Country Profile Ukraine

In 1991, after gaining independence of Ukraine, the absence of the structured public private dialogue system has become a breeding ground for the spread of “shadow” economy and corrupt relationships, when business considered more appropriate and most effective to invest not in the development of civil society and advocacy, but in obtaining necessary decisions by unlawful lobbying or direct corruption.

Nevertheless, Ukrainian authorities made a number of attempts to eliminate this problem and establish communication with business community. In March, 1993 a Resolution #210 established an advisory and expert body of the Government - the Council of Entrepreneurs under the Cabinet of Ministers of Ukraine, composed of 16 representatives of business associations. The Council is a permanent advisory body under the Cabinet of Ministers of Ukraine, the main task of which is to ensure interaction of government and business. Over time the Council and its regional representative offices has been reformed many times. As of 2017 the Council units the leaders of 84 business associations.

The next step was the adoption of the Resolution "On creation of local and regional sectoral councils of entrepreneurs" in May, 2009 #518 (repealed in 2011). In order to improve the mechanisms of cooperation between business and public sector a new document was accepted, that defined the relevant principles of PPD interaction – Resolution “On participation of civic society in formulation and implementation of government policy” by November, 2010 #996.

Pursuant to the Resolution, all Ukrainian ministries, other central executive bodies, city and regional administrations were ordered to form councils from NGOs, BSOs and BMOs, as well as to ensure their functioning. This was a significant step for the development of civil society, but many problems occurred with implementation of the public private dialogue. Since the councils could only include representatives of civic organizations and unions, without participation of entrepreneurs in fields, the subjects of the discussions did not reflect the problems of the real sector of the economy in the regions.

SME sector continued to defend its rights with rallies and protests, as they don’t believe that the government will hear their demands in a civilised way. On the other hand, the inability of most associations to formulate their proposals in professional way led to a loss of trust of the authorities, that business is ready to participate in the policy making processes.

However, the advantage of consolidation and civilised partnership with the authorities was quickly appreciated and implemented by big businesses, especially representative offices of foreign companies in the country.

So why European Business Association (ЕВА) (founded in 1999 by European Commission, joins more then 900 companies) and American Chamber of Commerce (ACC) (founded in 1992, joins 600 largest companies operating in Ukraine from over 50 nations across the globe) operate effectively in Ukraine, providing a big input to the improvement of legislation on entrepreneurship development. Large Ukrainian enterprises found protection of their interests in Ukrainian League of Industrialists and Entrepreneurs (ULIE) (started in 1992, ULIE has 28 regional offices, 73 branches, 22 representative offices and 34 commissions).

In last few years Ukrainian Chamber of Commerce and Industry (UCCI) continues to strengthen its position in the context of PPD both on national and regional levels. UCCI is a member of the International Chamber of Commerce, World Chamber Federation, as well as the Association of European Chambers of Commerce and Industry (EUROCHAMBRES). Nearly 10,000 enterprises and companies are members of UCCI as of 2017.

In December, 2014 was established The Business Ombudsman Council, funded through the Multi-donor Account for Ukraine set up at the European Bank for Reconstruction and Development (EBRD). The Business Ombudsman investigates complaints concerning alleged acts of corruption and other violations of legitimate interests of businesses by actions or omissions on the part of state and municipal authorities.

The main challenge of the PPD in Ukraine is the consolidation of the small and medium-sized entrepreneurship (SME) segment (not more than 5%) and the possibility of their competent participation in the PPD at the same level as the large companies. Because the imbalance of interests leads to a non-competitive policy and a blocking of SME development in Ukraine. Some of the associations of small entrepreneurs became the basis for achieving the political goals, as happened with NGO "All-Ukrainian association of small and medium businesses “Fortrecia” (44 regional and 7 regional unions, 65 individual members). In 2014-2015 were made few attempts to create a National SME Platform as a non-formal Local Reform Coalition of 74 BSOs and BMOs, with the support of USAID implemented by CIPE. As of 2017 coalition managed to achieve self-sufficiency without donor funding, but such independent initiatives still need support and assistance to reach a decent level of the development.