Andriy Shpakov is the executive director of EasyBusiness, a Ukrainian think tank, whose mission is to create a better environment for business operation and economic growth. Shpakov has a background in finance and business analysis, and during the last three years he has advised the Ukrainian government on how to develop a deregulation strategy and improve Ukraine’s position on the World Bank’s Doing Business ranking. Shpakov gave Atlas Network a little glimpse into Ukraine’s current political climate and what EasyBusiness is doing to spread the message of freedom in Ukraine, in light of an upcoming Atlas Network event in New York City on January 10.
Tell us a little about what’s going on in Ukraine right now, and what led to today’s current events.
Having declared Independence in 1991, Ukraine turned out to be at a crossroads whether to join Russia with its customs union or associate with the European Union. Being the most valuable prize left in Eastern Europe, Ukraine spent the post-Soviet era zigzagging between East and West. Such a transition period undermined systemic economic growth and facilitated distrust to political institutions and reached its verge in late 2013 when then-President Yanukovych backed away from signing an association agreement with the EU.
The shift of presidential policy from pro-European to pro-Russian resulted in almost 100 days of the nationwide protest movement that demanded the impeachment of Yanukovych. Despite protests, the parliament continued to pass anti-civil laws whereas the protesters were attacked by armed forces. Fortunately, protesters reached their goal in making Yanukovych and pro-Russian MPs leave the country, and then a new government was established.
So, what’s going on with the free-market moving in Ukraine right now?
The Revolution of Dignity brought a reform-minded and liberal government to the power that was open to new cooperation with both business and civil society in the reform agenda. Having proved its efficiency during the Revolution, NGOs and volunteers enjoyed the highest level of public trust that facilitates the growth of think tanks and strengthens their role in formulating public policy.
One of the Ukrainian think tanks that have been working in favor of economic freedom is EasyBusiness — aimed at building a better business-enabling environment. Our EasyBusiness team started off in May 2014 advising the economy minister and developing the Deregulation Strategy of Ukraine. The team has pursued the goal to boost Ukrainian positions in the World Bank’s Doing Business ranking through high-end economic research and independent policy recommendations based on the principles of free markets and competitive enterprises.
And what kind of results has EasyBusiness, your organization, seen?
As a result, thanks to EasyBusiness’ efforts, Ukraine has moved from the 112th to 76th position in the World Bank’s Doing Business ranking. Selected impact includes the decrease of time needed to start a business from 14 to 2 days (+40 positions within Starting A Business indicator), introduction of derivative action to strengthen rights of minority investors (+28 positions within Protecting Minority Investors indicator), and abolishment of paper seals and decrease of city construction tax from 10 percent to 2 percent (+105 within Getting Construction Permits indicator). The estimated economic impact of mentioned activities contributed to USD $15-20 billion (this is an estimate of potential economic impact within about the next 10 years).
However, even though reforms were on the government agenda as a number one priority, it is too early to be certain that reforms in Ukraine are irreversible.
What do you anticipate happening in the near future?
According to the latest events, now Ukraine faces the new protest movement against the corruption of current political elites run by Mikheil Saakashvili, the former president of Georgia, challenges of anti-corruption reforms that encourage “oligarchs strike back” and the influx of populism.
The upcoming presidential elections in 2019 have been already prepared three prospect candidates; however, two of them (Petro Poroshenko and Yulia Tymoshenko) are not the most reform-minded and libertarian. The third option is more desirable but less probable (Svyatoslav Vakarchuk).
All in all, as libertarian ideas are getting blurred, Ukraine definitely needs a new, pro-western and libertarian leader.