Successive Ukrainian governments have found it singularly difficult to pass legislation needed to pursue what are ostensibly economic policy priorities. Passing legislation and implementing policies to liberalize trade and improve the climate for foreign direct investment (FDI) have been especially difficult. The purpose of this study was to identify major barriers to trade and deficiencies in the current environment for FDI in Ukraine and to develop concrete policy recommendations for removing these barriers and improving the climate for FDI.

In our view, the Ukrainian government would be better served by adopting and successfully implementing a few key policies than by...

Of all the former Soviet republics, Ukraine suffered the longest and one of the deepest declines in economic activity. Its transition recession lasted from 1989 until 2000, 11 years (Figure 2.1). According to official statistics, Ukraine’s GDP by 1999 was just 38.5 percent of its 1989 level. Since 1999, the economy has grown rapidly; growth in GDP has averaged 7.3 percent per year. Nonetheless, Ukraine’s GDP in 2006 was still only two-thirds of its peak.

The factors that have driven recovery in Ukraine have been more akin to those in Russia than to those in the Central European states. A...

Ukraine is beginning to tap its great potential for economic development, but it remains a frustrating country in which to trade or invest. The list of problems facing those that want to trade or invest in Ukraine is long: The original Blue Ribbon Commission Report ran 92 pages, and the European Business Association has written 154 pages of detailed recommendations to address the myriad problems it found.¹ Sadly, few of these recommendations have been adopted. According to our interviewees, major obstacles to trading or investing include those described in this chapter.

All of our interviewees complained about the barriers to...

Despite its recent rapid rates of economic growth and its rich endowments of land and people, Ukraine remains a difficult place in which to trade and invest. There are numerous impediments to trade and investment, and many of them are deep seated and not easily removed. In this chapter, we offer several recommendations whose adoption would rectify the most egregious barriers to trade and investment in Ukraine. We have attempted to make these recommended policy changes as concrete and easy to implement as possible. All of them should lead to improvements for Ukrainian businesses and citizens, as well as their...