Ukraine has proven to be resilient economy – OECD Secretary-General
Secretary-General of the Organisation for Economic Co-operation and Development (OECD), Mathias Cormann, has stated that Ukraine has genuinely demonstrated itself to be a resilient economy.
To highlight the key message: Ukraine has truly proven to be a resilient economy, Cormann said during the presentation of the OECD Economic Survey and Integrity Review of Ukraine on Tuesday in Kyiv.
His team and he were inspired and deeply impressed by how Ukraine continues to function and work under such difficult and testing circumstances. But OECD hopes that, together, we can chart a path toward a secure and prosperous future for Ukraine. This means pursuing reform and implementing the best international practices to create the conditions for Ukraine's continued development through reform, he added.
At the same time, he emphasized the need to improve public finances and investment attractiveness, as well as the efficiency of public spending and how state funds are used.
As soon as the security situation allows, and if the government's fiscal strategies succeed, Ukraine could return to 5% GDP growth. That would signal the beginning of economic recovery. Supporting the economy means, first and foremost, supporting those who work, who pay taxes, and those projects that are geared toward reconstruction. That would mean the economy is recovering, that overall debt as a share of GDP is decreasing, and that tax collection is improving, he added.
Cormann also stressed the importance of strengthening the labor force, particularly by reintegrating both internally and externally displaced persons into the general labor market.
Among other priorities, he pointed to the reduction in the number of state-owned enterprises as a means to boost competition.
State-owned enterprises play a key role in many sectors of the economy, but at the same time, they often slow down privatization and discourage private companies from investing. So, clearly, a balanced approach must be found – some kind of golden middle ground between the roles of public and private enterprises, Cormann said.
Regarding the energy sector, he noted that reforming price-setting mechanisms could lead to a more efficient energy system. Again, once the security situation permits and price caps can be lifted, this will attract investors and allow for a more dynamic transformation of the economy in terms of energy efficiency, the OECD believes.
The OECD also pointed out that Ukraine is facing a labor shortage, making retraining programs critically important.
The organization has begun developing its vision for the reforms that will be required once peace is restored. This includes economic reforms to improve the business environment and investment climate.
Additionally, there is a recognized need for reforms in education, fiscal policy, the pension system, and for cutting bureaucratic red tape. The OECD also highlighted the importance of tackling the shadow economy.
As reported, OECD Secretary-General Mathias Cormann visited Ukraine to present the Economic Survey and Integrity Review of Ukraine.