1. Facilitating preparation of Ukrainian industrial policy: achievements, issues and lessons
Prof. Slavo Radosevic
GIZ Webinar
13th November 2018

2. Outline: Timeline and organisation of activities Achievements
Issues and challenges
Lessons
Annex:
An Outline of the Strategy of Development of the Industrial Complex of Ukraine for the period until 2025 (Draft March 2018)
Supporting background analyses and methodologies produced as part of preparatory work on Ukrainian IP strategy

3. Timeline of activities
Kick-Off Meeting for the Preparation of a National Industrial Policy Strategy, 16th June 2017
Steering Committee Meeting, 21st August 2017
First expert group meeting, September (preceded by EquIP three day training)
Second Expert group meeting, October 2017 (preceded by EquIP three day training)
First Core Drafting Group Meeting for the Preparation of a National Industrial Policy Strategy 30th November
Second Core Group Meeting 1st December 2017
Draft Strategy as of March 2018 (but not yet action plan)

4. Steering Committee on the Strategy for Industrial Development and Action Plan
MEDT
MinRegion
MinInfrastr
MinFin
MinEducat
MinEnergy
MinAgrarian
SAGSUR
NatCom
IndDevelopment
Reforms Office
Investment Office
Appoints and steers
Expert Groups on Strategy for Industrial Development and Action Plan – see next slide

5. Expert Groups on Strategy for Industrial Development and Action Plan
MEDT
Core Drafting Group
EQuIP Expert Group
Impact
Assessment
Diagnosis
Policy Instruments
Institutional
Set-Up
Core Drafting Group: MEDT representatives, MEDT Adviser, International Experts from GIZ
Expert Group: Members are appointed by Steering Committee members

6. Achievements:
Significantly improved methodological quality of Strategy document (see outline of Strategy):
Empirically grounded analysis
Prioritisation of intervention areas
Consistency between objectives and intervention areas
Portfolio of potential policy instruments to addres
A high ‘absorptive capacity’ of local expert group and build up of analytical capacities for industrial policy analysis

7. Issues:
Very limited participation of stakeholders especially from private sector
Limited broader (ie beyond narrow confines of local expert group) technical, operational and political capabilities (TOP) for design and especially implementation of industrial policy
Implementation issues not yet address (cf. action plan)
Uncertain and limited budget for implementation
The issues of administrative implementation capacities not yet addressed

8. Lessons
Consider whether there is sufficient political and resource commitment for EquIP approach (the full implementation of EquIP requires either developed TOP capacities or ambition to develop them)
In the absence of (1) apply EquIP selectively ie. focus on specific issues and areas of interventions. For further guides see section ‘Adjusting EQuIP when resources and commitment are limited’ in EQUIP AND CHALLENGES OF ITS USE IN SUSTAINABLE ECONOMIC DEVELOPMENT PROJECTS OF GIZ,Note By Slavo Radosevic
In applying (2) focus on industrial policy as process and on specific actions instead focusing solely on Strategy as document
Application of (3) requires in depth understanding of the institutional context and TOP capacities for IP > ex ante assessment and involvement of external experts to facilitate the process
Allow for bottom up approaches (complementary to EquIP top down logic) by enhancing the existing or building ‘islands of policy and organisational excellence’ (cf agencies, departments, programs)

9. An Outline of the Strategy of Development of the Industrial Complex of Ukraine for the period until 2025 (Draft March 2018)
General provisions
ІІ. Industrial policy in the context of the national development of Ukraine
Goal ‘Sustainable economic development”
Goal “Prosperity growth and social stability”
Goal “Improvement of national security”
ІІІ. Key industrial development problems
De-industrialisation of the economy
Lack of skilled workforce for the industry
Critical dependence on the export of raw materials
Dominance of industrial sectors with a low added value
High volume of the import of industrial goods
High geographical concentration of industrial exports
High regional concentration of the industry
Low resource efficiency of the industry and high pollution
IV. Goal and duration of the Strategy

10. V. Objectives of the Strategy
Strategic objective 1. Modernisation and growth of industrial production
1.1. Development of existing and creation of new types of activity with a higher added value
1.2. Increase of productivity and the volume of industrial production
1.3. Improvement of methods of economic business management
1.4. Integration into global production chains
Strategic objective 2. Regional industrial development
2.1. Increase of industrial production and processing volumes, especially in underdeveloped regions
2.2. Strengthening regional production chains
Strategic objective 3. Increase of the resource efficiency of industry
3.1. Resource efficiency
3.2. Implementation of efficient practices for waste management

11. VI. Areas of the Strategy implementation
Modernisation and growth of industrial production
Attraction of foreign and domestic investments for industry
Simplification of industrial activities (effective regulation)
Reform of the technical regulation, standardisation and metrology system
Creation of conditions for the development of competition in the industrial sector
Improvement of the system of public-private partnership in industry
Vocational training in line with the needs of industry
Promotion of the digitisation of industry
Regional industrial development
Implementation of the industrial policy taking into account the economic and innovative specialisation of regions
Development of cluster cooperation in the industry
Dissemination of modern organisational forms for the support of business projects and innovation in the industrial sector
Development of the infrastructure according to the needs of industry taking into account regional specifics
Simplifying access to raw materials and ensuring their deeper processing
Improving the resource efficiency of industry
Awareness raising for companies regarding available resource-efficient technologies
Promoting innovations and simplifying access to investments for resource-saving technologies
Implementation of efficient regulation in resource saving and use of renewable energy
Implementation of efficient practices in waste management and the principles of circular economy

12. Cont VII. Financial back-up for the Strategy implementation (?)
VIII. Organisational support and mechanism of the Strategy implementation (?)
ІХ. Expected results

13. Unfinished analysis of the existing industrial policy instruments:
Supporting background analyses and methodologies produced as part of preparatory work on Ukrainian IP strategy
Completed:
Preliminary assessment of current (implicit) industrial policy of Ukraine: Note by S. Radosevic
The role of policy impact assessment (PIA) in preparing Ukrainian industrial policy strategy: Note by S. Radosevic
Assessing the capacity for implementation of industrial policy: Note by S. Radosevic
Institutional Self-Assessment for Instrument Selection: Note by Amanda Janoo
Not completed
Unfinished analysis of the existing industrial policy instruments:
Instrument (name); Implementing Institution; Responsible Person; Related Intervention Area(s); Target Groups; Description of Instrument; Expected Impact of Instrument; Timeframe for implementation; Budget; Funding Source
Institutional Self-Assessment for Instrument Selection

14. Thank you