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The world Bank told how to accelerate the economic growth of Ukraine

Во Всемирном банке рассказали, как ускорить экономический рост УкраиныThe world Bank called the key to the Ukrainian economy reforms.

To accelerate their economic recovery Ukraine should first carry out pension, land, healthcare and anti-corruption reforms.

So says world Bank Director for Ukraine, Belarus and Moldova satu Kähkönen.

The Director recalled that at the beginning of the week the world Bank released an updated economic analysis, confirming the growth of the Ukrainian economy by 2.3% in 2016. However, this figure remains modest, especially that part of the increase was due to a record harvest that led to economic growth in the fourth quarter of the year by 4.8%.

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“Given the current rate and an unfavourable situation on foreign markets, the blockade in the Donbass and other factors, 2017, we forecast a slight increase of 2%. In order to accelerate economic growth and achieve a sustainable recovery, we need to introduce reforms. No other recipes,” said Kähkönen.

According to the Manager of the world Bank, there are four reforms that could be decisive for the recovery of the Ukrainian economy.

“The first is pension reform. From a fiscal point of view, it is extremely important to 11% of the national GDP is spent through the Pension Fund, with only half of these funds is covered by the pension contributions of the population, the rest is financed by the budget. This is a huge imbalance,” said the Director.

According to her, nearly 70% of the Ukrainian pensioners now live below the poverty line and need the protection of the state.

“Second in importance, in our opinion, is land reform. It requires significant transformation, but can itself become a significant impetus for shifts in case of successful implementation. The lifting of the moratorium, the preparation and opening of the land market will become an impetus to attract investment in the state,” emphasizes the Manager of the WB.

The third major reform Kähkönen called health care reform.

“The system of Finance is extremely inefficient: Ukraine spends on health care, over 4% of GDP — significantly more than any country with a similar income level, and quality of health services remains unsatisfactory. And it’s not just a question of inefficient use of budgetary funds, but also economic losses-mediated — increase of life expectancy on year increases GDP per capita by approximately 4%,” – emphasizes the Director.

According to her, every year in Ukraine due to premature death and disability “lost” nearly 6 million years of productive life.

Another key reform Kähkönen considers anti-corruption reform, the difficulty of which is obvious to all, including to private investors.

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