Industrial Policy Framework of Ukraine

1. INDUSTRIAL POLICY FRAMEWORK OF
UKRAINE
BASIC VERSION
based on studies of:
March 2015
COMMITTEE ON INDUSTRIAL POLICY AND ENTREPRENEURSHIP

2. Industrial
policy
means
targeted
government
efforts
to
develop
industrial
sector
through
a
set
of
policies
and
special
tools
Goals
Policies
Tools

3. Industrial
Policy
Goals
Higher
share
of
manufacturing
industry:
25% of GDP
Share
of
manufacturing
industry
in
GDP:
Higher
labor
produc?vity
in
manufacturing
industry
$30K
per
employee
Labor
produc?vity
in
manufacturing
industry,
thds.
$
per
employee:
14%
19%
22%
24%
25%
27%
31%
32%
Ukraine
Poland
Germany
Malaysia
Czech
Rep.
Belarus
Korea
China
13
27
30
33
36
97
104
134
Ukraine
Turkey
Poland
Slovakia
Czech
Rep.
Germany
Japan
USA

4. More
jobs
in
manufacturing
industry:
2 million jobs
Percentage
of
employed
in
manufacturing
industry
from
all
employed,
%
Higher
exports
in
manufacturing
industry:
80%
Manufacturing
industry
exports
(from
all
exports)
Higher
Foreign
Direct
Investment
(FDI)
in
manufacturing
industry:
35%
Share
of
FDI
into
manufacturing
industry
from
all
FDI
8%
17%
19%
19%
23%
26%
7,6
mln
0,5
mln
1,3
mln
Ukraine
Korea
Poland
Germany
Slovakia
Czech
Rep.
1,4
mln
4,2
mln
3
mln
59%
77%
78%
86%
88%
94%
Ukraine
Poland
Turkey
Korea
Czech
Rep.
China
26%
29%
32%
45%
47%
59%
Ukraine
Czech
Rep.
Turkey
Korea
Hungary
Poland

5. Industrial
Policy
Informa)onal
Policy
Educa)on
and
Science
Policy
Trade
Policy
Credit
Policy
Policies

6. • Selec)ve
import
subs)tu)on,
export
promo)on,
moving
up
the
value
chains
• Temporary
tax
and
export/import
incen)ves
for
new
produc)on,
R&D
and
IT
companies
• Cheaper
long-­‐term
loans
for
capital
investments
in
new
produc)on
and
for
increase
of
export
ac)vi)es
• Crea)on
of
“growth
points”
and
cluster
development
• Elimina)on
of
bureaucra)c,
corrup)on
and
an)-­‐compe))on
barriers,
harmoniza)on
with
regulatory
rules
of
EU
• Provision
of
skilled
workforce
to
produc)on
companies
and
R&D
centers,
science
commercializa)on
• Incen)ves
to
aJract
high-­‐quality
experts
to
Ukraine
and
to
restrain
brain
drain
• Promo)on
of
Ukraine
as
the
world’s
prime
loca)on
for
produc)on
and
R&D
• Preferen)al
public
procurement
for
domes)c
industrial
products,
increase
of
public
spending
for
economic
growth
Policies
Key
Tasks
Trade
Policy
Tax
Policy
Credit
Policy
Infrastructure
and
Regional
Policy
Regulatory
Policy
Educa)on
and
Science
Policy
Demographic
and
Migra)on
Policy
Informa)onal
Policy
Budgetary
Policy

7. Key
Tools/Ini?a?ves
Temporary
import
du)es
for
non-­‐raw
commodi)es
Temporary
export
du)es
on
raw
materials
Temporary
tax
incen)ves
for
new
produc)on
Temporary
tax
incen)ves
for
new
R&D
companies
Temporary
tax
incen)ves
for
new
ІТ
and
BPO
companies
Na)onal
Development
Bank
State
Credit
and
Export
Agency
Industrial
parks
Interregional
and
cross-­‐border
coopera)on
programs
Simplified
industry-­‐
specific
regulatory
models
Consecu)ve
implementa)on
of
EU
direc)ves
Public
procurement
from
local
manufacturers,
incl.
SME
State
loan
program
for
SMEs
Public
construc)on
projects,
incl.
through
PPP
Incen)ves
for
non-­‐
government
educa)on
ins)tu)ons
Program
to
aJract
high-­‐
quality
foreign
experts
and
repatriates
to
Ukraine
Promo)on
campaign:
Ukraine
as
produc)on
and
R&D
plaXorm
Policies
Promo)on
of
exporters’
interests,
incl.
through
WTO
Alloca)on
of
foreign
aid
for
growth
Incen)ves
for
non-­‐
government
research
projects
Incen)ves
for
talented
youth
(“Brain
Drain
Stop”)
Network
of
Ukrainians
abroad
Introduc)on
of
a
modern
skill
set
in
educa)on
programs
Trade
Policy
Tax
Policy
Credit
Policy
Infrastructure
and
Regional
Policy
Regulatory
Policy
Educa)on
and
Science
Policy
Demographic
and
Migra)on
Policy
Informa)onal
Policy
Budgetary
Policy
“Made
in
Ukraine”
Compe))ve
access
to
networks
and
energy

8. Horizontal
Tools
Ver)-­‐
cal
Tools
Selec)ve
Approach
(industries/clusters)
Universal
Approach
(cross-­‐industrial)
• Crea)on
of
a
mixed
working
group
-­‐
“an)
crisis
economic
office”
(Cabinet
of
Ministers,
Parliament,
experts,
manufacturers’
associa)ons)
• Filtra)on
of
industry
sector
problems
by
size
and
urgency
+
division
by
accountable
bodies
(Central
Authori)es,
Cabinet
of
Ministers,
Parliament,
Presiden)al
Administra)on)
• Working
subgroups
for
problem
solving
with
maximum
transparency
for
the
public
An?
Crisis
Program
Ac?on
Plan
• Development
of
a
road
map
for
implementa)on
of
state
tools/ini)a)ves
for
industrial
growth
(with
indica)on
of
deadlines,
responsible
people,
resources,
etc.)
• Valida)on
of
the
program
by
key
stakeholders:
industry
associa)ons,
interna)onal
donors,
etc.
• Planned
program
realiza)on
ensuring
maximum
transparency
for
the
public
Planned
Program

9. COMMITTEE ON INDUSTRIAL POLICY AND ENTREPRENEURSHIP
VICTOR
GALASYUK
Commibee
Chairman
Member
of
Parliament
Ph.D.
3
Sadova
St.,
office
219
Kyiv
01008,
Ukraine
e-­‐mail:
galasyuk@rada.gov.ua
Tel.:
+38
(044)
255-­‐3595
Direct:
+38
(044)
255-­‐2851