Ukrainian Institute for Policy
Analysis and Management
PRICE OF REFORMS
Goals, course, and results of systemic changes
in Ukraine (2014 - 2019)
Edited by
Doctor of Political Sciences, Candidate of Legal Sciences,
Professor V.M. Yakushik
Dnipro
"Serednyak T.K."
2019
UDC 316.422 (477) "2015/2019"
C 37
Authors: D. V. Bogatyrev, R. O. Bortnik, D. A. Gaevsky, V. V. Gaidai, V. E.
Dzividzinsky, I. V. Pechenkin, A. V. Peshko, M. E. Semyonov, N. Y. Spiridonov, V. M.
Yakushik.
The Price of Reforms / Ed. V.M. Yakushik. - Dnipro: Serednyak T.K., 2019 .-- 209 p.
ISBN 978-617-7761-70-8
This publication was prepared based on the results of the cycle of studies “The Price of
Reforms” conducted by the Ukrainian Institute for Policy Analysis and Management, published in
the period 2015-2019. The authors of the studies tried to impartially and reasonably analyze the
goals, course, and consequences of key reforms carried out in Ukraine after the change of power
in 2014, using examples of systemic changes in the spheres of police, education, health care,
deregulation, decentralization, anti-corruption and reformatting the judicial system. The
consequences of the implemented reforms, their reasons, and course were investigated; forecasts
were made, practical recommendations were given to optimize the processes and achieve the best
results of the ongoing reforms.
All statistical information used in the publication was obtained from official or other open
sources, and the research itself was tested publicly in the format of round tables and press
conferences.
Each of the studies in this edition is presented in the form of a graphic presentation and
text (except for material on judicial reform). The Ukrainian Institute for Policy Analysis and
Management invites you to a professional dialogue on research topics:
• email: uiamp2012@gmail.com;
• phone: +380937577565;
• website: https://uiamp.org.ua/cenareform
ISBN 978-617-7761-70-8
UDC 316.422 (477) "2015/2019"
1
This publication is based on the results of the “Price of Reforms” research program of the
Ukrainian Institute for Analysis and Management of Policy, which was conducted in the period
2015-2019.
The authors of the study attempted an impartial and reasoned analysis of the goals, course,
and consequences of the key reforms carried out in Ukraine after the change of power in 2014 with
special reference to police reform, education reform, health care, deregulation, decentralization,
anti-corruption and judicial reforms. They investigated the consequences of the introduced
reforms, their causes, and the course; forecasts were made and practical recommendations were
given to optimize processes and to achieve the best results of the ongoing reforms.
All statistical information used in this publication has been obtained from open-source
official or other public sources. The results of each of the studies were tested and made public at a
series of presentations and press conferences and roundtables.
Each of the studies in this publication is presented in the form of a graphic presentation
and a text (except for the judicial reform).
Ukrainian Institute for Analysis and Management of Policy invites for professional
dialogue on research topics: uiamp2012@gmail.com,
+380937577565, https://uiamp.org.ua/cenareform.
2
Introduction
At the time of the change of power in 2014, Ukraine required cardinal reforms in most
areas of public administration and social protection, which traditionally demonstrated low
efficiency, archaism, and a high level of corruption. Together with other acute political problems,
this gave rise to social alienation and a crisis of the legitimacy of the authorities. Realizing these
problems, the new ruling group initiated a series of reforms: police, education, health care,
deregulation, decentralization, judicial system, and also declared a new stage in the fight against
corruption.
Public and analytical structures supported by Western donors took an active part in the
development of the reforms. In many cases, the key initiator of the reforms was the International
Monetary Fund, and the reforms themselves were Ukraine's obligations to external creditors.
To a large extent, because of this and weak control over the reform process, the points of view on
the results of the reforms were polarized: those involved spoke of unprecedented successes, and
representatives of the public and expert community unconnected with the authorities -- about the
lack of positive results. The ellipsis in this issue was set by the presidential elections in Ukraine in
2019, in which the “reformist” command of the authorities lost with a devastating score to a non-systemic politician who promised, if not to give up part of the "Achievements", then at least revise
them.
Since 2015, the Ukrainian Institute for Policy Analysis and Management has tried to
scrupulously, comprehensively, and objectively deal with the goals and consequences of reforms,
working with a wide range of expert opinions and statistical data, to predict the results of reforms
and to offer their recommendations.
While conducting the study, we considered both the negative and positive aspects of the
changes, however, we were forced to conclude that there were no socially positive results for most
reforms, mostly either purely declarative or entailing a number of unforeseen consequences by
their creators.
At the same time, we came to the conclusion that all areas affected by the changes require
further, but better quality, study, and significant transformation taking into account the mistakes
made in previous periods, and the corresponding successful experience of introducing similar
changes in other countries.
We continue our work and invite you to the discussion and cooperation.
Ruslan Bortnik,
Director of the NGO "Ukrainian Institute for Analysis and Management of Policy"
Valentin Yakushik,
Doctor of Political Science, Professor
05/27/2019
3
Study No. 1
from the cycle "The Price of Reforms"
Police reform1
Authors:
Maxim Semyonov,
Daniil Bogatyrev,
Ruslan Bortnik
Among the many systemic problems of Ukraine that faced it throughout the history of its
independence, the problem of the law enforcement system was one of the most important. For a
new “pro-European” government, reforming the law enforcement system has become a kind of
internal political imperative. However, the impartial figures speak of its failure as a whole.
In late 2013 - early 2014 The Ukrainian police suffered from a whole range of problems:
corruption, low work efficiency, violence against citizens, connections with criminals, etc. All this
gave rise to the distrust of the majority of Ukrainian citizens to the authorities in general and to the
police as one of the components of its power apparatus in particular. The issue of reforming the
law enforcement system was repeatedly discussed in public discussions by politicians and
representatives of the expert community even during the presidency of Viktor Yanukovych. In the
spring of 2014, they returned to this problem again. After the strengthening of the power that came
on the wave of the Euromaidan, the holding of the presidential and parliamentary elections in 2014,
real preparations began for the implementation of the reform of the law enforcement system.
From the fall of 2014 to the spring of 2015, active development of its provisions was in
progress. With a difference of a month, July 4 and August 4, 2015, the patrol and the national
police are created, respectively. After the creation of the National Police, all employees of the old
departments were transferred to the position of acting and for approval in positions had to pass
certification according to physical, moral, and intellectual criteria. This rule did not apply to the
newly formed patrol police, whose officers were automatically assigned to the staff of the new
structure.
The first consequences of the reform
First, about 40% of former police officers did not pass the first stage of recertification2. In
2015 alone, 47 thousand employees (out of 170 thousand people)3 were dismissed from the internal
affairs bodies. The loss of such a number of experienced staff members inevitably affected the
1 The original version of the presentation: https://uiamp.org.ua/cref/cikl-cena-reform-reforma-policii
2 Ministry of Internal Affairs: about 40% of ex-policemen did not pass the first stage of recertification. 12/13/2015.
RIA Novosti Ukraine. https://rian.com.ua/ politics / 20151213 / 1001960786.html
3 Vajra A. Reform of the Ministry of Internal Affairs of Ukraine: there is an instruction to take off and become
eagles. 12/23/2015. RIA Novosti Ukraine. https://rian.com.ua/columnist/20151223/1002506288.html
4
crime situation in the country (more on this below). It is also worth noting that the recertification
was not duly formalized legally, which led to the return of old personnel to the system4 by being
reinstated in their previous positions by a court decision.
The arrival of new personnel to the police
The arrival of new people in the police could not compensate for the loss of old personnel.
Although the new cadres were loyal to the new government, they did not have professional
experience, were bound by instructions, did not undergo proper training, and so on. Since 2016,
every seventh employee has already left the ranks of the new police5, the reason for which is
disappointment in the new-old system, overload at work, etc.
The new police did not get rid of the vices of the old system. Outrageous high-profile
incidents of corruption, murder of citizens, drug and arms trafficking, and even civil strife continue
to take place. The most famous of these cases was a shootout in the village of Knyazhichi in
December 2016, during which officers of the State Security Service (subordinate to the Ministry
of Internal Affairs) and one of the special police units clashed. As a result, 5 law enforcement
officers were killed6. In total, in 9 months of 2016, according to Khatia Dekanoidze, at that time
the head of the National Police, 900 criminal cases were opened against police7. We are talking
about corruption, bribes, abuse of office. According to the official statistics of the Prosecutor
General's Office, in 2016, 1,140 criminal cases were initiated under the article “Excessive power
or official powers by law enforcement officers”. However, out of all this array of cases, only 58
cases were served with a notice of suspicion, only 46 cases were sent to the court with an
indictment.
At the same time, no decisions were made on 1,094 criminal offenses by the end of 2016.
Proceedings were closed for 2,459 criminal offenses8.
592,604 criminal offenses registered.
4 Rzheutskaya L. Police reform in Ukraine fails. 06/07/2016. DW. https://www.dw.com/ru/police-reform-in-ukraine-
failure/a-19312304
5 For three years of work of the National Police, every seventh policeman quit it
- auditors. 28.06.2018. Glavred. https://glavred.info/ukraine/513517-za-tri-goda-raboty-nacpolicii-iz-nee-uvolilsya-
kazhdyy-sedmoy-policeyskiy-auditory.html
6 Shooting in Knyazhichi: GPU named suspects. 05/17/2018. Correspondent.
https://korrespondent.net/ukraine/3971847-strelba-v-kniazhychakh-hpu- nazvala-podozrevaemykh
7 Dekanoidze: They got 900 records from dishonest policemen. 03.11.2016. Ukrinform.
8 In 2016, the number of crimes in Ukraine increased, including second-degree felonies by 20%. Detailed
statistics, 01/19/2017. ASN. http://asn.in.ua/ru/news/publishing/82847-za-2016-god-v-ukraine-vozroslo-
5
Since 2013, there has been a permanent increase in crime in Ukraine. The 2015 police
reform failed to stop the increase in the number of crimes, which continued against the background
of its activities.
In 2016, 592,604 criminal offenses were registered in Ukraine, which is 27,422 more than
in 2015. The number of second-degree felonies has significantly increased: from 177 855
recorded in 2015 to 213,521 in 2016, which is 35,666 (or 20%) more9. Characteristically, crime
statistics have especially worsened in key cities and regions. In 2016, 73 thousand criminal cases
were registered in Kyiv, which is 16% more than in 2015 (then there were 63 thousand)10. In the
Kharkiv region in 2015, 40.9 thousand criminal cases were registered, and in 2016 - 50.5
thousand (an increase of 23.5%)11. In the Odessa region in 2016, 34 thousand crimes were
registered12. This is 18% more than in 2015 (29 thousand crimes).
The situation with the registration of murders in Ukraine casts doubt on the credibility of
the official statistics on this matter. So, in 201313, 5861 murders were recorded, in 2015 - 8,22414,
and since 2016 the situation is difficult. According to the official statistics of the Prosecutor
General's Office, in the period from January to October 2016, 7,059 murders were committed15,
and from January to December 2016 - only 5,992 murders16. The data for a similar (and even more
extensive) period do not coincide, and those that were published later give smaller numbers. This
may indicate a falsification of statistics, which is generally characteristic of the Ukrainian law
enforcement system.
The number of crimes against property has increased
So, in 2013, 334 thousand were recorded, in 2015 - 362 thousand, and in 2016 - 405
thousand criminal offenses against property, which is almost 20% more than in 2013.
In particular, special attention is drawn to the growth of the facts of thefts, of which 242
thousand were recorded in 2013, 273 thousand in 2015, and 312 thousand in 2016, which is 30%
more than in previous years. The number of more socially dangerous crimes, namely robberies, is
also significantly increasing. In 2013, 22 thousand robberies were recorded (as in 2015), and in
9 Ibid.
10 In 2016, the number of criminal offenses in Kyiv increased by 16%. 10.02.2017. Voice.ua.
https://golos.ua/i/476663
11 The most criminal area was identified in Kharkiv. 31.01.2017. CityX. http://gx.net.ua/chp/v-harkove-obnaruzhili-
12 In the Odessa region, the number of serious crimes has increased significantly. 19.01.2017. Odessa.ua.
13 Single call about criminal law-enforcers, chest 2013 p. General Prosecutor's Office of Ukraine, Kyiv, 2014.
14 Single call about criminal law-enforcers, chest 2015 p. General Prosecutor's Office of Ukraine, Kyiv, 2016.
15 Vedomosti about criminal law-enforcers of past fate, January 2016, General Prosecutor's Office of Ukraine, Kyiv,
2016.
16 Information on material damage, their compensation and seizure of objects of criminal activity, December 2016,
General Prosecutor's Office of Ukraine, Kyiv, 2017
6
2016 - 27 thousand robberies. The number of robberies increased from 2,856 in 2013, 3,558 in
2015 to 3,904 in 201617.
The number of road accidents has slightly decreased
As for car thefts, if in 2013 there were 6,531 hijackings (of which 3461 were disclosed),
in 2015 11137 cars were stolen (3584 hijackings were disclosed), then in 2016 (without
December) 11353 cars were stolen. and solved 3068 crimes18.
Compared to 2013, the number of road accidents and their victims has slightly decreased.
In 2013, 190 thousand road accidents were recorded (of which 10.5 thousand were in the Crimea
and Sevastopol). They killed 4833 people, 37521 were injured. In 2015, there were 134 thousand
road accidents, 3,970 people died in them, 31,467 were injured. Crimea and Sevastopol were not
included in the statistics. In 2016, there were already 154 thousand road accidents (an increase of
11.6%), in which 3187 people died and 32,079 were injured19.
Change in the number of prisoners
The number of prisoners has also decreased in Ukraine20. If in 2013 there were 127
thousand of them, then in 2016, after the adoption of the new Criminal Procedure Code21 and the
so-called Savchenko Law22, there were 60 thousand of them or 167 prisoners per 100 thousand
people. For comparison, in the United States, this figure is 666 prisoners per 100 thousand people,
in Russia - 436, in Poland - 189.
The situation in the field of drug trafficking
Officially, the drug trafficking situation has improved tremendously. In 2013, 33,982
crimes in this area were recorded, in 2015 - 25,908, and in 2016 - 23,02923. However, a decrease
by more than one-third in the number of crimes in the sphere of drug trafficking raises obvious
doubts about the reality of these figures. Especially in the conditions of war and socio-economic
crisis. Even the lack of statistics from Crimea and part of Donbas cannot compensate for this. One
17 Ibid.
18 Hold me tight: Ukraine is covered by a wave of car thefts. 12/18/2016. Observer.
https://www.obozrevatel.com/auto/news/78104-ugon-avto-kyiv-ukraina-statistika-kak-izbezhat.htm
19 Statistics of accidents in Ukraine, Management of road safety. http://www.sai.gov.ua/ua/ua/static/21.htm
20 The number of prisoners in Ukraine last year decreased at a record level. 01/17/2014. 112.ua.
https://112.ua/obshchestvo/kolichestvo-zaklyuchennyh-v-ukraine-v-proshlom-godu-rekordno-umenshilos-
21 Criminal Procedure Code of Ukraine. Edition from 11.01.2019. https://zakon.rada.gov.ua/laws/show/4651-17
22 Law of Ukraine "On the introduction of amendments to the Crimean Code of Ukraine, which stipulates the order
for the court to secure a line before the forefront of the line of punishment."
http://search.ligazakon.ua/l_doc2.nsf/link1/T150838.html
23 Statistical information. General Prosecutor's Office of Ukraine.
https://www.gp.gov.ua/ua/stst2011.html?dir_id=112661&libid=100820
7
can make an assumption either about the falsification of statistics by the Prosecutor General or
about the strengthening of the coverage of the drug mafia by law enforcement officers.
Crime statistics
Ex-Minister of Justice Olena Lukash in an interview with RIA Novosti said that the current
Ukrainian government falsified police statistics and the real increase in crime is much more official
data. So, according to the ex-minister, from 2013 to 2016. kidnapping increased by 264%, vehicle
thefts - by 100%, murders - by 67%, robberies - by 46%. In 2016, 187 thousand second-degree
and first-degree felonies were committed in Ukraine. 444 thousand people suffered from the
actions of criminals. 6,988 people were killed24.
On the one hand, a representative of the previous government can be suspected of wanting
to denigrate the current government as much as possible, which could explain such high declared
figures for statistics of criminal offenses. On the other hand, the “post-revolutionary” Ukrainian
government can really underestimate statistical indicators to maintain its rating and make attempts
to reduce social tension.
When considering any figures (official or expert) regarding statistics on crimes in Ukraine,
it should be borne in mind that if in 2013 police statistics covered 46 million people, then as of
2017 the population of Ukraine has decreased: 2.5 million people stayed in Crimea, 4 million live
in territories controlled by the DPR and LPR, at least 1 million people emigrated from Ukraine.
Now the real population of Ukraine, i.e. in its legal field, is no more than 40 million people. At the
same time, official statistics take into account all 46 million: both the population living in Crimea
and in certain areas of the Donetsk and Luhansk regions. Thus, the actual number of crimes per
capita has grown even more than indicated in the statistics.
It may be tempting to attribute the explosive growth in crime to war. Indeed, the increase
in the number of crimes began in 2014. However, hostilities in 2015 and 2016 did not even
remotely resemble the large-scale battles of 2014 (with the exception of Debaltsevo at the
beginning of 2015). The front line stabilized, both sides began to form new authorities in the
controlled territories. But, despite the actual freeze of the conflict, the growth of crimes did not
stop.
International experience: the example of Israel
When analyzing the effectiveness of the updated law enforcement system, it will be
interesting to consider the experience of Israel. In a country that is permanently in a state of
conflict, throughout the 2000s there was a decrease in crime. In 2007, in terms of the crime rate,
Israel ranked in the international rankings between Finland and Luxembourg (61 crimes per 1000
24 Vinogradov Z. Elena Lukash: I admit my responsibility for the coup in Ukraine. 02/01/2017. RIA News.
https://ria.ru/20170201/1486936273.html
8
people)25 25. A certain increase in crime occurred in 2006 during the Second Lebanon War - by
4.2%. However, already in the next year, there was a drop in the crime rate by more than 6%26 26.
Thus, there are good reasons to doubt the statements of Ukrainian officials that the increase in the
level of crime is associated exclusively with the ongoing armed conflict. Of course, the outbreak
of war often activates criminals, but the end of active hostilities is followed by a rollback. In
Ukraine, due to the inability of the “post-Maidan” authorities to strengthen the law enforcement
system, this rollback did not occur and the growth of crime continued.
As for the crime detection rate, according to General Prosecutor Yuriy Lutsenko, it has
dropped significantly. In 2013 45% of all crimes were solved, in 2015 - 39%, then in 2016 - less
than 30% of crimes. Tellingly, the worst disclosure is observed in cities and key regions (in terms
of maintaining stability in the state). In Kiev, the disclosure rate is 16%, in Odessa - 20%, in the
Kharkov region - 22%27.
In March 2016, First Deputy Prosecutor General Yuriy Sevruk announced other figures:
10% of disclosure in Kiev and 20% - on average in Ukraine. It is unlikely that the disclosure rate
could have grown by one and a half times in a year28. The figures cited by Yu. Sevruk seems to be
more objective than those given by Y. Lutsenko, who is personally interested in presenting to
society a picture of what is happening that is “correct” for the authorities.
As for the confidence of Ukrainian citizens in the police, since the moment Ukraine gained
independence, it has been consistently low. 13% of Ukrainians fully or predominantly trusted the
police in 1994, 12% in 2005 and 9% in 2012. Immediately after the new police began to work, the
leadership of the Ministry of Internal Affairs began to issue victorious and somewhat fantastic
reports about the explosive growth of trust Ukrainians to the new police. In particular, the Minister
of Internal Affairs A. Avakov in October 2015 declared that 85% of citizens had confidence in the
police29. Tellingly, in May 2016 he already spoke about 44% trust30.
However, sociological research data show only a slight increase in Ukrainians' trust in the
police. Thus, according to the data of the Kiev International Institute of Sociology, published in
January 2016, 14.9% trusted the National Police (the successor to the police), and 20.7% trusted
the patrol police31.
"The cost of crime"
25 Central Bureau of Statistics of Israel: https://www.cbs.gov.il/EN/pages/default.aspx
https://www.gov.il/he/Departments/
ministry_of_public_security דרושים אנשי שטח ליחידת העילית של הרשות להגנת עדים 26
27 The crime detection rate in Ukraine has fallen sharply. 02/15/2017. Correspondent:
https://korrespondent.net/ukraine/3815247-raskryvaemost-prestuplenyi-v-ukrayne-rezko-upala
28 The crime detection rate in Kiev fell to 10%, in Ukraine - to 20%,
- Sevruk. 03/19/2016. 112.ua: https://112.ua/avarii-chp/uroven-raskryvaemosti- prestupleniy-v-kieve-snizilsya-do-10-po-ukraine-do-20-sevruk-299280.html
29 The level of trust of Ukrainians in the patrol police was 85% - Avakov. 04.10.2015. RIA Novosti Ukraine.
https://rian.com.ua/video/20151004/374695067.html
30 Avakov: The level of trust in the police is 44%. https: // sharij. net / 54749
31 Trust in social institutions and groups. КМІС: http://kiis.com.ua/?lang=ukr&cat=reports& id =579&page=1
9
We tried to calculate the “cost of crime” for the economy; damage from criminal activity
and the fight against it for the country's economy. Such studies are typical primarily for the United
States, where the average “cost” of the main types of crime for the economy is calculated.
According to RAND Corp., which is based on statistics from the Los Angeles Police Department
and the FBI, in 2010 the average “cost of crime” for the economy was as follows: murder cost $
8.6 million, rape $ 217 thousand, robbery - $ 67 thousand, robbery - $ 13 thousand, theft - $ 2.1
thousand32.
Unfortunately, we could not find similar calculations from the Ukrainian law enforcement
agencies. Therefore, we made an extrapolation of American indicators to Ukrainian realities,
taking into account the difference in Gross Domestic Product (GDP) in terms of purchasing power
parity3333. In 2013, the US GDP at PPP was $ 16.9 trillion, in 2015 - $ 18 trillion. In 2013,
Ukraine's GDP in terms of PPP was equal to $ 390 billion, in 2015 - $ 340 billion.Thus, the
difference in GDP in terms of PPP of the two countries in 2013 was 43 times, in 2015 - 53 times.
At the time of the study (end of 2016), there was no data on GDP at PPP for 2016. The average
US dollar exchange rate in 2013 was UAH 8, in 2015 the dollar fluctuated and at the end of the
year was equal to UAH 23.5.
Based on the above indicators, the “cost” of the corresponding crimes for the Ukrainian
economy is as follows: in 2013, murder “cost” the economy $ 200,000, rape - $ 5046, robbery - $
1558, robbery - $ 302, theft - $ 48; in 2015 murder cost $ 162 thousand, rape - $ 4094, robbery -
$ 1264, robbery - $ 245, theft - $ 39.
Thus, based on the official number of crimes, in 2013 murders “cost” the economy $ 1.172
billion, rape - $ 2.5 million, robberies - $ 4.4 million, robberies - $ 6.8 million, theft - $ 11.6
million. Total $ 1.195 billion.
In 2015, the murders "cost" the economy $ 1.332 billion, forces - $ 1.3 million, robberies
- $ 4.3 million, robberies - $ 5.4 million, thefts - $ 10 million. Total $ 1.353 billion.
Conclusion
We are aware that the method we have chosen is somewhat crude and incapable of covering
the economic consequences of all crimes (both due to the falsification of official statistics, and due
to the fact that a significant part of the Ukrainian economy is in the shadows). At the same time,
our data provide a certain understanding of the economic consequences of the increase in crime in
Ukraine in recent years.
It can be concluded that the results of the reform of the law enforcement system are
disappointing. The new police did not get rid of the vices of the old system, but, on the contrary,
adopted them. The new police are unable to curb the rise in crime in the country. The crime
32 Cost of Crime Calculator. RAND. https://www.rand.org/well-being/justice-policy/ ce nters / quality-policing / cost-of-crime.html
33 World Economic and Financial Surveys, World Economic Outlook Database. https: //
www.imf.org/external/pubs/ft/weo/2016/02/weodata/index.aspx
10
detection rate is steadily declining. All this gives rise to citizens' distrust of the Ukrainian law
enforcement system and disappointment in reforms.
Afterword
Since the conduct and publication of the above study at the end of 2016, the crime situation
in Ukraine has somewhat improved. For two years in a row (in 2017 and 2018), the Ministry of
Internal Affairs and the General Prosecutor's Office of Ukraine have reported a decrease in the
number of registered crimes.
In 2017, in Ukraine, according to the Ministry of Internal Affairs, almost 496 thousand
crimes were registered. At the same time, the Prosecutor General's Office revealed 523.9 thousand
crimes for the same period34. Compared to 2016, the crime rate in Ukraine then fell by 13.6%.
Most of all thefts were committed - almost 260 thousand, but this is 16.8% less than a year earlier.
The least among all crimes was premeditated murders - just over 1.5 thousand. In 2017, the number
of crimes related to illegal handling of weapons increased significantly, by 29% - almost 7.9
thousand cases were recorded. The number of crimes related to drug trafficking increased by
25.1% - up to 27.8 thousand. In addition, official crimes and forging documents have become more
frequent35.
For nine months of 2018, according to the Ministry of Internal Affairs, the crime rate in
Ukraine compared to the same period in 2017 decreased by 8%36. At the same time, the number
of second-degree and first-degree felonies from this number decreased by 11%
– From 155 thousand to 138 thousand. The largest number of crimes committed is theft
(191 thousand) and fraud (27 thousand). In addition, the number of premeditated murders
decreased.
- from 1185 to 1168. The number of robberies decreased by more than a quarter - from
2224 to 1622. There were 25% fewer robberies: in 2017 there were 14.2 thousand, in 2018 - 10, 6
thousand thefts were registered by 12% less (216.6 thousand compared to 191.5 thousand)37.
At the same time, according to statistics published by the General Prosecutor's Office in July 2018,
the overall crime rate in Ukraine decreased, but the number of especially serious crimes increased.
- committed with extreme cruelty, cynicism, or on an especially large scale, for which
punishment is from 10 years in prison to life38. At the same time, according to the GPU at the end
of the year, there were 412 more criminal proceedings under the article "premeditated murder"
34 Crime in Ukraine: statistics for the last year. Word and deed. https: //
ru.slovoidilo.ua/2018/02/16/infografika/obshhestvo/prestupnost-ukraine-statistika- proshlyj-god
35 Ibid.
36 In 2018, the rotsi zalnyy rivnosti in Ukraine went down in the most recent times. Ministry of Internal Reference
http://mvs.gov.ua/ua/news/16243_U_2018_
roci_zagalniy_riven_zlochinnosti_v_Ukraini_znizivsya_na_visim_vidsotkiv_FOTO. htm
37 Ibid.
38 The bandits in Ukraine have become more cynical. Today. https://www.segodnya.ua/ukraine/ b andity-v-ukraine-stali-cinichnee-1153685.html
11
than in 2017, cases of kidnapping people - by 49, and one hundred more bribe-takers were
identified among officials39.
As can be seen from the latest statistics, despite the general decrease in the number of
registered crimes, there is an increase in some categories of serious offenses. Over several years
of reforming the law enforcement system, the “new” police officers have gained the necessary
experience to disclose and prevent the simplest crimes (such as domestic crimes or theft), but
effectively counter illegal trafficking they have not learned from drugs and weapons, as well as to
prevent an increase in the number of crimes committed with special cynicism.
In this regard, it seems that for the reformed National Police, the problem of the lack of
professionals and employees in the investigative and operational units remains urgent, while the
problem of the formation of a new patrol police has been largely resolved.
39 Crime statistics of 2018: more murders and attacks by hackers. Today.
https://www.segodnya.ua/ukraine/kriminalnaya-statistika-2018-goda-stalo- bo lshe-ubiystv-i-atak-hakerov-1205078.html
12
UKRAINIAN INSTITUTE FOR ANALYSIS AND POLICY MANAGEMENT
The cost of reforms. Police.
September 2017
Kiev
Research author:
Maxim Semyonov
Director
Bortnik Ruslan Olegovich
Tel .: +38 093 757 75 65
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Number of Crimes
Number of serious and particularly serious
crimes, thousands of cases
General number of crimes, thousands
Crime Statistics
2013
2014
2015
2016
Share of second-degree and first-degree felonies
30
34
35
39
among the total number of crimes, %
Growth in the total number of crimes by 2013, %
-
-7
0
+5
Growth in the number of second-degree and
-
+6.5
+17
+37
first-degree felonies, %
Cases of delivery of notification of suspicion to
39
37
33
26
persons, %
Crimes against Property:
● total
Number of crimes against property, thousands
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Crimes against Property:
● Thefts and Robberies
Thefts, thousands
Robberies, thousands
Crimes against Property:
● hijackings
Number of hijackings of cars
Solved cases
Road traffic accidents
• 2013: 190 thousand road accidents (of which 10.5 thousand in the Crimea and Sevastopol).
They killed 4833 people, 37521 were injured.
• 2014: 153 thousand road accidents, in which 4,464 people died, 32,352 people were injured.
• 2015: 134 thousand road accidents, in which 3,970 people died, 31,467 people were injured.
• 2016: 154 thousand road accidents (an increase of 11.6%), in which 3187 people died and
32,079 were injured.
• In total, over the past 3 years, 12.4 thousand people died on the roads of Ukraine, more than
100 thousand were injured
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Drug Crimes
Drug crimes
Homicides
Homicides
• According to the official statistics of the Prosecutor General's Office, in the period from
January to October 2016, 7,059 murders were committed, and from January to December 2016 -
only 5,992 murders.
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Crime Rate Growth by Region
Number of crimes in Kyiv, thousands
Number of crimes in the Odessa region
Number of crimes in the Kharkiv region
Police crime
• During the 9 months of work of the new police, 900 criminal cases were opened against
policemen.
• In 2016, 1140 cases were initiated under the article “Abuse of power or official powers by law
enforcement officials”.
• In 58 cases, a notice of suspicion was served.
• 46 cases were sent to court with indictment.
• No decision was made on 1,094 criminal offenses by the end of the year.
• For 2,459 criminal offenses, proceedings were closed.
Number of prisoners in Ukraine
In 2013, there were 127 thousand prisoners.
In 2016, 60 thousand (adoption of the new Criminal Procedure Code and the Savchenko Law).
In 2019, 54,905 prisoners (data from the International Center for Prison Research, ICPS).
For comparison, the number of prisoners per 100 thousand inhabitants in the country (ICPS data,
2019):
• USA - 655 (No. 1);
• Russia - 381 (No. 18);
• Poland –196 (No. 76);
• Ukraine - 153 (No. 103)
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Budget of the Ministry of Internal Affairs
Budget, billions of hryvnia
Increased crime due to war
One of the explanations for the surge in crime in recent years is the war that has been
going on in the country for six years. However, active hostilities in Ukraine ended in February
2015; more than four years ago.
For comparison, the experience of Israel. During the Second Lebanon War (2006), there
was a surge in crime by 4.2%, but the very next year after the end of hostilities, crime fell by 6%
Crime Detection
Percentage of crime detection
Crime detection (Yuri Sevruk, the first deputy of Prosecutor General, March 2016):
10% in Kyiv
20% on average in Ukraine
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Trust in the police and police
Trust in the police, (Correspondent, 2013)
• 1994 - 13%, 2005 - 12%, 2012 - 9%.
A. Avakov's statements:
• October 2015: “The level of trust in the patrol police is 85%”.
• May 2016: “The level of trust in the police is 44%”.
Data from the Kiev International Institute of Sociology, January 2016:
• 14.9% trusted the National Police;
• 20.7% trusted the patrol police.
The "cost" of crime to the economy
• According to RAND Corp.: murder in the USA - $ 8.6 million, rape - $ 217 thousand, robbery -
$ 67 thousand, robbery - $ 13 thousand, theft - $ 2.1 thousand. We made an extrapolation of
American indicators to Ukrainian realities, taking into account the difference in GDP at PPP.
• In 2013, murders "cost" the economy $ 1.172 billion, rape - $ 2.5 million, robberies - $ 4.4
million, robberies - $ 6.8 million, thefts - $ 11.6 million. or UAH 9.560 billion.
• In 2015, murders “cost” the economy $ 1.332 billion, rape - $ 1.3 million, robberies - $ 4.3
million, robberies - $ 5.4 million, thefts - $ 10 million. or UAH 31.795 billion.
• In 2016, murders “cost” the Ukrainian economy $ 988 million, rape - $ 1.45 million, robberies -
$ 5 million, robberies
- $ 6.7 million, theft - $ 12.4 million. Total $ 1.013 billion or UAH 26.352 billion.
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Study No. 2
from the cycle "The Price of Reforms"
Education reform40
The team of authors:
Ruslan Bortnik
Nikolay Spiridonov
Denis Gaevsky
Maxim Semyonov
Daniil Bogatyrev
Current situation
The sphere of education is the basis for the long-term cultural, humanitarian and socio-economic development of the state. Education requires increased attention from the authorities and
society. Alas, the state of the education system in Ukraine is of great concern.
After Euromaidan, under the leadership of the profile minister S. Kvit, large-scale changes
in the education system began, and under his successor L. Grinevich. And on September 5, 2017,
i.e. 3.5 years after the start of reform activities, a new law on education was finally adopted4141.
At the same time, some experts, assessing the significance of the law, called it the “Constitution
in the field of education”, so important it is for the industry.
In general, changes in the field of education for 2016 - 2019 boiled down to the following:
1. Closing of universities (in total about 80 universities)42, reduction of state-funded student
positions in universities and the number of scholarship recipients (up to 30-50% of state employees
- in the future, it is planned that no more than 10-15% of state employees will receive
scholarships)43. However, in this case, responsibility should be assigned not only to the Ministry
of Education, but also to the Ministry of Finance and the Cabinet of Ministers as a whole.
2. Closing schools and reducing the number of teachers. According to the State Statistics
Committee, in the period 2014-2017. (excluding the Autonomous Republic of Crimea and the
ATO zone) the number of general education institutions decreased by 700 - from 17.6 thousand to
16.9 thousand44. The number of teachers decreased by 16 thousand - from 454 thousand to 438
40 Initial version of presentations: https://uiamp.org.ua/cref/reforma- obrazovaniya
41 Law of Ukraine "On education" // Vidomosty Verkhovnoy Radi (VVR), 2017, No. 38-39, article 380.
https://zakon.rada.gov.ua/laws/show/2145-19
42 The number of universities in Ukraine has decreased by one third and continues to decline. Country.
https://strana.ua/news/116507-chislo-vuzov-v-ukraine-sokratilos-na-tret-i- prodolzhaet-snizhatsja-mon.html
43 In Ukraine, the number of budget-funded places in universities has been reduced by almost 10%. "Straight".
https://prm.ua/ru/v-ukraine-pochti-na-10-sokratili-kolichestvo- byudzhetnyih-mest-v-vuzah
44 Secondary education in Ukraine: how the number of schools and students decreased during the years of
independence. Word and deed. https://ru.slovoidilo.ua/2017/08/22/ infografika / obshhestvo / srednee-obrazovanie-ukraine-kak-sokratilos-kolichestvo-shkol- i-uchashhixsya-gody-nezavisimosti
20
thousand45. Increased load on the infrastructure of educational institutions and teachers, which
leads to a deterioration in the quality of education (the number of students in schools increased
from 3.757 million to 3.846 million). The processes of “optimization” are especially painful in
rural areas, where schools are closed due to decentralization, leaving only support ones within the
united territorial communities. At the same time, the distance that some pupils of such schools
have to cover every day is 50 kilometers or more. And the number of school buses in rural areas
is not enough to transport children to educational institutions.
3. Reducing funding. Lack of funding is a traditional problem in Ukrainian education. So, for
example, the state budget of Ukraine over the past 10 years until the second Maidan (for 2003-2013) for various scientific programs, scholarships, grants, etc. 6-8 times less funds were allocated
than for the armed forces, which, as we know, have been in a catastrophic state all the years of
Ukrainian independence.
Now, in connection with the armed conflict in the east of the country, government revenues
to the army's piggy bank have increased significantly and amounted to tens of billions of hryvnias,
but this has not proportionally increased the incomes of Ukrainians working in the field of science
and education. The 2019 budget allocated UAH 211.927 billion46 for defense, and UAH 126.9
billion47 for education.
In the summer of 2017, the Cabinet of Ministers of Ukraine initiated a sharp reduction in
student scholarships. Thus, the government proposes to reduce spending on social stipends by
more than a third – from 992 to 631 million hryvnias, while the cost of an academic scholarship
for students enrolled in universities subordinated to the Ministry of Education is proposed to be
reduced by 21% - from 3.98 to 3.16 billion hryvnias48. This is despite the fact that in dollar
equivalent the scholarship for a student of a higher educational institution of 1-2 levels of
accreditation (colleges, technical schools) was about $30, and for a student of a higher educational
institution of 3-4 levels of accreditation (universities) - about 40-45 US dollars. For a European
country, this is negligible, but to make the contrast more striking, one should cite the figures for a
scholarship in 2013 - over $ 100 and, for example, a scholarship for 2007 (before the world
economic crisis) - almost $140.
The cuts also affected salaries. They began to either be cut, or delayed for a month or two,
or even three, depending on the region and the level of its subsidies. Note that the reduction in
salaries (for example, for teachers) is also associated with a decrease in pedagogical workload -
from 900 hours per teacher per year to about 60049.
45 Ibid.
46 The 2019 budget sets a new record for defense and security spending in Ukraine - journalist. UNIAN:
https://www.unian.net/society/10350009-v-byudzhete- 2 019-novyy-rekord-rashodov-na-oboronu-i-bezopasnost-ukrainy-zhurnalist.html
47 State budget-2019: spending on education increased by UAH 4.5 billion. DS.
http://www.dsnews.ua/politics/gosbyudzhet-2019-rashody-na-obrazovanie-uvelicheny- na -4-5-mlrd-20112018100300
48 Cabinet Decides to Cut Expenditure on Scholarships. Reviewer. https://www.obozrevatel.com/finance/business-
and-finance/kabmin-reshil-sokratit-rashodyi-na- stipendii.htm
49 The new option for the weekend will change. Reform of the most important education.
21
4. Transfer of education from scientific to ideological lines. In educational programs for high
school students in the course "History of Ukraine", the sections "Installation and approval of the
Soviet totalitarian regime (1921-1939)", "The war of Soviet Russia with the Ukrainian People's
Republic", "Soviet occupation of Ukraine"50. The same logic fits the statement of L. Grinevich
that the Ministry of Education lacks legal grounds for dismissing teachers who pursue an “anti-state policy”51. However, the new law is already correcting this shortcoming.
In general, the education reform carried out in Ukraine has so far only led to a drop in the
quality of education. In particular, to assess the quality of school education, we can refer to the
results of the UPE (external independent assessment). For example, in 2015, the results of the UPE
surprised even ex-Prime Minister A. Yatsenyuk: “As for secondary education, we have big
problems here. 10 percent of Ukrainian graduates did not pass tests in the Ukrainian language, 25
percent of children did not pass tests in mathematics, and 70 percent of children did not answer
the question when the Association Agreement with the European Union was signed”5252.
The results of UPE turned out to be approximately the same, and in 2016 9% of applicants did not
score the minimum threshold score in the Ukrainian language and literature, 13% in the history of
Ukraine, 15% in mathematics53.
In 2017, the situation continued to be unsatisfactory. VNO in Ukrainian language and
literature did not pass 8% of applicants, 16% - in mathematics, 18% - in English, 13% - in the
history of Ukraine54.
The trend continued in 2018. The independent assessment in the Ukrainian language and
literature, which took place on June 13, did not pass 14.5% of the total number of participants55.
The decline in the quality of secondary education obviously affects the quality of higher education.
A total of 6 Ukrainian universities were included in the rating of the best universities in the world
“QS World University Rankings” for 2016-2017, and recognized as the best university in Ukraine,
KhNU im. V. N. Karazin, took only 401 place and lost 19 points in comparison with the previous
year56.
The quality of education in Ukraine is best illustrated by the United Nations Human
Development Report. Thus, in the 2016 report, Ukraine is ranked 84th among all countries in the
50 Osvіtnі programs. Ministry of Education and Science. https://mon.gov.ua/ua/osvita/ zagalna-serednya-osvita /
navchalni-programi
51 Minister of Education of Ukraine to identify separatist teachers. Vlasti.net. http://vlasti.net/news/239010
52 Ukrainian graduates upset Yatsenyuk. All news. https://123ru.net/mix/25233800
53 Results of ZNO-2016: the worst is the Ukrainian language in Western Ukraine. Lead. https://vesti-ukr.com/poleznoe/obrazovanie/162126-rezultaty-zno-2016- huzhe-vsego-ukrainskij-jazyk-znajut-na-zapadnoj-ukraine
54 How many applicants did not pass the VNO. Gazeta.ua. https://gazeta.ua/ru/articles/ life / _skolko-abiturientov-ne-sdali-vno/778283
55 VNO in Ukrainian language and literature did not pass every seventh applicant. Country.
https://strana.ua/news/146592-testy-vno-po-ukrainskomu-jazyku-ne-stali-okolo-15-protsentov-uchastnikov.html 56
Six Ukrainian universities were included in the top 1000 universities in the world. Infographics. TSN.
https://ru.tsn.ua/ukrayina/shest-ukrainskih-vuzov-popali-v-top-1000- universitetov-mira-874188.html
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world in terms of the quality of education57. In this case, the dynamics are negative. Not only is
Ukraine in this ranking among all European countries in third place from the end (only Bosnia and
Herzegovina and Moldova have worse indicators), but also its annual indicators are decreasing: in
the 2013 Report, Ukraine was in 78th place58.
As a result of the ongoing reforms, Ukraine continues to lose social capital. Graduates of
Ukrainian schools have long preferred to study in European, American and Russian universities.
The trend intensified after the Euromaidan: if 5 thousand Ukrainians entered the universities of
neighboring Poland in 2013, then in 2014 - already 10 thousand59. At the end of 2016, at least 68
thousand Ukrainians studied at foreign universities60.
Taking into account the above, in fact, education reform should be designed to correct
negative trends in the relevant area. Formally, the adoption of the new law on education is designed
to stop the degradation of education in Ukraine. As far as it is possible to do this, we will answer
during the analysis of the specific provisions of the law.
On September 5, 2017, the Verkhovna Rada of Ukraine, after lengthy discussions, adopted
the Law of Ukraine No. 2145-VIII “On Education”61. This brought a number of significant changes
to the Ukrainian educational system.
Various forms of education.
An important innovation in the law is the legalization of various forms of education. In
particular, it establishes the institutional, individual and dual forms of education62. Forms of
education such as home, network and external become equal in legal terms with classical
institutional forms.
This innovation allows you to customize the learning process. In conditions when the state
is unable to provide a quality level of education within the institutional framework, it provides
citizens with a legal alternative.
At the same time, the possible narrowing of the spread of institutional forms of education
also has negative consequences. First, citizens pay taxes to the state, which must include going to
the educational process. In case of switching to homeschooling, citizens will obviously not receive
any tax benefits for the services they have not received from the state.
57 Human Development Report 2016. Human Development for All. UNDP.
http://hdr.undp.org/sites/default/files/hdr_2016_report_russian_web.pdf
58 Human Development Report 2013. Rise of the South: Human Progress in a Diverse World. UNDP.
http://hdr.undp.org/sites/default/files/ h dr_2013_ru.pdf
59 How many Ukrainian students study abroad. Delo.ua. https://delo.ua/ lifestyle / skolko-ukrainskih-studentov-obuchaetsja-za-rubezhom-326254
60 Ibid.
61 Law of Ukraine "On education" // Vidomosty Verkhovnoy Radi (VVR), 2017, No. 38-39, article 380.
https://zakon.rada.gov.ua/laws/show/2145-19
62 Ibid.
23
Second, the government has fewer incentives to improve the quality of education. After
all, there is a risk that more active people wishing to individualize their educational process will
leave state educational institutions, and conditional “Average citizens” (as a rule, people with a
lower income, who will not have the money to hire teachers) will be content with the current low
level of education. Already today, there is a tendency in urban schools that pupils acquire the bulk
of their educational knowledge at home, working independently with tutors or parents.
In addition, a new level of education is emerging - vocational higher education63. It is assumed
that it will be possible to obtain education at this level simultaneously with obtaining a complete
secondary education.
In fact, vocational guidance of pupils is supposed already in the senior grades. This
initiative is useful because it gives adolescents an opportunity to get an idea of their future
profession even before entering higher education institutions. However, the question arises as to
how this innovation will be implemented. Without retraining teachers and lecturers, adjusting
educational programs, etc. it will remain on paper.
Another interesting innovation of the law is the actual legalization of tutoring (Article 22.).
According to the document, individual entrepreneurs (IE) can provide educational services on an
equal basis with educational institutions. Before the adoption of the law, a significant part of
teachers worked as tutors. The above innovation was intended to legalize their activities. It should
be borne in mind that the legalization of tutoring can generate corruption. In particular, teachers
can be forced to take additional paid classes that have already been legalized.
At the same time, the law does not contain any norms that would stimulate teachers to
obtain legal status, which means to deal with reporting and pay taxes. For this reason, the
legalization of tutoring is likely to remain on paper.
Position of teachers
Increasing teachers' salaries is one of the key provisions of the 2017 law on education. We
are talking about the establishment of the minimum wage for teachers in the amount of UAH 10
thousand. The original bill referred to an increase to the size of two minimum wages (at that time
- about 6 thousand hryvnias). Then, the estimated salary of a teacher, when discussed in parliament,
was increased to 3 minimum wages (in 2017 - about 9.5 thousand hryvnias), and then increased to
10 thousand hryvnias.
It is assumed that for each successive qualifying category, the salary is increased by 10%.
The law also establishes bonuses for seniority: more than 3 years - + 10% of the salary, more than
10 years - + 20% of the salary, more than 20 years - + 30% of the salary.
Another 20% the law prescribes to pay extra for those who voluntarily passed the
certification of teachers.
63 Ibid.
24
According to the authors of the bill, the increase in teachers' salaries up to UAH 10
thousand. was supposed to become a powerful support for this traditionally socially unprotected
group of the population and increase the prestige of the profession. However, the reality does not
correspond to these plans. According to the Minister of Education Lilia Grinevich, as of September
2018, the average salary of educational workers in Ukraine amounted to 7,400 hryvnia. The
Minister noted that in the future it will gradually increase and only after 2020 teachers will be able
to receive a salary of at least 11 thousand hryvnias64.
Above it was said about a 20% allowance for voluntarily passing certification of teachers.
This is an extremely useful initiative that has the potential to improve the skills of teaching staff.
However, as of the beginning of 2019, the legislation lacks mechanisms for the implementation of
this provision. They have yet to be created by the government. Accordingly, independent
certification and the accompanying increase in teachers' salaries remain nothing more than a good
intention of the authorities.
Qualifications
The law pays special attention to improving the qualifications of teachers. In particular, it
formalizes various types and forms of professional development of teachers. We are talking about
both institutional and dual forms in the workplace.
Teachers are given more freedom in choosing opportunities to improve their qualifications,
which can potentially be a huge advantage for Ukrainian secondary education. At the same time,
one cannot exclude an increase in the activity of swindlers and fraudsters in the educational sphere.
According to the law, the National Qualifications Agency was created in early 201865. It is
intended to become a link between the education system and the labor market. For Ukraine, a
typical situation remains when graduates of even top universities do not have the skills and
qualifications that would allow them to meet the market requirements. The agency being created
is designed to analyze the labor market, in particular, relevant and promising skills / skills, and
adjust educational programs in accordance with these data.
If the National Qualifications Agency turns out to be effective and implements the tasks
set before it, this will become a tangible positive change that will affect both the Ukrainian
education system and the Ukrainian labor market.
Also, the concept of National Qualifications Levels appears in the law. The essence of this
innovation is to formalize the levels of qualifications according to a person's ability to perform
certain actions. For example, a zero-qualification level implies the ability of a person to act
independently in simple known situations under the direct supervision of another person. And the
tenth level of qualification presupposes the person's ability to identify and solve socially significant
64 How and when will teachers' salaries be increased: commentary by Grinevich. 24 channel.
https://24tv.ua/ru/kak_i_kogda_budet_proishodit_povyshenie_zarplat_uchiteljam_
kommentarij_grinevich_n1041324
65 The National Qualifications Agency has been established in Ukraine. Loyer: http: // loyer. com.ua/ru/v-ukraine-sozdano-natsionalnoe-agentstvo-kvalifikatsij
25
problems. Accordingly, the acquisition of different levels of qualifications occurs at different
levels of education.
This innovation is a useful systematization, since within the framework of the activities of
the National Qualifications Agency it will allow determining the level of qualifications of a
particular person or educational institution and adapting curricula in accordance with these data.
Thus, the issue of professionalization of education should be resolved.
The problem is that for this system to function effectively, trained personnel (at least at the
top to begin with) and regular funding are needed. As of the beginning of 2019, there are no clear
conditions for the successful implementation of the initiative with qualifications in the Ukrainian
education system.
Property and finance
An important change, which was emphasized by the drafters of the law, is a ban on the
privatization of property of educational institutions, as well as a ban on the use of this property for
any purpose other than education. In particular, the lease, concession and operational management
of any movable and immovable property is prohibited. In addition, the property of educational
institutions, according to the law, cannot be a subject of collateral, a source of debt repayment, etc.
Proponents of this innovation rightly noted that it will become an important element in the
fight against illegal seizure of land and premises from schools.
School management
According to the law “On Education”, school principals can hold office for no more than
2 terms of 6 years each. For first-time appointment of director, the first term of office is 2 years.
Supporters of this norm note that this will contribute to the renewal of management personnel in
schools, and will attract young and progressive teachers.
However, this rule may also have negative consequences. In particular, we are talking
about rural schools, which, in principle, are characterized by a shortage of teachers. Accordingly,
in schools with several teachers, it will be impossible to implement this provision of the law.
It should also be borne in mind that the established maximum tenure of a school principal of 12
years is fairly long. This corresponds to the full cycle of school education. And if we imagine that
this norm would have come into force in 2005 after the Orange Revolution, then, having assumed
the position of director, person X would have left this position only in 2017.It is worth recognizing
that for a real renewal of management personnel, where shorter terms of office.
Education in the regions
26
The situation in rural schools is closely related to the ongoing unification of territorial
communities, leading to the closure of schools in small villages. According to the law on education,
schools should remain only in the centers of the united territorial communities.
As a result, a situation will develop (and in part has already developed) in which the nearest school
A school providing complete secondary education may be located at a distance of 50 km
from the place of residence. This leads to further degradation of education in the regions.
Obviously, it will physically be extremely difficult for children, if at all possible, to travel 50 km
to the nearest school every day.
Secondary vocational education will also face serious problems. Since 2017, funding for
specialized secondary education institutions has been carried out from local budgets, and only in
the absence of adequate funds in them, the state allocates an educational subsidy. This situation
has already turned into a series of high-profile scandals with the closure of vocational schools in
the regions due to lack of funds66.
Thus, the right to secondary education guaranteed by the Constitution is violated. Local
vocational education is being questioned. In all likelihood, funding problems will continue to arise
locally, and the receipt of subsidies from the state, given the low quality of the work of the
bureaucratic apparatus, will be delayed or even absent altogether.
Education in the languages of national minorities
The most resonant provision of the Law “On Education”, which has caused sharp criticism
both within the country and abroad, is the linguistic component of the new law (Article 7). Thus,
the law, in fact, abolishes education in Ukraine in the languages of national minorities.
First, it should be noted that the “linguistic” norm of the law on education grossly violates
Ukrainian and international legislation. Here are some quotes from the Constitution of Ukraine
and the UN Convention on Non-Discrimination in Education.
According to article 10 of the Constitution of Ukraine, the state language in Ukraine is
Ukrainian. […] In Ukraine, the free development, use and protection of Russian and other
languages of national minorities of Ukraine is guaranteed. The state promotes the study of
languages of international communication67.
Article 22. The rights and freedoms of man and citizen, enshrined by this Constitution are
not exhaustive. Constitutional rights and freedoms are guaranteed and cannot be abolished. When
adopting new laws or amending existing laws, it is not allowed to narrow the content and scope of
existing rights and freedoms68.
66 In Ukraine, the Cabinet of Ministers is destroying vocational schools with particular cynicism. You don't need
education to earn money. UA.reporter: https://ua-reporter.com/news/v-ukraine-kabmin- s-osobym-cinizmom-unichtozhaet-ptu-na-zarabotkah-obrazovanie-ne-nuzhno
67 Constitution of Ukraine // Vidomosty Verkhovnoyi For Ukraine (VVR), 1996, No. 30, art. 141.https:
//zakon.rada.gov.ua/laws/show/254k/96-vr
68 Ibid.
27
Article 24. Citizens have equal constitutional rights and freedoms and are equal before the
law. There can be no privileges or restrictions based on race, skin color, political, religious and
other beliefs, gender, ethnic and social origin, property status, place of residence, linguistic or other
characteristics69.
Article 53. Everyone has the right to education. Complete general secondary education is
compulsory. The state ensures the availability and free of charge of preschool, complete general
secondary, vocational and higher education in state and communal educational institutions; […].
Citizens belonging to national minorities, in accordance with the law, are guaranteed the right to
education in their native language, or to study their native language in state and communal
educational institutions, or through national cultural societies70.
The UN Convention against Discrimination in Education71 elaborates on the concept of
discrimination in education:
1. In this Convention, the expression “discrimination” includes any distinction, exclusion,
restriction or preference based on [...] language [...] of national or social origin, and in particular:
a) blocking access to education of any level or type for any person or group of persons;
(b) Restricting the education of any person or group of persons to a lower level of education72.
As you can see, the UN Convention and the Constitution of Ukraine exhaustively formulate
the concept of “discrimination in education” and guarantee the citizens of Ukraine the broadest
rights in the field of education (including in the languages of national minorities).
However, the “linguistic” norm of the law is in conflict not only with the Constitution of
Ukraine and the UN Convention, but also with other articles of the same law.
So, in Art. 3 pt. 2 expressly stipulates the impossibility of any restrictions on the right to
receive education. And Art. 12 "On complete general secondary education, among other
competencies that a student forms at school", notes the ability to communicate in the native (if
different from the state) language. How this can be ensured by depriving the student of the
opportunity not only to study in their native language, but even to learn their native language at
school is completely incomprehensible.
Unfortunately, the new law in its provisions grossly violates the above-mentioned norms.
Let's consider the specific discriminating components of the “linguistic” norm of the law.
Teaching in the languages of national minorities is possible only in primary preschool
education in separate classes (groups). Obtaining general secondary education in the languages of
national minorities is possible until 2020 (later there were proposals to extend the “transition
period”, but this did not change the essence7373), and then only for those who had previously
69 Ibid.
70 Ibid.
71 Convention against Discrimination in Education. Adopted on December 14, 1960 by the General Conference of
the United Nations Educational, Scientific and Cultural Organization at its eleventh session. http: //
www.un.org/ru/documents/decl_conv/conventions/educat.shtml
72 Ibid.
73 Law on Education: Klimkin allowed an increase in the transition period for the language of instruction of
national minorities. UNIAN. https://www.unian.net/politics/10366953- z akon-ob-obrazovanii-klimkin-dopustil-uvelichenie-perehodnogo-perioda-dlya- yazyka-obucheniya-nacmenshinstv.html
28
studied in the languages of national minorities ... This opportunity will be canceled for this
category of students from 2020. For other categories of students, not previously trained in the
languages of national minorities, this provision of the law comes into force in 2018.
For indigenous peoples, separate classes (groups) are allowed for teaching and learning
their languages in secondary school. The concept of “indigenous peoples” is not defined in the
legislation, but they traditionally mean the Crimean Tatars, Krymchaks and Karaites.
The law declares guarantees for the study of languages of international communication, in
particular English. In educational institutions, according to the norm of the law, one or several
disciplines (the exact number is not regulated by the law) can be taught in two languages - state,
English, in other official languages of the EU.
It is obvious that these norms grossly violate the Constitution of Ukraine, international
humanitarian law and human rights. The provisions of the law on education are aimed at increased
Ukrainization and ousting the languages of ethnic minorities from the educational sphere.
About 400 thousand people study in the languages of national minorities in almost 750
educational institutions74.
Over 355 thousand students’ study in Russian in 581 Russian schools. It is important to
note that it was Russian-language schools that were most often closed in Ukraine. So, if in 2004
there were 1,555 Russian schools in Ukraine, then by 2017 their number decreased by 3 times - to
581. The number of schools in which teaching was conducted in the Ukrainian and Russian
languages decreased from 2,121 schools in 2004 to 542 in 2017 The number of pupils studying in
the Russian language decreased from 1.2 million in 2004 to 355 thousand in 2017 The number of
pupils studying the Russian language decreased from 1.5 million in 2004 to 919 thousand in
201775.
16 thousand children study in 75 Romanian schools. In 2004, there were 95 Romanian
schools in Ukraine with 26,000 students. The number of schools in which teaching was conducted
in the Ukrainian and Romanian languages increased from 8 schools in 2004 to 20 in 2017. The
number of pupils studying the Romanian language decreased from 174 thousand in 2004 to 4
thousand in 201776.
16 thousand children study in 71 Hungarian schools. In 2004, there were 74 Hungarian
schools in Ukraine with 19 thousand students. The number of schools in which teaching was
conducted in Ukrainian and Hungarian decreased from 30 schools in 2004 to 26 in 2017.The
number of pupils studying the Hungarian language decreased from 1,454 in 2004 to 1,110 in
201777.
74 About 400 thousand people study in the languages of national minorities in approx. 750 educational institutions.
Today. https://www.segodnya.ua/politics/v-
minobrazovaniya-obyasnili-normu-o-yazyke-obucheniya-v-novom-zakone-1054688. html
75 The data on education in the language of national minorities in Ukraine were announced. Bigmir.net.
http://news.bigmir.net/ukraine/1106944-Ozvucheny-dannye-ob-obuchenii-detej-na- 43
76 Ibid.
77 Ibid.
29
1,785 children study in 5 Polish schools. In 2004, there were 5 Polish schools in Ukraine
with 1,418 students. The number of schools in which teaching was conducted in the Ukrainian and
Polish languages decreased from 2 schools in 2004 to 1 in 2017.The number of students studying
Polish increased from 5533 in 2004 to 45.9 thousand in 201778.
As of the end of 2018, 2,693 students attend 3 Moldovan schools. In 2004, there were 8
Moldovan schools in Ukraine with 6128 students. The number of schools in which teaching was
conducted in the Ukrainian and Moldovan languages increased from 4 schools in 2004 to 10 in
2017.The number of pupils studying the Moldovan language increased from 1335 in 2004 to 2474
in 201779.
In 2018, there was not a single Crimean Tatar school in Ukraine. In 2004, there were 14 of
them, with 4797 students enrolled in them. By 2014, there were 15 Crimean Tatar schools in
Ukraine with 5,551 students. In 2004, the Crimean Tatar language was studied by 26.5 thousand
pupils. By 2014, there were 12.7 thousand of them left, and as of 2017 (without accounting for the
uncontrolled territory of Crimea) - a total of 340 students80.
The language norm of the law on education immediately drew sharp criticism from the
international community. The Ministries of Foreign Affairs of Hungary, Romania, Moldova and
Russia have expressed their protest in this regard.
Hungarian Foreign Minister Peyter Siyjarto called the new law on education “shame and
shame”, ordered Hungarian diplomats not to support any initiative of Ukraine in the international
arena, as well as to hinder the implementation of initiatives important for Ukraine81.
Moldovan President Igor Dodon called on Ukraine to revise the law on education82.
According to him, the implementation of this legislative act will lead to the denationalization of
the Moldovan community in Ukraine.
The Romanian President canceled his visit to Ukraine in protest against the “linguistic”
norm of the law83.
On the eve of the presidential and parliamentary elections, the authorities prefer to play on
the nationalist electoral field. Refusal from teaching in the languages of national minorities is an
absolutely populist step.
Financing education reform
78 Ibid.
79 Ibid.
80 Ibid.
81 Hungarian Foreign Ministry announced a boycott of Ukraine because of the new law on education. UNIAN.
https://www.unian.net/politics/2126014-mid-vengrii-obyyavilo-boykot- u kraine-iz-za-novogo-zakona-ob-obrazovanii.html
82 Dodon urged Ukraine to revise the law on education. Telegraph. https: //
telegraf.com.ua/ukraina/politika/3605978-dodon-prizval-ukrainu-peresmotret-zakon- ob-obrazovanii.html
83 Language question. What are Romania, Moldova and Hungary unhappy with. League.net.
https://www.liga.net/politics/opinion/yazykovyy-vopros-chem-nedovolny-rumyniya- mo ldova-i-vengriya
30
A traditional problem, which a significant part of the Ukrainian reforms rests on, is the lack
of funds for their implementation. On July 6, 2017, the Prime Minister of Ukraine Volodymyr
Groysman said that the country does not have enough $ 3 for education reform billion84. 4 days
later, the prime minister announced the cost of the reform in the national currency - UAH 87
billion. (already $ 3.2 billion)85.
To understand the size of these figures, we note that in the period 2014-2017. The budget
of the Ministry of Education increased by only 8.2 billion UAH.
–From UAH 24 to 32.2 billion. in a year.
According to the 2018 budget, the Ministry of Education allocated UAH 95.47 billion,
while in 2017 UAH 85.43 billion was allocated86.
In the budget for 2019, as noted above, the amount of allocations for education amounted
to 126.9 billion hryvnia87.
Thus, in spite of the declared problems with financing, the expenditures on education for
2017 - 2019. have grown significantly. Nevertheless, they are still not enough to achieve the
statutory figure of 10 thousand hryvnias. as the minimum wage for a teacher.
According to Art. 78 of the Law on Education, funding for education must be at least 7%
of GDP. Taking into account the fact that in Ukraine so much is not spent on any sphere (even on
defense), the real implementation of this provision is hardly possible.
Conclusion
Summing up the results of 5 years of reforms in Ukrainian education, the following results
can be noted:
First, the education reform did not lead to an improvement in its quality. On the contrary,
we can state the continuing degradation of secondary education, which is expressed as in the results
UPE, and in the position of Ukrainian universities in international rankings.
Secondly, there is an outflow of social capital from Ukraine. Since the start of the education
reform, the number of Ukrainian citizens who prefer studying at foreign universities has grown
sharply and, as of the beginning of 2019, almost 70 thousand Ukrainian students (according to
official data) are studying abroad. Most likely, after receiving a foreign education, they will not
want to return to Ukraine, which means they will be lost for it.
84 Groisman is looking for 87 billion hryvnia for education. UA1. http://ua1.com.ua/rus/politics / g roysman-ishchet-87-mlrd-griven-na-obrazovanie-32621.html
85 Groisman: There is no money for education reform. UA1. http://ua1.com.ua/rus/politics / g roysman-deneg-na-reformu-obrazovaniya-net-32524.html
86 The system of education and science in Ukraine allocated 95.47 billion UAH - the state budget-2018. Gordon.
https://gordonua.com/news/money/na-sistemu-obrazovaniya-i- nauki-v-ukraine-vydeleno-9547-mlrd-grn-gosbyudzhet-2018-225612.html
87 State Budget-2019: Expenditures on education increased by UAH 4.5 billion. DS.
http://www.dsnews.ua/politics/gosbyudzhet-2019-rashody-na-obrazovanie-uvelicheny- na -4-5-mlrd-20112018100300
31
Thirdly, a sharp ideological bias in Ukrainian education, causing the rejection of a
significant part of Ukrainian society, which serves not to consolidate, but, on the contrary, to
strengthen social contradictions in the country. Such innovations are possible only after a
comprehensive discussion with the public, representing the interests of different social and national
groups. An attempt to prohibit teaching in the languages of national minorities or to introduce
ideological control over teachers exacerbates this problem as much as possible.
Fourthly, salary increases, changes in the organizational structure of schools, etc., most
likely will not bring the desired results. Raising teachers' salaries is already facing a shortage of
funds. Changes in school management are also unlikely to bring real change.
All of the above indicates the low efficiency of the reforms. Without a significant change
in their direction, education in Ukraine will continue to degrade, and Ukrainian applicants will
continue to seek their happiness abroad.
Afterword
The above study was published in September 2017.The trend of degradation of the
Ukrainian education system has not been reversed since then. In 2018, according to the annual
ranking of higher education institutions in the world according to The QS World University
Rankings88, only 6 Ukrainian universities were included in this list. Even more depressing is the
fact that their places in the list are located far beyond the top hundred:
• Kharkiv National University. Karazin (place from 401 - 410);
• Kiev National University. Shevchenko (place from 411 - 420);
• National Technical University “Kiev Polytechnic Institute named after Sikorsky "(place from
501 - 550);
• National Technical University "Kharkiv Polytechnic Institute" (rank 701 - 750);
• Donetsk National University named after Stus (place from 801 - 1000);
• Sumy State University (ranked from 801 to 1000)89.
Another unrealized goal was to raise teachers' salaries to UAH 10,000. As mentioned
above, as of October 2018, the average salary of Ukrainian teachers was slightly more than 7
thousand hryvnia, and the Minister of Education Lilia Grinevich planned to reach the figure of 11
thousand by 202090. However, the biggest problems entailed the “Linguistic” article of the law
“On education”. It served as a catalyst for the deterioration of relations between Ukraine and
Hungary. Since 2017, this country has consistently blocked each meeting of the commission
"Ukraine-NATO". In addition, it was after the adoption in the fall of 2017 of the law on education
in the regions of Transcarpathia inhabited by Hungarians that the process of issuing passports of
their historical homeland to Ukrainian citizens of Hungarian origin was intensified. Despite
88 QS Top Universities 2018.https: //www.topuniversities.com/university-rankings/ w orld-university-rankings / 2018
89 Ibid.
90 How and when teachers will increase their salaries: commentary Grinevich. Channel 24:
https://24tv.ua/ru/kak_i_kogda_budet_proishodit_povyshenie_zarplat_uchiteljam_
kommentarij_grinevich_n1041324
32
protests from the Ukrainian side91, as of 2019, this process continues. Considering that the policy
of Ukrainization pursued by the current Ukrainian authorities and the policy of supporting
compatriots abroad pursued by the Hungarian authorities completely contradict each other, it is
possible to predict further stagnation or deterioration in relations between the two states.
91 The scandal with the issuance of Hungarian passports in Transcarpathia: what the Hungarian media wrote and
why the Ukrainians agree to it. TSN: https://ru.tsn.ua/ukrayina/ skandal-s-vydachey-vengerskih-pasportov-v-zakarpate-chto-pisali-vengerskie-smi-i-pochemu-ukraincy-soglashayutsya-na-eto-1220829. html
33
UKRAINIAN INSTITUTE FOR ANALYSIS AND POLICY MANAGEMENT
The cost of reforms. Education.
October 2017
Kiev
Authors of the study:
Ruslan Bortnik
Nikolay Spiridonov
Denis Gaevsky
Maxim Semyonov
Director
Bortnik Ruslan Olegovich
Tel .: +38 093 757 75 65
34
Current situation.
• Decline in the quality of secondary education. In 2017, 8% of applicants did not pass the
ZNO in the Ukrainian language and literature, 16% in mathematics, 18% in English, 13% in the
history of Ukraine.
• Degradation of higher education. There are only 6 Ukrainian universities in the QS World
University Rankings 2016/2017. Best, KhNU im. V.N. Karazin, took only 401 place and lost 19
points compared to the previous year.
• UN Human Development Report. In terms of the quality of education in 2013, Ukraine is on
the 78th place, in 2016 - on the 84th place.
• Reduced funding. Scholarships in the range of $ 30-45, depending on the level of accreditation
of the university, in 2013 - + $ 100. For teachers, the teaching load has been reduced from an
average of 900 to 600 hours per year. Deregulation reform has been going on in Ukraine since
2015.
Education reform
Higher education reform
• De facto absent;
• We do not consider the cuts in the budgetary enrollment in universities and the reduction in the
number of scholarship holders to be a reform of higher education.
Various forms of education
Legalization of various forms of education. Domestic, network, external become equal in legal
terms with classical institutional forms.
Advantages:
• allows you to individualize the educational process.
Disadvantages:
• the state reduces the provision of educational services, but does not provide tax incentives for
the opposition;
• the state has fewer incentives to improve the quality of education.
35
Vocational college education
• Receiving simultaneously with receiving a complete secondary education.
• Professional orientation of pupils already in high school.
• Gives adolescents the opportunity to get an idea of their future profession even before entering
higher educational institutions.
• Without retraining teachers and lecturers, adjusting educational programs, etc. this innovation
will remain on paper.
Legalization of tutoring
• At the moment, a significant part of teachers works as tutors.
• Individual entrepreneurs (IE) can provide educational services on a par with, in fact,
educational institutions.
• There is no incentive in the law for teachers to obtain legal status.
• Legalizing tutoring can create corruption.
Situation of teachers
Increase of salaries for teachers
• Low teacher salaries are a traditional Ukrainian problem.
• Initially, it was planned to increase salaries to two minimum wages (ie, about 6.5 thousand
hryvnias).
• When discussed in parliament, teachers' salaries were first raised to 3 minimum wages (approx.
UAH 9.5 thousand).
• As a result, teachers' salaries can cost up to UAH 10 thousand.
• The argument of the people's deputies: “why can we pay the policemen 10 thousand, but not
the teachers”.
Increasing teachers' salaries
• In addition, the salary for each subsequent qualification category will increase by 10%.
• Increases are established for seniority: more than 3 years -
+ 10% salary, over 10 years - + 20% to the salary, over 20 years - + 30% to the salary.
• Another 20% will be added to those who voluntarily passed the certification of teachers.
... which can lead to the dismissal of up to 2/3 of teachers who do not have enough money
• According to some politicians, the government can fire 2/3 of teachers in order to be able to
raise the salaries of the rest.
• The question is not only that the government may simply not have enough money to fulfill
financial obligations to all teachers, but also in stimulating individual forms of education.
36
Teacher certification
• Potentially helps to improve the pedagogical level of teachers.
• As an incentive, a 20% salary bonus for volunteer certified teachers.
• The legislation lacks mechanisms for the implementation of this provision.
Qualifications
• Various types and forms of professional development of teachers are being formalized.
• We are talking about both formal institutional forms and dual, in the workplace.
• More freedom in choosing opportunities to improve your qualifications. This is potentially a
huge asset.
• However, there is a danger of fraudsters becoming more active.
National Qualifications Agency
• The link between the education system and the labor market.
• It is called upon to analyze the labor market, current and prospective skills and abilities and,
according to these data, adjust educational programs.
• If successful, it will lead to huge positive changes that will affect both the Ukrainian education
system and the Ukrainian labor market.
National qualification levels
• Formalization of qualification levels according to a person's ability to perform certain actions.
• Within the framework of the activities of the National Qualifications Agency, it will determine
the level of qualifications of a particular person or educational institution and, according to these
data, adapt curricula, etc.
• Will there be trained personnel and regular funding for the implementation of good ideas is a
big question.
Property and finance
Ban on privatization of property
• Ban on privatization of property of educational institutions.
• Prohibiting the use of this property for any purpose other than educational.
• This will be an important element in the fight against illegal expropriation of land and premises
from schools.
37
Education in the regions
Situation of rural schools
• Transfer of schools in the regions from state funding to the maintenance of local budgets.
• Closing schools in small communities.
• An alternative is offered in the form of pivotal schools in large villages; however, they can be
up to 50 km in one direction.
• Physical inaccessibility of education for residents of the regions.
Corruption risks from the closure of rural schools
• A decrease in the number of rural schools will naturally lead to an increase in government
purchases of buses for the needs of these schools.
• In turn, this can create corruption risks, since one of the largest bus manufacturers in Ukraine,
the Bogdan corporation, belongs to the President of Ukraine, Peter Poroshenko.
Vocational education
• The reform deals a big blow to vocational education.
• Vocational schools stop funding at the state level, and transfer to local budgets.
• We expect that local budgets will not cope with this. As a result, the vocational school system
is degrading.
• This may lead to the fact that in a couple of decades there will be no skilled workers in
Ukraine.
38
Education in languages of national minorities
Fundamental laws
Excerpts from the Constitution of Ukraine
Article 10. The state language in Ukraine is the Ukrainian language. […] In Ukraine, the free
development, use and protection of Russian and other languages of national minorities of
Ukraine is guaranteed. The state promotes the study of languages of international
communication.
Article 22. Human and civil rights and freedoms enshrined in this Constitution are not
exhaustive. Constitutional rights and freedoms are guaranteed and cannot be abolished. When
adopting new laws or introducing amendments to existing laws, it is not allowed to narrow the
content and scope of existing rights and freedoms.
Article 24. Citizens have equal constitutional rights and freedoms and are equal before the law.
There can be no privileges or restrictions based on race, skin color, political, religious and other
beliefs, gender, ethnic and social origin, property status, place of residence,
on linguistic or other grounds.
Article 53. Everyone has the right to education. Complete general secondary education is
compulsory. The state ensures the availability and free of charge of preschool, complete general
secondary, vocational and higher education in state and communal educational institutions.
yah; […]. Citizens belonging to national minorities, in accordance with the law, are guaranteed
the right to education in their native language or to study their native language in state and
communal educational institutions or through national cultural societies.
UN Convention against Discrimination in Education
1. In this Convention, the expression “discrimination” covers any distinction, exclusion,
restriction or preference based on [...] the language [...] of national or social origin, and in
particular:
a) blocking access to education of any level or type for any person or group of persons;
b) limiting the education of any person or group of persons to a lower level of education;
39
Prohibition of studying and teaching in the languages of national minorities
• Actual cancellation of education in Ukraine in the languages of national minorities.
• Teaching in the languages of national minorities is possible only in primary preschool
education in separate classes (groups).
• Obtaining general secondary education in the languages of national minorities is possible until
2020, after which this opportunity is canceled.
• For indigenous peoples it is allowed to have separate classes (groups) for teaching and learning
their languages.
• The law declares guarantees for the study of languages of international communication, in
particular English (but, for some reason, not Russian).
Education in Ukraine in the languages of national minorities
• About 400 thousand people study in the languages of national minorities in approx. 750
educational institutions.
• Over 355 thousand students’ study in Russian in 581 Russian schools.
• It was Russian-language schools that were most often closed in Ukraine. So, if in 2004 there
were 1,555 Russian schools in Ukraine, then by 2017 their number decreased 3 times - to 581.
• The number of schools with education in Ukrainian and Russian decreased from 2,121 schools
in 2004 to 542 in 2017.
• The number of students studying in Russian decreased from 1.2 million in 2004 to 355
thousand in 2017.
• The number of students studying Russian decreased from 1.5 million in 2004 to 919 thousand
in 2017.
Education in Ukraine in the languages of national minorities
• 16 thousand children study in 75 Romanian schools.
• In 2004, there were 95 Romanian schools in Ukraine, enrolled in 26 thousand students.
• The number of schools with education in Ukrainian and Romanian increased from 8 schools in
2004 to 20 in 2017.
• The number of pupils studying the Romanian language decreased from 174 in 2004 to 4
thousand in 2017.
Education in Ukraine in the languages of national minorities
• 16 thousand children study in 71 Hungarian schools.
• In 2004, there were 74 Hungarian schools in Ukraine with 19 thousand students.
• The number of schools in which education was conducted in Ukrainian and Hungarian
decreased from 30 schools in 2004 to 26 in 2017.
• The number of pupils studying the Hungarian language decreased from 1,454 in 2004 to 1,110
in 2017.
40
Education in Ukraine in the languages of national minorities
• 1,785 children study in 5 Polish schools.
• In 2004, there were 5 Polish schools in Ukraine with 1,418 students.
• The number of schools with education in Ukrainian and Polish decreased from 2 schools in
2004 to 1 in 2017.
• The number of pupils studying Polish increased from 5533 in 2004 to 45.9 thousand in 2017.
Education in Ukraine in the languages of national minorities
• 2693 pupils go to 3 Moldovan schools.
• In 2004, there were 8 Moldovan schools in Ukraine with 6128 students.
• The number of schools in which education was conducted in the Ukrainian and Moldovan
languages increased from 4 schools in 2004 to 10 in 2017.
• The number of pupils studying the Moldovan language has increased from 1335 in 2004 to
2474 in 2017.
Education in Ukraine in the languages of national minorities
• At the moment, there is not a single Crimean Tatar school in Ukraine.
• In 2004, there were 14 of them, with 4797 students enrolled in them.
• By 2014, there were 15 Crimean Tatar schools in Ukraine with 5551 children.
• In 2004, the Crimean Tatar language was studied by 26.5 thousand pupils.
• By 2014, there were 12.7 thousand of them, and as of 2017 - only 340 students.
Prohibition of studying and teaching in the languages of national minorities
• The Hungarian Foreign Ministry called the new law on education “shame” and began to
impede the implementation of important matters for Ukraine in the international arena.
• The President of Romania canceled a visit to Ukraine due to the law on education.
• President of Moldova: "The implementation of the new law will lead to the denationalization of
the Moldovan community in Ukraine."
Financing education reform
• In the period 2014-2017. the budget of the Ministry of Education increased by only 8.2 billion
UAH. - from 24 to 32.2 billion UAH. in a year.
• In 2017, the allocation of UAH 52.8 billion is also envisaged. for educational subventions from
the state to local budgets.
41
No money, but you carry on
•IN. Groisman July 6, 2017: "The country lacks $ 3 billion for education reform."
•in. Groisman July 10, 2017: “the cost of the reform in the national currency is UAH 87 billion
(or $ 3.2 billion)”.
In the draft budget for 2018, financing of the Ministry of Education was reduced from
UAH 23 to UAH 21 billion ($ 724 million).
Reform results:
1. The reforms did not lead to an improvement in the quality of education in Ukraine. On the
contrary: Ukrainian education is degrading.
2. Outflow of social capital. Almost 70 thousand young Ukrainians (according to official data)
are studying abroad.
3. Ideological bias in Ukrainian education.
4. Social populism.
5. Lack of funds for reform.
42
Issue No. 3
from the cycle "The Price of Reforms"
Anti-corruption reform92
The team of authors:
Ruslan Bortnik,
Maxim Semyonov,
Denis Gaevsky,
Vladislav Dzividzinsky,
Daniil Bogatyrev,
Anatoly Peshko,
Valentin Gaidai,
Nikolay Spiridonov,
Igor Pechenkin,
Valentin Yakushik
Corruption in Ukraine has long been the talk of the town. This depressing fact is recognized
both domestically and abroad.
Reviews of foreign partners, Ukraine's place in international ratings and the amount
of damage from corruption
At the end of 2016, the Accounts Chamber of the European Union recognized Ukraine as
the most corrupt country in Europe93. The auditors' conclusions are based on the analysis of the
gas sector, Kiev's actions in the field of management of public finances, the efficiency of the use
of EU credit money and the fight against corruption in the period from 2007 to 2015.
According to Transparency International's corruption perceptions rating, in 2017 Ukraine
was ranked 130 out of 180 (in 2016 - 131, 2015 - 130, 2014 - 142)94. Ukraine shares its position
in the rating for 2017 with Gambia, Myanmar, Sierra Leone and Iran, which scored the same
number of points. According to TI, 86% of Ukrainians do not believe that the government will be
able to fight corruption. In Part I of the report on the situation in Europe and Central Asia,
published by Transparency International in February 2018, it was noted that anti-corruption
activists in Ukraine are subjected to harassment and violence, and the country's authorities have
92 Original version of the presentation: https://uiamp.org.ua/cref/cikl-cena- reform-reforma-policii
93 The EU named Ukraine the most corrupt country in Europe. Today. https://www.segodnya.ua/ukraine/v-es-
nazvali-ukrainu-samoy-korrumpirovannoy- stranoy-evropy-777106.html
94 Corruption Perceptions Index - 2017. Transparency International: https: // transparency.org.ru/research/indeks-vospriyatiya-korruptsii/rossiya-v-indekse- vospriyatiya-korruptsii-2017-posadki-ne-pomogli.html
43
ignored calls for the creation of an independent Anti-Corruption Court95. According to a study by
Ernst & Young Global published in April 2017, 88% of Ukrainian respondents believe that bribery
and corruption are widespread in the country96. Damage from corruption in the period 2014-2016
is estimated at no less than 130 billion hryvnia97, which is comparable to the annual budget
expenditures on national security and defense.
On November 3, 2017, the Resident Representative of the International Monetary Fund
(IMF) in Kiev, Josta Lyngman, stated that due to corruption, Ukraine annually loses 2% of its GDP
growth98. In March 2017, the head of NABU Artem Sytnik announced the amount of damage state-owned enterprises from corruption for the period after 2014. According to him, it is about 80 billion
hryvnia99.
Anti-corruption structures and costs of their activities
Immediately after the Maidan, the ranks of anti-corruption fighters have significantly
increased. New pro-film bodies have joined the anti-corruption public (which has been repeatedly
implicated in corruption scandals, such as the acquisition of a house by the head of the Corruption
Action Centre, Vitaly Shabunin, and the "money appropriation" by journalist Dmitry Gnap100). It
should be noted that all of them - NABU, SAP, NAPK and the recently created GBR - largely
duplicate the functions of the already existing GPU, SBU, MIA, military prosecutor.
As of the beginning of 2019, the list of anti-corruption bodies in Ukraine is as follows:
• National Anti-Corruption Bureau of Ukraine.
• Special anti-corruption prosecutor's office.
• General Prosecutor's Office of Ukraine.
• National Council for Anti-Corruption Policy.
• National Agency for the Prevention of Corruption.
• State Bureau of Investigation.
• General Inspectorate of Internal Investigations of the General Prosecutor's Office.
• Department of the Prosecutor General's Office for the investigation of corruption criminal
offenses committed by judges.
• Main Directorate for Combating Corruption and Legal Crimes (Directorate “K” of the SBU).
95 Europe and Central Asia: more civil engagement needed (part i). Transparency International:
https://www.transparency.org/news/feature/europe_and_central_asia_ mo re_civil_engagement
96 Karlin A. Ernst & Young: Ukraine Tops World Corruption Rating. The UNZ Review.
http://www.unz.com/akarlin/ernst-young-ukraine-tops-corruption/
97 Losses of the state in the amount of UAH 153 billion. What does the highest top corruption in Ukraine look like?
TSN. https://ru.tsn.ua/politika/ubytki-gosudarstva-v-153-mlrd-grn-kak- vyglyadit-vysshaya-top-korrupciya-v-ukraine-1169262.html
98 IMF assessed the losses of Ukraine from corruption. UNIAN. https: //economics.unian. net / finance / 2224004-mvf-otsenil-poteri-ukrainyi-ot-korruptsii.html
99 NABU is investigating 256 cases worth 80 billion hryvnia. Facts. https://fakty.ua/226987-nabu-rassleduet-256-proizvodstv-na-summu-v-80-mlrd- grn
100 Gnap and others: five scandals around anti-corruption in Ukraine. Air Force Ukraine.
https://www.bbc.com/ukrainian/features-russian-47171907
44
• Department of Internal Security of the Ministry of Internal Affairs.
• State Bureau of Investigation.
In addition, since the beginning of 2017, the topic of the creation of the Supreme Anti-Corruption Court has been actively discussed in the media101. During this period, 6 alternative
draft laws were submitted to parliament, one of which was subsequently withdrawn from
consideration. On March 1, 2018, the Verkhovna Rada voted in the first reading the presidential
bill No. 7440 “On the Supreme Anti-Corruption Court”102. On June 7, 2018, under pressure from
the IMF and the threat of non-disbursement of the next loan tranche, it was adopted in the second
reading103. It should be noted that of all the alternative draft laws, it is the one that least meets the
requirements of the IMF on the principles of staffing and mandatory verdicts of the Council of
International Experts on the issue of appointing judges, jurisdiction (jurisdiction of the VASU),
and the timing of its creation104.
Delaying the process of adopting the law on the VASU and prescribing in it long terms for
the formation of this body (created within 12 months from the date of entry into force), the coalition
of the BPP and the Popular Front achieved one of its most important goals - leveling the influence
of the future anti-corruption court on the results of the presidential and parliamentary elections in
2019. As of the beginning of 2019, if the process of adopting the law is not accelerated by
unforeseen circumstances, the VASU will not be created until June, and its first decisions should
be expected in 2020, that is, after the presidential and parliamentary elections.
The next in the list of anti-corruption bodies was the State bureau of investigation, the
process of establishing which has been dragging on since November 2015, when the Verkhovna
Rada adopted the corresponding law105. In mid-2018, it was expected that the State Bureau of
Investigation would start full-fledged work in the fall, however, this was achieved only by the
beginning of 2019.At the same time, many questions have accumulated in the staffing of the State
Bureau of Investigation. Initially, most of them concerned the competition for the position of the
head of the RRB, which was won by Roman Truba. The conditions for this official and former
private entrepreneur to be included in the number of applicants remain a mystery. Based on the
insights leaked to the media and information about R. Truba's previous career, it can be concluded
that he is a creature of the Popular Front, agreed by the NSDC Secretary A. Turchinov with the
president106. This means that, contrary to the declarations, the head of the new anti-corruption body
is dependent on the representatives of the ruling coalition.
101 The President hopes that the Anti-Corruption Court will be established by February. UNIAN.
https://www.unian.net/politics/10379022-prezident-nadeetsya-chto- a ntikorrupcionnyy-sud-budet-sozdan-k-fevralyu.html
102 Law of Ukraine "On the Vicious Anti-Corruption Court" // Vidomosty Verkhovnoy Radi (VVR), 2018, No. 24,
Article 212. https://zakon.rada.gov.ua/laws/show/2447-19
103 Ibid.
104 What the IMF Requires: Full Text of the Letter from Washington to Bankova. European truth.
https://www.eurointegration.com.ua/rus/ a rticles / 2018/01/15/7076112 /
105 Law of Ukraine "On the State Bureau of Development" // Vidomosty Verkhovnoy Radi (VVR), 2016, No. 6,
Article 55. https://zakon.rada.gov.ua/laws/show/794-19
106 Newly elected chairman of the RRB: whose protégé is Roman Truba. 24 channel.
https://24tv.ua/ru/novoizbrannyj_predsedatel_gbr_chim_stavlennikom_ javljaetsja_roman_truba_n890630
45
As soon as Roman Truba began to hold a second competition for filling vacant positions
in the bureau entrusted to him (beginning of November 2018), a scandal broke out on the network
due to the alleged harassment of the husband of the head of the Deputy Head of the State Security
Bureau Olga Varchenko, Sergei Varchenko to student Natalia Bureiko107. Later it became known
that the incident was a production in which the political strategist Vladimir Petrov, known for
organizing black PR campaigns, was accused. The main reason for such a campaign in the case of
the RRB could be the conflict between Roman Truba and Olga Varchenko over the expediency of
holding a repeated competition for filling vacant positions (R. Truba ordered it to be held, and O.
Varchenko opposed it). As of early 2019, the investigation into the defamation scandal is ongoing.
Total budgetary expenditures on anti-corruption structures in the period 2015 - 2017
amounted to UAH 2.9 billion. And the costs for the “old” Ministry of Internal Affairs, SBU, GPU,
which have not lost their anti-corruption functions, for 2014 - 2016. amounted to 138 billion
hryvnia108108. In the 2018 budget, more than 2.2 billion hryvnias were allocated for the activities
of NABU, SAP and NAPK. At the same time, the total funding for the activities of the GPU, the
Ministry of Internal Affairs and the Security Service of Ukraine in 2018 amounted to UAH 78.34
billion109.
The State Budget of Ukraine for 2019 provides for the Prosecutor General's Office in the
amount of UAH 7.2 billion110. Expenses in the amount of UAH 7 billion are provided for the
implementation of prosecutorial and investigative activities, training and professional
development of the prosecutor's office personnel111. For work It is planned to allocate UAH 127
million to the specialized anti-corruption prosecutor's office, and UAH 14.3 million to support the
activities of the qualification and disciplinary commission of prosecutors112. UAH 803 million,
which is UAH 211 million. more than in 2018. For the work of units and institutions of the National
Police, expenses are provided in the amount of UAH 28.8 billion, which is UAH 4 billion. more
than in 2018. It is planned to allocate UAH 867.5 million to the National Anti-Corruption Bureau
of Ukraine, which is UAH 10 million. more than in 2018113113.
For comparison: during the period from 2010 to 2013, under the “pre-maid” government,
expenses on the Ministry of Internal Affairs, Security Service of Ukraine, and GPU amounted to
68 billion hryvnias. Prominent politicians and officials were sent to jail (though not all of them for
corruption): Y. Timoshenko, Y. Lutsenko, V. Volga (head of the Financial Services Commission),
I. Markov (People's Deputy from the PR), V. Galitskiy (head of the Employment Service), I.
107 Gubin V. Cut legs for Varchenko. How Tinder and a KPI student can bury the "Ukrainian FBI". Country.
https://strana.ua/articles/ analysis / 170409-vse-detali-tinder-skandala-ot-kotoroho-mozhet-zaviset-budushchee-hosbjuro-rassledovanij-.html
108 Expenditures for NABU and NAPK in 2018 will increase, for SAP will decrease - draft state budget. ZN.ua.
https://zn.ua/UKRAINE/rashody-na-nabu-i-napk-v-2018- godu-vyrastut-na-sap-sokratyatsya-proekt-gosbyudzheta-260391_.html
109 Ibid.
110 Spending on the Prosecutor General's Office, National Police and NABU in 2019. Ukrainian right.
http://ukrainepravo.com/news/ukraine/vydatky-na-genprokuraturu- n atspolitsiyu-i-nabu-u-2019-rotsi-zbilshat- /
111 Ibid.
112 Ibid.
113 Ibid.
46
Zvarych (“judge-carol-man”), B. Presner (deputy minister of ecology), N. Sinkovskiy (deputy
head of the State Committee for Reserves), V. Shcherbina (ex-mayor of Alushta) …
Duplication of the functions of anti-corruption agencies leads to interdepartmental
competition. In 2016, the public witnessed the clarification of relations between the GPU and the
NABU - not only during the searches of the prosecutor's office in the office of A. Sytnyk's
department, but also right in the center of Kiev, where the officers of these bodies started a fight.
In December 2016, A. Sytnik complained that the GPU, headed by Y. Lutsenko, blocked NABU's
access to the Unified Register of Pre-trial Investigations114.
In 2018, conflicts between anti-corruption agencies continued. This time NABU and SAP
became their defendants. In the spring of 2018, a listening device was found in the aquarium of
the head of the SAP, Nazar Kholodnitsky. Later it turned out that it was installed by the employees
of NABU, acting in conjunction with the GPU115. Then, in September 2018, SAP accused NABU
of trying to lay a cable in the building of the department, designed to secretly collect information116.
Results of the work of anti-corruption bodies
You can often hear the hypothesis that the newly formed anti-corruption structures are an
instrument of external influence on the top of the Ukrainian government. This influence seems to
be carried out through high-ranking officials from the past American administration, in particular,
through the former US Vice President Joseph Biden, who, according to media reports, directly
influenced the closure of the case by the Special Anti-Corruption Prosecutor's Office of the ex-official of the times of Yanukovych, Nikolai Zlochevsky117. Since 2014, Joseph Biden's son Hunter
Biden has been on the board of directors of Burisma, the largest gas production company in
Ukraine, founded by Zlochevsky118. Consequently, the former American vice president had a
personal interest in closing this high-profile case, and such a closure was not difficult for him,
since NABU and SAP work closely with the US Embassy in Ukraine, and in the latter, until
recently, cadres (including the ambassador) dominated appointed by the Obama administration.
The development of the situation around the “Nasirov case” (the only official from the
highest echelons, to whom the hands of NABU reached) may indicate the failure of foreign
partners' attempts to influence the Ukrainian leadership in the issue of anti-corruption activities.
The ex-head of the State Fiscal Service, dismissed from office, is accused of illegally providing
tax installments to fugitive deputy A. Onishchenko, whose case, in connection with the successful
114 Lutsenko closed NABU's access to the base of criminal cases - Sytnik. New time.
https://nv.ua/ukraine/politics/lutsenko-zakryl-dostup-nabu-v-bazu-ugolovnyh-del- sytnik-332807.html
115 Wiretapping and Kholodnitsky through the aquarium. Full text. Country. https: // strana.ua/news/133823-proslushka-kholodnitskoho-cherez-akvarium-polnyj-tekst. html
116 They found a wiretap at Kholodnitsky again. The cable was pulled from Okhmatdet. Country.
https://strana.ua/news/161977-k-sap-snova-protjanuli-kabel-chtoby- proslushivat-kholodnitskoho.html
117 The price of respectability. How much it cost Zlochevsky to bleach in the west and in Ukraine. DS.
http://www.dsnews.ua/politics/tsena-respektabelnosti-kak-eks- min istr-yanukovicha-zlochevskiy-02022018220000
118 Ibid.
47
escape of the defendant to Europe, became a failure for the Anti-Corruption Bureau119. As often
happens in such cases, R. Nasirov was released “for health reasons” from the courtroom. At a
reporting briefing in February 2018, the heads of NABU and SAP admitted that taking into account
the pace of consideration in court and the volume of the indictment (800 pages), R. Nasirov's case
could be heard for years120. In fact, this statement is a sign of one's own impotence.
Another fugitive, Judge N. Chaus, who was "taken" with fanfare by NABU and SAP, by a
happy coincidence, was detained in Moldova. However, in April 2017, a Moldovan court released
him from custody. Extradition negotiations are still ongoing121.
Another fugitive judge, ex-head of the Kiev Court of Appeal A. Chernushenko, in addition
to hiding from law enforcement agencies, made a series of statements about pressure on the
judiciary by senior Ukrainian officials. Law enforcement agencies did not react to these
statements122.
The power structures also did not react to the statement of the ex-deputy A. Shepelev that
the current Attorney General Y. Lutsenko in 2006 demanded a bribe from him in the amount of
150 thousand dollars. According to A. Shepelev, he personally transferred this amount to Y.
Lutsenko in exchange for the termination of the pressure - deprivation of parliamentary immunity
and citizenship123.
The case of ex-head of the State Emergency Service Sergei Bochkovsky, who was publicly
detained right at the Cabinet meeting on March 25, 2015, ended with a similar shameful failure124.
After a short stay in custody, Bochkovsky was released, and then on April 26 In 2018, by the
decision of the Kiev District Administrative Court, the order of the Cabinet of Ministers of Ukraine
dated March 25, 2015 on the dismissal of Sergei Bochkovsky from the post of the head of the State
Emergency Service and the corresponding order of the State Emergency Service was declared
illegal125. Official was reinstated in his post and even tried several times to show up for work,
which he did, however, failed, as the Ministry of Internal Affairs appealed against the decision to
restore it.
119 NABU summoned Onishchenko to serve the indictment. NewsOne. https: // newsone.ua/news/society/nabu-vyzvalo-onishchenko-dlja-vruchenija-obvinitelnoho-akta- .html
120 Nasirov's lawyers demanded that the court read out almost 800 pages of the accusation. RIA Novosti Ukraine.
https://rian.com.ua/politics/20171207/1030192142/ Nasirov-obvinenie-advokaty.html
121 As soon as Chaus is extradited to Ukraine, it will take us no more than three weeks - a month for the case to go to
court - Kholodnitsky. Gordon. https://gordonua.com/news/politics/kak-tolko-chausa-ekstradiruyut-v-ukrainu- nam-ponadobitsya-ne-bolee-treh-nedel-mesyaca-chtoby-delo-poshlo-v-sud- holodnickiy- 234914.html
122 Former MP: Chernushenko's statement about pressure from the Presidential Administration should be
investigated. UNIAN. https://www.unian.net/politics/1095198-eks- d eputat-zayavlenie-chernushenko-po-povodu-davleniya-so-storonyi-ap-neobhodimo- rassledovat.html
123 The ex-People's Deputy admitted that the drunken Lutsenko received a huge bribe from him. News: https://vesti-ukr.com/politika/225853-eks-nardep-priznalsja-chto-daval- lutsenko-ohromnuju-vzjatku
124 The head of the State Emergency Service was detained at a meeting of the Cabinet of Ministers. New time.
https://nv.ua/ukraine/glava-gossluzhby-po-chrezvychaynym- situaciyam-zaderzhan-pryamo-na-zasedanii-kabmina-40666.html
125 The case of ex-head of the State Emergency Service Bochkovsky is being considered by the Court of Appeal
today. RBK - Ukraine. https://www.rbc.ua/rus/news/delo-eks-glavy-gschs-bochkovskogo- s egodnya-1531832145.html
48
Another scandal with which the National Anti-Corruption Bureau is strongly associated is
the “case of Manafort,” the ex-head of staff of D. Trump. In 2016, NABU legalized the anti-Trump
political “jeans”, accusing P. Manafort of receiving $ 12.7 million from V. Yanukovych's team126.
After D. Trump's victory in the presidential election, a number of political experts expressed fears
that the story with incriminating evidence from NABU would harm Ukraine's relations with the
United States. However, shortly after D. Trump came to the presidency, P. Manafort was accused
in the United States of “conspiracy against American interests”127, and everyone forgot about the
potential reason for deteriorating relations with Ukraine.
As for the measurable indicators of the fight against corruption, they are extremely modest.
Of the 128 people who received prison sentences for corruption (in the period from July 2015 to
July 2016), only 3 high-ranking officials (two heads of regional state administrations and the
deputy head of the State Agricultural Inspection) and 4 an official of class "B" (three investigators
and the head of the Lazurnensky village council). According to A. Sytnik, as of February 2017,
NABU transferred 50 criminal cases to court and achieved 12 sentences, but no less than 5 cases
an agreement was reached with the investigation. The head of the department argues that many
cases are hampered in the courts, therefore he advocates the creation of the aforementioned VASU.
At the beginning of 2018, Roman Sytnyk announced that the National Anti-Corruption Bureau of
Ukraine had brought 173 criminal proceedings to court in two years.
The attitude of corrupt officials. In addition, according to him, in two years of work, the courts
passed sentences against only 18 people128.
As of September 2017, the total number of proceedings in cases investigated by NABU
was 410. At that time, the bureau's detectives reported suspicion to 260 persons, and 86 cases were
sent to court. Of these, court decisions were made only in 23. At the same time, only 17 convictions
have gained legal force129.
At a joint briefing on the results of work for the 2nd half of 2017, the heads of NABU and
SAP A. Sytnik and N. Kholodnitsky said that since the beginning of the investigations, the amount
of compensated damage amounted to about UAH 250 million, 117 of which were compensated
for reporting half-year. In addition, according to the statements of anti-corruption officials, “it was
possible to prevent the embezzlement of almost 2 billion hryvnyas, 1.5 of them in the energy
sector,” and another 650 million hryvnias are currently in the process of confiscation. During the
investigation period, the bureau's lawyers filed 35 lawsuits to invalidate transactions related to
corruption. The final decision was made by the court of cassation only in 15 of them130.
126 Ukraine is ready to provide the United States with information about Manafort - Groisman. Delo.ua.
https://delo.ua/econonomyandpoliticsinukraine/ukraina-gotova-predostavit- ssha-informaciju-o-manaforte-grojsma-336034 /
127 The FBI accused Manafort of money laundering and conspiracy against the United States. Delo.ua.
https://delo.ua/econonomyandpoliticsinukraine/fbr-obvinilo-manaforta-v- otmyvanii-deneg-i-zagovore-protiv-ssha-335942 /
128 In two years, NABU transferred 173 criminal cases to court - Sytnik. Voice.ua. https://golos.ua/i/595334
129 In 2017, the rotsi of NABU was able to attack the corruption - Artem Sitnik. NABU.
https://nabu.gov.ua/novyny/u-2017-roci-nabu-posylylo-nastup-na-korupciyu-artem- sytnyk
130 Ibid.
49
At a briefing held on February 12, 2019, Artyom Sytnik said that out of 28 criminal cases
sent to court in the second half of 2018, only in 8 cases did the judges begin consideration on the
merits. The rest of the cases are in preparation for consideration. The head of the NABU called
such a pace of trial unacceptable. He stated that their joint work with SAP is being stopped in the
courts. In the second half of 2018, according to A. Sytnik, 44 persons were notified of suspicion,
investigations were completed against 61 suspects, and 32 top corruption cases were sent to
court131. Also, the head of the department said, that, as of the time of the report, about 200 cases
referred to the court are not being considered, as they await the creation of the Supreme Anti-Corruption Court132.
The statistics on the return of funds to the budget is impressive only at first glance. There
are serious reasons for doubting its reliability. So, in 2016, the management of NABU reported
that during the year of their work, 100 million hryvnias were returned to the treasury and the theft
of 580 million hryvnias from state-owned enterprises was prevented. At the same time, according
to D. Kalenyuk, Executive Director of the Anti-Corruption Center, in the first half of 2016, only
78 thousand hryvnias of corruption assets were returned to the budget.
In addition, NABU itself for weeks for a long period of its existence, was a participant in
corruption scandals associated with the purchase of ammunition for special forces - socks for 373
hryvnia per pair and T-shirts for 1116 hryvnia133.
The activities of the NAPK, headed by the former teacher A. Yatsenyuk N. Korchak also
caused serious complaints. According to Schemes, in July and September 2016, NAPK members
wrote out bonuses for themselves in the amount of 250% in addition to salaries and allowances134.
The criteria for the success of a given department are determined by its employees. As a result of
this scandal, as well as behind-the-scenes trading for positions in March 2018, N. Korchak was
dismissed from the post of head of the NAPK, and her place was taken by Alexander Mangul135.
Full verification of the noisy electronic declarations of Ukrainian officials as of the
beginning of 2019 have not been held. At the beginning of 2019, NAPK checked a total of 615
declarations of officials for 2016-2018. out of several million136. In fact, the legalization of capital
took place in Ukraine, a large part of which was obtained illegally.
Conclusion
131 Stenograms to the Director of NABU Artem Sitnik
132 Ibid.
133 NABU saved: shirts for the special forces were purchased at UAH 1.6 thousand, and T-shirts at UAH 1.1
thousand. TSN. https://ru.tsn.ua/groshi/nabu-sekonomilo-rubashki-dlya- specnaza-zakupili-po-1-6-tys-grn-a-futbolki-po-1-1-tys-grn-546233. html
134 Anti-corruption fighters from the NAPK have written bonuses for themselves in the amount of 250% of their
salary. Country. https://strana.ua/news/37779-razrabotchiki-e-deklarirovaniya-premirovali-sebya-na- 250-k-okladam-rassledovanie-zhurnalistov-shem.html
135 Instead of the scandalous Korczak, Alexander Mangul was elected the new head of the NAPK. UNIAN.
https://www.unian.net/politics/10059593-vmesto-skandalnoy-korchak- n ovym-glavoy-napk-izbran-aleksandr-mangul.html
136 How NAPC checks the declarations of politicians - mass media. Bigmir.net. http: // finance.
bigmir.net/news/97843-Kak-NAPK-proverjaet-deklaracii-politikov---SMI
50
Summarizing the above, we have to admit that the anti-corruption reform has not yet
achieved its goals. The problem of its failure seems complex to us. It is associated with such factors
as low qualifications of employees of anti-corruption bodies, imperfect legal framework,
dependence of anti-corruption structures on the highest echelons of power, etc.
The results of the work of anti-corruption bodies clearly do not correspond to the funds
spent on their activities. So, the total costs for NABU, SAP, and NAPK in the period from 2015
to 2019. (including the funds pledged for 2019) will amount to UAH 6.09 billion137.137 At a
reporting briefing in early 2018, the heads of NABU and SAP stated that since the start of the
investigations, the amount of compensated damage amounted to about UAH 250 million. Taking
into account the data announced at a similar briefing in 2019, this figure reached UAH 450
million138. In addition, according to them, “it was possible to prevent the theft of almost another
UAH 2 billion, 1.5 of them - in the field of energy"139. Even with this "prevention" in mind, the
effect of activities of NABU and SAP does not cover the spent on it in the period from 2015 to
2019. 3.1 billion hryvnia140.
The number of solved cases and “incarceration” of corrupt officials is also not impressive.
At the beginning of 2018, out of 300 persons suspected of corruption over the entire period of the
NABU and SAP activities, only 165 citizens were referred to court. Out of 86 criminal proceedings
sent to court, decisions were made in 23 cases, and only 17 convictions entered into legal force
(data as of September 2017, 1 more conviction was added to them by February 2019).
Delaying the process of creating an anti-corruption court, confrontation between various
elements of the anti-corruption system (NABU against the GPU, etc.), as well as attempts by the
authorities to direct the process of creating new specialized structures in a direction favorable to
them are vivid evidence that a corrupt “deep state”, in the depths of which the main decisions of a
political and economic nature are made and for which external forms such as the ruling coalition,
presidential powers and the judicial system serve only as a screen.
At the moment, we are witnessing how large corruption cartels are trying to fill the newly
formed anti-corruption structures with their henchmen and paralyze their work in every possible
way. Modest anti-corruption results from 2016 to 2018 serve as the best proof that in this fight
against the will of foreign partners and financial donors who have high hopes for NABU, SAP,
and the future VASU, Ukrainian corrupt officials are still winning. This means that the tangle of
corruption problems in Ukraine will have to be unraveled for more than one year.
137 The figure was obtained by summing up the costs of the activities of anti-corruption structures for the indicated
years, described in the section “Anti-corruption structures and costs of their activities”.
138 Stenogram in the speech of the Director of NABU Artem Sitnik for an hour at the press briefing “Result of that
wiklici in the robot of NABU for the 2nd half of 2018”, 8 February 2019. NABU.
https://nabu.gov.ua/verbatims/stenograma-vistupu-direktora-nabu- artema-sitnika-pid-chas-prec-brifingu-rezultati-ta
139 In 2017, the rotsi of NABU made an attack on corruption - Artem Sitnik. NABU. https://nabu.gov.ua/novyny/u-2017-roci-nabu-posylylo-nastup-na-korupciyu-artem- 79
140 The figure was obtained by summing up the costs of the activities of the anti-corruption structure for the
indicated years, described in the section “Anti-corruption structures and costs of their activities”.
51
Afterword
The above study was published in March 2018, and subsequently supplemented with fresh
data (as of late 2018 - early 2019) and is included in this book. From the updated data, it follows
that over the past year, the authorities have failed to reverse the failed trajectory of anti-corruption
reform. At the beginning of 2019, the Supreme Anti-Corruption Court had not yet been created,
as a result of which hundreds of criminal cases investigated by NABU are gathering dust in the
courts, waiting “in the wings”. The situation in the National Anti-Corruption Agency has not
changed either. The agency remains extremely ineffective, as evidenced by the fact that since 2016
it has checked a little more than 600 electronic declarations of officials out of several million.
During this time, an automated system for checking declarations has not been created.
The enmity between anti-corruption structures, undermining public confidence in them,
continued throughout 2018. The situation was relatively stabilized only closer to the presidential
elections.
In view of the above, our conclusions remain unchanged: the anti-corruption reform in
Ukraine has failed.
52
UKRAINIAN INSTITUTE FOR ANALYSIS AND POLICY MANAGEMENT
The cost of reforms. Anti-corruption reform.
March 2018
Kiev
Authors of the study:
Daniil Bogatyrev, Maxim Semyonov,
Denis Gaevsky, Vladislav Dzividzinsky,
Valentin Gaidai, Nikolay Spiridonov,
Igor Pechenkin, Valentin Yakushik,
Anatoly Peshko, Ruslan Bortnik
Director
Bortnik Ruslan Olegovich
Tel .: +38 093 757 75 65
53
Current situation: international rankings / independent research data
• According to Transparency International's Corruption Perceptions Index, in 2017, Ukraine
ranked 130th out of 180. It shares its position with the Gambia, Myanmar, Sierra Leone and Iran.
• According to a study by Ernst & Young Global published in April 2017, 88% of Ukrainian
respondents believe that bribery and corruption are widespread in the country.
• According to Transparency International, 86% of Ukrainians do not believe that the
government will be able to fight corruption.
• At the end of 2016, the Accounts Chamber of the European Union recognized Ukraine as the
most corrupt country in Europe. The auditors' conclusions are based on the analysis of the gas
sector, Kiev's actions in the field of public finance management, the effectiveness of the use of
EU loan money and the fight against corruption in the period from 2007 to 2015.
Current situation: damage from corruption
• According to the statement of the Permanent Representative of the International Monetary
Fund (IMF) in Kiev, Jost Lyngman, due to corruption, Ukraine annually loses 2% of its GDP
growth.
• Damage from corruption in the period 2014-2016. is estimated at no less than 130 billion
hryvnia, which is comparable to the annual budget expenditures on national security and defense.
• According to the statements of the head of NABU Artem Sytnyk, since 2014 the damage to
state-owned enterprises from corruption amounted to about UAH 80 billion.
Anti-corruption structures
New:
• National Anti-Corruption Bureau of Ukraine
• Special anti-corruption prosecutor's office
• National Council for Anti-Corruption Policy
• National Agency for the Prevention of Corruption
• State Bureau of Investigation
Old:
• General Prosecutor's Office of Ukraine
• General Inspectorate of Internal Investigations of the General Prosecutor's Office
• Department of the Prosecutor General's Office for Investigation of Corruption Criminal
Offenses Committed by Judges
• Main Directorate for Combating Corruption and Legal Crimes (Directorate “K” of the SBU)
• Department of Internal Security of the Ministry of Internal Affairs
54
The Creation of an Anti-Corruption Court: An Unfinished Epic
• The first draft anti-corruption court law was submitted to parliament in February 2017.
• Since then, 6 alternative bills have appeared in the Rada, one of which (the first) was
withdrawn.
• The presidential bill “On the Supreme Anti-Corruption Court” was adopted by the Rada in the
first reading on March 1, 2018.
• According to the statements of experts and Western partners, the presidential bill is aimed at
sabotaging the creation of an anti-corruption court, or turning this process in a direction
favorable to the authorities.
• The main claims of Western partners to the presidential bill were put forward in a letter to the
IMF to the head of the Presidential Administration of Ukraine I. Rainin, January 11, 2018
IMF requirements for the law "On the Supreme Anti-Corruption Court"
1. Make the role of the Public Council of International Experts decisive, not advisory.
2. Ensure participation in the Council of experts recommended by international organizations
and donor countries.
3. Bring the jurisdiction of the Supreme Anti-Corruption Court in line with the jurisdiction of
NABU and SAP.
On March 1, 2018, the draft law was voted in the first reading without making the
appropriate amendments. At the same time, the letter to the IMF noted that in its current form the
Fund is not ready to support the adoption of the law on the Supreme Arbitration Court, and
therefore - to recognize this requirement as fulfilled.
Budget expenditures on anti-corruption structures
• Total budgetary costs for anti-corruption structures in the period 2015-2017. amounted to UAH
2.9 billion.
• Expenses for the Ministry of Internal Affairs, Security Service of Ukraine, GPU, which have
not lost their anti-corruption functions, for 2014-2016. amounted to UAH 138 billion.
• In the budget for 2018, more than 2.2 billion hryvnias were allocated for the activities of
NABU, SAP and NAPK. At the same time, the total funding for the activities of the GPU, the
Ministry of Internal Affairs and the Security Service of Ukraine in the current year will amount
to UAH 78.34 billion.
• Until the beginning of 2019, the amount spent on the activities of NABU, SAP and NAPK
since their inception will exceed UAH 5.1 billion.
55
Duplication of anti-corruption functions
• Last year, the public witnessed the clarification of relations between the GPU and the NABU -
not only during the searches of the prosecutor's office in the office of A. Sytnyk's department,
but also right in the center of Kiev, where the officers of these bodies staged a fight.
• In December 2016, A. Sytnik complained that the GPU, headed by Y. Lutsenko, blocked
NABU's access to the Unified Register of Pre-trial Investigations.
Results of work: the amount of funds returned
• Based on the results of the second half of 2017, the amount of damage compensated by NABU
and SAP for the entire period of their activity amounted to about UAH 250 million.
• It was possible to prevent the theft of almost 2 billion hryvnias, 1.5 of them in the energy
sector.
• Another UAH 650 million is currently in the process of confiscation.
• Even taking into account the “theft prevention”, the refunded amount does not cover UAH 2.9
billion spent on anti-corruption structures in 2015–2017.
Results of work: cases and sentences
• As of September 2017, the total number of proceedings in cases investigated by NABU was
410.
• The Bureau reported suspicion to 260 persons, and 86 cases were sent to court.
• Decisions were made in 23 cases.
• 17 convictions have become legal.
56
Consideration of NABU cases in courts
• As of September 01, 2017
Results of work: high-profile cases
• The case of the ex-head of the State Fiscal Service R. Nasirov.
The ex-head of the State Fiscal Service, dismissed from office, is accused of illegally providing
tax installments to the fugitive deputy A. Onishchenko. On June 26, 2017, R. Nasirov was
released by the Solomenskiy District Court on bail of UAH 100 million. The heads of NABU
and SAP admitted that taking into account the pace of consideration in court and the volume of
the indictment (800 pages), the case of R. Nasirov can be heard for years.
• The case of Judge N. Chaus, suspected of receiving a bribe in the amount of $ 150,000.
The suspect fled to Moldova, was detained there, but after the expiration of the period of
detention, he received a measure of suppression "house arrest" and is suing the Moldovan
authorities for political asylum. Negotiations on the extradition of N. Chaus to Ukraine are still
going on.
• Statement of ex-deputy A. Shepelev about the extortion of a bribe by Y. Lutsenko in 2006.
The statement of extortion and the receipt of a bribe of $ 150,000 by the current Prosecutor
General was ignored by law enforcement and anti-corruption agencies.
• The case of P. Manafort, accused of receiving $12.7 million from V. Yanukovych's team.
After D. Trump's victory in the US presidential elections, the case was hushed up in fear of
worsening relations with the American side. It was not renewed even after P. Manafort was
brought to trial in the United States.
57
Summing up
• The anti-corruption court has not yet been created and is unlikely to work until 2020 (in
accordance with the presidential bill, its formation is envisaged for 1 year).
• The amounts of funds returned by NABU and SAP to the treasury do not cover the costs of
their maintenance.
• The percentage of convictions that have entered into force is 19.7% of the number of cases
brought to court by NABU.
• Out of 423 declarations of people's deputies in two years, only 11 electronic declarations were
checked by the NAPC.
• Places in international anti-corruption ratings remain consistently low, and Western partners are
unhappy with the progress of the fight against corruption and attacks on anti-corruption activists.
58
Study No. 4
from the cycle "The Price of Reforms"
Health care reform141
Authors:
Daniil Bogatyrev,
Denis Gaevsky,
Anatoly Peshko,
Ruslan Bortnik
The state of the healthcare system is a key marker of the state of society and the state, a
“litmus test” of social changes and the real effectiveness of state policy. Unfortunately, a fair
number of problems have accumulated in this area, which are exacerbated by ill-considered
experiments and reforms. We have devoted this study to their consideration.
The current health situation
In the period from 2013 to 2015. the number of hospital beds per 10 thousand people
decreased from 88 to 78.1, and in 2017 this indicator decreased to 74 units per 10 thousand
people142.
Decreased in the above time period and the number of medical personnel per 10 thousand
people from 97.4 in 2013 to 87.3 in 2015. In 2018, there were 4.4 doctors and 8.6 nurses per 1000
people in Ukraine143. The shortage of medical workers in the regions of Ukraine bordering on the
EU countries is especially acute.
The amount of funds allocated for health care in the state budgets from 2013 to 2018
inclusive (consolidated budget in million hryvnia):
• 2013 - 61.5 ($ 7.68)144
• 2014 - 57.1 ($ 4.42)145
• 2015 - 71.0 ($ 2.95)146
• 2016 - 75.4 ($ 3)147
141 The original version of the presentation: https://uiamp.org.ua/cref/reforma- zdravoohraneniya-issledovanie-no4-iz-cikla-cena-reform
142 Pendzin O. Medical reform in a European way: what should Ukraine be guided by. Mind.
https://mind.ua/ru/openmind/20178091-medicinskaya-reforma-po- evropejski-na-chto-orientirovatsya-ukraine
143 Ibid.
144 Budget expenditures by function. The price of the state. http://cost.ua/ru/budget/ ex penditure
145 Ibid.
146 Ibid.
147 Ibid.
59
• 2017 - 102.3 ($ 3.8)148
• 2018 - 103.6 ($ 3.93)149
Despite the nominal growth in healthcare spending, which we can observe in the table
above, in freely convertible currency, they fell from $ 7.6 billion to $ 3.9 billion - almost twice. In
2018, 2.6% of GDP150 was spent on health care (for comparison: in 1998 - 3.3%151, in 2010 -
7.8%152, in 2012 - 7.4%153). In 2019, less than 3% of GDP was also allocated to medicine154154.
In the most developed countries of the world (USA, Belgium, Denmark, Norway) the same
indicator is at least 8%.
According to WHO recommendations, funding for the health sector should be maintained
at 7% of GDP.
Health care services are becoming unavailable for the average Ukrainian. In a study carried
out jointly by the International Renaissance Foundation, the Kiev International Institute of
Sociology and the NAUKMA School of Public Health “Health Index. Ukraine - 2016 ”, the
following data are given:“ 43% of the citizens of the country hospitalized in the last year were
forced to borrow or sell property to cover the cost of treatment. According to an all-Ukrainian poll,
the average amount of funds that Ukrainians had to borrow amounted to UAH 4865155”. In a
similar study for 2017, it is indicated that 30% of respondents were forced to refuse a visit to a
doctor or hospitalization due to financial problems. To be fair, it should be noted that in 2016 this
indicator was 42%, and in 2018 it dropped to 24%156. However, in some regions of the country it
still exceeds last year's level. Thus, in the Cherkasy region, due to financial difficulties, 75% of
the respondents refused to be examined / hospitalized157.
There is reason to believe that healthcare spending will continue to decline in the
foreseeable future. Adviser to the Cabinet of Ministers of Ukraine, ex-Minister of Economy of
Slovakia Ivan Miklos stated: “Financing of these spheres (health care and education) is excessive
and extremely ineffective. Therefore, it is important not only to cut costs, but also to improve the
quality of services, which, despite huge budget spending, remain poor. Do not invest unjustified
148 Ibid.
149 Ibid.
150 Expenditures on health care in the 2018 budget will amount to 2.6% of GDP. Bigmir.net.
http://finance.bigmir.net/news/86260-Rashodi-na-zdravoohranenie-v-budjete-2018- s ostavyat-26-VVP
151 First Annual Report of the Supreme Council for the sake of Ukraine for the rights of the people from the
standpoint of the defense of the rights and freedoms of the people in Ukraine, 2000.
http://www.uapravo.com/hro/text.php?lan=ukr&id=1727&id_book=1698&id_ p arent=1723
152 The system of financing health protection of Ukraine and new tendencies. HCM. http://www.hcm.in.ua/wp-
content/uploads/sistema_finansuvannya_ohoroni_zdorovya_ ukrayini_reformi_i_svitovi_tende
nciyi_shevchenko_m.v.pdf
153 Ibid.
154 Shklyarskaya O. The 2019 budget for medicine: free diagnostics and reform against the backdrop of savings.
Angle. https://racurs.ua/2088-budjet-2019-na-medicinu- besplatnaya-diagnostika-i-reforma-v-oblastyah-pilotah-na-fone-ekonomii.html
155 Health Index. Ukraine - 2016.http: //health-index.com.ua/zvit_index_2016_ukr. pdf
156 Health Index. Ukraine - 2018.http: //health-index.com.ua
157 Ibid.
60
sums in hospital walls, but redirect them to caring for the patient's health. This is an example of
structural reform158”.
In terms of the rate of population decline, Ukraine occupies one of the first places in the
world. The reason for this is not only labor migration, but also a high mortality rate of the
population. If in 2013 the negative balance (the difference between births and deaths) was 158
thousand people, then in 2017 it was already 210 thousand159. Thus, the negative balance increased
by 32.9%.
In 2015, Ukraine recorded the highest level of child and maternal mortality among
European countries. So, in Ukraine, 2378 cases of infant deaths were registered in the first 28 days
of life. In Poland, the same indicator was 1,122 cases, in Romania - 1,047, in Germany - 1,449160.
According to international estimates, in 2015, the country registered 120 cases of maternal
mortality, while in neighboring Poland - 12, Romania - 56, Germany - 42. At the same time, the
population of Poland and Germany significantly exceeds the population of Ukraine161.
In addition, there is a surge in the growth of tuberculosis incidence among children and
adolescents in Ukraine. It was the result of the missing BCG and tuberculin vaccines. In 2016, the
incidence rate of children increased from 4.2 to 5.8162 cases per 100 thousand population. In
general, in Ukraine, this figure was 8.6 cases.
According to the WHO, more than 5% of people in Ukraine are infected with hepatitis C,
in absolute terms it is more than 2 million people163. According to the chief state sanitary doctor
of Kiev, Oleg Ruban, there is a latent epidemic of viral hepatitis in Ukraine. Hepatitis C and B -
only in Kiev in 2015 a twofold increase in chronic viral hepatitis was registered164.
Ukraine remains the leader in Europe in terms of the spread of HIV infection. According to
UNAIDS experts, up to 250 thousand people live with HIV in Ukraine. And only every second
person knows about his diagnosis - as of October 1, 2016, 132 thousand HIV-positive patients
were registered in Ukraine165. According to experts, since 2014, the epidemiological situation with
HIV in our country has been rapidly deteriorating. One of the main indicators used to track the
development of the epidemic is the number of new cases of HIV infection. For 10 months of 2017,
158 Miklos named two failed reforms in Ukraine. Reviewer. https: // www.obozrevatel.com/finance/business-and-
finance/01948-miklosh-nazval-dve- provalnyie-reformyi-v-ukraine.htm
159 Ukrainians are becoming less and less: why is this happening and what will happen next. Today.
https://www.segodnya.ua/ukraine/pochemu-ukraincev-stanovitsya- vse -menshe-1064912.html
160 Deaths of children and women in childbirth. Is everything as bad in Ukraine as UNICEF claims? RIA Novosti
Ukraine. https://rian.com.ua/ analytics / 20170316 / 1022311180.html
161 Ibid.
162 Drugova I. There is an epidemic of tuberculosis, HIV and hepatitis in Ukraine. Next in line for the bubonic
plague? RIA. News Ukraine: https://rian.com.ua/ analytics / 20170226 / 1021761111.html
163 An innovative project for the treatment of hepatitis C was launched in Ukraine. 100 Life.
http://network.org.ua/ru/2017/07/28/v-ukraine-zapustili-innovatsionnyj-proekt- po -lecheniyu-gepatita-s /
164 There is a latent epidemic of viral hepatitis in Ukraine, it's worse than AIDS - Ruban. RIA Novosti Ukraine.
https://rian.com.ua/kiev/20160303/1006121615. html
165 The HIV situation is worse than in Africa: Germans are shocked by the situation in the Russian Federation.
League News. http://news.liga.net/news/world/14839187-
situatsiya_s_vich_khuzhe_chem_v_afrike_nemtsy_v_shoke_ot_polozheniya_v_rf.htm
61
this indicator increased by 10.1%166 compared to the same period in 2016. These data correspond
to the dynamics of the epidemic, which it was about 10 years ago.
In 2016, the World Health Organization predicted a measles epidemic in Ukraine in 2017,
since the level of vaccination in the country was lower than in African countries. At the end of
2017, the WHO forecast began to come true. A measles epidemic came to Ukraine, from which
(as of January 12, 2018) 5 people died in different regions of the country, including two children.
The total number of measles cases over the past year amounted to more than 7 thousand people167.
Answering the question about what epidemics of infectious diseases may arise in Ukraine
in the near future, the executive secretary of the National Medical Chamber of Ukraine S.
Kravchenko was categorical: “Due to the catastrophically low level of vaccination we can have
outbreaks of any immunosuppressive infectious diseases. In addition, given the state of affairs in
our infrastructure, which, in fact, has been destroyed, starting with aeration and water utilities, we
have to admit that the water in the tap and the water in the sewerage system are one and the same.
Therefore, we can have anything that is transmitted by contact and everyday life - and cholera is
the same168”.
Health care reform
At the end of 2016, the Cabinet of Ministers adopted 10 resolutions initiated by the
Ministry of Health on reforming the industry. One of them involved the creation of hospital
districts. Despite the fact that more than two years have passed since the adoption of the resolution,
the process of their formation has not yet been completed.
According to the plan, hospitals will be divided into hospital districts, in each of which one
specialized hospital will remain. They will serve the population of two or three districts of the
region at once. One district provides coverage of an area with a population of at least 200 thousand
people with a level 2 hospital or 120 thousand people with a 1st level hospital. Thus, some of the
medical institutions will be enlarged, and the rest will be re-profiled with a decrease in status and
staff reduction. According to the Ministry of Health of Ukraine, these measures should
significantly save public funds and improve the quality of medical care.
Disagreement with the reform decisions led to protests in the Vinnytsia region. Their
participants believed that as a result of the reform of U. Suprun, entire districts would remain
without full-fledged medical care, because in order to receive the necessary treatment, their
residents would have to go to other settlements, covering a distance of tens and hundreds of
kilometers, which is tantamount to a sentence for many patients and poor people.
166 AIDS in Ukraine: statistics as of 01.11.2017. Elena Pinchuk Foundation. http: // www.
antiaids.org/news/aids_stat/spid-v-ukraine-statistika-na-01112017-11214.html
167 More than 7 thousand people fell ill with measles this year in Ukraine - Ministry of Health. UNIAN.
https://health.unian.net/country/10040258-v-ukraine-v-etom-godu-koryu- zaboleli-bolee-7-tysyach-chelovek-minzdrav.html
168 Drugova I. There is an epidemic of tuberculosis, HIV and hepatitis in Ukraine. Next in line for the bubonic
plague? RIA Novosti Ukraine. https://rian.com.ua/ analytics / 20170226 / 1021761111.html
62
Later, similar protests took place in other regions of Ukraine. Participation in them was
noted mainly by rural residents and hospital staff, subject to reduction. The former were outraged
by the disappearance of medical facilities within walking distance, while the latter were outraged
by the loss of jobs.
The aforementioned executive secretary of the National Medical Chamber of Ukraine S.
Kravchenko commented on the creation of hospital districts as follows: “We see that within the
framework of the creation of hospital districts, there is “optimization”, but in fact - the destruction
of medical institutions. And this is contrary to the Constitution, which stipulates that this cannot
be done. Therefore, in this case, within the framework of this reform, the availability of medical
care for citizens of Ukraine and their medical provision are reduced169”.
During 2016 - 2018 there were regular scandals in connection with the purchase of foreign
drugs and vaccines. In the summer of 2016, the procedure for certification of foreign medicines
was simplified, which, according to a number of physicians, led to the prevalence of low-quality
drugs used to treat Ukrainians, since the examination of registration materials for medicines
purchased by international organizations was replaced by a validation translation of instructions
or information on the use of the drug. There were cases when the list of drugs purchased through
international intermediaries (UNDP, Crown Agents, UNICEF, etc.) included drugs of dubious
quality with Indian origin.
As of 2018, there was no effect from the reform of the reference pricing of medicines:
28.9% of medicines in Ukraine are more expensive than in neighboring EU countries, and the price
of a number of medicines is overstated by 14 times170.
The aforementioned reform initiatives at the end of 2016 were just the beginning of a large-scale and highly dubious reform of the healthcare sector, which we are witnessing. The main
legislative framework for the reform was adopted at the end of 2017, and at the time of this study
we were on the verge of its entry into full force.
This base consists of two laws signed by the President on December 29, 2017:
• "On state financial guarantees for the provision of medical services and medicines171" 171;
• “On increasing the availability and quality of medical services in rural areas172” 172.
The main innovation of the first law was the introduction of the concept
"State solidary health insurance". In fact, it means that there will be no transition to the insurance
model of medicine, which experts have been talking about for a long time and in which deductions
of each patient go to his personal insurance account, in Ukraine. The insurance model is good for
its accumulative principle, in which by the time of retirement (when citizens usually have problems
that require expensive surgical or conservative treatment), the patient accumulates an amount in
169 "Medical Maidan" was the beginning of a large-scale social explosion. Arguments and Facts.
http://www.aif.ua/opinion/medicinskiy_maydan_kak_nachalo_ ma sshtabnogo_socialnogo_vzryva
170 Ukraine after medical reform: a country of epidemics with record mortality. RIA Novosti Ukraine.
https://rian.com.ua/analytics/20180412/1034179276/ Ukraine-reforma-strana-epidemiya.html
171 Draft Law on State Financial Guarantee of Providing Medical Services to Likarsky Assistance. Verkhovna Rada
of Ukraine. http://w1.c1.rada.gov.ua/pls/zweb2/ w ebproc4_1? pf3511 = 61566
172 Law of Ukraine "On the promotion of the availability and quality of medical services at the Silk society" //
Vidomosty Verkhovnoi Radi (VVR), 2018, No. 5, Art. 32.https: //zakon.rada.gov.ua/laws/show/2206-19
63
his personal insurance account sufficient to cover the cost of all procedures. However, the
introduction of the model of “state solidarity health insurance” means that the Ukrainian authorities
have decided to go the other way.
As stated in the law, under such a system, contributions will be collected from all citizens
and sent to the general budget, from where they will then be redistributed to cover the “state
guaranteed package” of medical services to patients who have applied for medical care. To the
concept of a "guaranteed package".
Let us return below, but for now we note that this approach is fraught with serious problems
in the future. In their essence, they are similar to the problems of the solidarity pension system,
when the people currently employed provide for the current pensioners. Given the depopulation
and aging of the population, which are extremely relevant for Ukraine, in a few decades, when
today's able-bodied citizens will massively seek medical care, the system of solidarity health
insurance will not be able to provide them with sufficient funding for even a modest “guaranteed
package”.
As for the "guaranteed package" itself, it is nothing more than evidence of the abolition of
free medicine in Ukraine at the legislative level. In addition, in spite of the unambiguous name,
the law directly states that “The state guarantees full or partial ... payment for the services specified
in the guaranteed package173”. Actually, within the framework of the “package”, the state
guarantees payment for emergency, primary and palliative medical care, but specialized and highly
specialized care will be paid from the state treasury only in part. Basically, this means that the
word "guaranteed" here - nothing more than a fiction, because not all of the listed services are
going to be compensated by the state in full.
Another extremely dubious provision of the law is the creation of a central executive body
that implements state policy in the field of organizing financing for the provision of medical
services (later called the “State Health Service”). According to experts, excessive centralization
and lack of control of this body is fraught with increased corruption in the distribution of funds
allocated in the budget for medicine.
Thus, the Vice-President of the Academy of Economic Sciences of Ukraine, Candidate of
Medical Sciences A. V. Peshko, wrote the following in his publication about the medical reform:
“According to the medical“ reform,” a body not provided for by the Constitution is created, a
certain public council on medicine, which at its own discretion, without any outside control and
qualified management, will distribute the entire medical budget at its “great-power” discretion,
which a priori confirms the corruption nature of this a body that launders public health
expenditures of Ukraine, which is not under the control of either the medical community or the
employees of the Ministry of Healthcare of Ukraine174”.
As for the law “On improving the availability and quality of medical care in rural areas”,
one of its main innovations is “the introduction of telemedicine facilities on the basis of primary
173 Draft Law on State Financial Guarantor of Providing Medical Services to Likarsk Employees. Verkhovna Rada
of Ukraine. http://w1.c1.rada.gov.ua/pls/zweb2/ w ebproc4_1? pf3511 = 61566
174 Peshko A. Medical "reform" named after paramedic U. Suprun. League blogs:
https://blog.liga.net/user/apeshko/article/29886
64
health care centers”. In practice, this means that former rural hospitals, “downgraded” to the level
of feldsher-midwife stations, will become a place where doctors from the city will be treated via
Skype, with the only employee of such centers communicating with them. Needless to say, the
quality of the examination, and hence the accuracy of the diagnosis, will decrease significantly
with this method?
As for telemedicine in Ukrainian villages, one should also note the low rates of its
implementation. Thus, the World Bank, together with international partners, prepared the terms of
reference for the development of a software product for the implementation of telemedicine in 5
regions of Ukraine only at the beginning of 2019175.
Changes in the procedure for providing medical care have affected not only rural residents.
On April 2, 2018, a campaign of signing “declarations” with family doctors began in Ukraine.
Within the framework of the adopted concept of medical reform, therapists will turn (at the
beginning of 2019 they have already partially turned) into family doctors, without whose referral
it will be impossible to get an appointment with specialized specialists (for example, an
ophthalmologist, gastroenterologist, etc.). In addition, contrary to the statements of the acting.
Minister health care U. Suprun that citizens should not rush to choose a family doctor and sign a
declaration with him, since July 1, 2018, therapists, pediatricians and family doctors receive
patients free of charge only after signing this document.
Patients who sign the declaration with the family doctor will be entitled to the following
services:
• monitoring the state of health;
• diagnosis and treatment of the most common diseases, injuries, poisoning, complications during
pregnancy;
• accompanying a patient with chronic diseases;
• provision of emergency assistance;
• referral of the patient to provide secondary (specialized) or tertiary (highly specialized) medical
care;
• Prophylaxis (vaccination, reviews and studies of at-risk patients);
• hematological studies (general blood test with leukocyte formula), biochemical and
immunochemical studies (blood glucose, total cholesterol, general urine analysis), instrumental
research methods (electrocardiogram, sputum microscopy), rapid tests (for HIV, viral hepatitis,
syphilis)176.
For all services and procedures, except for the ones listed above (in the finally approved
list of free medical services for 2019, there are 54 services related to the above categories177),
patients will have to pay out of pocket, according to tariffs that are updated once a year.
175 How telemedicine will help rural residents of 5 regions in 2019. Faces. http://www.litsa.com.ua/show/a/44918
176 Medical reform: what free medical services will patients receive. Delo.ua. https: //
delo.ua/econonomyandpoliticsinukraine/medreforma-kakie-besplatnye-meduslugi- poluchat-pacienty-344180
177 In Ukraine, 54 medical services will become free. Today: https: //www.segodnya.ua / u kraine / v-ukraine-54-medicinskie-uslugi-stanut-besplatnymi-1202293.html
65
The above approach raises many questions even among ordinary citizens, not to mention medical
professionals. For example, it remains unclear whether a person will need the injured person to go
to the family doctor, or, as before, he will be able to go directly to the traumatologist.
The reform assumes that with the introduction of the institution of family doctors, the basic
rate of a doctor will be 370 hryvnia per patient per year. At the same time, a physician can sign
declarations with 2 thousand citizens. However, this does not mean that he will receive in his hands
the amount of 740 thousand hryvnia (2 thousand multiplied by 370). The hospital will accumulate
money for patient care. In particular, they will form the rates for narrow-profile specialists who do
not conclude contracts with patients. As for the real salary of a family doctor, it will, of course,
depend on how many patients he can “recruit”, but not directly. At the same time, the Aesculapius
will receive an additional payment for serving elderly patients.
In general, according to the calculations of the legislators, the salaries of doctors should grow 6
times. According to the Deputy Head of the Verkhovna Rada of Ukraine Committee on Health
Issues Irina Sysoenko, the starting salary of doctors should be 250% (over 18 thousand hryvnias)
of the average in Ukraine. Surgeons and neurosurgeons are promised 4-6 times the average salary.
In a professional environment, such rosy forecasts cause skepticism. So, according to the
aforementioned A. Peshko: “The load that is provided for one family doctor is 2 thousand people.
per year a priori shows that he will be able to devote to each of his patients no more than half an
hour of time throughout the year. If the doctor physically only has 30 minutes. time for
examination, examination, diagnosis and treatment of the aforementioned average patient, plus the
preparation of paper or even electronic documentation, no effective and real help, and even less
about any cure of the patient from any disease there is no need to speak178”.
Attention is also drawn to the personnel problems of Ukrainian medicine, which stood in
the way of implementing the health care reform.
according to the described principle. If we divide the population of Ukraine, which,
according to the State Statistics Committee, reaches 42 million 603 thousand, by the standard “2
thousand patients per doctor”, we can conclude that there is a need for more than 21 thousand
family therapists. According to some estimates, now there are about half of them.
Conclusion
As of the beginning of 2019, Ukrainian healthcare is in a deplorable state. Epidemics occur
on the territory of the country, the presence of which is unthinkable for a civilized state in the 21st
century. Child mortality in Ukraine is significantly higher than in neighboring countries of Eastern
Europe, and the volume of funding for the health sector is only 2.6% of GDP, instead of 7%
recommended by WHO. In these conditions, it becomes obvious that medical reform in our
country is really necessary.
178 Peshko A. Medical "reform" named after paramedic U. Suprun. League. Blogs.
https://blog.liga.net/user/apeshko/article/29886
66
Nevertheless, the concept of reforming the health sector that is being introduced now raises
a lot of questions. The system of “state solidarity health insurance” introduced by the law “On
state financial guarantees for the provision of medical services and medicines” will inevitably lead
to the fact that in the future the amount of funds for payments for state-guaranteed medical services
will steadily decrease. The introduction of “telemedicine” instead of full-fledged medical care in
rural areas will lead to further population decline due to an increase in mortality and emigration
abroad in search of better living conditions. In addition, the spread of this technology leaves hope
for the best.
The introduced concept of family medicine will worsen the quality of patient care due to
the high workload on doctors, create new bureaucratic procedures related to the signing of
declarations, and is unlikely to be able to raise the salaries of doctors to the promised level due to
providing hospitals with the opportunity distribution of funds allocated to patients (fertile ground
for corruption). As a result, we run the risk of getting a situation in which hospital bosses will write
out exorbitantly high salaries for themselves, and ordinary family doctors will still have to demand
humiliating handouts from patients and ask them to buy medicines at their own expense.
During the period of implementation of the healthcare system reform (2016 - 2018), we
did not see significant changes for the better, and the above-mentioned shortcomings of the
introduced concept give us reason to believe that in the future it will not succeed, destroying the
remnants of the old medical system and not offering anything effective in return.
Afterword
The UIAMP study on health care reform was published in April 2018. Updating it for
inclusion in this book, we have updated the material with fresh data.
Since the publication of the study, the model of health sector reform described in it has
begun to materialize. As of the end of 2018, more than 20 million people all over Ukraine signed
declarations with family doctors179179. Nevertheless, the results of opinion polls on the topic of
trust and. about. Minister of Health Ulyana Suprun and the reform she is carrying out speak of a
negative assessment by citizens of both the head of the Ministry of Health and her activities.
According to the October (2018) survey of the Sofia Center for Social Research, 75% of
respondents did not trust Ulyana Suprun180. A poll on trust in the advice of the U. Suprun,
conducted in September of the same year, showed a 68.5% level of distrust181.
In view of the “toxicity” of the figure of Ulyana Suprun and the reform she is carrying out,
attempts are regularly made in parliament and courts to remove her from the post of acting. Head
of the Ministry of Health. At the time of compilation of this book (February 2019), the last of them
179 Declarations with the doctor were signed by over 20 million Ukrainians. Today.
https://www.segodnya.ua/ukraine/deklaracii-s-vrachom-podpisali-bolee-20-millionov- u kraincev-1186279.html
180 "Politics with female disguises". Center for Social Doslidzhen "SOFIA". http://sg-sofia.com.ua/politika-z-
zhinochim-oblicham?utm_referrer=
181 Poll: how many Ukrainians believe in the professionalism of Ulyana Suprun. Et Cetera.
https://etcetera.media/opros-kakaya-chast-ukraintsev-verit-v-professionalizm-ulyanyi-suprun.html
67
was undertaken by deputy I. Mosiychuk, at whose suit the Kiev District Administrative Court
banned U. Suprun for several days from performing the duties of running the ministry182. However,
a few days later the court annulled its decision183.
In general, with the exception of a number of scandals around the personality of U. Suprun,
no significant changes have occurred in the trajectory of the ongoing reform of the health care
system since the initial publication of the study. As of the beginning of 2019, all of the above
conclusions remain valid.
182 The court clarified the ruling banning Suprun from exercising the powers of the minister. Censor.net.
https://censor.net.ua/news/3110685/sud_razyasnil_reshenie_o_
zaprete_suprun_realizovyvat_polnomochiya_ministra
183 The judge overturned the decision by which Suprun was banned from acting as head of the Ministry of Health.
Delo.ua: https://delo.ua/econonomyandpoliticsinukraine/sudja-otmenil- reshenie-kotorym-suprun-zapretili-350181 /
68
UKRAINIAN INSTITUTE FOR ANALYSIS AND POLICY MANAGEMENT
The cost of reforms. Health care reform.
April 2017
Kiev
Authors of the study:
Daniil Bogatyrev
Denis Antonovich
Anatoly Peshko
Ruslan Bortnik
Director
Bortnik Ruslan Olegovich
Tel .: +38 093 757 75 65
69
Current position
Number of nursing staff and hospital beds
• In the period from 2013 to 2017. the number of hospital beds per 10 thousand people decreased
from 88 to 74.
• In the above time period, the number of medical personnel in terms of 10 thousand people also
decreased from 97.4 in 2013 to 87.3 in 2015.
• Currently, there are 4.4 doctors and 8.6 nurses per 1000 people in Ukraine.
• The deficit of medical workers is especially acute in the regions of Ukraine bordering on the
EU countries.
Healthcare spending in the budgets of 2013-2018
Year
Healthcare spending, consolidated budget
Billion UAH
Billion USD
2013
61.5
7.68
2014
57.1
4.42
2015
71
2.95
2016
75.4
3
2017
102.3
3.8
2018
103.6
3.93
Budget expenditures on health care as a percentage of GDP
• Today, 2.6% of GDP is spent on health care.
• For comparison: in 1998 this indicator was 3.3%, in 2010 - 7.8%, and in 2012 - 7.4%.
• In the most developed countries of the world - the USA, Belgium, Denmark, Norway, the same
indicator is at least 8%.
• According to WHO recommendations, funding of the health sector should be maintained at 7%
of GDP.
70
Accessibility of healthcare services
• In the study “Health Index. Ukraine - 2016” provides the following data:
43% of the country's citizens hospitalized over the past year were forced to borrow or sell
property to cover the cost of treatment.
• The average amount of funds that the Ukrainians had to borrow amounted to UAH 4865.
• A similar study from 2017 indicated that 30% of respondents were forced to refuse a visit to a
doctor or hospitalization due to financial problems.
Fertility and mortality
• In 2013, the negative balance (the difference between births and deaths) was 158 thousand
people, and in 2017 it was already 210 thousand. Thus, the negative balance increased by 32.9%.
• Today, Ukraine has the highest level of child and maternal mortality among European
countries. In 2015, 2378 cases of infant deaths in the first 28 days of life and 120 cases of
maternal deaths were registered in Ukraine.
Epidemics
• In Ukraine, there is a spike in the growth of tuberculosis incidence among children and
adolescents. It was the result of the loss of the BCG vaccine and tuberculin. In 2016, the
incidence rate of children increased from 4.2 to 5.8 cases per 100 thousand population.
• According to the WHO, more than 5% of people in Ukraine are infected with hepatitis C, in
absolute terms it is more than 2 million people.
• Our country remains the leader in Europe in terms of the spread of HIV infection. According to
UNAIDS experts, up to 250 thousand people live with HIV in Ukraine. For 10 months of 2017,
the number of new HIV infections increased by 10.1%.
• In 2016, the World Health Organization predicted a measles epidemic in Ukraine in 2017. At
the end of 2017, the WHO forecast began to come true. A measles epidemic came to Ukraine,
from which (as of January 12, 2018) 5 people died in different regions of the country, including
two children. The total number of measles cases over the past year was more than 7 thousand
people.
Reform: hospital districts
• At the end of 2016, the Cabinet of Ministers adopted 10 resolutions initiated by the Ministry of
Health, one of which provided for the formation of hospital districts.
• According to the plan, hospitals will be divided into hospital districts, in each of which one
specialized hospital will remain. They will serve the population of two or three districts of the
region at once.
• One district provides coverage of an area with a population of at least 200 thousand people with
a level 2 hospital or 120 thousand people with a level 1 hospital.
71
Problems in the procurement of drugs
• Over the past 2 years, there have been regular scandals in connection with the purchase of
foreign drugs and vaccines. In the summer of 2016, the procedure for certification of foreign
medicines was simplified, which, according to a number of physicians, will lead to the
prevalence of low-quality drugs used to treat Ukrainians.
• Examination of registration materials for medicines purchased by international organizations
has been replaced by checking the correctness of the translation of the instructions or information
on the use of the medicine.
• There is still no effect from the reform of the reference pricing for medicines - 28.9% of
medicines in Ukraine are more expensive than in neighboring EU countries, and the price of a
number of medicines is overstated by 14 times.
Legal framework for the reform
• The Law of Ukraine “On State Financial Guarantees for the Provision of Medical Services and
Medicines”.
• Law of Ukraine “On improving the availability and quality of medical services in rural areas”.
• Both laws were signed by the President on December 29, 2017.
Health Reform Law Provisions
• The main innovation of the first law was the introduction of the concept
tiya "state solidary health insurance". In fact, it means that there will be no transition to the
insurance model of medicine in Ukraine.
• Under such a system, contributions will be collected from all citizens and sent to the general
budget, from where they will then be redistributed to cover the “state guaranteed package” of
medical services to patients who have applied for medical care.
• Given the depopulation and aging of the population of Ukraine, in a few decades, when current
able-bodied citizens will massively seek medical care, the system of solidarity health insurance
will not be able to provide them with sufficient funding for even a modest “guaranteed package”
"Guaranteed package" and its pitfalls
• The “Guaranteed Package” is nothing more than evidence of the abolition of free medicine in
Ukraine at the legislative level.
• Despite the unambiguous name, the law directly stipulates that “The state guarantees full or
partial ... payment for the services included in the guaranteed package”.
• As part of the “package”, the state guarantees payment for emergency, primary, and palliative
medical care, but specialized and highly specialized care will be paid from the state treasury only
partially.
72
Allocation of funds for financing medical services
• According to the law, a Central Executive Body is created.
government, implementing state policy in the organization of financing the provision of medical
services.
• According to experts, excessive centralization and lack of control of this body is fraught with
increased corruption in the distribution of funds allocated in the budget for medicine.
• So, Vice President of the Academy of Economic Sciences of Ukraine, Candidate of Medical
Sciences A.V. Peshko, in his publication on medical reform, wrote the following: “According to
medical
“Reform”, a body, as stipulated by the Constitution, is created, a certain public council on
medicine, which at its own discretion, without any outside control and qualified management,
will distribute the entire medical budget at its “great power” discretion”.
Rural medicine:
Reduction, degradation and treatment by Skype
• One of the main innovations of the law “On improving the accessibility and quality of medical
care in rural areas” is “the introduction of telemedicine facilities on the basis of primary health
care centers”.
• In practice, this means that former rural hospitals, “downgraded” to the level of feldsher-obstetric centers, will become a place where doctors from the city will be treated via Skype, with
whom the only employee of such centers will be in contact.
Family doctors and conclusion of declarations with them
• On April 2, 2018, the signing campaign began in Ukraine
“Declarations” with family doctors.
• Within the framework of the adopted concept of medical reform, therapists will turn into family
doctors, without whose referral it will be impossible to get an appointment with specialized
specialists.
• Contrary to the statements of the acting. Minister of Health U. Suprun said that citizens should
not rush to choose a family doctor and sign a declaration with him, since July 1, 2018, therapists,
pediatricians and family doctors will receive patients free of charge only after signing this
document.
73
Services provided by family doctors
• Patients who have signed a declaration with a family doctor will be entitled to the following
services:
-Health monitoring.
-Diagnosis and treatment of the most common diseases, injuries, poisoning, complications during
pregnancy.
-Accompanying a patient with chronic diseases.
-Providing emergency care.
-Direction of the patient to provide him with secondary (specialized) or tertiary (highly
specialized) medical care.
-Prophylaxis (vaccination, reviews and studies of at-risk patients).
-Hematological studies (general blood test with leukocyte count), biochemical and
immunochemical studies (blood glucose, total cholesterol, general urine analysis), instrumental
research methods (electrocardiogram, sputum microscopy), rapid tests (for HIV, virus- hepatitis,
syphilis).
• For all services and procedures other than those listed above, patients will have to pay out of
pocket, according to tariffs that are updated once a year.
Personnel problems of Ukrainian medicine
• If we divide the population of Ukraine, which, according to the State Statistics Committee,
reaches 42 million 603 thousand, by the standard “2 thousand patients per doctor”, we can
conclude that there is a need for more than 21 thousand family therapists.
• According to some estimates, now there are about half the number of doctors.
Workload and salaries of doctors
• The reform assumes that with the introduction of the institution of family doctors, the basic rate
of a doctor will be 370 hryvnia per patient per year. At the same time, the physician will be able
to sign declarations with 2 thousand citizens.
• However, this does not mean that he will receive in his hands the amount of 740 thousand
hryvnia. The hospital will accumulate money for patient care. In particular, rates for narrow-profile specialists will be formed from them.
• According to the legislators' calculations, the salary of physicians should grow 6 times and
amount to 250% (more than UAH 18 thousand) of the average in Ukraine.
• In a professional environment, such rosy forecasts cause skepticism. Thus, according to the
aforementioned academician, candidate of medical sciences A. Peshko, “the load that is provided
for one family doctor is 2 thousand people. per year, a priori, shows that he will be able to devote
no more than half an hour of time to each of his patients during the whole year”.
74
Study No. 5
from the cycle "The Price of Reforms"
Business deregulation reform184
Authors:
Daniil Bogatyrev,
Ruslan Bortnik
Reform of deregulation of doing business has been going on in Ukraine since 2015. Unlike
anti-corruption or medical reforms, it is not heard by the society, and all reports on its progress go
without proper media coverage. Meanwhile, this is one of the most ambitious reforms affecting
such spheres as legal regulation of doing business, the formation of an investment climate,
registration of property rights to real estate and even prices for socially significant food products,
as well as the basics of human life safety. in society. We present to your attention an analysis of
the interim results of the deregulation reform.
Deregulation of doing business
The deregulation reform was launched in April 2014, when the government of A.
Yatsenyuk began its first stage. Already in October 2014, the then prime minister reported on the
first results of deregulation, proudly stating that out of 56 regulatory bodies only 27 remained, 680
of more than 1,100 controlling functions remained, and only 84185 of 143 licenses now exist.
The beginning of the reform was presented under anti-corruption slogans. According to A.
Yatsenyuk, the reduction in the number of supervisory bodies and functions, as well as the
introduction of a moratorium on inspections, should have spurred the pace of business
development. This statement was fully consistent with the dogmas of the neoliberal approach to
the economy, in which any regulation of business by the state is considered a clear evil, and it is
assumed that, freed from such regulation, business will flourish, raising the entire economy and
creating more jobs.
However, theory has diverged from practice. The reduction in the number of control
functions and a moratorium on inspections pushed the business to save on product quality, safety
of warehouses and production facilities.
A striking example of the consequences of “deregulation” together with an unscrupulous
approach to doing business and a desire to hide corruption schemes was the fire at the oil depot of
184 Original version of the presentation: https://uiamp.org.ua/cref/issledovanie- no5-iz-cikla-cena-reform-reforma-deregulyacii
185 185 Arseniy Yatsenyuk: Praise for the package of anti-corruption new laws and deregulation to give Ukraine the
power of the article on the way to really fight against corruption. Uryadovy portal.
https://www.kmu.gov.ua/ua/news/247657661
75
the BRSM-Oil company near the city of Vasilkov in the Kiev region in the summer of 2015186.
The fire killed 6 people. In addition, irreparable damage to the environment was caused.
The prevalence of counterfeit products on store shelves was another consequence of "deregulation
from Yatsenyuk." This was especially pronounced in the growth of counterfeit alcohol volumes.
In the fall of 2016, a wave of fatal surrogate alcohol poisoning swept across Ukraine. In October
2016 alone, 143 cases of poisoning were registered throughout the country, 65 of which resulted
in the death of patients187.
Also, in October 2016, the head of the State Service of Ukraine on food safety and
consumer protection in Kiev, Oleg Ruban stated that about 40% of goods that hit the shelves of
Ukrainian stores are counterfeit188.
In 2015, the then Minister of Economic Development Aivaras Abromavicius began a new
stage of reform. The minister called deregulation the main priority for the activities of the body
entrusted to him. “Our priorities were clearly defined from the very beginning, and we adhere to
them. The first is deregulation, the second is the reform of state-owned enterprises, the third is
public procurement, and the fourth is the promotion of Ukrainian goods abroad189” - said A.
Abromavichus. Nevertheless, three years after the start of the reform, its slipping was obvious, and
the results leave much to be desired. To illustrate this thesis, let us turn to the official statistics.
For the period from 2015 to 2018 in Ukraine, two deregulation plans were adopted and
should have been implemented: the first for 2015–2016 and the second for 2016 - 2017. Let's
consider their implementation in order, based on the official data of the State Regulatory Service
of Ukraine.
Deregulation plan (2015-2016)190
The document consists of 12 sections, each of which is subdivided into a different number
of paragraphs. Some of them were successfully completed, and some were not. Below is an
analysis of completed / unfulfilled items in a tabular format.
186 The fire at the oil depot near Vasilkov uncovered the grandiose scam of the Belarusian Republican Youth Union
and the deception of drivers. TSN. https://ru.tsn.ua/politika/pozhar-na-neftebaze-pod- vasilkovom-rasskryl-grandioznuyu-aferu-brsm-i-obman-voditeley-439518.html
187 Already 65 people have died of alcohol poisoning in Ukraine. Gordon. http: // gordonua.com/news/localnews/ot-otravleniya-alkogolem-v-ukraine-umerli-uzhe-65- chelovek-155312.html
188 Greetings from the past from Yatsenyuk: Ukrainians are forced to eat cheap counterfeit products. News agency
Kharkov. https://nahnews.org/936849-privet-iz- proshlogo-ot-yacenyuka-ukraincy-vynuzhdeny-est-deshevyj-falsifikat
189 Guk O. Interview with the Minister of Economy Aivaras Abromavicius: “Well, what kind of a foreigner am I?”.
Today. https://www.segodnya.ua/economics/enews/intervyu- s -ayvarasom-abromavichusom-nu-kakoy-ya-inostranec-654438.html
190 Deregulation plan 2015-2016 p. The sovereign is the regulatory service of Ukraine. http: //
www.drs.gov.ua/deregulation/plan-deregulyatsiyi/
76
Section Name
Completed
Uncompleted
Items and
items and
Sub-Items
sub-items
Simplification of licensing and permitting procedures for
31
14
regulating economic activities
Improvement of procedures for technical regulation of economic
4
3
activity
Improvement of the procedure of state supervision (control) over
2
4
the regulation of economic activity
(no data for
one item)
Simplification of procedures for customs and tax regulation of
3
2
economic activities
(no data for
one item)
Improvement of Ukraine's position in the DoingBusiness rating
6
1
Simplification of the conditions for doing business in the
8
2
agricultural sector
Simplification of the conditions for doing business in the food
8
0
industry
Simplification of the conditions for doing business in the
8
1
construction industry
Simplification of the conditions for doing business property
3
0
activity in the electric power industry
(for one
item no
data)
Simplification of the conditions for doing business in the oil and
5
3
gas industry
Simplification of the conditions for doing business in the field of
8
4
information technology
Simplification of the conditions for doing business in the field of
8
11
telecommunications
Total
94
45
77
Items, the execution status of which at the time of the end of the plan was listed as “in the
process of execution” were taken into account as unfulfilled, since they were not completed on
time.
As we can see, out of 139 points and sub-points, only 94 were fulfilled according to the
results of the planning period. And 45 points and sub-points remained unfulfilled. Attention is
drawn to the fact that the deregulation of business in the field of telecommunications was the worst.
Here, out of 19 points and sub-points, only 8. We will draw more informative conclusions after
analyzing the plan for 2016-2017 and comparison of the results of the implementation of the two
documents.
Deregulation plan (2016 - 2017)191
This time the plan consisted of 10 sections with different numbers of points and sub-points.
An analysis of their implementation is given below in the form of a table.
Section Name
Completed
Uncompleted
Items and
Items and
Sub-items
Sub-Items
Simplification of the conditions for doing business in the
4
2
agricultural sector
Simplification of administrative procedures for regulating
8
25
economic activity
Simplification of the conditions for doing business in the
4
0
construction industry
Improvement of the procedure of state supervision (control)
6
3
over the regulation of economic activity
Expanding the opportunities of business entities to participate in
2
6
the provision of public services
Simplification of the conditions for doing business in the oil
6
2
and gas industry, subsoil use, and power generation
191 Deregulation plan 2016-2017 rr. The sovereign is the regulatory service of Ukraine. http: //
www.drs.gov.ua/deregulation/plan-deregulyatsiyi-2016-2017-rr/
78
Section Name
Completed Uncompleted
Items and
Items and
Sub-items
Sub-Items
Simplification of procedures for customs and tax regulation of
7
5
economic activity and reporting
(no data
for one
item)
Simplification of the conditions for doing business in the field of
14
8
information technology and telecommunications
Improvement of procedures for technical regulation of economic
4
1
activity
Simplification of the conditions for doing business in the food
3
2
industry
Total
58
64
In contrast to the previous plan for 2015 - 2016, here we see a negative dynamic of
implementation. Of the 122 points and sub-points, only 58 have been implemented, while the
majority (64) remain unfulfilled. This state of affairs seems especially deplorable, given that the
data are provided as of May 20, 2018, that is, almost five months after the announced deadline for
the implementation of the plan. But even these five months could not break the negative balance
of accomplished and unfulfilled.
It should also be noted that it had the least success in 2016 - 2017. managed to achieve in
the simplification of administrative procedures for regulating economic activities. Here we see 25
unfulfilled points versus 8 completed ones. Meanwhile, this section of the plan concerns all
industries and types of activity without exception, which means that it affects the investment
climate more than all others. The results of the simplification of the conditions for doing business
in the sphere of information technology and telecommunications. Obviously, keeping in mind that
in the previous plan the deregulation of the telecommunications sector showed the worst balance,
it was decided to combine it with the information technology sector in one column. But this did
not greatly improve the situation: 14 completed items and 8 unfulfilled ones. The “progress” of
regulatory reform in the field of information technology and telecommunications is most clearly
illustrated by a study published in 2018 by the Swiss business school IMD on competitiveness in
the digital environment. In the rating compiled according to the results of the study, Ukraine was
in 58th place out of 63192.
192 Despite the challenge from Asia. “The West” leads in digital - US, Canada and seven European countries in top
10. IMD. https://www.imd.org/news/updates/imd-world- d igital-competitiveness-ranking-2018 /
79
In general, comparing the results of the implementation of the two plans, we have to state
that even according to official sources in 2016-2017. deregulation reform slowed down
significantly. The picture of what is happening is complemented by a message from the same State
Regulatory Service dated the end of February 2018, which states that “60 and even more than 80%
of the planned activities remain unfulfilled by individual regulators193”.
Research by think tanks also suggests that there are no grounds for victorious reports on
the issue of deregulation of doing business. On October 2, 2018, the Bureaucracy Index 2018 study
was published by the analytical center “EasyBusiness”, which showed that the sphere of
employment in Ukraine is much more bureaucratic than in the rest of the studied countries (mainly
Europe)194. Thus, the number of man-hours that a Ukrainian entrepreneur must spend per year to
register employees is 170 people / hour with an average the indicator for the rest of the countries
is 74 people / hour. At the same time, the number of bureaucratic procedures required to register
an employee in Ukraine is 31% higher than the average. Given these data, it can be safely argued
that high taxes are not the only reason for "wages in envelopes." The reluctance of Ukrainian
employers to formalize their employees is also due to the bureaucratic nature of this process.
In early October 2018, discussions around the deregulation of control in the field of fire
safety resumed. The draft law “On Amendments to Certain Legislative Acts of Ukraine
Concerning the Methods of State Supervision (Control) in the Sphere of Technological and Fire
Safety” (No. 9132)195 was submitted for consideration to the Parliament. According to Andrey
Zaletov, member of the National Commission for Financial Services, it is designed to reduce
pressure on entrepreneurship by minimizing state supervision (control) measures in the field of
technogenic and fire safety196. We have already seen what such bills are fraught with during the
fire at the BRSM-Neft oil depot.
Involvement of non-state actors in the implementation of deregulation reform
Some nongovernmental structures are quite satisfied with the ongoing deregulation reform,
which is the main reason for their existence and the source of budget funds for their activities.
Such an organization is, for example, the Better Regulation Delivery Office, an independent nongovernmental structure, created on the initiative of the Ministry of Economic Development during
his tenure as head A. Abromavicius197. Arguing the need to create an OER, Deputy Minister Yulia
193 Tyravsky V. Deregulation in Ukraine is taking place, but very slowly. UBR. https://ubr.ua/business-practice/laws-and-business/derehuljatsija-v-ukraine- proiskhodit-no-ochen-medlenno-3865486
194 The sphere of pravlashtuvannya in Ukraine is bureaucratized. The state is the regulatory service of Ukraine.
http://www.drs.gov.ua/press-room/sfera- p ratsevlashtuvannya-v-ukrayini-zabyurokratyzovana /
195 Draft Law on Making Amendments to Acts of Legislative Acts of Ukraine as a Way of Hardening Powerful
Observation (Control) in the Sphere of Technogenic and Pozhezhnaya Security. Verkhovna Rada of Ukraine.
http://w1.c1.rada.gov.ua/pls/zweb2/ w ebproc4_1? pf3511 = 64699
196 Deregulation of state supervision in the field of technogenic and fire safety will contribute to the development of
the insurance market - Zaletov. Interfax Ukraine. https://interfax.com.ua/news/economic/535308.html
197 How the best regulation is happening in Ukraine: the first results of the robotics of the BRDO Efficient
Regulation Office. Reform in advance. http: // reforms. in.ua/ua/news/yak-stvoryuyetsya-yakisne-regulyuvannya-v-ukrayini-pershi-rezultaty- roboty-ofisu-efektyvnogo
80
Klimenko then said: “Realizing that no ministry today has sufficient resources to quickly analyze
and change the regulatory field, the Ministry of Economic Development has taken the initiative to
create a BRDO198” 198. From the lips of a high-ranking government official, this statement sounds
like a sign of his own impotence. It follows from it that the Ministry of Economic Development
itself is not able to conduct an appropriate analysis and remove regulatory barriers, and a dubious
non-state structure can do this without any special problems.
In fact, such a statement of the question may have two reasons:
• desire to show loyalty to Western partners and implement all measures recommended by an
organization affiliated with them;
• the intention to create a non-governmental structure, for which activities will be continuously
allocated funds from the budget, while the line ministry will not fulfill its direct responsibilities.
Considering that the OER was created in Ukraine and precisely at the initiative of the
Ministry of Economic Development (although it has a fashionable English-language name), we
tend to the second option.
According to the OER representatives, one of the key goals of their organization was to
improve Ukraine's position in the rating Doing Business. It is worth noting that Ukraine has indeed
managed to achieve some progress in this area. In 2015, our country climbed 16 points in the
ranking, taking 96th position199, in 2016 it continued to improve its indicators and provided ranked
83rd200, at the end of 2017 ranked 76th201, and at the end of 2018 - 71202. It would seem that
progress is obvious and an “independent non-governmental organization” could triumphantly
declare its success. If not for one “but”: the largest growth in the rating of Ukraine in “Doing
Business” was noted in 2014, when the country “skyrocketed” by 28 positions, taking 112th
place203. As a reminder, no Office of Effective Regulation existed at that time.
However, the very formulation of the goal of improving positions in the rating looks
strange, because in order to attract investment, the key condition is not only the simplicity of
legislative regulation of entrepreneurial activity, but also political stability in the state. Until the
end of the armed conflict in Donbass, or at least the establishment of a lasting truce, there is no
need to talk about this.
But even with the growth of positions in the rating, not everything is so smooth.
“Colleagues” of Ukraine in the post-Soviet space occupy much higher positions in it than our
country (even despite the growth of its rating from year to year). Thus, Russia in 2017 took 35th
198 Ibid.
199 In the Doing Business rating for ease of doing business, Ukraine climbed 16 points. Gordon.
http://gordonua.com/news / m oney / v-reytinge-doing-business-po- legkosti-vedeniya-biznesa-ukraina-podnyalas-na-16-punktov-64289.html
200 200 Ukraine has improved its place in the ranking of ease of doing business. TSN.
https://ru.tsn.ua/groshi/ukraina-uluchshila-svoe-mesto-v-reytinge-legkosti-vedeniya- biznesa-513706.html
201 Rankings & Ease of Doing Business Score. Doing Business. http: // www. d oingbusiness.org/rankings
202 There are no major changes. What does the growth of Ukraine in Doing Business mean? League business.
https://biz.liga.net/ekonomika/all/article/kardinalnyh-izmeneniy-net-o-chem- govorit-doing-business-2019
203 Doing Business-2014 rating: Ukraine skyrocketed by 28 positions. Details. http://podrobnosti.ua/938930-rejting-
doing-business-2014-ukraina-vzletela-na-28- pozitsij-no-v-top-100-ne-voshla-obnovleno.html
81
place, Kazakhstan - 36th, and Belarus - 38204. An even more significant gap is observed with its
western neighbors. In last year's ranking, Poland took 27th place.
In view of the above, even if we assume that when choosing a country for financial
investments, foreign investors are guided exclusively by the Doing Business rating, the
conclusions for Ukraine will be disappointing.
Another ambitious goal of the Office of Effective Regulation in 2015 was the development
and implementation of the information and analytical system PROSTIR, designed to “analyze the
complex impact of any regulatory function on individual markets and make informed decisions
based on macroeconomic indicators205". As of the end of 2018, this system has not been developed
and implemented.
Looking ahead, we note that the OER is constantly gushing with dubious ideas about
deregulation in various spheres of the state's life. Its employees did not bypass the party and the
regulation of prices for socially important products. But first things first.
On May 5, 2018, the Cabinet of Ministers approved a package of decisions developed by
the Office for Effective Regulation in conjunction with the Ministry of Economic Development206.
All of them were aimed at further deregulation of the norms of doing business by curtailing the
powers of regulatory authorities and abolishing seals confirming the legal origin of products. In
particular, instead of inspections of enterprises by the relevant inspectorates, it is proposed to
create an “analytical system that will operate on the basis of a risk-based approach”. As conceived
by the authors of the initiative, such a system will allow checking not all enterprises in a row, but
only those where there are risks of violations. The mechanism for identifying such risks remains
unclear. The only way to identify them without preliminary checks is to check enterprises based
on the results of poisoning with low-quality products or accidents at work. That is, instead of work
proactively, it is proposed to use a reactive approach. Needless to say, such initiatives are fraught
with new victims of non-observance of industrial safety regulations and poisoning with counterfeit
products?
The list of industries subject to deregulation as a result of the aforementioned package of
decisions of the Cabinet of Ministers deserves special attention. The official statement on the
website of the Ministry of Economic Development says the following: “The government has
canceled a number of acts in order to reduce the burden on retail trade in alcoholic beverages, trade
in petroleum products and repair of household appliances in terms of the use of seals207”.
That is, the lowering of safety standards is applied specifically to those industries, the deregulation
of which has already led to a man-made disaster and poisoning by a surrogate, which has claimed
204 Rankings & Ease of Doing Business Score. Doing Business. http: // www. d oingbusiness.org/rankings
205 How the best regulation is happening in Ukraine: the first results of the robotics of the BRDO Efficient
Regulation Office. Reform in advance. http: // reforms. in.ua/ua/news/yak-stvoryuyetsya-yakisne-regulyuvannya-v-ukrayini-pershi-rezultaty- roboty-ofisu-efektyvnogo
206 Uryad adopted low deregulation initiatives of the Ministry of Economic Development. Ministry of Economic
Development and Trade of Ukraine. http://www.me.gov.ua/News/ Deta il? lang = uk-UA & id = 06058746-eb3c-4c71-ba94-2dda81f8df6a & title = UriadPidtri mavNizkuDereguliatsiinikhInitsiativMinekonomrozvitku
207 Ibid.
82
more than 70 human lives. It is easy to guess that with the entry into force of the new rules,
tragedies may repeat themselves.
The “firm tread of reform” continued on 18 July 2018, when the Cabinet of Ministers
adopted the so-called “Sixth Deregulation Package”, simplifying the employment of foreigners in
Ukraine208. The corresponding decision provides for the cancellation of the possibility of refusing
to issue a residence permit on the basis that the date of entry into Ukraine precedes the date of
obtaining a work permit. The message of the Ministry of Economic Development and Trade says
that the expected result of such changes is the openness of Ukraine for highly qualified foreign
specialists, as well as a decrease in the burden on the Migration Service. According to the first
deputy head of the department M. Nefyodov: “We are not talking about illegal migrants coming
to us. The point is to remove absolutely absurd norms of legislation, when a person who received
a certificate for permanent employment ... must leave the territory of Ukraine and come back209”.
In reality, the situation looks somewhat different. Given the low level of wages, highly
qualified foreign specialists are unlikely to go to work in Ukraine, especially in conditions when
our own professionals are actively leaving abroad. But for illegal (or semi-legal) migrants from
the Middle East and Africa, Ukraine remains quite attractive (albeit not as attractive as the EU
countries). We have seen examples of how simple documents are forged to obtain a residence
permit or Ukrainian citizenship for immigrants from the aforementioned regions in numerous
stories with fictitious marriages. The loudest of them was exposed in Odessa, where Arab students
"married" local pensioners in order to obtain a residence permit. After the above deregulation
norms come into force, a similar situation may be repeated (on a much larger scale) with work
permits. All sorts of small entrepreneurs will happily arrange them for hard currency and a small
(by foreign standards) monthly fee. This can result in both a reduction in the number of low-skilled
jobs for Ukrainian citizens and an increase in ethnic organized crime.
A quick glance at the above figures and data is sufficient to draw some important conclusions.
First, during the course of the reform of the deregulation of entrepreneurial activity in Ukraine, a
number of enslaving legislative norms were indeed abolished. However, none of the adopted
deregulation plans, which had expired, were implemented in full. Moreover, we have to admit that
the progress of the reform slows down over time. If the deregulation plan for 2015 - 2016. was
fulfilled by 67.6%, then the next plan for 2016 - 2017. was fulfilled by only 47.5%. In addition, in
comparison with 2014 - 2015, progress in the Doing Business rating has slowed down
significantly210.
Secondly, on the initiative of one of the former ministers of economic development A.
Abromavicius, the analysis of state regulatory acts and the development of amendments to them
was partially entrusted to a specially created non-state structure – Office of effective regulation
208 Sixth package of deregulation: The Cabinet of Ministers has simplified the employment of foreigners in Ukraine.
UNIAN. https://economics.unian.net/finance/10192338-shestoy- paket-deregulyacii-kabmin-uprostil-trudoustroystvo-inostrancev-v-ukraine.html
209 Ibid.
210 See Sections: Deregulation Plan (2015 - 2016); Deregulation plan (2016 - 2017); and Engaging non-state actors
in the implementation of deregulation reform.
83
(Better Regulation Delivery Office). For three years of work, this organization has not achieved
the goals set for them, but continues to regularly receive funding for its activities from the state
budget. 54 million hryvnias have been allocated for the implementation of one project, developed
and implemented with the help of the OER - the Educational Platform211211. Some of these funds
will go towards the purchase of computers, however, the rest will be allocated directly to the
implementation of the project, which is the responsibility of the nongovernmental organization. At
the moment, the Office of Effective Regulation oversees five such projects, which makes it
possible to estimate the funds spent on it at about several tens of millions of hryvnias.
Deregulation of prices for manufactured goods, services, and consumer goods
Along with the reform of state regulation of the economic activity of private enterprises in
Ukraine the deregulation of prices for various goods and services is being systematically carried
out.
From October 1, 2016 to January 1, 2017, the effect of decrees No. 1548 of December 25,
1996 and No. 1222 of October 17, 2007 regarding state regulation of prices (to establish a
maximum trade markup of 15-20%) was suspended for 17 groups of goods, in particular for bread,
sugar, cereals, meat and sausages, cheese, sour cream, butter, baby food, eggs, etc.212
As it turned out later, this deregulation of prices was an experiment designed to study the
reaction of the market and consumers to such measures. As a result, prices for various food
products in 2016 increased from 7.9% (chicken carcasses) to 64.1% (cabbage)213.
Apparently, the government was satisfied with the result of the experiment and decided to abolish
state regulation of prices for certain food products on an ongoing basis. On June 7, 2017, the
Cabinet of Ministers of Ukraine adopted a resolution No. 394, which abolishes state regulation of
food prices214. It entered into force on July 1, 2017. According to the State Statistics Service, in
2017 the rise in food prices in different commodity groups ranged from 20% to 170%. At the same
time, vegetables rose in price the most: beets - by 170%, and carrots - by 160%215. For meat and
dairy products, the rise in price ranged from 21% (butter) to 39% (pork). The overall inflation rate
211 Office of Effective Regulation in addition to helping to light up the e-platform. New Ukrainian school.
http://nus.org.ua/news/ofis-efektyvnogo-regulyuvannya-dopomozhe-stvoryty-osvitnyu-e-platformu /
212 Retail pricing deregulation awaits. TradeMasterGroup. https: // trademaster.ua/zakon/312319
213 Food prices are growing: the TOP of the most expensive products in Ukraine has been named. Today.
https://www.segodnya.ua/economics/enews/ceny-na-edu-rastut-nazvan-top- s amyh-podorozhavshih-produktov-v-ukraine-781202.html
214 Decree from 7th worm 2017 p. No. 394. Cabinet of the Ministry of Finance of Ukraine. https: //
www.kmu.gov.ua/ua/npas/250050387
215 The State Statistics Service named the "leaders" of price increases among products in 2017. Today.
https://www.segodnya.ua/economics/enews/gosstat-nazval-liderov-podorozhaniya- s redi-produktov-v-2017-godu-1103370.html
84
in Ukraine in 2017 was 13.7% and exceeded the same indicator for the previous year (12.4%)216.
However, in 2018 it slightly decreased - to 9.76%217.
To illustrate the difference between how price / regulation deregulation is presented to
society and what it actually entails, the simplification of the industrial fishing permit system is best
suited. In 2015, lobbying for this decision, the head of the State Agency for Fisheries of Ukraine
Yarema Kovaliv stated that, according to the estimates of the service entrusted to him, after
deregulation, some commodity items produced in Ukraine (bream, carp, silver loaf) may amount
to 40%218. However, with the beginning of deregulation in 2016, the opposite trend began to be
observed - and over the year, prices for fish of Ukrainian production increased by an average of
1.7%219. Compared to the rest of the food, the increase is small, but this is clearly not the promised
40% price reduction.
As can be seen from the above data, the abolition of state regulation of consumer prices
led to their significant growth and a drop in the purchasing power of the population. But the process
of price deregulation in this area is not over yet.
On June 13, 2018, the Ukrtsukor Association called on the Chairman of the Verkhovna
Rada, Andriy Parubiy, to consider as soon as possible the draft Law of Ukraine “On invalidating
some laws of Ukraine on state regulation of the production and sale of sugar220”. The bill was
passed by the Verkhovna Rada on September 4, 2018 - and now the price of sugar is gradually
increasing, as has already happened with other products. It should also be noted that during 2016
- 2017. sugar remained almost the only product, the price of which (after taking off in 2014)
steadily decreased every year. In view of this, in this case, the argument about “ineffectiveness of
government regulation, unable to contain prices”, which is often cited by supporters of
deregulation in this area, seems untenable.
Sugar price deregulation initiatives are not limited to “free float” of sugar prices. Thus, on
June 19, 2018, the already mentioned non-governmental organization Office of Effective
Regulation held a round table “State price regulation in Ukraine, arguments for and against221”
From the press release of this event, it can be understood that its organizers are in favor of the
abolition of such regulation. The Law of Ukraine “On Prices and Pricing” of 2012 established state
regulation of prices for goods that have a significant impact on the general level and dynamics of
prices, have significant social significance and are produced by natural monopolies. The first two
categories are not clearly defined in the legislation, which leads to their arbitrary interpretation by
the authorized bodies. As a result, 139 spheres are subject to price regulation instead of 43, ”the
216 Inflation in Ukraine at the end of 2017 has become known. Today. https: //
www.segodnya.ua/economics/enews/stala-izvestna-inflyaciya-v-ukraine-po-itogam- 20 17-goda-1104391.html
217 Inflation rate in Ukraine in 2018. StatBureau. https: //www.statbureau. org / ru / ukraine / inflation
218 Deregulation will reduce fish prices by up to 40%. AgroNews. https://www.agronews.ua/ node / 55542
219 What kind of fish do Ukrainians buy and how much does it cost. Delo.ua. https://delo.ua/ business / kakuju-rybu-pokupajut-ukraincy-i-skolko-ona-stoit-340243 /
220 220 Ukrtsukor Calls on Verkhovna Rada to Support Deregulation of the Sugar Market. ProAgro.
http://www.proagro.com.ua/news/ukr/15114.html
221 221 Business insight: more low challenge. Office of effective regulation.
https://www.facebook.com/brdo.ukraine/posts/600650413627372
85
announcement of the event says222. Based on the fact that the Office of Effective Regulation plays
a significant role in planning deregulation measures, which it then recommends to the Ministry of
Economic Development, during 2019 we should expect appropriate initiatives to amend the
aforementioned Law of Ukraine “On Prices and Pricing”.
Deregulation of prices is taking place not only in the retail food trade, but also in the sphere of
transport services. As part of this policy, on February 19, 2018, Ukrzaliznytsya introduced a new
procedure for determining the tariff for the use of freight cars belonging to it. As a result, the tariff
increased by 16-17% depending on the distance of transportation223. This circumstance
significantly affected the enterprises of the agricultural sector, which are one of the main users of
this service. As a result, in the fall of 2018, bakery products rose in price.
As for the very formation of the tariff for the rental of wagons “On a market basis”, it looks
absurd in the absence of a market. Ukrzaliznytsia is the only company on the Ukrainian market
that provides services of this kind. The service price is formed taking into account such factors as
the freight rate (70% when the tariff for car rental is set) and station dues (6%). The cost of both
components is determined by "Ukrzaliznitsa "alone. Thus, under the pretext of “deregulation,” the
monopolist simply raises prices in the hope of getting 3 billion hryvnias of additional profit.
But the most disastrous consequences for ordinary citizens are threatened by the
deregulation of energy prices, to which during 2017-2018. European partners called on Ukraine.
In particular, in the fall of 2017, such calls were made by the Director of the EBRD in Ukraine
Shevka Acuner224 and the chief economic adviser to the Prime Minister of Ukraine, Slovak
politician Ivan Miklos225.
After analyzing the above data, we can conclude that the deregulation of prices for food
products, as well as for services provided to citizens and private enterprises, led to a significant
rise in prices for these goods and services. The lack of a market in some areas allows local
monopolists (Ukrzaliznytsia, Naftogaz and others) dictate their terms to consumers and raise the
price unilaterally for no apparent economic reason. As a result, the policy of price deregulation
negatively affects the well-being of most households and the development of private
entrepreneurial initiatives.
Property registration reform
On December 13, 2015, the laws “On state registration of rights to real estate”, “On state
registration of legal entities, individual entrepreneurs and public organizations”, “On amendments
222 Ibid.
223 "Deregulation" of the carriage component: but things are still there. AgroPortal. http: //
agroportal.ua/views/blogs/deregulyatsiya-vagonnoi-sostavlyayushchei-a-voz-i-nyne- tam / #
224 224 Participants of the Kiev International Economic Forum called for a move away from manual regulation of
energy prices. Ukrainian news. https://ukranews.com/news/523309-uchastnyky-kyevskogo-mezhdunarodnogo-ehkonomycheskogo-foruma-pryzvaly-otoyty-ot-ruchnogo
225 The greatest success in the energy reform - deregulation of prices in the energy sector - Ivan Miklos.
Commander-in-Chief. https://glavcom.ua/news/naybilshiy-uspih-energoreformi- deregulyaciya-cin-na-energonosiji-ivan-miklosh-446399.html
86
to Budget Code of Ukraine (regarding the financial support for the provision of administrative
services by local self-government bodies) ”, simplifying the entry of data into registers226.
Thus, a registration reform began in Ukraine, the goals of which were declared to be the
simplification of the registration procedure, the fight against corruption in the field of registration,
and additional protection of property rights. A key innovation was the acquisition of the right to
amend the registers by private notaries, accredited banks, centers for the provision of
administrative services of local councils and even Ukrposhta.
The head of the Ministry of Justice Pavel Petrenko then declared: “We did the right choice
by handing over these functions to professional notaries. Their motivation not to commit illegal
actions is much higher, because they risk losing their license227”.
It should be noted that the reform has not yet achieved the stated goals. Instead of making
it easier to do business, the adopted legislation provided new opportunities for fraudsters and
raiders who, with the help of corrupt registrars, transfer property and corporate rights to
themselves. Raiding is facilitated by the fact that when dealing with real estate, a title deed is no
longer issued - all information is stored only in the electronic register. The obligatory notarization
of the signatures of the founders and authorized persons on the constituent documents is not
required, nor is the notarization of the constituent agreement required. Private businesses are no
longer required to use stamps. The territorial principle of registration actions has been canceled.
All this led to the fact that in October 2016, parliamentarians needed to adopt a law "On
Amendments to Certain Legislative Acts of Ukraine Concerning Improving State Registration of
Rights to Real Estate and Protection of Property Rights228", which was nicknamed "anti-raider
law". " (in particular, the mandatory provision of extracts from the state register in paper form was
returned).
If we turn to the statistics, then, according to the Deputy Head of the Ministry of Justice
Pavel Moroz, in 2015 3,000 raider attacks were recorded, 90% of which were successful. In 2016,
the number of raider seizures exceeded 3 thousand229. The indicators of the growth of raiding in
certain sectors of the economy are also impressive. Thus, in 2017, the number of raider seizures in
the agricultural sector increased 2.5 times230.
According to the Anti-Raider Union of Entrepreneurs of Ukraine, today there are more
than 30 large raider groups operating in the country with connections in the Ministry of Justice,
courts and law enforcement agencies. It is noteworthy that according to the results of 2016 in the
226 The transfer of more importance to the sphere of state restructuring, like a warehouse reform of decentralization
in Ukraine. Migratsiya. http://migraciya.com.ua/news/MainTerritor ia lDepartmentofJusticeintheOdessaregion / ua-the-transfer-of-authority-in-the-civil- register-as-part-of-decentralization-reform-in-ukraine /
227 227 In our country, some law enforcement agencies work on the principle of television shows. Channel 112.
https://112.ua/interview/u-nas-nekotorye-pravoohranitelnye-organy- rabotayut-po-principu-teleshou-421224.html
228 228 Law of Ukraine "On the introduction of amendments to certain legislative acts of Ukraine as well as for a
thorough restructuring of the rights of the state to protect the rights of power" // Vidomosty Verkhovna Radi (VVR),
2016, No. 47, article 800 http: // zakon2. rada.gov.ua/laws/show/1666-19
229 Raiding in Ukraine: out of 3 thousand capture attempts, 2.7 thousand were successful - Dorotich. RIA Novosti
Ukraine. https://rian.com.ua/ economy / 20161008 / 1017497642.html
230 During the year, the number of raider seizures of Ukrainian fields increased by 2.5 times. Voice.ua.
https://golos.ua/i/588379
87
world ranking of the Property Rights Index, Ukraine dropped to 115th place out of 128 (in 2015 -
109th place out of 129). In 2017, the trend continued - and our country was already in 123rd place
out of 127231.
Raiders show a particular interest in agricultural land, since the export of agricultural
products in the general structure has already grown to 40%.
In the fall of 2016, the head of the Association of Farmers and Landowners, Ivana Tomich,
announced that over the past year, raiders destroyed 2,000 farms232.
However, it is difficult to say unequivocally what is the contribution of the legislative amendments
of December 13, 2015 to the increase in the incidence of raiding. In addition to the transformation
of legal norms, the growth in the number of attempts at raider seizures is facilitated by:
• reduction of the resource base;
• fragmentation of the country's legal field;
• collapse of law enforcement and judicial systems.
Nevertheless, it can be unambiguously asserted that with the help of unlawful interference,
attacks were carried out on the assets of the American company Bunge Ukraine (elevators in
Vinnitsa region), the network of gas stations of the Latvian company TRI Management, the
network of Lithuanian hypermarkets Novus (under threat had assets for UAH 1 billion). These
cases were included in the top 5 raider attacks on the assets of foreign investors in Ukraine in
2016233.
In the first half of 2016, the Ministry of Justice received about one thousand complaints
about the actions of registrars, most of which were related specifically to raider seizures. The goal
of fraudsters is not necessarily control over the entire enterprise - often it is enough to gain access
to liquid working capital.
No less resonant stories for the period 2014 - 2016. combined (legal and force) raider
attacks on the Zhitomir delicacies ”, supermarket chain“ Amstor ”, Kramatorsk metal warehouse,
Odessa market“ 7 km ”,“ Agro-firm Kornatskikh ”, private private enterprise“ Chumaki234”.
In addition, the cyber defense system requires serious improvement in registers of property
rights, since recently there has been a sharp increase in cases of cybercrime, when fraudsters gain
access to personal computers of notaries, and then copy over corporate rights and real estate
objects. Now in Ukrainian courts dozens of cases are being examined, where it is a question of
such manipulations with registers.
Economic losses from raiding are measured in billions of hryvnias - these are lost foreign
investments, and assets of enterprises that have been raided offshore, and payments by Ukraine in
cases lost in international courts, and much more. In a word, raiding is a complex problem that
231 The Right of Power - 2017. Ukrainian Helsinki Split of Human Rights. https: // helsinki.org.ua/pravo-vlasnosti-2017/
232 War for land in Ukraine. This is no longer raiding, this is robbery
RIA Novosti Ukraine: https://rian.com.ua/analytics/20170707/1025616798.html
233 TOP-5 raider seizures of foreign investors' assets. Business Censor:
https://biz.censor.net.ua/resonance/3009363/top5_reyiderskih_zahvatov_aktivov_ inostrannyh_investorov
234 Ibid.
88
will have to be solved for many years. It seems to us that an important step for its solution is not
only the improvement of legislation, but also the expansion of the “fodder base” through the new
industrialization of Ukraine, which will reduce the motivation for illegal enrichment.
Summarizing the above, one cannot fail to note a negative trend consisting in an increase
in the number of raider seizures and a fall in Ukraine's positions in international ratings of the
observance of property rights. Reform of state registration that took place in 2015 - 2016 not only
did not correct the situation, but also aggravated it. All this cannot but affect the investment
climate, the improvement of which was declared as the goal of all the above aspects of the
deregulation reform.
Conclusion
Having analyzed the activity and results of the deregulation reform in its three main areas
(deregulation of doing business, price deregulation, and deregulation of state registration), we
came to the following conclusions:
First, since 2014, the reform has been unsuccessful. Already the first two waves of
cancellation of regulatory acts and supervisory functions in 2014 - 2015. led to a catastrophic
deterioration of safety standards at enterprises and the quality of produced products. The
consequence of this policy was an increase in the number of counterfeit and simply low-quality
goods on store shelves (up to 40% of the total mass), as well as a wave of poisoning with surrogate
alcohol in 2016, during which more than 60 people died. The man-made disaster at the BRSM-Neft oil depot near Kiev in 2015, which killed 6 people, was also a consequence of the deterioration
in control over safety standards at enterprises. In this regard, it is especially significant that these
tragedies did not teach the Ukrainian government anything - and in the spring of 2018 it adopted
a new package of deregulation, which provides for another simplification of control in the spheres
of alcohol production and trade in oil products. Probably, in the future Ukraine will face a
repetition of the tragic poisonings and man-made disasters of 2015-2016.
Secondly, the results of the implementation of the deregulation plans approved by the
government are also questionable. In 2017 - 2018 the pace of reform in the field of doing business
has slowed down significantly compared to the period 2016-2017. None of the two deregulation
plans that have expired so far have been implemented to the end. Moreover, the deregulation plan
for 2016 - 2017. was completed by less than half. The negative dynamics is obvious.
Telecommunications and computer technologies remain one of the most problematic sectors in
terms of legislative deregulation, which is confirmed by Ukraine's low positions in the digital
competitiveness rating. At the same time, the industry in which deregulation is most active is
agriculture. This testifies to the priority of the agricultural sector over the sphere of knowledge-intensive production in the eyes of the government.
Third, the Ministry of Economic Development engages a non-governmental organization,
the Office of Effective Regulation, which it itself has created, in the analysis of regulatory acts and
planning the next steps of deregulation reform. From our point of view, this organization was
89
created to obtain and “wash out” of public funds received to finance its activities. According to
our estimates, only on projects supervised by the OER, as of the end of 2018 it earned several tens
of millions of hryvnias. The organization duplicates the functions that the ministry itself should
perform. In addition, over the three years of its existence, the OER has not achieved any of its
goals, with the exception of the dubious growth of Ukraine's positions in the rating.
“Doing Business”, which are far from the only criterion for increasing investment attractiveness.
The above-mentioned dubious proposals for further deregulation of the sphere of alcohol
production and trade in petroleum products were put forward by the Office of Effective Regulation.
Fourthly, the deregulation of prices for food products and services for the population and
business led to a significant increase in prices, which, for some commodity items, exceeded 200%
in two years. This circumstance negatively affects the purchasing power of citizens, since the new
prices “eat up” most of the growing average wages (not to mention the minimum). The planned
deregulation of gas prices, which is planned to be increased by 18% - 70%, threatens to have even
more disastrous consequences for the population. Considering that at the moment 65% of citizens
receive subsidies for utilities, and the state does not have enough funds to cover them, the next
increase in the price of gas (and after it for heating with hot water) threatens to generate a large-scale crisis of non-payments and evictions.
Fourthly, deregulation in the field of state registration did not give positive results. The
simplification of the rules for registering property rights and the expansion of the range of subjects
entitled to carry out registration actions led to a significant increase in crimes and fraud on this
basis. In addition, the number of attempted raider seizures is growing steadily from year to year.
This trend is especially noticeable in the agricultural sector, which, as we have already indicated
above, is a priority for the authorities in terms of getting rid of enslaving regulatory norms. In view
of the increase in the number of attempts at raider seizures, even the systematic deregulation of
the agricultural sector is not able to increase its attractiveness for foreign investors.
Thus, the following was spent on the reform of deregulation:
• 4 years of time;
• several billion hryvnias.
Its results were:
• an increase in the number of counterfeit products on the shelves of grocery stores up to 40% of
the total mass of goods;
• death of more than 60 people from poisoning with surrogate alcohol in 2016;
• a man-made disaster at the BRSM-Oil base, which claimed the lives of 6 people and had a
disastrous impact on the environment;
• an increase in prices for some commodity items by 200% for the period from 2016 to 2017;
• billions in losses from raiding, the growth of which was the result of deregulation of the sphere
of registration of property rights.
90
Afterword
An initial study by the Ukrainian Institute for Policy Analysis and Management on business
deregulation reform dates from October 2018. From its publication to February 2019, little has
changed in this area. Speaking about the consequences of the deregulation reform, first of all, it
should be noted that it has failed to achieve one of its main goals - the restoration of the inflow of
foreign investments into the Ukrainian economy. In 2012 the volume of foreign investments
amounted to 7.19 billion US dollars, then in 2016 (the most successful year in terms of investments
after the Euromaidan) this figure was 3.19 billion, and in 2018. - 1.53 billion235. Moreover, over
the last two years (2017-2018), when deregulation was carried out most actively, the volume of
investments not only did not increase, but more than halved.
The above indicates that the wrong strategy was chosen during the reform. Instead of
entrusting its implementation to specialized state structures, the authorities created an opaque
scheme involving the involvement of the Office of Effective Regulation, which is, in fact, a private
contractor, in the reform process. The work of this structure was aimed at increasing Ukraine's
positions in the “Doing Business” rating, which was really achieved. However, the volume of
direct foreign investments is not growing, but on the contrary - it is decreasing.
235 Foreign direct investment. last update: 14.01.2019. Ministry of Finance.
https://index.minfin.com.ua/economy/fdi/
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UKRAINIAN INSTITUTE FOR ANALYSIS AND POLICY MANAGEMENT
The cost of reforms. Deregulation reform.
October 2018
Kiev
Authors of the study:
Ruslan Bortnik
Daniil Bogatyrev
Director
Bortnik Ruslan Olegovich
Tel .: +38 093 757 75 65
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Current Position
• Reform of deregulation has been going on in Ukraine since 2015.
• This is one of the most ambitious reforms affecting such spheres as legal regulation of doing
business, formation of the investment climate, registration of property rights to real estate, prices
for socially important food products, and the basics of human life safety in society.
Deregulation of doing business
• Launched in April 2014
• In October 2014, out of 56 regulatory bodies, only 27 remained, out of more than 1,100
regulatory functions - 680, and out of 143 licenses - 84.
• The reform was launched under anti-corruption slogans.
First results
• Reducing the number of supervisory functions and moratoriums on inspections pushed
businesses to save on product quality and safety.
• Tragic results:
-fire at the BRSM-Neft oil depot (2015) - 6 dead.
- In October 2016, about 40% of goods in stores in Ukraine were counterfeit.
-143 cases of poisoning with surrogate alcohol in October 2016, 65 of them were fatal.
Deregulation Plan 2015-2016
● Only 94 promises out of 139 were fulfilled, whereas 45 were not.
● The worst results of deregulation took place in the field of telecom industry. Only 8
promises out of 19 were fulfilled.
Deregulation Plan 2016-2017
• Out of 122 points and sub-points, only 58 have been fulfilled. 64 remain unfulfilled.
• Negative dynamics of implementation of the plan in comparison with 2015 - 2016.
• Least success in 2016 - 2017 managed to achieve in the simplification of administrative
procedures for regulating economic activities. Here we see 25 unfulfilled points versus 8
completed ones. This section of the plan affects the investment climate more than all others, as it
concerns all industries and activities without exception.
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Outcomes
• 58th out of 63rd in the ranking of competitiveness in the digital environment (Swiss business
school IMD).
• The number of man-hours that a Ukrainian entrepreneur must spend per year to register
employees is 170 people / hour, while the average figure for other countries is 74 people / hour.
(Bureaucracy Index 2018 from EasyBusiness).
• The number of bureaucratic procedures required to register an employee in Ukraine is 31%
higher than the average (Bureaucracy Index 2018 from EasyBusiness).
• At the beginning of October 2018, a draft law “On Amendments to Certain Legislative Acts of
Ukraine Concerning the Methods of State Supervision (Control) in the Sphere of Technogenic
and Fire Safety” (No. 9132) was submitted to parliament for consideration.
We have already seen what such bills are fraught with during the fire at the BRSM-Neft oil
depot.
Involvement of non-state actors in deregulation
• Involvement of non-state structures in deregulation
• “Office of Effective Regulation” (Better Regulation-Delivery Office) is a non-governmental
structure created on the initiative of the Minister of Economic Development A. Abromavicius,
designed to “quickly analyze and change the regulatory field, since no ministry is able to do
this”.
• The main goal of the OER was the growth of Ukraine's positions in the Doing Business rating,
and it was achieved.
• In 2015, the country was ranked 96th, in 2016 - 83rd, in 2017 - 76th.
If not for one "but":
• The largest growth in the rating of Ukraine in the "Doing Business" was noted in 2014 (before
the existence of the OER / BRDO), when the country "skyrocketed" by 28 positions, taking
112th place.
• Only for the implementation of one project developed and implemented with the help of the
OER - the Educational Platform, 54 million hryvnias were allocated. Some of these funds will go
towards the purchase of computers, however, the rest will be allocated directly to the
implementation of the project, which is the responsibility of the nongovernmental organization.
At the moment, the Office of Effective Regulation oversees five such projects, which makes it
possible to estimate the funds spent on it at about several tens of millions of hryvnias.
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Price deregulation and its consequences
• Started in October 2016 (experimental).
• As a result, prices for various food products in 2016 increased from 7.9% (chicken carcasses)
to 64.1% (cabbage).
• June 7, 2017 - Resolution No. 394 was adopted, abolishing state regulation of food prices.
• According to the State Statistics Service, in 2017 the rise in food prices in different product
groups ranged from 20% to 170%. At the same time, vegetables rose in price the most: beets - by
170%, and carrots - by 160%.
Price deregulation and its consequences
• Price deregulation is taking place not only in the food retail sector, but also in the transport
services sector. As part of this policy, on February 19, 2018, Ukrzaliznytsya introduced a new
procedure for determining the tariff for the use of freight cars belonging to it. As a result, the
tariff increased by 16-17% depending on the distance of transportation.
• As part of the deregulation of energy prices, from November 1, 2018, gas for ordinary
consumers will cost UAH 8,550. per thousand cubic meters.
Property registration reform
• Began in 2015 with the entry into force of the laws “On state registration of rights to real
estate”, “On state registration of legal entities, individual entrepreneurs and public formations”,
and “On amendments to the Budget Code of Ukraine (relative - but financial support for the
provision of administrative services by local governments) ”, simplifying the entry of data into
the registers.
• Instead of making it easier to do business, the adopted legislation provided new opportunities
for fraudsters and raiders who, with the help of corrupt registrars, began to rewrite property and
corporate rights to themselves.
• This led to the fact that in October 2016, parliamentarians were forced to adopt the law “On
Amendments to Certain Legislative Acts of Ukraine Concerning the Improvement of State
Registration of Rights to Real Estate and Protection of Property Rights”, which was nicknamed
in the professional environment “Anti-raider law” and partially rolled back legal norms to the
state “before December 13, 2015” (in particular, the mandatory provision of extracts from the
state register in paper form was returned).
• In 2015, 3 thousand raider attacks were recorded, 90% of which were successful.
• In 2016, the number of raider seizures exceeded 3 thousand.
• The indicators of the growth of corporate raiding in certain sectors of the economy are also
impressive. So, in 2017, the number of raider seizures in the agricultural sector increased about
2.5 times.
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Property registration reform
• According to the information of the Anti-Raider Union of Entrepreneurs of Ukraine, today
there are more than 30 large raider groups operating in the country with connections in the
Ministry of Justice, courts and law enforcement agencies.
• According to the results of 2016, in the world ranking of the Property Rights Index, Ukraine
dropped to 115th place out of 128 (in 2015 -
- 109th place out of 129).
• In 2017, the trend continued, and our country was already in 123rd place out of 127.
Conclusions:
Thus, the following was spent on the reform of deregulation:
• 4 years of time;
• several billion hryvnias. Its results were:
• Increase in the amount of counterfeit goods on the shelves of grocery stores up to 40% of the
total mass of goods.
• Death of more than 60 people from poisoning with surrogate alcohol in 2016.
• Man-made disaster at the BRSM-Oil base, which claimed the lives of 6 people and had a
devastating impact on the environment.
• Increase in prices for some commodity items by 200% for the period from 2016 to 2017.
• Billions of losses from raiding, the growth of which was the result of deregulation of the sphere
of registration of property rights.
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Study No. 6
from the cycle "The Price of Reforms"
Decentralization reform236
Authors:
Daniil Bogatyrev,
Ruslan Bortnik
In 2014, the decentralization process started in Ukraine. All the talk about the need for
administrative-territorial reform, which had been conducted before, remained just talk and did not
go further than projects. Decentralization includes two blocks: budget decentralization itself and
administrative-territorial reform with the creation of united territorial communities. Below is a
retrospective analysis of the implementation of both blocks.
Fiscal decentralization
Within the framework of budgetary decentralization, the sources of replenishment of local
budgets have been changed. The essence of the changes is as follows237:
• payments for the provision of administrative services were transferred from the state budget
(except for 50% of the administrative fee for state registration of rights to real estate and state
registration of legal entities / individuals - entrepreneurs), as well as the state duty;
• the percentage of enrollment of the environmental tax has been increased from 35 to 80%;
• local budgets are assigned stable sources: personal income tax according to new standards
(budgets of cities of regional significance, districts - 60%, regional budgets
–15%, the budget of the city of Kiev - 40%) and 10% of the income tax to the regional budgets. It
should be noted that earlier (before the start of the reform) at the disposal of local budgets, 100%
of personal income tax (Kiev
- fifty%);
• from 2015, a tax was introduced on retail sales of excisable goods (beer, alcoholic beverages,
tobacco products, oil products) at a rate ranging from 2% to 5% of the cost of goods sold instead
of the tax for viticulture, horticulture and hop growing, which will be received to local budgets;
• Since 2015, the real estate tax base has been expanded by including commercial (non-residential)
property in taxation.
Have such changes led to an increase in local budget revenues? Let's consider specific indicators.
236 Original version of the presentation: https://uiamp.org.ua/cref/reforma- decentralizacii-v-ukraine-celi-hod-posledstviya
237 Budgetary decentralization: a real inflow on the financial basis of securing and generating the views of
territorial communities. Hromadske Space: https: // www.prostir.ua/?news=byudzhetna-detsentralizatsiya-realnyj-
vplyv-na-finansove- zabezpechennya-ta-rozpodil-vydatkiv-terytorialnyh-hromad
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On August 2, 2016, President of Ukraine P. Poroshenko, celebrating the “Day of the Paratrooper”
in Zhytomyr, said that the revenues of local budgets in 2016 due to the decentralization reform
increased by 43%238. In 2015, the then Prime Minister of Ukraine A. Yatsenyuk239 also spoke
about the 40% growth in local budget revenues.
At the same time, statistics paint a completely different picture for us.
Revenues of local budgets in 2013 amounted to 103.6 billion UAH240 240, in 2014 (at the
beginning of decentralization) - 99.1 billion, in 2015 –117.4 billion UAH, 2016 - 146.6 billion.
Nominal own revenues of local budgets (i.e., excluding transfers) in the period 2013 - 2016.
increased by UAH 78.3 billion, from 92.3 billion to 170.6 billion. At the same time, the share of
local budgets (excluding transfers) in the consolidated structure remained unchanged, amounting
to 21.5%.
However, one should distinguish nominal budget revenues from real ones. Indeed, inflation
in 2014 was 24.9%, and in 2015 - 43.3%241 241. The cost of many goods, services and works has
grown exponentially (in particular, the tariffs for housing and communal services by 4-6 times).
Thus, real revenues of local budgets fell: in 2014 - by 30.5%, and in 2015 - by 21% (compared to
2014) and by 57.5% (compared to 2013 g.).
However, in 2014 - 2015 in Ukraine, there was also a galloping devaluation. Therefore, if
in dollar terms the revenues of local budgets in 2013 amounted to $ 13.1 billion, then in 2014 - $
8.8 billion, in 2015 - $ 5.3 billion, and in 2016 - $ 5, 5 billion. So "In foreign currency" local budget
revenues fell by almost 2.5 times for (2013 - 2016).
With the development of the reform, officials tirelessly increase the perceived “profit” from
its implementation. Here's what they said about the reform in 2018:
“From 2014 to 2017, the own revenues of local budgets of Ukraine increased by UAH 124
billion. (from 68.6 billion to 192.7 billion). For 2018, the upward trend also continues. And the
total amount of financial resources at the disposal of local governments in 2017 for the first time
exceeded half of the total consolidated budget of Ukraine and amounted to 51.2%, ”the
government portal“ Decentralization ”says242.
Similar figures (the share of local budgets at the level of 52% of the consolidated budget)
were given by the President during his speech in the Cherkassy region on November 20, 2018243.
238 Poroshenko stated about the re-election of monetary budgets. Novini. http: // ua.lexss.org/5864-poroshenko-zayaviv-pro-perevikonannya-mscevih-byudzhetv. html
239 Yatsenyuk rozpov, as soon as they grew in income to the state budget. News-Cloud. http: // www.news-cloud.net/news/ukraine/28531-yacenyuk-rozpovv-nasklki-virosli-dohodi- derzhbyudzhetu.html
240 Consolidated budget of Ukraine. Last update: 27.02.2019. Ministry of Finance.
https://index.minfin.com.ua/finance/budget/cons/
241 Inflation Index. Last update: 13.02.2019 09:54. Ministry of Finance. https: //
index.minfin.com.ua/economy/index/inflation/
242 People's Deputies were presented with an assessment of the financial capacity of some communities.
Decentralization. https://decentralization.gov.ua/news/8489
243 President in Cherkasy: Decentralization is the opportunity to develop communities. President of Ukraine.
https://www.president.gov.ua/news/prezident-na-cherkashini- d ecentralizaciya-ce-mozhlivosti-roz-51086? fbclid =
IwAR3F3NMv2E9DH9bH- Hmkisn4Z_IeThwj1wxMWOVZDJrw5
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It is noteworthy that in these statistical calculations and statements of the President, in
contrast to last year, there is no comparison with 2013, when the dollar exchange rate was at around
UAH 8. Nevertheless, knowing the average dollar exchange rate for 2014, we can conclude that
in dollar terms over the specified period, the revenues of local budgets of Ukraine decreased by
slightly more than 1 billion dollars (from 8.8 billion to 7.24 billion). When compared with 2013,
local budget revenues fell by $ 5.86 billion.
The dependence of local budgets on transfers has not disappeared, which was declared one
of the goals of the reform. In 2013, the amount of transfers amounted to UAH 115.8 billion. (125%
of own revenues), in 2016 - UAH 170.6 billion. (115% of own income), and in 2017 - UAH 272.9
billion. (141% of their own income).
Analysis of the dynamics of inter budgetary transfers for 2010 - 2016 showed that almost
all types of transfers are increasing every year. According to the State Treasury of Ukraine, in 2016
UAH 195.4 billion was transferred. inter-budget transfers from the state budget to local ones,
which is 210% more than the volume of transfers in 2010244. Thus, the decentralization reform in
no way reversed the trend of subsidizing local budgets at the expense of the state, which was
outlined long before the Maidan.
According to the government portal Decentralization, in 2018, local budgets were provided
with 3 types of transfers245:
• Basic subsidy. Bureaucratic language explains it as “the result and means of equalizing the tax
capacity of local budgets246”. In fact, this means that the “rich” territorial communities and regions,
of which there are not so many, are withdrawn “surplus” of taxes collected by them (we have
already written above about the decrease in the share of personal income tax remaining in local
budgets from 100% for regions and 50% for Kiev, up to 60% and 40%, respectively), and are sent
to the “poor” administrative units, where the collected taxes do not cover the cost plan. To put it
even simpler, we are not talking about any decentralization here. This is a typical post-Soviet
system with donor and subsidized regions. Its only difference is the smaller distribution of regions
(in addition to districts, there are also territorial communities).
• Additional subsidies. Here the picture is even more interesting. The document states that these
subsidies are used to finance the costs transferred from the state budget for the maintenance of
educational and health care institutions, as well as to compensate for the losses of local budgets
caused by the introduction by the state of benefits for the payment of land tax. That is, the state
continues to finance the institutions transferred to the balance of local authorities, but now all the
responsibility for the problems that arise in them (such as lack of funding) are borne by the city,
village councils, and UTO, and not the central and regional apparatus of ministries. As for the land
tax, the situation looks completely absurd. At the beginning of the decentralization reform, it was
announced that land would become almost the main source of income for united territorial
244 Mizina I. V., Kochergina O. V. Office of transfer of income in the international budgets.
http://www.pap.in.ua/5_2017/73.pdf
245 Formation of budget budgets for 2018 ric: interbudgetary transfers. Part II. Decentralization.
https://decentralization.gov.ua/news/6571
246 Ibid.
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communities in rural areas. It was assumed that large agricultural holdings would pay for its use
to local budgets. But it was not there. For oligarchic companies, the state introduced incentives,
and instead of large revenues from land tax, local budgets have to be content with modest provided
compensations.
• Subventions. They are divided into two types: educational and medical. This type of transfers is
a direct derivative of the reforms in education and medicine, which have reduced the number of
relevant institutions in rural areas. Those areas and general relativity, where they remained
"Pivotal" hospitals and schools allocate these subventions, and the neighboring districts, in which
most of the students of "pivotal" schools and patients of "pivotal" hospitals live, do not get
anything, since
“Money follows the patient / student”. It is unlikely that such a principle of distribution of
subventions will contribute to the expansion of the network of medical services or school education
in the future.
Thus, the nominal increase in the own revenues of local budgets is achieved to a large
extent by transferring them (in fact, subsidies) from the state budget. The volume of these transfers
and their percentage in the structure of local budgets is constantly growing, which does not allow
us to speak of this "reform" as an actual decentralization of local budget revenues.
Social expenditures are also shifted to local budgets. In 2016, the Cabinet of Ministers transferred
to them at least UAH 19 billion of spending on social infrastructure (educational and healthcare
institutions), in 2017 - another UAH 18 billion. At the same time, since 2017, the responsibilities
for the payment of salaries to the administrative and technical personnel of social infrastructure
institutions, as well as payment for utility services consumed by these facilities, have been
transferred to local budgets. The situation was getting worse
The “reform of 3200,” and then 3700, which sharply increased the minimum wage and,
accordingly, the tax burden, which made it necessary to send a certain part of the workers on
unpaid leave.
As already mentioned two paragraphs above, in the transfer of costs for the operation of
educational and medical institutions to local budgets, there is a hidden goal - to shift the
responsibility for insufficient funding of these institutions onto the shoulders of local authorities
while actually preserving their content at the expense of the state budget through the mechanism
subsidies. In other words, when there is a problem of underfunding of a separate vocational school
or a district hospital, and residents of the district write complaints about this to the relevant
ministry, they are told that the local authorities are to blame for the current situation, although in
fact the institutions were both financed from the center and continue to be financed ( however, the
amount of funds allocated for their activities has decreased).
Summing up the results of budget decentralization, it is worth noting that:
• taking into account inflation and devaluation of the national currency in the period from 2013 to
2017, the local budgets did not increase, as the authorities report, but decreased. In dollar terms,
they fell from $ 13.1 billion to $ 7.24 billion;
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• the so-called transfers (grants and subsidies) from the central budget significantly exceed the own
revenues of local budgets. In 2017, they accounted for 141% of the declared amount of their
income. This indicates that the statistical increase in “own revenues of local budgets” occurs due
to manual control from the center. Thus, the local authorities become hostages to the central
authorities, which can give money for certain costs, or maybe (for example, due to the political
disloyalty of the local authorities) they cannot be allocated. At the same time, according to the
legislation, the blame for the underfunding of certain items of expenditure will lie with the local,
not the central leadership;
• The basic subsidy (one of the main types of transfers) is nothing more than the reincarnation of
the good old system, in which “surpluses” from donor regions are redistributed to subsidized
regions. Thus, there is no question of any correlation between the number of large taxpayers on
the territory of the administrative-territorial unit and the standard of living in it. Universal "poverty
leveling" triumphs;
• additional subsidies include funding (significantly reduced) of institutions transferred to the local
balance, including hospitals, schools and vocational schools. In fact, the state continues to finance
them, but the responsibility for cutting funds for their maintenance has been assigned to the local
authorities, which in fact have a very indirect relationship to this process.
Administrative and territorial reform.
Administrative and territorial reform, which began simultaneously with budgetary
decentralization, presupposes formation of a new administrative-territorial structure of the state,
consisting of three levels:
• Basic. Its administrative-territorial units will be communities created by combining village and
settlement councils of nearby settlements. For example, if there is one urban settlement and several
villages in the neighborhood, they can be united into one community. As of December 2018, 838
such communities were created, which, according to the Minister of Regional Development
Gennady Zubko, is 57.7% of the planned for 2020 the final number of united communities
(1450)247.
• District. Everything here remains unchanged. Despite the fact that the boundaries of the districts
were determined back in Soviet times, and proceeding from the reduction in the number of
population, they should have been revised long ago, the Concept of the formation of local self-government and territorial organization of power in Ukraine248. proposes to completely preserve
these administrative-territorial units ...
247 Until 2020, Ukraine can complete the process of establishing communities, - Zubko. Khmelnitsk regional state
administration. http://km-rda.gov.ua/news/novunu- u ryad / 7961-do-2020-roku-ukraiina-maie-zavershiti-proces-obiednannia-gromad- zubko.html
248 Cabinet of Ministers of Ukraine. Ordering from April 1, 2014 № 333-r Kiev. About the concept of reforming the
micro-self-production and the territorial organization of power in Ukraine:
http://zakon5.rada.gov.ua/laws/show/333- 2 014-р
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• Regional. Here, as in the previous paragraph, no revisions of the boundaries of regions (oblasts,
cities of national subordination, and autonomous republics) are envisaged.
The expected goals for the implementation of this concept with three levels of administrative-territorial units are named:
• strengthening the legal, organizational, and material resources of territorial communities;
• improving the quality and availability of public services;
• introduction of a mechanism of state and public control over the provision of public services;
• introduction of quality standards for public services, etc.
It should be noted that in 2014, when the reform began, the level of its support in society
was extremely low. According to the results of a sociological survey conducted by KIIS in 2014,
only 2.4% of respondents considered the problem of reforming the administrative-territorial
structure a priority249. Contrary to the statements of the authorities, this circumstance is due not
only to “Poor awareness of the population”. Rather, on the contrary: residents of small settlements
understood that with their unification into territorial communities, most of the administrative
services would “move” from them to neighboring urban-type settlements, to which they had to
travel several tens of kilometers. At the same time, it is not a fact that the quality of service
provision will increase.
Another obstacle on the way to the reform of the administrative-territorial structure was
the disproportion between officials of local executive authorities and local self-government bodies.
In 2015, there were three quarters of the former, and only a quarter of the latter250. With the
unification of territorial communities, this proportion practically did not change. Meanwhile, this
indicator is key in defining real, and not declarative, decentralization. Officials of the executive
branch of the district and especially the regional level will not be able to effectively respond to the
needs and aspirations of citizens, even if there are 3 times more of them than employees of local
self-government bodies. That is why in neighboring countries that have successfully carried out
the administrative-territorial reform, this proportion looks exactly the opposite. For example, in
Poland, there are 3 employees of local government bodies for one local executive official251.
The main legislative act regulating the unification of territorial communities was the law adopted
in 2015 "On the voluntary unification of territorial communities252". According to its main
provisions, voluntary unification of territorial communities of villages, towns and cities is carried
out in compliance with the following principles:
• constitutionality and legality;
• voluntariness;
• economic efficiency;
• state support;
249 Creation of OTG is not a priority: KIIS research. ZN.ua. http: // opros2014. zn.ua/main
250 Nudelman V. Administrative and territorial reform: do no harm! ZN.ua. https://zn.ua/internal/administrativno-territorialnaya-reforma-ne-navredi-_. html
251 Ibid.
252 Law of Ukraine "About the voluntary establishment of territorial communities" // News of the Verkhovnoy Radi
(VVR), 2015, No. 13, Article 91. http://zakon.rada.gov.ua/laws/ s how / 157-19
102
• ubiquity of local self-government;
• transparency and openness;
• responsibility.
As of the beginning of 2019, the principle of “ubiquity” raises the greatest number of
questions. According to the government portal “Decentralization”, today there are 838 united
territorial communities in Ukraine, the population of which is 6 864 882253. At the same time,
according to the official data (from which the government portal comes when determining the
population of the UTO, although they are clearly overestimated), 31.1% of the population of
Ukraine, or 13,155,300 people are rural residents254. Taking into account the fact that the united
territorial communities include not only villages and urban settlements, but also small towns, it
can be stated that the administrative-territorial reform affects less than half of its potential
audience.
One of the obstacles to the unification of communities is the confusion with the data of the
State Geocadastre, which arose as a result of the disorderly and / or corrupt allocation of land plots
by representatives of the village councils. So, in 2015, about the obstacles to volume the head of
the State Geocadastra M. Martynyuk declared the change in territorial communities due to the lack
of data on the territories of the village councils in the cadastre255. A natural question follows from
this statement: if in the State Geocadastre all the years of independence there was no data on the
territories of individual village councils, how could these village councils allocate to their residents
the land plots prescribed by law? When uniting communities, the desire of a larger settlement to
“pocket” the land assigned to a neighboring small village / s for the purpose of their subsequent
distribution often becomes a big problem.
Most of the “land” problems in the unification of territorial communities arise near large
cities and regional centers. So, in June 2018, the country's main political and land battles unfolded
around the creation of new united territorial communities in the suburban Ternopol region. Then
the deputies from “Svoboda”, supporting their fellow party member - the mayor of Ternopil Sergei
Nadal - and enlisting the support of irreconcilable opponents - elected from the Petro Poroshenko
Bloc, protested against the creation of several UTOs near Ternopil, especially in the village of
Belaya. This story has been going on since 2015. Deputies of the Ternopil Regional Council are
trying to prevent the creation of united territorial communities in the suburban area, suggesting
instead to join the city, thereby providing it with an additional resource for land allocation.
Another problem in the unification of territorial communities is the selection criteria for
their centers. The state defined them as simply as possible: no more than 20 kilometers of distance
and the presence of a paved road in the center of the community. However, the mere presence of
a paved road does not solve anything. According to the Minister of Infrastructure, 97% of the roads
in the country are in poor condition. Even in the capital, 90% of the roads require major repairs,
253 Perelik of common territorial communities. Decentralization. https: // decentralization.gov.ua/gromada
254 254 Population of Ukraine 2017-2018: quantity, density. Zh_nochiy online magazine I vagіtna.
http://www.yavahitna.com.ua/2017/09/08/naselennya-ukraїni-2017-2018- kilkist -gustota
255 V. Nudelman. Administrative and Territorial Reform: Do No Harm! ZN.ua.
https://zn.ua/internal/administrativno-territorialnaya-reforma-ne-navredi-_. html
103
which requires UAH 1.5 billion. How, in such conditions, to ensure the declared indicator of 30
minutes of travel to school for students from remote villages of united territorial communities?
Moreover, under the guise of decentralization, a number of educational institutions are being
closed (only “pivotal” schools in the OTO center remain) and healthcare.
According to the State Statistics Committee, in the 2016-2017 academic year, the number of
educational institutions compared to the previous "Season" decreased by 400 units: from 17.3
thousand to 16.9 thousand256. The number of teachers also decreased by 6 thousand: from 444
thousand to 438 thousand.
The situation with medical institutions is no better. In 2012, there were 2.5 thousand
hospitals in Ukraine, and in 2017 there were already 1.7 thousand257. Opponents of the reform
argue that in this way the authorities are trying to drive the population off the land, which will then
be transferred to transnational corporations.
Summing up the results of the administrative-territorial component of the decentralization
reform, we note the following facts:
• The creation of united territorial communities is proceeding more slowly than the authorities
planned. He is hampered by the disorder in the documents on land management and the desire of
the authorities of the larger settlements to get the land of the smaller ones at their disposal.
• Contrary to the stated goals, the unification of village and settlement councils into territorial
communities does not always lead to an improvement in the quality of administrative services
provided. The main reasons for this state of affairs are the remoteness of the basic infrastructure
(schools, hospitals, OTO councils) from the residents of the villages that entered them, combined
with the disgusting quality of the roads, as well as the unhealthy proportions of the distribution of
administrative resources (officials) between the local executive power and local governments (3/1
in favor of the former).
• Administrative and territorial reform carried out within the framework of decentralization, does
not take into account the population that has significantly decreased over the past 27 years and
does not change the boundaries of districts / oblasts established in the Soviet period. Because of
this, an imbalance is created between different districts and regions in the number of sources of
income and taxpayers, which the authorities subsequently try to compensate through the
redistribution of income and subsidies from the central budget. This, in turn, creates significant
corruption risks.
Conclusion
In the course of analyzing the above material, we came to the following conclusions:
Firstly, despite the fact that 2017 was declared “decisive” and almost “final” in the
implementation of the reform, which assumed budgetary decentralization and changes in the
256 Osvita in numbers: how the number of schools changed for the rest of the rock. New Ukrainian school.
http://nus.org.ua/news/osvita-v-tsyfrah-yak-zminylas-kilkist-shkil-za- o stanni-roky /
257 There are fewer hospitals in Ukraine. UNN. https://www.unn.com.ua/ru/ n ews / 1738838-v-ukrayini-pomenshalo-likaren.
104
administrative-territorial structure, none of its components so far so far (as of the end of 2018) has
not been fully implemented.
Secondly, with each year of reform, the country is moving further and further away from
the goal declared by the authorities - the growth of own revenues of local budgets. Despite the
positive dynamics demonstrated by government statistics, the number of transfers from the central
budget to local budgets (in fact, subsidies) is growing every year and has already reached 141% of
the total amount of local budgets' own revenues. One of the main transfers, the basic subsidy,
undermines the very idea of decentralization reform, since it is the reincarnation of the system of
redistribution of “surplus” from “rich” regions to “poor” ones. As a result, all regions are equalized
in poverty, and the number of economically efficient enterprises paying taxes on the territory of
the community does not affect its welfare. As for the real revenues of local budgets, in dollar terms
from 2013 to 2017. they fell from $ 13.1 billion to $ 7.24 billion. The principle of providing
“progressive” statistics by increasing the percentage of transfers in the structure of local budgets
indicates that the appearance of "budgetary decentralization" is created from the center in manual
mode. This leads to a situation of dependence of local authorities on the central authorities, which
may or may not allocate funds for them (including due to the political disloyalty of local leaders).
Thus, the declared decentralization turns into even greater centralization, which takes place
covertly, but emerges with a careful analysis of statistics and the legal framework. Leaving the
“crane” on the financial flow in its hands, the central government shifted all formal responsibility
for the underfunding of infrastructure facilities onto local officials.
Thirdly, at the time of the study, the administrative-territorial component of the reform
(creation of united territorial communities) covers less than half of its target audience (in terms of
population) and slightly more than half (in terms of the number of united territorial communities
planned for creation). This is due to the fact that the merger does not always entail an improvement
in the quality of administrative and other services. The main number of officials in the regions is
concentrated in the executive authorities, and not in local self-government, which is entrusted with
the function of direct contact with people. In addition, in off-road conditions, even 20 km, defined
as the maximum distance from the center to the outskirts of the community, becomes a serious
obstacle when it comes to travel to school or hospital. Another problem of the administrative-territorial reform is the disorder in the data of the State Geocadastre on the boundaries of
settlements and the desire of large cities to swallow nearby villages in order to dispose of their
land. This circumstance has already given rise to a number of conflicts, and, most likely, will
generate more than one in the future.
Afterword
Since the first publication of this study on the UIAMP website, the authorities have
continued to advertise the decentralization reform as the most successful of all the reforms carried
out. At the same time, the same figures of "growth of local budgets" were named, which we cited
above, and the increase in the share of subsidies from the center in these budgets was hushed up.
105
Nevertheless, Ukraine needs decentralization, as well as administrative and territorial
reform. But the goal of these transformations should not be to cut spending on “ineffective” rural
schools and hospitals, but to optimize the territorial organization of the state in accordance with
the decrease in its population over the past 27 years. In addition, local authorities should indeed
be given more authority to improve infrastructure and attract investment. However, this does not
mean that they should be blamed on the problems associated with financing educational or other
communal institutions.
As of February 2019, it can be predicted that decentralization reform will continue to
follow the beaten path without producing tangible positive results.
106
UKRAINIAN INSTITUTE FOR ANALYSIS AND POLICY MANAGEMENT
The cost of reforms. Decentralization reform.
December 2018
Kiev
Authors of the study:
Ruslan Bortnik
Daniil Bogatyrev
Director
Bortnik Ruslan Olegovich
Tel .: +38 093 757 75 65
107
Decentralization Reform
The decentralization process in Ukraine started in 2014.
It consists of the two parts:
• Administrative and territorial reform with the creation of united territorial communities
• Fiscal decentralization
Within the framework of budgetary decentralization, the sources of filling local budgets
have been changed.
The essence of the changes is this:
• The state budget transferred the fee for the provision of administrative services (except for 50%
of the administrative fee for state registration of rights to real estate and state registration of legal
entities / individuals - entrepreneurs), as well as the state fee.
• The percentage of the environmental tax has been increased from 35 to 80%.
• Since 2015, the real estate tax base has been expanded by including commercial (non-residential) property in taxation.
• Since 2015, a tax has been introduced on retail sales of excisable goods (beer, alcoholic
beverages, tobacco products, oil products) at a rate ranging from 2% to 5% of the cost of goods
sold instead of the tax for viticulture, horticulture and hop growing, which will be go to local
budgets.
• Local budgets are assigned stable sources
–The tax on income of individuals according to new standards (budgets of cities of regional
significance, districts - 60%, regional budgets - 15%, the budget of Kiev - 40%) and 10% of the
profit tax to regional budgets; It should be noted that earlier, before the start of the reform, 100%
of personal income tax remained at the disposal of local budgets (Kiev - 50%).
108
Change in revenues of local budgets
• The President and the Government report on the growth of their own revenues of local budgets
from UAH 68.6 billion to UAH 192.7 billion. from 2014 to 2017 In fact, the situation is
somewhat different:
• Due to the devaluation, in dollar terms over the specified period, the revenues of local budgets
of Ukraine decreased by slightly more than $ 1 billion (from 8.8 billion to 7.24 billion). When
compared with 2013, local budget revenues fell by $ 5.86 billion.
• It is also worth making an adjustment for inflation, which in 2014 was 24.9%, and in 2015 -
43.3%.).
Change in revenues of local budgets
USD equivalent
Billion
Billion
UAH equivalent
Year
Increasing dependence of local budgets on transfers
Analysis of the dynamics of interbudgetary transfers for 2010-2016 showed that almost all types
of transfers increase every year. According to the State Treasury of Ukraine, in 2016 UAH 195.4
billion was transferred. inter-budgetary transfers from the state budget to local ones, which is
210% higher than the volume of transfers in 2010.
• In 2013, the amount of transfers amounted to UAH 115.8 billion. (125% of own revenues of
local budgets).
• In 2016 - UAH 170.6 billion. (115% of own income).
• In 2017 - UAH 272.9 billion. (141% of own income).
109
Types of transfers:
• Basic subsidy
Bureaucratic language explains it as “the result and means of equalizing the tax capacity of local
budgets”. In fact, this means that the “rich” territorial communities and regions, of which there
are not so many, are withdrawn “surplus” of taxes collected by them and sent to “poor”
administrative units, where the collected taxes do not cover the cost plan. Typical "leveling" of
the Soviet model.
Types of transfers:
• Additional subsidies
Here the picture is even more interesting. Officially, these subsidies are used to finance the costs
transferred from the state budget for the maintenance of educational and health care institutions,
as well as compensation for the losses of local budgets caused by the introduction by the state of
benefits for the payment of land tax. That is, the state continues to finance the institutions
transferred to the balance of local authorities, but now all responsibility for the problems arising
in them is borne by the city, village councils, and OTO, and not the central and regional offices
of ministries.
Types of transfers:
• Subventions
They are divided into two types: educational and medical.
This type of transfers is a direct derivative of the reforms in education and medicine, which have
reduced the number of relevant institutions in rural areas. These subventions are allocated to
those districts and OTOs where the “pivotal” hospitals and schools remain, and the neighboring
districts, where most of the pupils of the pivotal schools and patients of the “pivotal” hospitals
live, do not get anything.
110
Results of budget decentralization
• Taking into account inflation and devaluation of the national currency, in the period from 2013
to 2017, the own revenues of local budgets did not increase, as the authorities report, but
decreased. In dollar terms, they fell from $ 13.1 billion to $ 7.24 billion.
• The so-called transfers (grants and subsidies) from the central budget significantly exceed the
own revenues of local budgets. In 2017, they accounted for 141% of the declared amount of their
income.
• Basic subsidy (one of the main types of transfers) is nothing more than the reincarnation of the
good old system, in which “surpluses” from donor regions are redistributed to subsidized
regions.
• Additional grants include funding (significantly reduced) of institutions transferred to the local
balance, including hospitals, schools, and vocational schools. In fact, the state continues to
finance them, but the responsibility for cutting funds for their maintenance has been assigned to
local authorities.
Administrative and territorial reform
Administrative and territorial reform presupposes the formation of a new administrative-territorial structure of the state, consisting of three levels:
•Base
Its administrative-territorial units will be communities created by combining village and
settlement councils of nearby settlements. To date, 838 such communities have been created
(57.7% of the final number of united communities planned for 2020 - 1,450).
•District
Everything here remains unchanged.
•Regional
Here, as in the previous paragraph, no revisions of the boundaries of regions (oblasts, cities of
national subordination, and autonomous republics) are envisaged.
Reform goals:
• Strengthening the legal, organizational, and material resources of territorial communities;
• Improving the quality and availability of public services;
• Introduction of a mechanism of state and public control over the provision of public services;
• Implementation of quality standards for public services, etc.
111
Disproportion of officials
One of the obstacles on the way to the reform of the administrative-territorial structure was the
disproportion between officials of local executive authorities and local self-government bodies.
In 2015, there were three quarters of the former, and only a quarter of the latter. With the
unification of territorial communities, this proportion practically did not change. Meanwhile, this
indicator is key in determining real, not declarative decentralization. Officials of the executive
branch of the district and, moreover, the regional level, will not be able to effectively respond to
the needs and aspirations of citizens, even if there are three times more of them than employees
of local self-government bodies. That is why, in neighboring countries that have successfully
carried out the administrative-territorial reform, this proportion looks exactly the opposite. For
example, in Poland there are 3 employees of local self-government bodies for one local
executive power official.
Legislative regulation
The law “On the voluntary unification of territorial communities”, adopted in 2015, became a
legislative act regulating the unification of territorial communities. According to its main
provisions, the voluntary unification of territorial communities of villages, settlements, and cities
is carried out in compliance with the following principles:
• Constitutionality and legality;
• Volunteering;
• Economic efficiency;
• State support;
• The ubiquity of local self-government;
• Transparency and openness;
• Responsibility.
Implementation problems
• At the moment, the greatest number of questions is caused by the principle of “ubiquity”.
According to the government portal “Decentralization”, today there are 838 united territorial
communities in Ukraine, the population of which is 6 864 882 people. At the same time,
according to official data (from which the government portal comes when determining the
number of the UTO population, although they are clearly overestimated), 31.1% of the
population of Ukraine, or 13,155,300 people, are rural residents. Taking into account the fact that
the united territorial communities include not only villages and urban settlements, but also small
towns, it can be stated that the administrative-territorial reform affects less than half of its
potential audience.
112
Problems:
One of the obstacles to the unification of communities is the confusion with the data of the State
Geocadastre, which arose as a result of the indiscriminate and / or corrupt allocation of land plots
by representatives of the village councils.
• When uniting communities, the desire of a larger settlement to “pocket” land assigned to a
neighboring small village / s for the purpose of their subsequent distribution often becomes a big
problem.
• Most of the “land” problems in the unification of territorial communities arise near large cities
and regional centers.
• Another problem in the unification of territorial communities is the selection criteria for their
centers. The state defined them as simply as possible: no more than 20 kilometers of distance and
the presence of a hard-surfaced road in the center of the community. However, the mere presence
of a paved road does not solve anything. According to the Minister of Infrastructure, 97% of the
roads in the country are in poor condition.
Reducing the number of schools and hospitals
• According to the State Statistics Committee, in the 2016-2017 academic year, the number of
educational institutions, compared with the previous “season”, decreased by 400 units: from 17.3
thousand to 16.9 thousand. teachers: from 444 thousand to 438 thousand
• The situation with medical institutions is no better. In 2012, there were 2.5 thousand hospitals
in Ukraine, and in 2017 there were already 1.7 thousand.
Results of the administrative-territorial component of the decentralization reform
• The creation of united territorial communities is proceeding more slowly than the authorities
planned. He is hampered by the disorder in the documents on land management and the desire of
the authorities of the larger settlements to get the land of the smaller ones at their disposal.
• Contrary to the stated goals, the unification of village and settlement councils into territorial
communities does not always lead to an improvement in the quality of administrative services
provided.
• The administrative-territorial reform carried out within the framework of decentralization does
not take into account the population that has significantly decreased over the past 27 years and
does not change the boundaries of districts / oblasts established back in the Soviet period.
113
General conclusions
• Firstly, despite the fact that 2017 was declared “decisive” and almost “final” in the
implementation of the reform, which implied budget decentralization and changes in the
administrative-territorial structure, none of its components before so far (as of the end of 2018)
has not been fully implemented.
• Secondly, with each year of reform, the country moves farther and farther from the goal
declared by the authorities - the growth of own revenues of local budgets. Despite the positive
dynamics demonstrated by government statistics, the number of transfers from the central budget
to local budgets (in fact, subsidies) is growing every year and has already reached 141% of the
total amount of local budgets' own revenues.
• Third, at the time of the study, the administrative-territorial component of the reform (creation
of united territorial communities) covered less than half of its target audience (in terms of
population) and slightly more than half (in terms of the number of combined territorial
communities planned for creation). communities). This is due to the fact that the merger does not
always entail an improvement in the quality of administrative and other services. The main
number of officials in the regions is concentrated in the executive authorities, and not in local
self-government, which is entrusted with the function of direct contact with people. In addition,
in off-road conditions, even 20 km, defined as the maximum distance from the center to the
outskirts of the community, becomes a serious obstacle when it comes to travel to school or
hospital. Another problem of the administrative-territorial reform is the disorder in the data of
the State Geocadastre on the boundaries of settlements and the desire of large cities to absorb
nearby villages in order to dispose of their land. This circumstance has already given rise to a
number of conflicts, and, most likely, will give rise to more than one in the future.
114
Study No. 7
from the cycle "The Price of Reforms"
Judicial reform
Authors:
Daniil Bogatyrev,
Ruslan Bortnik
Officially, the last judicial reform in Ukraine began in 2014, when its strategy was
developed258. Prior to this, attempts at reform were undertaken several times, but they are not the
subject of this study. The initial goal of the reform was formulated rather vaguely: “to achieve EU
standards by 2020”. At the same time, there was an understanding among the lawyers and judges
involved in the development of this strategy that the future reform should be comprehensive.
Thus, the head of the Main Directorate for the Judiciary and Legal Policy of the Presidential
Administration of Ukraine, Alexander Volkov, while developing a strategy for reforming the
judicial system, noted: “It is impossible to implement judicial reform as such without constitutional
reform. Until the moment of making changes to the Constitution, it is necessary to correct what is
possible. If there are problems with the transparency of the judicial system or specific cases of
specific judges, then these problems must be eliminated.
The European Court of Human Rights in one of its decisions noted that in Ukraine there is a
significant imbalance in the organization of the distribution of powers, therefore, the country must
bring its Constitution in line with its obligations. It is necessary to determine the constitutional
foundations of the judicial system.
A serious reform of the judicial system can only take place on the basis of a new section
"Justice" in the Constitution259.
In addition, at the dawn of the reform, the idea arose not to appoint judges by a
parliamentary decision, as this "politicized the process."
In accordance with the law “On Restoring Confidence in the Judiciary in Ukraine260”
adopted in the spring of 2014, a temporary ad hoc commission was created to check judges who
were suspected of “making unjust decisions”. The audit was carried out within one year from the
moment of the formation of the temporary special commission, the procedure for the creation of
which was also determined by this law.
In particular, judges who made decisions on restricting the rights of citizens to hold rallies
and assemblies in the period from November 21, 2013 to the entry into force of the law, on the
election of a preventive measure in the form of detention of persons who were recognized as
political prisoners, and decisions on administrative penalties from protesters from November 21,
258 Prodigal M. New wave of judicial reform. Vishcha is glad to be righteous. http: //
259 Ibid.
260 Law of Ukraine "On the Renovation of Confirmation to Judicial Authority in Ukraine" // Vidomosty Verkhovna
115
2013 until the entry into force of the law and the decision to revoke the status of a people's deputy,
etc.
The law also established new rules for the formation of judicial bodies. In particular, judges
began to be elected to administrative positions by secret ballot from among the judges working in
this court. Delegates to the Congress of Judges became conferences of judges of general,
administrative and economic courts in all regions of Ukraine on the principle of "one delegate from
twenty judges".
The Council of Judges of Ukraine began to be elected by the delegates of the Congress of
Judges. New members of the High Council of Justice, the High Qualification Commission of
Judges, as well as judges of the Constitutional Court of Ukraine, who began to be appointed by
the Congress of Judges, could only be persons appointed in accordance with the requirements of
this law.
The transitional provisions indicate that from the moment of entry by virtue of this law, the
powers of the members of the High Council of Justice and the High Qualification Commission of
Judges of Ukraine were terminated, after which these bodies were formed in accordance with the
current legislation.
The above-described law was popularly nicknamed “the law on the lustration of judges”.
This is how the new government itself presented it.
In practice, it turned out to be much more difficult to “lustrate” judges than to pass a law.
It is worth mentioning here that, according to the classical definition, lustration is legal restrictions
introduced after the change of government to restrict the rights of supporters of the previous
government261. Thus, lustration (including judges) on the basis of their belonging to the previous
government does not correspond to the Constitution of Ukraine, since Article 24 of the latter states:
“There can be no privileges or restrictions based on race, color, political, religious and other
convictions262”. The occupation of certain positions under the previous government can be
interpreted as following certain political convictions.
On August 10, 2016, two years after the adoption of the law on restoring confidence in the
judicial system, the head of the Department for Lustration of the Ministry of Justice of Ukraine
Tatiana Koochenko stated that in Ukraine the lustration of the judicial system did not actually take
place263. In her opinion, this did not happen "because of the enormous resistance of the judicial
system."
Partly T. Kozachenko was right. Knowing the legal framework and having extensive
connections in the justice system, dismissed judges were easily reinstated in their posts, proving
the illegality of their dismissal.
Thus, it can be stated that the first and most impulsive act of judicial reform failed.
261 Larin A. Lustration as a basis for restricting the right to vote. https://cyberleninka.ru/article/n/lyustratsiya-kak-osnovanie-ogranicheniya- izbiratelnogo-prava
262 Constitution of Ukraine. https://www.president.gov.ua/documents/constitution
263 In Ukraine, the lustration of the judicial system actually did not take place - Ministry of Justice. UNIAN.
https://www.unian.net/politics/1463343-v-ukraine-lyustratsiya- s udebnoy-sistemyi-fakticheski-ne-sostoyalas-minyust.html
116
The next attempt to reform the judicial system was the law “On ensuring the right to a fair trial”
that came into force in March 2015264. Its main innovations were: the return of the right to make
the final decision in contentious cases to the Supreme Court of Ukraine, permission for one judge
to head the court for no more than one term, as well as the passing of a qualification assessment
by all judges, including any information about the work of a judge.
As a result of the qualification assessment and more detailed detailing of the requirements
for “shaking up” the judiciary in the laws, which will be discussed below, the number of judges
from 2015 to summer 2018 decreased by 3.2 thousand people. This was announced at the
beginning of August 2018 by the chairman of the High Qualification Commission of Judges
(VKKSU) Sergey Koziakov265. According to him, when the new composition of the VKKSU
began its work (2015), about 9 thousand judges worked in Ukraine, and as of the summer of 2018,
their number decreased to 5.8 thousand.
S. Koziakov himself then commented on these results of the reform in the following way:
“Because we had demands from people and politicians to carry out a serious reform of two
components - it is purification and renewal. Unfortunately, cleaning up is much faster than
updating266”. He also said that in 2016, together with the National Anti-Corruption Bureau,
VKKSU began a primary qualification assessment procedure. “On the air, they actually asked a
lot of unpleasant questions about the condition and so on. A total of 350 judges were evaluated by
us first, and in subsequent four months, more than 1.5 thousand judges resigned of their own free
will,” said S. Koziakov267.
Along with the number of judges, the number of courts also decreased. In June 2018, Lyuba
Beardsley, an expert of the Strategic Group of Advisers to Support Reforms in Ukraine, reported
that at the central level, the Supreme Court absorbed four High Specialized Courts, which reduced
the number of judges by half, and at the regional and local levels the number ships decreased from
764 to 380268.
Today in Ukraine there are 22 courts in which cases are not considered and, in general,
justice is not performed. This was announced on August 13, 2018 by the chairman of the Council
of Judges of Ukraine Oleg Tkachuk. “In Ukraine, out of more than 8 thousand judges, 5,200
thousand are currently working. Perhaps a little less, a little more - qualification assessment is
underway, judges submit an application dismissal and so on. That is, the lack of judges and courts
as such in the state is obvious, ”O. Tkachuk said269.
264 Law of Ukraine "On the protection of the right to a fair trial" // Vidomosty Verkhovnoi Radi (VVR), 2015, No. 18,
No. 19-20, article 132. https://zakon.rada.gov.ua/ laws / show / 192-19
265 Since 2015, the number of judges in Ukraine has decreased by more than a third,
- VKKSU. Censor.net. https://censor.net.ua/news/3081180/s_2015_goda_kolichestvo_
sudeyi_v_ukraine_umenshilos_bolee_chem_na_tret_vkksu
266 Ibid.
267 Ibid.
268 Beardsley L. Justice reform in Ukraine: there is progress. Ukrainian truth.
https://www.pravda.com.ua/rus/columns/2018/06/19/7183788/
269 The Council of Judges told how many courts do not work in Ukraine. Today. https://www.segodnya.ua/politics/v-
sovete-sudey-rasskazali-skolko-sudov-v-ukraine- ne-rabotayut-1162618.html
117
Speaking of the reduction in the number of courts and judges, one cannot ignore the issue
of costs for the judicial system. According to the report of the European Commission on the
Effectiveness of Justice (CEPEJ) of the Council of Europe, published in 2016, the budget of
Ukraine allocated for the needs of the judicial system, in terms of each inhabitant, was 8.1 euros.
This amount was almost eight times lower than the European average - 64.5 euros - and 26 times
lower than the maximum figure among EU countries, which was recorded in Switzerland - 214.8
euros per capita270.
Overall, in Europe, the lowest per capita government budget for the judiciary in 2016 was
recorded in Azerbaijan (7.8 euros), Moldova (8.3 euros) and Armenia (8.4 euros)271.
It should be noted that one of the goals of the judicial reform in Ukraine was initially named
to reduce the costs of maintaining the judicial system. Nevertheless, it can be stated that, in
comparison with the EU countries, which is declared as a state policy, Ukraine spends too little on
justice, and this may well be one of the reasons for its inefficiency.
As for the costs of the judicial system of Ukraine, in absolute terms they are growing (and
not decreasing, as it was declared) from year to year. Thus, to finance the Office of the State
Judicial Administration of Ukraine from the general fund of the state budget in 2018 was allocated
10 billion 687 million UAH272 272, which is 61% more than in 2017 (6 billion 632 million). UAH).
The 2019 budget provides for an allocation of UAH 13.6 billion for similar purposes273.
As for the salaries of judges, they have increased since 2014. From January 1, 2018 (as of
the beginning of 2019), the base salary of a judge is: for a judge of a local court - 20 living wages
(UAH 37,060), for a judge of an appellate court and a higher specialized court - 30 living wages
(UAH 55,590)274.
At the same time, the salaries of court administrative staff remain extremely low. Thus, the
salary of an assistant judge of a local court is UAH 7900, an appellate court - UAH 9600, a
secretary of a local court hearing - UAH 3500, an appeal court - UAH 4400, judicial director of
the local court - UAH 2643, court of appeal - UAH 3600275.
From the above data, it follows that despite the increased costs of the judicial system, not
all of its employees receive a decent salary.
Innovations provided for by the laws "On Amendments to the Constitution of Ukraine (on
Justice)" and "On the Judiciary and the Status of Judges"
270 Ukraine's expenses on the judicial system are 26 times lower than the average European
- Council of Europe. Fi. News. https://news.finance.ua/ru/news/-/435953/rashody-ukrainy-na-sudebnuyu-sistemu-v-26-raz-nizhe-sredneevropejskih-sovet-evropy
271 Ibid.
272 Costs for courts in 2018 will grow by 60% - draft state budget. ZN.ua. https://zn.ua/UKRAINE/rashody-na-sudy-v-2018-godu-vyrastut-na-60-proekt- gosbyudzheta-260401_.html
273 Budget-2019: how much money will the judicial system receive. Judicial-legal newspaper.
https://sud.ua/ru/news/publication/125484-byudzhet-2019-skolko-deneg- poluchit-sudebnaya-sistema
274 In 2018, the salary gap for judges will be even wider, - Monich. Law and business. https://zib.com.ua/ru/131564-v_2018_godu_razriv_v_zarplate_sudey_budet_ esche_bolshe moni.html
275 The salaries of employees of the judiciary in 2018 were announced. Law and business.
https://zib.com.ua/ru/131639-obnarodovani_razmeri_zarplat_ rabotnikov_sudebnoy_sistemi_v_2.html
118
On June 29, 2016, the Law of Ukraine "On Amendments to the Constitution of Ukraine
(on Justice)276" was published, which entered into force on September 30, 2016, with the exception
of the provisions on the possibility of Ukraine's recognition of the jurisdiction of the International
Criminal Court under the conditions determined by the Roman charter, which will enter into force
three years after the publication of this law. In addition, on July 16, 2016, the Law of Ukraine “On
the Judicial System and the Status of Judges277” was published, set out in a new edition and aimed
at implementing the changes introduced by the Law on Justice. Judicial reform involves the
following conceptual changes278:
276 Law of Ukraine "On the introduction of amendments to the Constitution of Ukraine (justice)" // Vidomosty
Verkhovnoi Radi (VVR), 2016, No. 28, art. 532.http: //zakon.rada. gov.ua/laws/show/1401-19
277 Law of Ukraine "On the judicial system and the status of courts" // Vidomosty Verkhovnoi Radi (VVR), 2016, No.
31, art. 545.http: //zakon.rada.gov.ua/laws/show/1402-19
278 Court reform in Ukraine. Asters. https://www.asterslaw.com/ru/press_ ce nter / publications /
judicial_reform_in_ukraine /
119
120
Table - "Judicial reform in Ukraine279"
1. Changes to the court system
The Law on the Judiciary introduces a three-tier system of judiciary, which includes local
courts, courts of appeal and the Supreme Court, which performs the functions of the cassation
instance (there is a direct contradiction with the Constitution, which will be discussed below).
Higher specialized courts will operate in the judicial system to consider certain categories of cases.
The Supreme Court is composed of the Grand Chamber of the Supreme Court, the Administrative
Court of Cassation, the Economic Court of Cassation, the Cassation Court of Cassation and the
Cassation Court of Civil Law.
The restructuring of the Supreme Court had to be carried out within six months from the
date of the entry into force of the Law on the Judiciary (that is, at the end of 2016). However, the
process lasted until the beginning of November 2017 (it dragged on for almost a year longer than
the timeframe prescribed in the law), when the President appointed 114 Supreme Court justices280.
The whole process looked like this.
The High Council of Justice, during September 14-25, 2017, considered 120 materials on
the submission to the President on the appointment of judges of the Economic Cassation,
Administrative Cassation, Cassation Criminal, Civil Cassation Courts as part of the Supreme
Court. On September 29, 2017, the High Council of Justice approved a submission to the President
on the appointment of 111 candidates to the positions of judges of cassation courts within the
Supreme Court. At the same time, the SCJ postponed consideration of materials on seven
candidates for positions of judges of the Supreme Court. The reasons for this were unresponsive
reviewed disciplinary proceedings against incumbent judges; the presence of disciplinary
complaints requiring verification prior to resolving the issue of appointing candidates to positions;
the receipt of appeals regarding the candidate, which required additional study.
During the meeting on November 9, 2017, the SCJ considered the issue of submitting a
submission to the President on the appointment of three more judges to positions at the Cassation
Court and the Civil Court of Cassation within the Supreme Court.
Thus, the Supreme Council of Justice formed a list of 114 judges of the Supreme Court,
who were appointed by the President on November 11, 2017. On 30 August 2018, he appointed
three more judges281.
279 Judicial reform in Ukraine. Ukraine Crisis Media Center. http://uacrisis.org/ u a / 44463-ukrainian-sudova-reforma- v-ukrayini
280 New Supreme Court: Poroshenko will appoint 114 judges today. Ukrinform. https://www.ukrinform.ru/rubric-
polytics/2341861-novyj-verhovnyj-sud-porosenko- segodna-naznacit-114-sudej.html
281 The President appointed three justices of the Supreme Court. Judicial-legal newspaper.
https://sud.ua/ru/news/publication/124430-prezident-naznachil-trekh-sudey- verkhovnogo-suda
121
Criticism of the process of creating the Supreme Court in professional legal circles is
connected with the excessive role of the president in appointing judges (the transfer of these
powers from parliament to the president was presented under the guise of “reducing political
influence on the judicial system”, but now this influence is concentrated in the same hands), and
with the uncertainty of the legal nuances of its formation (as noted above, the Supreme Court was
to be formed in six months, but in fact this process took almost one and a half; in addition, the
Constitution states that the new court should wives were created by a separate law, and the
adoption of the law on the Supreme Court of Ukraine did not take place282.
Separately, it is worth dwelling on the issue of forming the High Council of Justice, which,
according to the law “On the Judicial System and the Status of Judges,” is responsible for
submitting candidates for judicial positions for approval by the President. The powers of the SCJ
include the appointment and dismissal of judges, as well as the consideration of disciplinary cases
against them. This structure replaced the previously existing High Council of Justice, and it is on
it that responsibility for the formation of the judiciary. Now Bankova has a controlled majority in
the GSP. According to various estimates, 16 “bayonets” are loyal to the president and his partners
with a sufficient quorum of fifteen members. The Supreme Council has become a convenient body
for total control over the judiciary283. Thus, any decisions of this structure can be considered
potentially biased, especially when it comes to the appointment of judges of the Supreme Court.
2. Specialization
Taking into account the specifics of certain categories of cases, it was planned to introduce
the High Court for Intellectual Property and the High Anti-Corruption Court, which were supposed
to act as courts of first instance to consider certain categories of cases assigned to their jurisdiction,
and were to be created. given within 12 months from the date of entry into force of the law.
As we know, the epic with the creation of the Supreme Anti-Corruption Court continues to
this day. Until the beginning of spring 2018, factions of the parliamentary coalition generally
denied the need to establish it. Then, after Western partners, represented by the EU and the IMF,
“put the squeeze on” the Ukrainian authorities, the law “On the Supreme Anti-Corruption Court”
was nevertheless adopted. However, this court has not yet been established. As of the time of the
study, the process of its formation was at the stage of selection of candidates. Meanwhile, such a
long-term formation of an anti-corruption court is nothing more than a sabotage of the norms of
one of the two main laws that determine the contours of judicial reform in the country, since it
clearly states that the process of creating this court cannot last more than 12 months. However,
this norm was "Interrupted" (without cancellation) by a similar provision of the law "On the
282 ВС: legitimacy is in question. Law and business. https://zib.com.ua/ ru / 130612-o_chem_zabili_reformatori_sozdavaya_verhovniy_sud_.html
283 The rush from Sakhalin to Kiev and the disappearance of tens of thousands of dollars and euros. Country.
https://strana.ua/articles/analysis/174563-iz-deklaratsii-hlavy-vyssheho-soveta-pravosudija-ihorja-benedisjuka-ischezli-krupnye-summy-nalichnosti.html
122
Highest anti-corruption court ", which allows you to delay the start of the work of this body until
the summer of 2019.
In addition, the reform provides for additional specialization at the level of cassation review
of cases. Thus, in the Administrative Court of Cassation, separate chambers should be created to
consider cases in relation to taxes, fees and other obligatory payments, to protect social rights, the
electoral process and referendum, as well as to protect the political rights of citizens, and court -
separate chambers for considering bankruptcy cases, on the protection of intellectual property
rights, and cases related to antitrust and competition laws, as well as in relation to corporate
disputes, corporate rights and securities.
3. New procedure for appointment, dismissal and responsibility of judges
We have already briefly touched on this topic above, when we wrote about the formation
of the new composition of the Supreme Court. Now let's take a closer look at it.
As part of the judicial reform, the minimum age threshold for judges was raised to 30 years
and the maximum age was set at 65 years. A procedure for appointing judges based on a public
competition and qualification assessment was also introduced. This appointment is carried out by
the President on the proposal of the High Council of Justice (previously, the Supreme Rada was
responsible for the unlimited election of judges). This rule raises the most questions and allows
doubting the sincerity of the intentions of the presidential entourage to reform the judicial system
in the direction of increasing its independence. If earlier the appointment of judges required a
search for a compromise, at least within the ruling parliamentary coalition, which provided a
(albeit not ideal) system of checks and balances, now the president alone makes such decisions.
Whether it is possible in such a situation to speak about the independence of the appointed judges
is a rhetorical question.
As before, judges are appointed for an indefinite term. However, in order to avoid abuse,
the grounds for their dismissal have been broadened and guarantees of immunity have been
narrowed. Thus, a judge cannot be held accountable for his court decision, while the commission
of a crime or disciplinary offense will result in prosecution on a general basis.
An exhaustive list of grounds for dismissal of a judge was also defined, which covers, in
particular, such grounds as: commission of a significant disciplinary offense by a judge, gross or
systematic neglect of his duties, which is incompatible with the status of a judge or determined his
inadequacy for the position held. , as well as violation by the judge of the duty to confirm the
legality of the source of origin of the property. The High Council of Justice (formed from the High
Council of Justice) is empowered, inter alia, to decide on the dismissal of a judge from office, to
consent to the detention or detention of a judge, and to decide on the temporary suspension of a
judge from the administration of justice. In addition, during a two-year transitional period (ended
in summer 2018), the President was empowered to transfer all judges from one court to another,
and the corresponding powers of the High Council of Justice in this area were deferred. This
123
provision also shows the true intentions of the reformists of the judicial system - to maximize the
powers of the president so that he could form a completely loyal judiciary.
It should be noted that the Law on Justice provides that the powers of judges previously
appointed for a term of five years shall terminate at the end of the term for which they were
appointed. In the future, such judges may be appointed to office in accordance with the general
procedure. Previously elected judges indefinitely, continue to exercise their powers. At the same
time, the law on justice provides for the assessment of the adequacy of the office of all judges
without exception. Determination, based on the results of such an assessment, of the judge's
inconsistency with the positions based on the criteria of competence, professional ethics or
integrity, or the refusal of the judge from the specified assessment, are grounds for the dismissal
of the judge from office.
In the summer of 2018, the High Qualification Commission of Judges reported that, based
on the results of the qualification assessment, 17%, or 238 judges, had already been dismissed or
are subject to dismissal284284. As of July 30, 2018, the assessment is reported to have been
completed in respect of 1,385 judges of local and appellate courts. Of these, 1,147 judges (83%)
successfully completed this procedure and were recognized as appropriate for their position. The
remaining 238 (17%) judges are subject to dismissal or have already been dismissed, in particular:
127 judges (9%) did not confirm their suitability for their position - 83 judges did not pass the
exam and 44 judges did not pass interviews with the members of the Commission; 111 judges
(8%) were dismissed, among other things, of their own free will or their powers were terminated
during the assessment. Judges, in respect of whom the assessment has started, but there are no final
results due to the announcement of a break or suspension of the qualification assessment - 292.
Behind the bureaucratic wording, it is difficult to identify which of the judges was
dismissed for objective reasons, and who - on instructions from “above”; serious influence of the
president.
4. Results of the courts
The main results of the work of the courts are considered to be the ratio of the number of
convictions and acquittals, as well as - the ability to pass sentences in high-profile cases of
significant social and political significance.
Speaking about these indicators, it is worth noting that in 2016, local courts announced
sentences against 86,744 persons. Of these, 314 people were acquitted, which is 0.36%. In 2017,
the percentage of acquittals was 0.29%285 285. For comparison, in Japan 1% is justified, in the
284 According to the results of a quality assessment, 17%, or 238 judges, are still sound or sound. Vishcha
kvalіfіkatsіyna comіsіya suddіv. https: //vkksu.gov.ua/ua/news/za-riezultatami-kwalifikacijnogo-ociniuwannia-17-abo-238- suddiw-wzie-zwilnieno-abo-pidliagaiut-zwilnienniu /
285 Gorobets A. Where are the acquittals? Presumption of innocence and practice. League.net.
https://www.liga.net/society/opinion/gde-opravdatelnye- pr igovory-prezumptsiya-nevinovnosti-i-praktika
124
Netherlands - 10%, in Great Britain - 20%, in the USA - 20% (of those who did not cooperate with
the investigation)286.
It follows from the above that the “reformed” Ukrainian judicial system, in terms of its
accusatory bias and the miraculous number of acquittals, can only be compared with the Russian
one (in the Russian Federation in 2016, the percentage of convictions was also 0.36%, 2015 -
0.43%, and in 2014 - 0.54%287 287), and not with the judicial systems of the liberal democracies
of the West.
One of the most striking results of the reform of the judicial system of Ukraine can
rightfully be considered the case of the judge of the Dnieper district court of Kiev, Mykola Chaus.
On August 9, 2016, he was detained while receiving a bribe of $ 150,000. The bribe was for making
the “necessary decision” in a criminal proceeding on drug trafficking.
“Nikolai Chaus suspected that NABU was engaged in it, and demanded to raise the bribe
from $ 100,000 to $ 150,000,” said the head of the National Anti-Corruption Bureau Artem Sytnik.
The judge buried the money he received in his garden in liter jars. Despite the fact that the judge
was caught taking a bribe, they could not arrest him, since the Verkhovna Rada did not give
permission for this. A request for consent to the detention of N. Chaus was sent to the Verkhovna
Rada. The next day after being caught in a large currency bribe, the judge did not come to work.
On August 11, 2016, detectives of the National Anti-Corruption Bureau of Ukraine
searched N. Chaus's house.
On November 14, 2016, the press service of the National Anti-Corruption Bureau of
Ukraine reported that on November 11, 2016, Interpol put on the international wanted list Nikolai
Chaus, a judge of the Dniprovsky District Court of Kiev. The latter crossed the border illegally
into Moldova and surrendered to the authorities. Ukraine demanded extradition, and while the case
was pending, N. Chaus was allegedly found dead in an apartment with multiple stab wounds. Later
it turned out that this was not true, N. Chaus is alive, is under house arrest and is awaiting
extradition to Ukraine. As of the beginning of 2019, the pending extradition of the odious “servant
of Themis” continues288.
Another resonant "achievement" of the reformed judicial system is the story of Judge
Anton Chernushenko, which has been going on since 2015. On June 19, 2015, a search was carried
out in his office in the building of the Kiev Court of Appeal, which was carried out by employees
of the General Prosecutor's Office and the Security Service of Ukraine. The judge was accused of
committing offenses under Part 2 of Art. 375 (Deliberately unjust decision made by a judge) and
Part 2 of Art. 376-1 (Interference in the activities of the judiciary) Criminal Code289.
286 99.64%. With such a probability, you will be found guilty if the case goes to trial. New Newspaper.
https://www.novayagazeta.ru/articles/2017/08/11/73453-pered- kem -vy-opravdyvaetes
287 Ibidю
288 Judge Chaus, who escaped to Moldova, was temporarily removed from office - SCJ. Censor.net.
https://censor.net.ua/news/458046/sbejavshiyi_v_moldovu_sudya_ chaus_vremenno_otstranen_ot_doljnosti_vsp
289 Former chairman of the Kiev Court of Appeal dismissed. Court.ua. https: // sud. ua / ru / news / publication /
119180-uvolen-byvshiy-predsedatel-apellyatsionnogo-suda- kieva
125
The judge was charged with the facts of interference in the work of the automated system
for the distribution of cases. This, according to the investigation, led to the fact that Anton
Chernushenko personally decided which judge to consider which case, including with political
overtones.
On June 30, 2015, the Verkhovna Rada agreed to the arrest and arrest of Anton
Chernushenko.
On July 2, 2015, the judge's son Dmitry Chernushenko was arrested, whom the
investigation suspected of influencing the distribution of cases in the Capital Court of Appeal.
However, it was not possible to bring Anton Chernushenko to justice. On July 7, 2015, the GPU
announced that the judge had left Kiev, and put him on the wanted list. According to the
investigation, Anton Chernushenko left for Russia.
Subsequently, the fugitive judge published a series of video messages, in which he spoke
about the sanctions that the judges of the Kiev Court of Appeal issued for wiretapping certain
persons, for example, well-known politicians, diplomats and representatives of various foreign
missions in Ukraine.
The High Council of Justice tried to dismiss the judge, but for various reasons this did not
happen. In 2016, A. Chernushenko even tried to resign, but he failed to do so.
The Supreme Council of Justice began to consider the case of Anton Chernushenko on April 2,
2018, after which he dismissed him only on May 29, 2018. It seems that there is no talk of bringing
A. Chernushenko to criminal liability.
Another indicator that colorfully describes the results of judicial reform in Ukraine is its
place in international rankings. Thus, according to the ranking of the rule of law, compiled by the
international organization World Justice Project in 2017, Ukraine was in 77th place (out of 113)290.
In 2016, it was ranked 78th, and in the pre-reform 2012, in a similar ranking, our country was
ranked 79th in terms of the “Effectiveness of Criminal Justice” indicator291, although only 97
countries were assessed at that time.
Progress in 2 positions in this international rating is extremely difficult to call “an
outstanding achievement of the reform”.
5. Attempts to reform the institution of the Bar
On September 6, 2018, a draft law "On Advocacy and Advocacy" No. 9055 was introduced
to the Rada, initiated by President292. This bill has caused a stormy critical reaction in the
professional community.
290 World Justice Project: Ukraine ranked 77th in the world rule of law ranking. DS.
http://www.dsnews.ua/politics/world-justice-project-ukraina-stala-77-oy- v -mirovom-reytinge-verhovenstva-04022018133700
291 The level of the rule of law in Ukraine was rated at the top three. LB.ua. https://lb.ua/ news / 2012/11/28 /
180602_uroven_verhovenstva_prava_ukraine.html
292 Draft Law on the legal profession and advocacy activity. Verkhovna Rada of Ukraine.
http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=64557
126
On October 8, 2018, Lawyer's Day, a massive flash mob of lawyers began on the Facebook
social network, who protested against the presidential bill293. In the opinion of representatives of
the legal community, the document significantly limits the independence of lawyers and narrows
the rights of lawyers. Lawyers note that the analysis of the provisions of the draft law in the context
of advocacy indicates the presence of a real threat of loss of independence by advocates, and, as a
result, deprivation of Ukrainian citizens for years ahead of their right to effective defense.
“Behind the unconcealed desire to change the profile of the law there are illusory ideas to
make the legal profession weak and dependent, and the lawyers - manageable,” wrote the lawyers
with an appeal to support the initiative against the draft law294.
Leading lawyers of the country took part in the flash mob and thus expressed their attitude
to the bill, emphasizing that if it is adopted, it will be much easier for the state, represented by law
enforcement agencies, to get rid of the “obstinate” lawyer than to build its legal position in a state-controlled court. Lawyers want to draw the attention of the authorities, deputies, the public and the
whole society to the risks and risks of draft law No. 9055. Some of them drew attention to the fact
that such norms were recently adopted in the self-proclaimed “DPR”295.
As for the essence of the presidential bill, it contains two blocks: fundamental changes in
the system of lawyer self-government and new rights of lawyers. At the same time, the draft law
does not solve any of these tasks, which caused a public protest and the advocacy community.
VA, and human rights organizations. Moreover, realization of a draft law can lead to the
opposite effect - paralysis of self-government and the lack of rights of a lawyer in the process.
When the cumulative effect of these two trends is achieved, the legal profession as a professional
institution will cease to exist.
The greatest resistance among lawyers is caused by the amendments to the Criminal
Procedure Code of the draft law on the so-called “abuse of procedural rights”. At the discretion of
the judge, many of the actions of the lawyer can be considered a violation with further sanctions
against the lawyer. Motions, complaints and recusals can turn from defensive tactics to abuse if
the judge so decides. For failure to appear at a hearing, this rule can be applied to a lawyer, but not
to a prosecutor.
The draft law contains many preferences in favor of the prosecutor's office, ranging from
access to the legal profession and ending with the presentation of suspicions to lawyers in a
simplified manner. According to the current legislation, if an investigator submits a suspicion, then
he violates the rights of a lawyer as a special subject. This is often seen as a form of pressure on
lawyers.
If the new bill is passed, prosecutors will have expanded opportunities to temporarily
suspend lawyers, replacing them with public defenders from the free legal aid system, in fact, in
any situation that is unfavorable for the prosecution. The document also provides for a complete
293 What are the risks and threats of the presidential draft law on the legal profession? UN.
https://ukranews.com/publication/2548-kakye-rysky-y-ugrozy-neset-prezydentskyy- zakonoproekt-ob-advokature
294 Ibid.
295 Ibid.
127
“reset” (liquidation) of all bodies of lawyers' self-government and the election of new ones, which
will directly affect the security and legal status of each lawyer.
Summing up the section devoted to the changes in the judicial system of Ukraine
introduced by the laws "On Amendments to the Constitution of Ukraine (on Justice)" and "On the
Judicial System and the Status of Judges", we note the following points:
• The High Council of Justice was replaced by the High Council of Justice, in which the president
has a majority of his loyal members;
• the right to appoint judges was transferred from the Verkhovna Rada to the President, which was
originally presented as “a decrease in political influence on the process of appointing judges ”, but
in fact led to the concentration of this influence in the same hands.
• Despite the fact that the previously appointed judges retained their posts, the qualification
assessment mechanism provided for by the new laws makes it possible to weed out the most
disloyal judges under the pretext of inconsistency with their position, or failure to pass an
“interview” with members of VKKS;
• In general, the adoption of the two above-mentioned laws was aimed rather not at reforming the
judicial system, but at its subordination to the president, which eventually resulted.
• The Ukrainian justice system has retained its “accusatory” bias with a meager number of
acquittals. At the same time, in the most resonant cases, it was not possible to obtain decisions;
• The scanty percentage of convictions, the abundance of outrageous high-profile cases and the
consistently low places of Ukraine in the ratings of justice indicate the failure of the reform, and
attempts to make the legal profession “manual” further aggravate the impression of the results of
the reform.
The innovations stipulated by the law “On Amendments to the Economic Procedural
Code of Ukraine, the Civil Procedure Code of Ukraine, the Code of Administrative Procedure
of Ukraine and other legislative acts”.
Law No. 6232 “On Amendments to the Economic Procedural Code of Ukraine, the Civil
Procedure Code of Ukraine, the Code of Administrative Procedure of Ukraine and other legislative
acts296” was signed by the President on November 23, 2017.
Its main disadvantages are:
• anti-social orientation, depriving the majority of citizens of access to justice;
• procedural violations - the bill contains three new codes, changes to a number of other codes and
laws, which should be considered and adopted as separate bills.
Next, we will consider the main innovations introduced by the aforementioned law and their
consequences in more detail.
296 Draft Law on the introduction of amendments to the State Procedural Code of Ukraine, the Civil Procedure Code
of Ukraine, the Code of Administrative Judicial Service of Ukraine and other legislative acts. Verkhovna Rada of
Ukraine. http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61415
128
1. The Supreme Court became both the first and the cassation instance at the same
time.
The new procedural codes of draft law No. 6232 define the Supreme Court as a court of
cassation, which directly contradicts the provisions of clause 11 of the “Transitional Provisions”
of the Constitution of Ukraine, which clearly distinguishes between the Supreme Court and the
courts of cassation. The Grand Chamber of the Supreme Court now acts as a court of appeal in
cases considered by the Supreme Court as a court of first instance.
The list of such cases is defined in Art. 22 of the draft Code of Administrative Procedure
of Ukraine297, according to which the Supreme Court, as a court of first instance, has jurisdiction
over cases on the establishment of the results of elections or an all-Ukrainian referendum by the
Central Election Commission, cases on a claim for the early termination of the powers of a people's
deputy, as well as on appealing acts, actions or inactivity of the Verkhovna Rada, the President of
Ukraine, the High Council of Justice, the High Qualification Commission of Judges, the
Qualification and Disciplinary Commission of Prosecutors.
It is easy to see that all of the listed types of court proceedings relate to elections, political
trials in the country and the process of appointment / dismissal of judges. This means that their
transfer to the Supreme Court, on which, as we have already written above, the President has
enormous influence, is fraught with the complete politicization of these trials and the issuance of
controversial (dependent) decisions on them.
2. Cassation is no longer for everyone.
According to Art. 328 of the Code of Administrative Procedure of Ukraine, court decisions
in cases of minor complexity are not subject to cassation appeal, except for cases defined by
evaluative concepts not deciphered in the text:
• The cassation appeal concerns the issue of law, is of fundamental importance for the formation
of a unified law enforcement practice;
• the person filing the cassation appeal is deprived of the opportunity to refute the circumstances
established by the court decision when considering another case;
• the case is of significant public interest or is of exceptional importance to the party to the case
who is filing the cassation appeal.
Thus, situations may arise when similar cases will be reviewed on cassation, depending on
the composition of the court, and not on the existence of legal grounds for such a review.
The cassation administrative court is given the authority to declare the cassation appeal
unfounded before its consideration, at the stage of its adoption. In addition, he may refuse to open
a cassation proceeding if it is clear that the rule of law has been correctly applied and that there
are no “reasonable doubts” about its application or interpretation. These concepts are not
297 Code of Administrative Judiciary of Ukraine // Vidomosty Verkhovnoi For Ukraine (VVR), 2005, No. 35-36, No.
37, art. 446.http: //zakon.rada.gov.ua/laws/ show / 2747-15
129
deciphered in the text of the law, which deprives the applicant of the guaranteed Art. 6 of the
"Convention for the Protection of Human Rights and Fundamental Freedoms" the right to a fair
trial.
3. The final destruction of banking secrecy.
Amendments to the Law “On the Judicial System and the Status of Judges” provide for the
creation of a unified judicial information and telecommunication system, which, in particular, will
ensure the automated seizure of funds.
4. The court will become inaccessible to the poor.
According to Art. 136, the court fee is once again increasing, after it has grown tenfold
with the adoption of the law on court fees in 2016. The plaintiff, together with the defendant, must
submit to the court an approximate amount of expenses for professional legal assistance. The court
may order the parties to pay in advance to the deposit account of the court a predetermined amount
of such expenses. If the plaintiff fails to pay the specified funds, the court has the right to leave the
claim without consideration or cancel due to non-payment of the summons of a witness or an
expert examination in advance. This limits access to justice for 90% of citizens.
From January 1, 2019, the court fee for individuals is from UAH 768.4. up to 9 605 UAH
for legal entities, the same indicator is from UAH 1921. up to UAH 672 350 Thus, the court fee
rates are high enough to restrict access to justice for the majority of citizens.
In addition, the mandatory pre-trial settlement limits access to justice. Art. 169 of the law
provides that the statement of claim shall be returned, in particular, when there is no evidence of
the adoption of measures for pre-trial settlement of the dispute in the case when such measures are
mandatory by law.
5. The increased terms of the appeal make it possible to evade responsibility
(amendments to Art. 461 of the CCP).
Setting a 30-day time limit for filing an appeal. During this time, the decision of the first
instance court did not take effect. If the court did not apply measures to secure the claim, then the
defendant, who lost the case, may, for example, sell or otherwise alienate the property on which
the dispute was considered, or take actions that would make it impossible in the future to enforce
a court decision in favor of the plaintiff. Art. 6 of the Convention for the Protection of Human
Rights and Fundamental Freedoms regarding a reasonable time frame for the consideration of the
case298.
298 Convention for the Protection of Human Rights and Fundamental Freedoms (as amended and supplemented by
Protocol No. 11, accompanied by the texts of Protocols No. 1, 4) Rome, 4.XI.1950: https://www.irs.in. u a /
index.php? option = com_content & view = article & id
= 276: 1 & lang = ru & Itemid =
130
6. The electronic court denies access to justice for all who do not have the Internet.
Pursuant to Articles 129 and 130, part of the notices of litigation (for example, if the last
registration was Donbass, Crimea or the location is unknown) will be transmitted via the Internet,
while neither smartphones nor Internet services are included in the living wage.
7. The court ceased to be open to society; the principle of publicity of the trial has been
violated (Articles 9, 204, 205).
The court may prohibit photographic recording, video recording or broadcasting of an open
court session if they interfere with the course of the trial. In fact, it is the judge's unlimited
discretionary right to make the process closed to society for far-fetched reasons, especially in high-profile cases.
The court may not admit those who wish to be present at an open court session into
the courtroom if there are no vacant seats.
The court may refuse to publicly declare court decisions taken following the results of
closed court hearings, which violates Article 6 of the European Convention on Human Rights299,
which states that judgments are in any case announced publicly.
The judge will be able to secretly meet with each of the parties separately, while the
subject of the conversation cannot be fixed even by a participant in the process on pain of criminal
prosecution. This will allow judges to claim undue benefit from one side or the other without fear
of responsibility.
The presumption of guilt of the defendant in administrative proceedings is canceled.
If earlier the authority was obliged to prove the legality of its decisions, then after the adoption of
6232 the court was able to transfer the responsibility of proving the violation of rights to the
plaintiff-citizen. This limits the rights of citizens in the admin process.
The consideration of cases is legalized in the case when, through the fault of the court,
the participant in the case did not receive notification in a timely manner. So, in a large
number of administrative cases, in particular on electoral disputes, disputes on the restriction of
freedom of peaceful assembly, appeal against administrative penalties, the participant in the case
is considered to be duly notified of the time and place of the consideration of the case from the
moment of notification (part 2 of Art. 268 CAS as amended by law). And even if such a referral
took place a minute before the start of the court session, the person will be considered duly notified.
Experts with powers of judges. In accordance with Art. 69, an expert on legal issues may
be involved in the case, whose powers include providing an opinion on the application of the
analogy of law or analogy of the law and the content of the norms of foreign law (Article 115 of
the draft). However, according to Ukrainian law, only the court has this right.
299 Ibid.
131
Punitive psychiatry. Art. 343 provides that a court decision in a case on compulsory
provision of psychiatric care to a person is subject to immediate execution, and an appeal against
the decision does not suspend its execution.
Disclosure of personal data. The register of court decisions will include the names and
surnames of the participants in the cases.
Procedural violations
In accordance with Article 4 of the Law of Ukraine “On the Judicial System and the Status
of Judges”, amendments to this law can be made exclusively by laws on amendments to the Law
of Ukraine “On the Judicial System and the Status of Judges”.
The text of the bill, introducing new editions of the codes, does not cancel the actions of
the old codes.
A huge number of formulations that violate the constitutional requirement for the
authorities to act only on the basis and within the framework of the law: “the court may”, “the
court has the right”, “recognized by the court”, “at the initiative of the court”, “the court promotes
reconciliation of one hundred - ron. "
At the end of the second section of our study, we note that the law "On Amendments to the
Economic Procedure Code of Ukraine, the Civil Procedure Code of Ukraine, the Code of
Administrative Procedure of Ukraine and other legislative acts":
• continues the trend towards strengthening the president's control over the judicial system. This
is ensured through the consideration of all cases related to elections, political processes, and, in
fact, the appointment of judges, in the Supreme Court of Ukraine, over which the president has
direct and strong influence;
• violates a number of rights of citizens, including the right to access to an independent trial,
regardless of financial situation.
Conclusion
Summing up the results of the study, several important conclusions can be drawn.
First, before the start of the reform in 2016, its authors said that it should ensure the functioning
of the judicial system, prescribed in the constitution, as one of three independent branches of
government. To this end, it was supposed, among other things, to neutralize the influence of
political factors on the appointment of judges, depriving the Verkhovna Rada of this function. In
fact, it turned out to be the exact opposite. As a result of the adoption of the laws “On Amendments
in the Constitution of Ukraine (on Justice)” and “On the Judicial System and the Status of Judges
”, as well as the transformation of the judicial system in accordance with them, the right to appoint
judges passed to the President. He also gained decisive influence in the High Council of Justice
and the Supreme Court. Thus, political influence on the judiciary was concentrated in one hand,
which further exacerbated the problem of politically motivated appointments and sentences.
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Secondly, under the pretext of qualification assessment, a “cleaning” of the judicial system
from disloyal to the authorities / insufficiently compliant judges is carried out. The presence in the
procedure of this assessment of such a subjective element as an interview with members of the
High Qualification Commission of Judges with the decisive influence of the President on this
commission allows you to reject any “Politically unreliable” or refusing to make decisions handed
down from above by a judge.
Thirdly, the fact that the cases related to the work of the Central Election Commission, the
election results, the termination of the powers of people's deputies, the appointment and dismissal
of judges will now be considered by the Supreme Court controlled by the president, makes it
practically impossible to issue independent verdicts in such cases. - possible.
Fourthly, the costs of the functioning of the judicial system are growing, not decreasing,
contrary to the declared goals of reforms. Nevertheless, what this money is spent on is a big
question. While the salaries of judges have been raised to a decent level, the salaries of court
administrators are still scanty. At the same time, the legal costs were shifted onto the shoulders of
citizens and legal entities-plaintiffs. Thus, it turns out that the lion's share of the increased costs of
the justice system goes to “reorganizations” and “proficiency tests”, the effectiveness of which is
highly questionable, due to the large number of unfilled judicial vacancies and, as a result, delays
in the consideration of cases.
Fifth, the results of reforming the judicial system through the adoption and implementation
of the above-mentioned laws remain dubious. Since 2012, Ukraine has risen in the rule of law
rating by only 2 positions, which can hardly be called a “success” adequate to the funds and efforts
spent on reform. In addition, the percentage of acquittals not only does not grow, but has even
decreased in recent years, which speaks of the “punitive” bias of our judicial system, which in no
way correlates with the situation in countries with developed democracies. The last straw in the
assessment of the judicial reform was resonant criminal cases, which ended in nothing but the
flight of the defendants.
Sixth, the law “On Amendments to the Economic Procedural Code of Ukraine, the Civil
Procedure Code of Ukraine, the Code of Administrative Procedure of Ukraine and other legislative
acts” has narrowed the possibility of citizens' access to fair and independent justice. In fact, he
introduced a property qualification for going to court, once again increasing court fees. In addition,
the changes introduced by this law to the Code of Administrative Procedure of Ukraine allow
citizens to refuse cassation on the basis of provisions that can be interpreted ambiguously. In
addition, the law contains a number of minor legal inconsistencies and violations of the rights of
citizens.
Afterword
The UIAMP study on judicial reform has not previously been published on the institute's
website. It was held in December 2018 and is the most recent of all presented in this book. Since
its inception, the situation in the justice sector has not changed.
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To confirm this thesis, we will cite one glaring fact: on February 26, 2019, the
Constitutional Court declared unconstitutional Art. 368-2 of the Criminal Code, which provides
for the punishment for illicit enrichment300. This article obliged civil servants to provide
explanations about the sources of their income and the income of their family members. If the
official could not do this, he should have been prosecuted. According to the Constitutional Court,
Art. 368-2 of the Criminal Code violates the presumption of innocence. According to the judges,
the prosecution must prove the illegality of the proceeds.
After the abolition of the above article, the National Anti-Corruption Bureau and the
Special Anti-Corruption Prosecutor's Office will be forced to close all criminal cases initiated
under it. Among other things, this means that the public will never wait for the verdict in the case
of the Minister of Infrastructure Vladimir Omelyan and many others like him. In fact, this decision
of the Constitutional Court put an end to two reforms at once - judicial and anti-corruption.
300 The Constitutional Court canceled the article of the Criminal Code on illegal enrichment. League News:
https://news.liga.net/politics/news/konstitutsionnyy-sud-otmenil-statyu-uk- o-nezakonnom-obogaschenii
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TABLE OF CONTENTS
Police reform. ................................................................................................................................. 4
Reform of education. .................................................................................................................... 20
Anti-corruption reform. .................................................................................................................43
Reform of the health care system. ................................................................................................ 59
Business deregulation reform. ...................................................................................................... 75
Decentralization reform. ............................................................................................................... 97
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Scientific publication
PRICE OF REFORMS
Goals, course and results of systemic
changes in Ukraine (2014 - 2019)
Edited by
Doctor of Political Sciences, Candidate of Legal Sciences,
Professor V.M. Yakushik
Publisher "FLP Serednyak T. K.", 49000, Dnipro, 18, PO Box 1212
Certificate of entry of the subject of publishing activity into
the State Register of Publishers, Manufacturers and
Distributors of Publishing Products
DK No. 4379 dated 02.08.2012.
Publisher ID in ISBN 7761
Signed for printing on 22.07.19. Format 60x84 1/16. Offset paper.
Circulation 100 copies. Order No. 758.
CONV. print sheets 11.16. Accounting ed. sheets 9.25
136
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