Ukraine 2018

Ukraine enjoys free and fair elections, although sometimes minor incidents occur which do not influence the outcome. The fairness of the outcome could however to some extent be influenced by Ukrainian oligarchs, who fund parties who act in line with their interests. This leads to parties who are not funded by an oligarch having a big disadvantage over oligarch-funded parties. As Ukraine is one of the poorest countries in Europe, voters are susceptible to “vote-buying”. Especially during parliamentary elections, candidates bribe voters with gifts, such as buckwheat. Once elected, these parliamentarians can easily get their investment back through corruption. Although election monitors generally call the elections competitive and credible, concerns have been expressed about

In general, Ukraine is governed by its democratically elected authorities, who have sufficient power to govern the country. However, there are several threats to Ukraine’s sovereignty, rule of law and democracy. First of all, the elected authorities are not in control over Russian occupied Crimea and the occupied territories in the Donbas. Second of all, oligarchs and powerful business groups who have close ties to Ukrainian officials can influence the decision making process. The widespread corruption amongst public officials also allows wealthy people to influence decision making.

Freedom of press, speech and expression is guaranteed by the Ukrainian constitution. The media landscape in Ukraine is diverse and pluralistic, and criticism of the government is often featured in the media. However, the vast majority of Ukrainian media outlets are owned by oligarchs, and the diversity of the media is merely a representation of the diverse interests of the different oligarchs. Truly independent and non-aligned media are hard to find in Ukraine. A different threat to the objectivity of reporting in Ukraine is that journalists often report in a “patriotic” way about sensitive issues. Due to the conflict with Russia, most Russian TV channels are banned from broadcasting in Ukraine. Several Russian social media outlets and search engines have also been banned.

One of the biggest issues Ukraine is currently facing is its lack of the rule of law - both on the higher and on the lower level. On the lower level, wealthy individuals can escape prosecution by bribing judges. On the higher level, public prosecutors are highly dependent on political power. Ukraine suffers from corrupt and politicized courts on the higher and lower levels. In 2016, a comprehensive reform of the judiciary system went into effect. The reform was aimed at creating a more independent and competitive selection of judges, an increase in their salaries, a broader evaluation of their work and a better control of their assets in order to decrease corruption. The reform came under heavy criticism in 2017, when NGOs criticized the lack of transparency of the selection of candidates

The situation has barely changed during the past few years. Ukraine is still, after Russia, the most corrupted country in Europe. Globally, Ukraine is on the 130th place, out of 180 countries, together with Iran, Gambia, Myanmar and Sierra Leone. The bribery rate in Ukraine hasn’t improved in recent years and is still stuck at 38%, which makes it the highest in Europe. Although politicians acknowledge that corruption is a big problem in Ukraine, there is little political will to fight corruption, despite pressure from civil society. The recently created anti-corruption bureau NABU, which is tasked with investigating corrupt officials, is being obstructed by government officials and by law enforcement agencies. The latter even arrested NABU officials and seized files from the bureau. In

The Maidan Revolution of 2014 improved the respect for - and awareness of - human rights in Ukraine. Civil society is very strong, with civic groups going after social, political, cultural and economic agendas being able to influence decision-making at different levels of government. The March 2017 law that increases monitoring of anti-corruption NGOs is considered to be a negative development concerning human rights in Ukraine. In general, free speech is upheld in Ukraine and Ukrainians can say whatever they want. However, the conflict in the east has made it sometimes difficult for pro-Russian Ukrainians to express their opinion. There is no free speech in Crimea and the occupied parts of the Donbas. Ukrainians are completely free to practice their religious believes, however the

Due to the high level of corruption within the judiciary system, private property rights in Ukraine are not sufficiently protected. Furthermore, the enforcement of contracts is hurdled by the very high costs of going to court. Registering a property in Ukraine is a very long and costly process, both due to inefficient land cadastre and to complicated valuation rules for determining the transfer tax. Foreign nationals are not allowed to own land in Ukraine, however most restrictions on foreign investment have recently been lifted. The privatization process is not transparent and is not fair. Russian and offshore companies have been banned from participating in the privatization process due to concerns over Russian influence in Ukraine. In the Donbas, private businesses have been

Government spending in Ukraine reaches around 42.8% of GDP, which is comparable to other European countries. Ukraine’s government debt to GDP decreased from 81% in 2016 to 71.8% in 2017 however this too remains as a dangerously high level. The inflation rate in Ukraine was 14.44% in 2017, which is extremely high taken that the inflation rate of the Euro was 1.5% at the time. Corruption remains as one of the biggest problems for the functioning of the government. It causes an incredible loss for the country’s GDP. Although reforms have been conducted, they remain limited. Ukraine still has a large amount of state owned companies, which are largely inefficient. This leads to losses and to the companies needing state subsidies. Although the privatization process has started, it remains

In 2017, Ukraine was ranked 76th out of 190 countries in “doing business”. Ukraine’s position went up 20 places in two years however there are still quite some improvements to make. The main reasons as to why Ukraine’s position improved are numerous reforms, albeit not always successful, that Ukraine conducted over the past few years. According to the World Bank, Ukraine improved in three areas; the government made the obtainment of construction permits easier by reducing the fees and it protected minority investors by requiring detailed public disclosure of related-party transactions. The World Bank noted that in 2017 Ukraine improved especially its tax system, jumping up 41 positions in the ranking by making it easier to pay taxes. A big issue for entrepreneurs in Ukraine is

International trade is extremely important for Ukraine, thus the freedom to trade internationally is largely being upheld. Ukraine is the 53rd largest export economy in the world, with its main export partners being the EU, Russia, Turkey and China. Imports originate mostly from the EU, Russia, China and Belarus. In the years leading up to the 2014 Maidan Revolution, the Ukrainian exports were already decreasing. The 2014 war worsened this trend, with exports decreasing significantly. Although the export slightly increased in the beginning of 2017, it decreased again significantly by the end of that year. According to the Global Competitiveness Report, inflation, corruption and the political instability are the most problematic factors for doing business with