Kiew Panorama

The German Advisory Group Ukraine

Project Goal

The task of the German Advisory Group Ukraine is the continuous guidance of economic reforms in Ukraine and support of Ukrainian institutions in economic policy decision-making processes in the form of specific recommendations for action.

The overarching goal of the German Advisory Group Ukraine is the development of a sustainable economic structure in Ukraine, achieved through a strengthened integration in the world economy and the improvement of the economic framework conditions.

Aside from economic policy advice, the team informs the public and relevant institutions and organizations about economic policy topics and other current developments.

Background

The decision to support Ukraine’s transformation process with the help of a German consulting team was made during conversations between then-head of government Helmut Kohl and Leonid Kuchma. The first area for consultation would be the introduction of the hryvnia as the national currency – Ukraine would benefit from the experience Germany gained when introducing the D-mark.

Aside from support during the currency reform, there was also great demand on the Ukrainian side for advice on other topics of transformative economic policy. The German Advisory Group Ukraine has continuously accompanied the economic reform process in Ukraine since 1994, and Berlin Economics has been commissioned with the implementation of the project since 2006. The consulting services involved in this project are not limited to the topic of economic transformation, but include all economic policy questions as they arise.

Consulting Focuses of the German Advisory Group Ukraine

Macroeconomic Analyses

  • Monetary and exchange rate policies
  • Financial policy and debt management
  • Trade and integration policy

Financial market development

  • Banking sector and the development of local capital markets
  • Financial market regulation and oversight

Energy economy

  • Development prospects of the gas and oil industries as well as electricity production
  • Increasing energy efficiency

Infrastructure and public utilities

  • Privatization, public-private partnerships (PPP)
  • Encouraging small and medium enterprises (SMEs)

Social and health policy

  • Conception, evaluation, and implementation of social and health measures
  • Reform of pension structure

Our Approach

As with all Berlin Economics projects, our trademark features demonstrate the emphasis we at the German Advisory Group put on the quality of our consulting (link to mission statement, to the anchor of our consulting concept).

Specifically, we offer Ukrainian target institutions independent analyses and evaluations of planned policies upon request, which we present to high ranking decision-makers in the Ukrainian government. We then develop concrete and understandable recommendations for action based on these analyses and assessments.

All our consulting material is published with the approval from our Ukrainian partners. This information is free to access, and includes consulting papers, technical analyses, policy briefings, conference contributions, and presentations.

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Berlin Economics was assigned the implementation of the German Advisory Group Ukraine project in 2006, and has been following the expansion of project-related public relation work since then.  We understand part of our assignment to be contributing to the objectivity of the debate in and around the country with our local knowledge and detailed understanding of developments in Ukraine.

For this reason we have been publishing a regular newsletter about current economic policy topics in Ukraine since 2008, in which we present our analyses and recommendations. The newsletter comes out regularly in German and English, and has been an important point of reference in public discussions in Europe ever since.

We have also made it our mission to make our knowledge available to German institutions, including federal institutions, independent think tanks, political foundations, and trade associations. In addition to providing our publications to representatives of relevant fields, we have developed semi-annual information events about government consulting in Ukraine at the Federal Ministry for Economics and Energy. Here we provide information about the overall economic situation and current developments in Ukraine and answer specific questions. Our contributions are made available to the public through Wirtschaftsausblick Ukraine.


Examples of Our Work

Recently, Ukraine’s trade policy has been a special focus of our consulting work. During the negotiations for a Deep and Comprehensive Free Trade Agreement (DCFTA) between the EU and Ukraine, it quickly became clear that, aside from consultation on trade policy questions in Ukraine, there is an urgent need for accurate information on both sides.

Up until now, the public debate surrounding DCFTA has been characterized by misunderstandings. Berlin Economics therefore made it its task to contribute to the objectivity of the debate concerning Ukraine as the German Advisory Group Ukraine.

As part of a strategic partnership with east forum Berlin, Berlin Economics gives annual presentations concerning publicly discussed topics where we see an urgent need for more public information.

eat forum Berlin

The leader of the German Advisory Group Ukraine, Ricardo Guicci, at east forum 2016

During the eventful year of 2014, Ricardo Giucci presented at the 2nd east forum Berlin on the chances of a country like Ukraine completing free trade agreements with the EU and the Eurasian Economic Union (EEU) simultaneously (the compatibility debate). The presentation successfully rebutted the public impression of an either-or-decision between trade relations with “the East or West.” Our analysts’ findings concerning the compatibility of simultaneous free trade agreements were presented among others to former Ukrainian Minister of Economical Development and Trade Pavlo Sheremeta and Russian First Deputy Prime Minister Igor Shuvalov, who signaled interest in further conversations.

Eastern Partnership countries between East and West Perspectives and challenges

The focus of the presentation at the 3rd east forum Berlin was the economic crisis in Ukraine. During the panel “(Re)Building Ukraine,” Ricardo Giucci provided an overview of economic reforms currently underway in Ukraine, as well as a statement concerning their contribution to macroeconomic stabilization of the country and the need for further reform. He chose this topic in part due to discussions concerning Ukraine’s looming bankruptcy, the IMF program, and the perceived lack of willingness to reform the Ukrainian government.

Economic reforms aimed at external stabilisation. A progress assessment

The 4th east forum dealt with the divergence between political and economic realities in the EU and Eastern Europe. The main focus was the economic future of Europe and economic relations between the EU and EEU. During a panel on trade relations, Ricardo Giucci presented the first results concerning the effects of free trade agreements between the EU and Ukraine, Georgia, and Moldova. In the public perception, the DCFTA remains ineffective: Ukrainian exporters in particular have experienced significant declines. However, this decline has only affected nominal exports – our calculations show that real exports to the EU are increasing significantly. The reason for the often cited decline is mostly the decline of resource prices on the world market;  the DCFTA has in fact had a positive effect on exports.

4th east forum

Newsletter 92/2016 “Ukrainian exports to the EU: Positive impact of the DCFTA?”

Aside from the east forum, Berlin Economics’ information work includes delivering numerous presentations, mostly in Germany and Ukraine, but also in other EU states. We thus ensure that Berlin Economics’ research is used effectively in the design of cooperation between the EU and Ukraine. We are also constantly expanding our public relations work in order to contribute to a debate about Ukraine based on empirical facts.

Partners

IER Deutsche_Botschaft_in_Kiev Delegation_der_Deutschen_Wirtschaft_in_der_Ukraine