Reforms cooked slowly



The transformation of the country is not about fast food changes on the run, but about “cooking slowly with constant stirring”. It is not about a sudden shower that brings relief and heavy yields immediately, but about slow and inevitable changes in the business climate.

And this provides much more optimism than illusive quick wins, which can turn into treasons as rapidly as they appeared.

During its term, the Government held six sessions dedicated exclusively to deregulation: it resulted in hundreds of abolished obsolete acts, about 30 resolutions aimed at improving the business climate developed by the BRDO Office together with ministries and business representatives. This Wednesday, the Government increased favorableness of the business climate in the country by 5 degrees having adopted 5 important decisions for entrepreneurship. So, with regard to the latter.

Firstly, everyone finally remembered that we lived in the 21st century, and it was impossible to develop without connecting to the Internet. Today in Ukraine,  there are about 5 million connections to the broadband Internet: the one that powers desktop computers and laptops. It is not a large number for the country with about several tens of millions of people. Business is ready to help: telecommunication operators can provide remote and rural areas with the Internet. but for this purpose, business owners are required a simplified access to the infrastructure:  electricity generation facilities; transport facilities; home distribution networks and construction facilities. Nowadays, there are about 156 thousand apartment buildings in Ukraine, and to this day, the developers set discriminatory conditions for granting access to infrastructure elements of construction facilities. Therefore, the resolution adopted by the Cabinet of Ministers is urgently needed, since it will remove unfair and non-transparent conditions that hampered the telecommunications market development.  This decision could potentially increase the number of broadband Internet connections by almost 14 million users – from 5 to 19 million. Accordingly, the barriers to introduce telemedicine health care services identified by the President as a priority as well as e-learning, e-health, e-commerce and other areas that will affect the living standards of citizens in the regions will be removed.

This is a long-awaited and very “requested” decision. The rules for access to infrastructure elements were developed by BRDO experts and coordinated with leading associations (Telas, the Internet Association of Ukraine, the Telecommunication Chamber of Ukraine, the Association of Rights Holders and Content Providers and the Ukrainian League of Industrialists and Entrepreneurs) ) a year ago, but the Cabinet of Ministers approved them just now.

However, it is too early to pop the champagne. The rules will fully work only when the Ministry of Energy, the Ministry of Transport and the Ministry of Regional Development approve the Methodology to calculate the infrastructure access cost. The draft methodology was also developed by BRDO experts, agreed with the relevant associations and sent to the ministries more than a year ago. Immediately after the Cabinet of Ministers voted, we received a public Volodymyr Omelyan’s promise in social networks to develop the ministry’s methodology by the end of the month. We look forward to the respond of the two other ministries and believe in common sense.

The next decision was more “prosaic”, but it is also about modern technologies while being important for the business climate and positive for every citizen. We are talking about the geocadastre. The urgent problem for entrepreneurs is a large number of refusals to register in the StateGeoCadastre, which could easily be avoided. For example, in 2016, the number of refusals to register land plots amounted to 135 thousand. Moreover, when refusing, cadastral registrars were not bothered to explain the reasons. conclusions on refusals could contain a brief reference that “documents do not comply with the land cadastre law” or that electronic documents “are not valid”. In other words, you were politely told to go screw without explaining the reasons and indicating how to change the situation. As a result of changes approved by the Cabinet of Ministers this week, registrars will be obliged to indicate the provisions of the regulatory act violated or the name of the electronic document’s elements containing mistakes. This will reduce the number of unreasonable refusals to register land plots. In other words, it is the elementary improvement of communication that will save time and money for businesses.

The next improvement in this resolution is an opportunity to submit documents for the state registration of land plots online. Just imagine these amazing technologies in Ukraine! Unfortunately, the draft amendments did not contain provisions that would include a preliminary examination of electronic documents on land plots.  However, it is planned to introduce this examination procedure when updating the electronic service for online registration of land plots.

Another useful improvement is monitoring of the application processing in the land cadastre. If it is now possible to check the status of a limited number of application types envisaged by the Procedure for the State Land Cadastre, in the future, it will be possible for types of applications as well as it will be possible to review analytics on the number of such applications by regions. The big data as it is.

These changes will reduce the number of refusals to register in the StateGeoCadastre from 135 thousand times to 100 thousand, that is, up to 2% of the total amount per year, smoothly and inevitably. Such a “mitigation” of the business climate will provide 56.6 million UAH of business savings per year. It is not bad for the resolution, and +1 degree to the ease of doing business.

The next landmark decision supported by the Cabinet of ministers is related to the human resources, which, as you know, are the most important factor. From now on, foreign specialists will be able to obtain employment in Ukraine in a simplified manner. It is just about highly paid specialists. This procedure has been very complicated for a long time: to obtain a residence permit, State Migration Service (SMS) officers required from foreign specialists to leave Ukraine and return after obtaining a work permit. It was possible to leave and return through the territory of any country without obtaining any additional documents. What has changed: the possibility to refuse issuing a residence permit for a foreigner on the grounds that the date of entry into Ukraine is prior to the date of obtaining a work permit is canceled. Obviously, besides the inflow of qualified specialists in various areas, this will also reduce the burden on the State Migration Service significantly.

In addition, there is a related decision that also deals with more comfortable employment – from now on, the representative offices of foreign legal entities will be able register and maintain work record cards of their representatives by their own. This is weird, but previously, the Directorate General for Rendering Services to Diplomatic Missions had to do this. Probably, a person who was responsible for this sector liked Orwell very much. Fortunately, things will change now, and foreign establishments will save time and money. It is +1 point for the Government. We just have to update work record cards one way or the other, but it is quite a different story.

In addition, 22 obsolete and irrelevant acts were abolished. These are types of economic activity, which are not subject to licensing in accordance with the Laws on Licensing. This will reduce the regulatory pressure on businesses and abuses by government officials as well as improve the investment climate in Ukraine.

All these decisions are inevitable changes, it’s about cooking slowly with constant stirring. The country is gradually but inevitably changing!