Finding common ground for the way forward

The indicates that Ukraine has the potential to position itself as a key player in tomorrow’s global economy. So far, however, Ukraine has largely been a passive and reactive player: growing fast during the global commodities boom of the early 2000s and then contracting even faster during the downturn period. Its current economic fragility has also made it dependent on external assistance, which has been subject to fierce geopolitical maneuvering between Russia and the European Union.

External pressures aside, Ukraine now stands at a crossroads with respect to the socio-economic model it chooses and the strength of the social contract that it can establish between the government and society. By building a strong and resilient economy based on transparent institutions, as suggested in the Virtuous Circle scenario, Ukraine can be in a position to define its own destiny. The choice is largely up to the main stakeholders in the Ukrainian economy, who need to find common ground for a strong, forward-looking agenda for the country and its place in the wider region. Deep institutional reforms are the main instruments that Ukrainian stakeholders can use to escape the country’s current low equilibrium and kick-start the modernization of the economy. Even while facing the most serious geopolitical confrontation in recent history, Ukraine’s capacity to foster strong and agile domestic institutions will define the country’s ability to adjust to the changing environment and deliver lasting prosperity to its citizens.

External policy anchors such as the Association Agreement with the European Union can be important catalysts for this institutional reform agenda. Yet, concluding such an agreement cannot in and of itself guarantee successful implementation of reforms unless there is genuine political will and wide-ranging support from all stakeholders. It will also require efforts on all sides to overcome the divisions between Russia and the EU that this process has stirred up and that culminated in the current crisis. The intent of the Scenarios for Ukraine process was to build momentum behind a constructive society-wide dialogue on Ukraine’s economic future, fostering an environment in which these reforms can effectively be implemented.

Three attributes have characterized the Scenarios for Ukraine process, and could form the basis of a forward-looking agenda that succeeds in finding common ground among all stakeholders, both internal and external. 1.Strategic rather than tactical thinking: Economic reforms need to be conceived with a systemic long-term view of the country’s place in the region and its comparative advantage in an evolving global context. While potentially providing the country with short-term benefits, playing external partners against each other is unlikely to provide long-term prosperity for the country or the region. 2. Inclusive rather than divisive processes: Developing this agenda and building the requisite momentum for implementing it will require effective cooperation among stakeholders. Strategies that unite, therefore, need to prevail over actions that deepen divisions. 3. Comprehensive rather than piecemeal approach: The Ukrainian economy is a large and complex ecosystem embedded in a larger regional system, and isolated measures in one part of the system are unlikely to have fundamental effects over the long term. Following these principles, the World Economic Forum remains committed to supporting Ukraine and acting as an impartial platform for this constructive and forward-looking multistakeholder dialogue.