Business expectations for 2020

27/ 01/ 2020

Upcoming year promises to be filled with business news and events. Therefore, the European Business Association has identified ten priorities that will help businesses and the country develop to achieve the ambitious goal of 5-7% economic growth. Anna Derevyanko. Executive Director of the European Business Association. Most of the business priorities are closely linked with the key issues discussed at the Davos Forum - economics, technology, industry, and ecology. At the same time, only along with basic things - a fair judiciary, effective law enforcement agencies and unified rules - they will help to bring about real changes in the country. Thus, we fervently hope that this year business proposals will be taken into account to take full advantage of the potential that Ukraine has in order to make 2020 a year of real development and investment attraction. Thus, the first priority is to counteract the shadow economy, which varies from 25% to 60% depending on the sector, which creates unequal rules in the market and prevents transparent business from moving forward. It is about combating smuggling and counterfeiting, protection of intellectual property rights, etc. The second is to reduce the tax burden on the wage fund and the pressure on legal businesses. For example, last year’s experience has shown that sometimes under the slogans of the tax system modernization, irrational tax innovations and selective additional taxation for fair payers can be offered. The third is the implementation of the principles of the circular economy. In this regard, it is an incentive to reduce the generation and utilization of pollutants by industrial enterprises within the framework of Ukraines international obligations and the European approach to waste sorting (introduction of extended producer responsibility), since over 93% of waste is now dumped in landfills and only 4.18% is sorted. The fourth is the continuation of the harmonization of Ukrainian legislation with EU regulations so that Ukrainian products meet European requirements and the business has no difficulties with delivering goods to and from the EU. For example, the animal industry needs certain regulations improvement in this regard (adoption of the draft law on veterinary medicine, introduction of European standards of product safety control, for example, for the presence of salmonellosis in poultry), pharmaceutical sphere, adaptation of labeling requirements, for example for cosmetics, etc. The fifth is the adoption of modern labour legislation. The business has been talking about these changes for several years. So, in the end, it is worth taking the step to meet the European conditions of labour law to open the labour market of Ukraine for high-quality international specialists and to replace the Soviet Code of Labour Laws in Ukraine, which is currently in force, with a new document. The sixth is health care. It refers to the ensuring of continuation of medical reform, the introduction of transparent criteria for further expansion of the Affordable Medicines program and control of medicines quality (to eliminate any duplication, in particular for imports of medicines), further effective implementation of the National List of Essential Medicines and development of medical technologies evaluation. Besides, special attention should be paid to the development of the clinical research field and the increasing number of projects to broaden access for seriously ill patients to innovative and free treatment, etc. The seventh is the promotion of international trade. Business lacks permits for international freight transportation, which currently creates significant obstacles to free trade, hinders the proper fulfillment of contractual obligations of Ukrainian enterprises to European customers, and, in general, harms the business climate in Ukraine. Besides, the business expects the signing of the ACAA Agreement. The eighth is the introduction of the land market through the adoption of the law on the circulation of agricultural land. The ninth is to foster innovations, education and the introduction of new technologies in business and government. It is a matter of digitizing the communication between the business and the state, further development of cashless payments, education system reboot – essential investments in human capital, technology, creation of the innovation economy to lay the foundation for further economic and social growth. The tenth is to stimulate the investment attractiveness of Ukraine overall and in regions particularly. Last year brought important shifts in the delegation of certain state functions and assets to the private sector, such as the launch of a big privatization and concession mechanism. Hopefully, this trend will continue in 2020 as well. These are positive signals for investors and new opportunities to attract financing and reduce corruption. Thus, we hope that 2020 will be the year of qualitative and progressive changes in the country, and by the end of the year, most business expectations will come true.

Anna Derevyanko Executive Director of the European Business Association

Most of the business priorities are closely linked with the key issues discussed at the Davos Forum - economics, technology, industry, and ecology. At the same time, only along with basic things - a fair judiciary, effective law enforcement agencies and unified rules - they will help to bring about real changes in the country. Thus, we fervently hope that this year business proposals will be taken into account to take full advantage of the potential that Ukraine has in order to make 2020 a year of real development and investment attraction.

Thus, the first priority is to counteract the shadow economy, which varies from 25% to 60% depending on the sector, which creates unequal rules in the market and prevents transparent business from moving forward. It is about combating smuggling and counterfeiting, protection of intellectual property rights, etc.

The second is to reduce the tax burden on the wage fund and the pressure on legal businesses. For example, last year’s experience has shown that sometimes under the slogans of the tax system modernization, irrational tax innovations and selective additional taxation for fair payers can be offered.

The third is the implementation of the principles of the circular economy. In this regard, it is an incentive to reduce the generation and utilization of pollutants by industrial enterprises within the framework of Ukraine’s international obligations and the European approach to waste sorting (introduction of extended producer responsibility), since over 93% of waste is now dumped in landfills and only 4.18% is sorted.

The fourth is the continuation of the harmonization of Ukrainian legislation with EU regulations so that Ukrainian products meet European requirements and the business has no difficulties with delivering goods to and from the EU. For example, the animal industry needs certain regulations improvement in this regard (adoption of the draft law on veterinary medicine, introduction of European standards of product safety control, for example, for the presence of salmonellosis in poultry), pharmaceutical sphere, adaptation of labeling requirements, for example for cosmetics, etc.

The fifth is the adoption of modern labour legislation. The business has been talking about these changes for several years. So, in the end, it is worth taking the step to meet the European conditions of labour law to open the labour market of Ukraine for high-quality international specialists and to replace the Soviet Code of Labour Laws in Ukraine, which is currently in force, with a new document.

The sixth is health care. It refers to the ensuring of continuation of medical reform, the introduction of transparent criteria for further expansion of the Affordable Medicines program and control of medicines quality (to eliminate any duplication, in particular for imports of medicines), further effective implementation of the National List of Essential Medicines and development of medical technologies evaluation. Besides, special attention should be paid to the development of the clinical research field and the increasing number of projects to broaden access for seriously ill patients to innovative and free treatment, etc.

The seventh is the promotion of international trade. Business lacks permits for international freight transportation, which currently creates significant obstacles to free trade, hinders the proper fulfillment of contractual obligations of Ukrainian enterprises to European customers, and, in general, harms the business climate in Ukraine. Besides, the business expects the signing of the ACAA Agreement.

The eighth is the introduction of the land market through the adoption of the law on the circulation of agricultural land.

The ninth is to foster innovations, education and the introduction of new technologies in business and government. It is a matter of digitizing the communication between the business and the state, further development of cashless payments, education system reboot – essential investments in human capital, technology, creation of the innovation economy to lay the foundation for further economic and social growth.

The tenth is to stimulate the investment attractiveness of Ukraine overall and in regions particularly. Last year brought important shifts in the delegation of certain state functions and assets to the private sector, such as the launch of a “big” privatization and concession mechanism. Hopefully, this trend will continue in 2020 as well. These are positive signals for investors and new opportunities to attract financing and reduce corruption.

Thus, we hope that 2020 will be the year of qualitative and progressive changes in the country, and by the end of the year, most business expectations will come true.