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Government launches the Reforms Matrix for analysis and coordination of agreements with international partner: Yuliia Svyrydenko
10.06.2024 | 12:24 | Section for Public and Mass Media Relations.

The Cabinet of Ministers of Ukraine has introduced the Reform Matrix, a new analytical tool for effective decision-making and management of the reform process. The matrix will contribute to the consolidation of the necessary administrative, legislative and financial resources for the implementation of the conditions and recommendations determined by the agreements with Ukraine’s international partners.

A team of the Ministry of Economy and the Ministry of Finance worked on the Reform Matrix project in cooperation with the Reform Office of the CMU, the Kyiv School of Economics, and the Centre for Economic Strategy. In the preparation process, they also consulted with the Growth Lab of Professor Ricardo Hausmann at Harvard University and were assisted by the World Bank.

“The Matrix systemises the conditionalities and recommendations of Ukraine’s international partners. In 2024 alone, we have to fulfil 410 indicators presented in official documents. The Matrix will help us prioritise and determine the sequence of reform measures.

To meet the needs of the state, the focus should now be on steps that will have the maximum effect on strengthening macroeconomic indicators and economic recovery without significant fiscal costs. Internal transformations should be carried out systematically and consistently, while being supported through the improvement of external conditions with the assistance of partners,” Yuliia Svyrydenko explained.

Thus, the Reform Matrix includes the European Commission’s Recommendations defined in the Report on Ukraine within the framework of the EU enlargement package, the Structural Beacons of the IMF, Indicators within the framework of the Ukraine Facility programme, as well as the Conditions of the World Bank (Development Policy Loan, DPL).

The reform measures provided for by the Matrix were analysed by the Ministry of Economy, the Kyiv School of Economics and the Centre for Economic Strategy according to the methodology of the Growth Centre of Harvard University and with the assistance of the World Bank. According to the analysis, the reforms were prioritized as follows:

  • Macroeconomic policies that will have the greatest overall impact on economic growth. They include tax and customs reforms to expand the domestic revenue base, eliminate quasi-fiscal distortions, and maintain overall price stability.
  • Management of the public sector and institutions. This process includes strengthening regional policy coordination, developing measurable action plans for reforming law enforcement and fighting corruption, and improving public investment management capacity, including the judiciary.
  • Structural reforms. Cover labour market programmes and human capital policies, measures to facilitate trade and the business environment, including state-owned enterprise and corporate governance reforms, and regulation integrating and reforming sectors such as energy, critical materials, rural economy and transport.

At the same time, the analysis also showed that the implementation of the measures provided for by the Reform Matrix will not be sufficient to ensure the critical needs of the state related to defence, energy stability, critical capital investments, technology transfer and access to markets.

It was determined that to maximise the effect of reforms, Ukraine, together with its international partners, should focus on three following areas:

  1. Address macroeconomic risks with the help of partners within the Multi-agency Donor Coordination Platform and secure long-term (until 2027) external financing and in-kind support.
  2. Promote faster recovery by removing the main obstacles to development. Air defence, energy resilience, stable and predictable access to foreign markets, labour shortages, and logistics (SEAL+) should be addressed.
  3. Enhance potential growth - the reforms need to be complemented by timed and scaled investments and technology transfer arrangements from partners that will increase productivity and capital formation.

“The economy cannot grow without capital investment and increased productivity. In order for Ukraine to have a chance to catch up with the EU countries in terms of GDP per capita, in the next 10 years, investments or the volume of technology transfer should amount to US 10-30 billion per year. We have identified a specific list of priority areas for investment - first of all, defence and then energy, processing industry, green metallurgy, critical materials, agro-food, certain construction materials, etc. Opening of markets, reduction of trade barriers, inclusion of Ukraine in the single market of the EU are the necessary conditions for increasing exports and attracting capital investments,” Yuliia Svyrydenko emphasized.

Ministry of Economy of Ukraine 01008, Ukraine, Kiyv city,
Grushevsky str., 12/2