to be done.

The problem is "how to do it", in "what sequence of steps" and "at what costs". The issue is the lack of implementation capacity in the country. In order to successfully implement reforms that would improve Ukraine's investment climate, the new government must start with reforming itself into an administration that is capable of designing and implementing economic policy efficiently. A comprehensive Public Administration Reform should be now a priority for Ukraine.

Ukraine's current government structure retains many of the problems inherited from the former Soviet Union, including cumbersome decision- making, bureaucracy, and unclear responsibilities among government agencies.

The existing system of developing, passing and implementing economic policies stalls implementation of economic reforms that would improve the country's business environment. There is now an urgent need to "de-sovietalize" public institutions.

Without transforming the way government agencies presently work, it is likely that the current numerous obstacles to investment will be removed very slowly or will be quickly reversed or substituted by new regulations.

On the contrary, if well done, public administration reform will stimulate fast implementation of other reforms, make the public sector less prone to corruption and red-tape, and improve the country's image, thereby putting the country on a different path, on an accelerated course to attract investment and faster development and growth.

Public administration will become a facilitator rather than an obstacle to implementation of other economic reforms.

The reform of public administration is a lengthy process with many stages. The government should start the reform by approving a plan of action for implementing the concept of administrative reform.

The plan of action should take into account the experiences of other countries, which shows that a comprehensive and drastic reform of public administration has a better chance of succeeding than piecemeal or incremental reform.

A number of countries have experienced success in reforming their public administration (such as Canada, New Zealand, Poland, and Ireland).

The reform of public administration would require the following steps:

  • (i) clearly define the Objectives/Role of the Government limiting it to "public" goods and support - not substitution - of the private sector;
  • (ii) undertake a comprehensive "audit" of all government programs, with a view to transfer some of them to local governments, sub-contract others to the private sector and eliminate unnecessary/overlapping activities;
  • (iii) develop the concept of well-defined 'Programs and projects" for all government activities (this will help to improve administrative efficiency, deal with corruption and also bring equilibrium to the fiscal budget);
  • (iv) improve the efficiency in retained "core" government activities and local governments, increasing public transparency and access to government information; and
  • (v) carry out a civil service reform introducing effective "Incentives" and "Control" Systems.

Additional Reforms Needed In Ukraine

In addition to Public Administration Reform, other reforms that are critical to improve Ukraine's business environment include the following:

[1] Improve macroeconomic stability by strengthening fiscal policies (improving tax administration, reforming the pension system, decentralizing financing), monetary policies (developing techniques for inflation targeting -open market operations, forecasting models) and foreign exchange rate policies (abandoning the exchange rate anchor)

[2] Improve the legal environment by:

  • (i) improving the practice of "public" consideration of any legislative act to be adopted, including their correspondence with existing legislation;
  • (ii) improving the functioning of the Judiciary and securing its independence by inter-alia enacting the draft laws on the Status of Judges and on the Functions of the Judiciary (Organization, Court Procedures, and Court system) and further improving the financing of courts; and
  • (iii) improving court enforcement procedures.

[3] Accelerate further quick deregulation and liberalization of business activities (permits, licenses).

[4] Develop sound corporate governance practices by enacting key pending legislation (e.g., the Joint Stock Companies law), abolishing the Commercial Code while amending the Civil Code, developing corporate governance codes, and accelerating the adjustment of Ukrainian accounting standards to international accounting standards.

[5] Liberalize trade, join the WTO, sign free trade agreements with the EU, CIS, and other countries, and simplify trade clearance procedures.

[6] Strengthen the financial sector, particularly by enforcing banking regulations and supervision.

[7] Implement a prevention program to deal with corruption.

[8] Improve the country's image by strengthening an Investment Promotion Agency and implement specific activities for large investors (identify major projects, carry out targeted promotional campaigns, identify niches/sectors) and for small/medium firms (access to bank credit, better information on laws, etc).

 

Past Highlight Events

RT XVII Items of Note
Highlights from Ukraine's Quest for Mature Nation Statehood RT XVII: Ukraine & Religious Freedom, held in Washington, DC on Oct. 27, 2016
 
UA HES SE: UA 25th B-Day
Highlights from UA HES Special Event: 'Commemorating the 25th Anniversary of the Modern Ukrainian State', held at the NY Princeton Club on Sept. 17, 2016
 
US-UA WG YS IV Highlights
Highlights from US-UA WG Yearly Summit IV: Providing Ukraine with an Annual Report Card, held at the University Club in Washington, DC on June 16, 2016
 
US-UA SD VII Items of Note
Highlights from US-Ukraine Security Dialogue VII held on February 25, 2016 in Washington DC
 
UA HES SE: WW2 Legacy
Highlights from the UA Historical Encounters Special Event: 'Contested Ground': The Legacy of WW2 in Eastern Europe, held in Edmonton on October 23-24, 2015
 
Holodomor SE Highlights
Highlights from the UA Historical Encounters Special Event: Taking Measure of the Holodomor, held at the Princeton Club of NY on November 5-6, 2013
 
US-UA SD III Items of Note
Highlights from US-Ukraine Security Dialogue III held on May 19, 2012 in Chicago, IL

  • Former UA Foreign Minister Volodymyr Ohryzko's keynote
 
UEAF Forum VI Highlights
Highlights from UEAF Forum VI, held in Ottawa, Canada on March 7-8, 2012
 
RT XII Items of Note
Highlights from Ukraine's Quest for Mature Nation Statehood RT XII: PL-UA & TR-UA, held in Washington, DC on Oct 19–20, 2011
 
US-UA ED III Items of Note
Highlights from US-Ukraine Energy Dialogue III, held in Washington DC
on April 15-16, 2008
 
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