Ukraine

Overview

Ukraine, the second largest country in Europe, with a population of more than 45 million, has close and longstanding ties to Canada.

The country has seen a significant increase in political freedom, a reduction of state control over the media, and the emergence of a vigorous national debate. It is internally stable and striving to be a model for democratic transformation and stability in Central and Eastern Europe.

Between 2000 and 2007, Ukraine enjoyed strong economic growth, averaging 7.5 percent annually. The country is now considered a fully functioning market economy, having privatized its land and assets and become a member of the World Trade Organization (WTO). However, the global economic crisis in 2008 hit Ukraine harder than most other east European countries due to its dependency on steel and iron ore industries, as well as its vulnerabilities in its financial and banking sectors.

Ukraine has outlined its priorities for development, setting out an extensive plan for reform in such areas as:

• Rule of law and government effectiveness
• Trade and investment
• Taxation and public finances
• Laws and standards

Poverty reduction remains among Ukraine's top development priorities. The government recognizes that to reduce poverty means improving the business-enabling environment and increasing the competitiveness of Ukrainian firms. The economic downturn underlined further the need to diversify the economy and stimulate productivity and innovation in key sectors, including agriculture.

Thematic Focus

In 2009, as part of Canada's new aid effectiveness agenda, Ukraine was selected by CIDA as a country of focus.

The goal of CIDA's program in Ukraine is to improve economic opportunities for Ukrainians in a strengthened democracy.

Canada is working with the Government of Ukraine to assist with the reforms needed to realize the country's full economic potential and build a sound public institutional and legal environment for closer integration with Europe.

Economic growth

CIDA focuses on improving the business-enabling environment, restoring confidence in financial institutions, and increasing the competitiveness of small- and medium-sized enterprises by diversifying skills and increasing access to credit. CIDA also supports economic growth through interventions aimed at strengthening public institutions built on the rule of law and accountability. Increased attention will be paid to judicial and civil service reforms and local governance, as well as commercial and other courts involved in resolving commercial and business-related matters.

Food security

CIDA is supporting food security, placing an emphasis on sustainable agricultural programs and thereby adding to Ukraine's already strong position to contribute to redressing the global food security crisis. CIDA's involvement in agriculture is strongly encouraged by the Ukrainian government as a means to address rural poverty, particularly since there are few donors working in that area. Attention will be given to increasing net exports of grains and select commodities while promoting the use of environmentally friendly practices and norms.

Progress on Aid Effectiveness

Canada is the fourth largest bilateral donor in Ukraine. CIDA will continue to build Ukraine's capacity to engage in donor coordination by encouraging joint monitoring of projects and playing an active role in several donor working groups.

Canada has developed a reputation as a trusted partner in governance and private sector development and has become a leader in building capacity and transferring best practices, which are now being emulated by other donors.

Accomplishments 2009-2010

Food security

• Contributed to making Ukrainian grain products more marketable; as a result, 20 state bread inspection laboratories were able to attain ISO/17025 accreditation for proficiency testing
• Helped establish 17 agricultural extension service offices, and trained 40,000 professionals, community leaders, and farmers in best practices related to agricultural and rural development, increasing the profits of the 79 percent of farmers involved
• Helped more than 500 farms introduce new crop varieties, and assisted more than 300 farms to introduce intensive production technologies for cereals, pulses and vegetables.

Economic growth

• Helped streamline Ukraine's business administrative and regulatory procedures, resulting in the enactment of 11 pieces of legislation, including amendments to the laws on licensing and permits
• Supported the revival of the credit union movement in Ukraine, affecting 1.5 million members from 325 credit unions; helped reduce poverty, increase employment, and encourage new ways of generating income.

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