The World Bank recommended that Ukraine rob pensioners, sell land and reduce medical costs
For its economic recovery, Ukraine should first of all carry out pension, land, health and anti-corruption reforms.
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This is what Satu Kahkonen, World Bank director for Ukraine, Belarus and Moldova, thinks so, writes the Kiev publication ZN.UA.
The financier recalled that at the beginning of the week the World Bank published an updated economic analysis, confirming the growth of the Ukrainian economy by 2,3% in 2016. However, this figure remains modest, especially since the growth was partly due to a record harvest, which led to economic growth of 4,8% in the fourth quarter of the year.
“Taking into account the current pace and unfavorable conditions in foreign markets, the blockade in Donbass and other factors, we also predict a slight growth of 2017% for 2. Reforms must be implemented to accelerate economic growth and achieve a sustainable recovery. There are no other recipes,” Kahkonen pointed out.
According to the World Bank manager, 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 - 11% of the state’s GDP is spent through the Pension Fund, while only half of these funds are covered by pension contributions from the population, the rest is financed by the budget. This is a huge imbalance,” the director pointed out.
“The second most important thing, in our opinion, is land reform. It requires significant transformations, but it itself can become a significant impetus for changes if successfully implemented. The lifting of the moratorium, the preparation and opening of the land market can become an impetus for attracting investments into the state,” emphasizes the WB manager.
Kahkonen called health care reform the third most important reform.
“The sector’s financing system is extremely ineffective: Ukraine spends over 4% of GDP on medicine – significantly more than any country with a similar income level, and the quality of medical services remains unsatisfactory. And this is a question not only of ineffective use of budget funds, but also of indirect economic losses - an increase in life expectancy by a year increases the level of GDP per capita by approximately 4%,” the director emphasizes.
According to her, every year in Ukraine almost 6 million years of productive life are “lost” due to premature mortality and disability.
Kahkonen considers anti-corruption reform to be another key reform, the difficulties of which are obvious to everyone, including private investors.
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