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  • Economic freedom and government assistance for business: experts weight in

    30.03.2015

    Does government assistance for business contradict the notion of equality of business before the law and the principle of economic freedom?

    It does not, the experts argue, provided that equal rules and fair competition are in place. This question was discussed at the panel discussion titled “Government Assistance in the Context of Economic Freedom in Ukraine” that was hosted on Monday, March 30, by the Institute for Economic Research and Policy Consulting (IER) with the support of the Center for International Private Enterprise (CIPE).

    The panelists were Dmytro Liapin, senior fellow of the National Institute for Strategic Studies, Oleksiy Imas, investment banker and project manager of the NGO “Easybusiness”, Serhiy Loboyko, director of the Center for Innovations Development at the National University of the Kyiv Mohyla Academy and co-organizer of the National SME Platform, Ruslan Rokhov, head of the Agency for Strategic Communications and Development “Spilni zusyllya”, Ivan Verstyuk, economic journalist, Nina Isakova, doctor of economic sciences and senior fellow at the Dobrov Center for Scientific and Technological Potential and Science History Studies of the National Academy of Sciences of Ukraine, as well as Arthur Kovalchuk and Iryna Fedets, research associates of the IER. The discussion was moderated by Igor Burakovsky, Head of the Board of the IER.

    Business surveys show that a significant share of Ukrainian producers considers creating equal conditions for business to be priority measure for policy makers. “The business opinion survey that was conducted in early 2015 by the Institute for Economic Research and Policy Consulting showed that 39.3% of the industrial enterprises expect the government to create a level playing field for all businesses,” – says Iryna Fedets, research associate of IER. “At the same time, the proportion of the respondents who expect the government to support their sector is smaller: it equals 23.5%. This could be explained either by the fact that the business prefers equal conditions rather than special privileges, or that with today’s challenging economic situation in the country, enterprises do not put much hope in the government support.”

    Discussing the small and medium enterprises (SMEs) in Ukraine, the IER research associate Arthur Kovalchuk said there the international experience lists a significant number of instruments of support for such enterprises. That is why there is no need in his opinion to invent totally new mechanisms. “The question is – said Arthur Kovalchuk – what instruments will have the best effect given the specifics of SMEs in Ukraine. But none of them will work efficiently as long as the basic conditions are not provided, namely property rights, elimination of corruption, fair courts, and the like.”

    The panelists urged Ukrainian civil society, especially the young people, to take more active part in the reforms implementation process. According to them, only a small part of Ukrainian youth is involved in the civic initiatives aimed at changes in economic policy. And if the young people see no changes in Ukraine and do not experience more economic freedom, they may lose their aspirations to start own businesses and will be more likely to choose emigration.

    The experts voiced several suggestions to improve economic freedom in Ukraine and boost public impact on the reforms making process. Their suggestions included holding an open dialogue between the business and the government, businesses working together in associations to advocate for their interests, rethinking business stimulation policy, and delegating business regulation to the local authorities. 

     

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    Category:  Round Table
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