Simeon Djankov, ex-Minister of finance of Bulgaria visited KSE with #UkraineReforms project

On Feb.22–24 Mr. Simeon Djankov, Vice Prime Minister and Minister of finance of Bulgaria in 2009–2013, author of World Bank’s Doing Business project visited Kyiv and Odesa within the frame of #UkraineReforms, joint project of Wilfried Martens Centre for European Studies, Kyiv School of Economics, Reanimation Package of Reforms and Stronger Together.

Mr.Djankov started his visit from the lecture at Kyiv School of Economics on successes and failures in post-communist reform. He presented an overview of changes in income, political and property rights and other indicators in the countries of Eastern Europe, the Balkans and former Soviet Union within 25 year-period. According to him, even after 25 of transition in a number of countries, including Russia and Ukraine, the oligarchs still control not just business life but also public life, which prevented major political and economic changes.

“Currency board can work even in the countries, which are highly corrupt. It worked in Bulgaria and can work in Ukraine”

“The one reform that is the most difficult to figure out how to do in Ukraine, is reducing the role of the oligarchs,” Mr.Djankov said. He also emphasized that macroeconomic stabilization, privatization and lustration should be the priorities on Ukraine’s government reform agenda now. “If you can privatize in the first six months of you in power, regardless of how you do it, that’s the most successful reform you can do,” he said. To stabilize the currency and stop devaluation he recommended to introduce the currency board in Ukraine. “Currency board can work even in the countries, which are highly corrupt. It worked in Bulgaria and can work in Ukraine,” he said.

Recorded version of his lecture is available here:

Mr.Djankov also participated in a public debate on the tax reform together with Ivan Miklos, ex-Minister of finance of Slovakia and chief adviser of Minister of finance of Ukraine Natalie Jaresko, economic expert of the Reanimation Package of Reforms Pavlo Kukhta and Gabriele Baumann, head of Konrad Adenauer Foundation in Ukraine. He recommended to conduct the reform together with the privatization of the state-owned companies from production sector. The optimal tax system, according to Mr.Djankov should be based on indirect taxes, like taxes on assets or capital.

Recorded version of the debate is available here:

Mr.Djankov also paid visit to Odesa during his stay in Ukraine. He delivered a lecture at Odesa National University of I.Mechnykov and met with representatives of the European Business Association. The EU integration shouldn’t be considered just a political act, as it is opening the country to a new market, which give opportunities in public and business sectors, he said. It also leads to changes in the structure of the government, according to him. “Bulgaria and Ukraine are similar in terms of religion, culture, traditions. So how did it happen that Bulgaria managed to change and Ukraine did not. And the answer is EU accession,” Mr.Djankov told the students at the University of Mechnykov.

Mr.Djankov is currently a visiting professor at London School of Economics and a visiting fellow at Peterson Institute for International Economics. Together with Anders Aslund, Senior Fellow at the Atlantic Council, an adjunct professor at Georgetown University and a Chairman of the International Advisory Council at the Center for Social and Economic Research, he co-authored a book “The Great Rebirth. Lessons from the Victory of Capitalism versus Communism” about the key reforms and reformers in former Soviet republics, which recently was published in Ukrainian language. Mr.Djankov plans to write a sequel in five years and include Ukraine in it.