ARE UKRAINIAN CITIES FRIENDLY TO BUSINESS?

04.01.2019
ARE UKRAINIAN CITIES FRIENDLY TO BUSINESS?

There are many rankings which assess the opportunities, conditions or environment for business. The investment appeal ranking, the investment activity ranking, to name a few.

Transparency International Ukraine has recently published an investment transparency ranking. In this index, we assess how much the cities heed the voice of business when they develop regulatory acts, how actively the city informs potential entrepreneurs and investors on the advantages of investing in it, how open the city is to entrepreneurs.

The assessment methodology of investment sector transparency includes three indicators which reflect how friendly the city is to entrepreneurs. Let’s talk about them in detail.

Is the city connected to the official platform helping people to start a business?

The platform in question is the National Information Service for Starting Businesses developed by Better Regulation Delivery Office. It is a kind of legal advice online – on this website in just a few clicks you can find out what to do to start a certain kind of business – a bakery, a gas station, a beauty salon etc. As of the time of the assessment, 5 cities were connected to the platform – Vinnytsia, Zhytomyr, Mykolaiiv, Odesa and Chernivtsi. None of them uploaded more than 5 examples. But this is the most rapidly developing indicator – as of the end of October, 7 more cities joined. The system currently contains 100 cases of various types of business.

Has the city council approved an entrepreneurship development program and is it financed in 2018?

Local self-government authorities have practical tools of assistance with entrepreneurship. For instance, they can refund part of the interest on entrepreneurs’ loans, co-finance startups, finance entrepreneurs’ education and promote local brands. To do it, a target program is usually approved or a target fund established. Such programs and funds are a practical tool to deliver promises on entrepreneurship development. In the course of assessment, we identified that the program had been approved and financed in 41 cities out of 100. However, the amounts in 2018 are not too impressive – Kyiv allocated UAH 3,000,000 for development of entrepreneurship, while other cities – from UAH 10,000 to UAH 200,000.

Has the city council implemented electronic auctions for sales of seasonal trade placement rights?

This indicator belongs to the best practices of transparency, and the idea here is to create equal conditions to sell rights for placement of such objects and destroy potential corruption risks. If the rights are granted through an auction, it enables a greater number of potential participants to join the auction, which means that the result will be better and the business will develop, generating GDP and jobs. As of the moment of assessment, only 4 cities implemented those electronic auctions – Kyiv, Lviv, Khmelnytskyi and Drohobych. The ProZorro.Sale team is actively working on helping this number grow.

Generally, the investment sector transparency ranking shows that cities are currently not very friendly to entrepreneurs, but they are getting there – especially active cities which are already leaders in various sectors and strive to implement best practices.

Generally, the investment sector transparency ranking shows that cities are currently not very friendly to entrepreneurs, but they are getting there.

Kateryna Tsybenko

Source: biz.nv.ua