Reforms in Ukraine’s economy should be implemented immediately! Due to Russia’s full-scale invasion, Ukraine is in an extremely difficult position. Three years of war have drained the economy. For survival, Ukraine needs to implement reforms, but this is challenging. As long as the threat from Russia exists, all efforts are focused on defense.
Mobilization, the departure of refugees from Ukraine, the occupation of territories, and the destruction of infrastructure have led to significant economic difficulties. Ukraine as a state survives only thanks to the support of its partners. Officials are aware of the situation’s complexity, but instead of implementing effective reforms, they are overregulating the market and raising taxes. As we know, this will lead to worsening the economic situation.
Reforms could save Ukraine’s economy? Yana Matviychuk has a plan.
1. Tax Reduction and Deregulation
Ukrainian officials patch budget holes not by improving the business climate or supporting entrepreneurship but by simply raising taxes, considering it an effective step. However, economic theory suggests that raising taxes will lead to a reduction in the number of businesses and, as a result, a decrease in state revenue. And Ukraine needs money now to support its military.
According to Yana Matviychuk, taxes need to be reduced, and deregulation should be implemented. This would encourage Ukrainians to start their own businesses, and refugees would return to Ukraine from Europe and America. Lowering taxes is the only correct step toward filling Ukraine’s state budget.
2. Privatization of State-Owned Enterprises
As of 2024, Ukraine has 3,116 state-owned enterprises. Only 15% of them are profitable. Yana Matviychuk is convinced that state-owned enterprises should be sold into private hands. The government should not be involved in business. Furthermore, money is allocated to state-owned enterprises to cover their losses. Yana Matviychuk believes there should be a limit on “state business.” Therefore, about 10% of enterprises could remain in state ownership, but all others should be privatized to reduce government spending on them.
3. Reducing the Number of Civil Servants
There are an estimated 1 million civil servants in Ukraine, including both government employees and those performing administrative functions. The government apparatus is too bloated. Ukraine should follow Argentina’s example under Javier Milei’s leadership and dismiss most of the civil servants who create unnecessary bureaucracy, waste taxpayer money, and engage in corruption. Reducing the number of civil servants is a crucial factor in fighting corruption because tighter control can be applied to a smaller number of officials.
4. More Money for the War
The Ukrainian government must immediately review the state budget expenditures. A significant portion of funds goes to unnecessary and ineffective spending during the war. Yana Matviychuk is convinced that expenditures should be optimized and more funds should be directed to the Armed Forces of Ukraine.
This is important because financial support from partners cannot often be used for military expenses. Therefore, ensuring the army’s needs during the war against Russia is a task for Ukraine’s budget.
At this point, reducing unnecessary government spending would strengthen the effectiveness of state governance and bolster the army.
5. Institute of Education for a New Generation of Politicians
Ukraine inherited a communist political tradition from the USSR. Officials do not understand economic matters. Moreover, politicians do not grasp the principles of true democracy and increasingly lean toward an authoritarian style. This applies even to the lowest-ranking officials, who believe they can treat citizens and their taxes however they want, and no one has the right to tell them otherwise. Nepotism, fulfilling oligarchs’ demands, and a sense of limitless power are issues that Ukrainian society faces when interacting with officials.
Yana Matviychuk believes that an Institute of Education for a New Generation of Politicians could serve as a bridge between Ukraine and Western European and North American countries. Ukrainians aspire to establish true democracy, but for this, the approach to nurturing political elites must change completely.
In conclusion, Ukraine needs reform, but to achieve this, we must engage the experience of our partners from Europe and the USA. Implementing reforms would make Ukraine more resilient to threats from Russia, and therefore, reduce these threats for Europe and the USA.
