Hi-tech modernization should be the main consequence of the reforms in Ukraine. The ways to achieve it will be the keynote of the second Kyiv International Economic Forum, together with the formation of a common reform vision.
Issues to be discussed:
Agriculture in Ukraine has huge development opportunities thanks to the fertile soil and growing demand for food in the world. A number of reasons prevent quality leap in this sector: no private ownership of land, inadequate banking and non-banking financing, lack of cutting-edge technologies of cultivation and processing.
At the same time, there are warnings about the timeliness of launch of the market circulation of land and increasing the agricultural production, particularly because of ecology risks. Investments in all types of non-grain agribusiness are promising, as well as creation of a transport and storage infrastructure for agricultural products.
Issues to be discussed:
• Sale of agricultural land: national catastrophe or the path to increased profitability and investment attractiveness?
• What should be the state policy in the agricultural sector? Larger volumes or greater margins?
• Agriholdings: monopolists or partners for small business? How to ensure the development of SMB in the agricultural sector?
• What should be the role and share of organic farming?
• Is protectionism in the agricultural sector needed to create conditions for import substitution?
• How to start using hi-tech in agribusiness?
• What should be done for Ukrainian vegetables and fruits to replace imported products all the year round?
• What should be the policy regarding sea and river ports, river and coastal fleet, to increase grain exports?
• How to ensure long and cheap loans for agribusiness?
• Subsidies to farmers exist in the EU, but they are criticized when applied in Ukraine. How to ensure the correct orientation of the state aid?
• Export quotas and tolls. What should be the position of the state?
• What are the short and long-term consequences of the European Union Association Agreement for the agricultural sector?
• How to integrate Ukrainian agricultural enterprises in the global added value chain and do not miss the opportunity of self-development at the same time?
Energy efficiency is a key component of strategic development plans in the developed countries. So far, Ukraine can't overcome the substantial backlog from the developed world in energy efficiency. We have several strategies and state programs, but instead of sufficient investment in the reducing of energy consumption we buy large amounts of gas.
Energy consumption per production unit in Ukraine is several times higher than those in the developed countries. The dominance of outdated energy-intensive technologies, raw material export orientation and lack of public culture of energy consumption lead to chronic dependence on energy imports. But it is possible to achieve energy independence. We need to apply energy saving in the industry and at home, and use a great potential of the country in the production of energy from renewable and alternative sources.
Issues to be discussed:
• How to achieve energy modernization of the cities?
• What are the prospects for renewable energy in Ukraine and the world? Can we expect in 10 years to have 25%of the country's energy consumption to be from alternative sources?
• What effect do energy saving projects have compared with similar investments in gas and oil?
• What should be done for quick and powerful restart of wind energy in Ukraine?
• What prevents active use of biomass energy?
• Are there any prospects of hydropower in Ukraine?
• House with zero energy consumption – is it myth or reality?
• How to teach ordinary citizens to be energy efficient? Would tariff increase become a driver for energy saving?
• How to make solar energy development a business of millions of people and small businesses?
• Will the spread of solar and wind energy in Ukraine help manufacturers in mechanical engineering?
• Energy saving experience in various economy sectors in the EU, the US, China and Japan.
It is obvious, that for rapid economic growth Ukraine needs to change the structure of the national economy. Those branches that produce goods with high added value and provide high performance workplaces are socially and economically desirable. They should be prioritized and encouraged, among other things — by collecting rent from raw material and low-tech industries. Ukraine needs a transition from inertia movement to controlled development, technological modernization and re-industrializing.
According to the experts, economic patriotism should be the heart of the ideology of economic reforms. Non-intervention does not work, so the task of the state is to create more attractive business conditions in comparison with other countries.
Issues to be discussed:
• What should be the economic doctrine of Ukraine?
• Which regulatory steps are required to create a competitive economy? What should be the correlation of regulation and deregulation?
• What should be the new industrial policy of Ukraine?
• Was industrial policy used as a development tool in Europe after the World War II and in the "Asian tigers"? Which international examples of industrial policy should we pay attention to?
• What is the essence of new EU industrial policy?
Hi-tech development in Ukraine is hampered by the lack of innovative infrastructure. At the same time, the country has big chance of making a breakthrough, if it chooses digital economy as one of the main priorities. But Ukraine has problems with all the digital agenda attributes:
• The market of digital services is underdeveloped.
• Digital society lags behind in digital skills, hi-tech usage in healthcare, and overall low level of trust in e-services.
• Lack of broadband Internet access, inchoate 3G penetration level and absence of 4G, no-digital zones.
• Low level of trust in e-government services, total prevalence of paper document flow, lack of transparency.
• Science orientation at a raw material economy, brain drain, low science financing, no venture financing.
All these problems hamper the development of hi-tech product companies. Successful Ukrainian hi-tech companies are focused on IT outsourcing, but not end products.
Issues to be discussed:
• Which tasks should the Government and Parliament accomplish to help develop digital economy?
• How should we change Ukraine's economy for hi-tech to permeate in all areas?
• What are the possible ways of innovative ecosystem development in Ukraine?
• What is the influence of the Digital Agenda on the economy and society?
• What hampers the development of e-market, ICT infrastructure, research centers, e-government?
• What are the global trends in making of innovative products?
• How the country may help to attract strategic investors?
• Can Ukraine replicate experience of creating "Silicon Valleys"?
• How to use the opportunities provided by the EU, in particular, by the Horizon 2020 program?
Change of approach to the international financing is crucial. Funds should not only go to macroeconomic stabilization, energy, agriculture and road infrastructure, but also to hi-tech products production projects. Besides, we must change the paradigm of the population on the use of its own funds towards investing in the real sector.
Issues to be discussed:
• What are the actual demands of the international financial institutions regarding the banking sector reform in Ukraine?
• How the requirements of the international financial institutions will affect the macroeconomic and microeconomic situation?
• Is it possible to change the conditions of the international financial institutions in 2016 and subsequent years?
• Is it possible to develop the economy while having the frozen conflict in the Donbas? What geopolitical partners does Ukraine need to balance Russian influence?
• What is the situation with the restructuring of Ukraine's external debt?
• What was the use of EU funds and other creditors earlier?
• What internal funding instruments are necessary for development projects?
• What should be the policy of the Ministry of Finance and the National Bank to resume credit financing?
• What are the prospects for financing of the real sector under the external assistance programs (EBRD, EIB, European Commission, etc.)?
Ukraine has had numerous development programs. They were produced by the Cabinet of Ministers, Presidential Administration, political parties and experts - representatives of civil society. But the progress is weak, as GDP has not yet reached the 1990 level. Reasons: unrealistic assessment of the situation, populism and lack of political will to implement the programs.
Issues to be discussed:
Every country in the world is committed to growth, but not all have equal starting opportunities. The choice of the weak countries in the global competition is between two poles: complete openness of the economy without stimulating of any sectors, or creation of "points of growth". The last one is about supporting individual activities or giving special conditions to certain areas for doing business. For Ukrainian enterprises, the domestic market is not sufficient; therefore, the focus on exports should be inseparable from the investment activities.
Issues to be discussed:
• How to create an attractive business climate in Ukraine through the "points of growth"?
• What specific support mechanisms are needed to create innovation clusters?
• What should be the role of the state in the formation of industrial parks?
• What are the examples of industrial parks and free economic zones in Ukraine?
• Benefits of industrial parks: how to count them? How to prevent corruption if special conditions are made?
• What changes of macroeconomic indicators occur in case of successful operation of industrial parks?
• Is it possible to use public-private partnerships in the industry?
• Conversion of oligarchic FIGs into core clusters — myth or reality? What can the state do to start this process?
• How Ukrainian companies can conquer the markets of other countries? Where to start?
• How to stimulate export without violating international agreements?
For a developed democracy, the triangle "government - business - civil society" is the basis for balanced economic and social development. The main actors in this process are separated from each other and cooperate under clear rules. From the other side, in Ukraine we have a political-oligarchic system of government, where state power, financial resources, political parties and media belong to the same clan groups.
Despite the fact that financial-oligarchic elites are unwilling to do any changes not to lose their benefits, civil society and the business community can win the situation. Joint actions of the society led by new leaders and professional associations can create the "magic triangle" for successful development.
Issues to be discussed:
• Government activities shall inure to the benefit of business and society. At the same time, each of the three sides of the social contract should look for joint solutions. How to achieve this?
• Any reforms are doomed to failure without public support. How make accelerated economic development a national idea?
• Civil society: how to ensure the impact of existing legislation on the authorities without Maidans?
• What are the advantages and disadvantages of having businessmen in power?
• Where the nationwide leaders are "forged", in order to work in the government? What opportunities are there for promotion of regional leaders?
• How to organize effective interaction between the business and the government avoiding corruption?
• How to ensure development of civilized lobbyism in Ukraine?
• How government and business could join forces in developing strategies?
• How to organize effective work of business associations?
• Is a united business association possible in Ukraine?
• To what extent is the European experience in this area suitable for Ukraine?
• What should be the role and functions of business ombudsmen?
After the fall of the Soviet trading system, all businesses were provided with the opportunity to engage in export and import. The tradition of overcoming shortages of goods has been entrenched for decades and has led to an active import of consumer goods. At the same time raw materials dominated over hi-tech and high margin goods.
International trade agreements were usually concluded in the interest of big companies. Inexperience of businesses, especially medium-sized ones, resulted in the international negotiations on one-sided opening of the markets, and not in favor of Ukrainian companies.
Today there is an urgent need for an active study of the already existing conditions of international trade, and explaining their benefits and opportunities for the Ukrainian businessmen. Unfavorable terms of trade should be reviewed.
Issues to be discussed:
• Ukraine is not sufficiently promoting the interests of Ukrainian vendors abroad. What do domestic enterprises lack to be competitive both abroad and within the country?
• Is it necessary to sign free trade agreements with all the new trading partners? What are positive and negative experiences?
• Is there a sufficient number of analytical institutions?
• What promising areas for Ukrainian exports are existing?
• What are the effects of the European Union Association Agreement for Ukrainian businesses?
• What should be done to improve the export-import balance?
• Africa and Latin America — are there chances for Ukrainian goods at those markets?
• What are the success stories of Ukrainian companies entering the EU market?
• Will export insurance help, taking into account the lack of long-term and cheap loans?
• What are the examples of successful removal of technical and customs barriers?
In the late 1990s, after the difficult years of hyper-inflation, a very efficient banking system was formed in Ukraine. High bank estimates implied high profits on capital investments. It led to opening of new banks and acquiring of Ukrainian banks by foreign investors. This made it possible to introduce a large amount of credit resources to the corporate sector and to extend consumer loans.
Along with favorable export environment, the economy of Ukraine was growing. This situation caused degradation of risk management and low quality of advances portfolio.
2008 global financial crisis showed significant deficiencies of the system: prevalence of short-term speculative money that was quickly withdrawn from the Ukrainian financial market, lack of willingness of foreign banks to support Ukrainian subsidiaries, a large number of small and inefficient banks, etc. Local CIS crisis that began in 2014 together with ineffective NBU activities acuminated the problem even more. Ukrainian banking system practically ceased to perform its function of lending business, and has entered a permanent banking crisis, dragging down the overall economic situation.
Issues to be discussed:
• How to revive the banking system in Ukraine?
• How to return trust in banks to make people's savings a reliable resource for the economy?
• Is there a chance for the development of new credit practices (Р2Р credits, financial services at retail chains, etc.)?
• Bank of bad loans: who and how should establish it?
• What can small banks do if the banking system collapses?
• International financial aid. How much does Ukraine need? How a businessman can get money on beneficial terms?
• Currency issuance: could the money be steered into the economy?
• Does Ukraine need a development bank?
In order for the improved system of education to help gaining added value, but not brain drain, it must be mounted in an innovation chain. This chain includes schools and high education, science, commercialization of inventions, launch of serial products and capitalization of companies. Absence or underdevelopment of any of these chain links makes the improvement of all others inefficient.
Issues to be discussed: