Meeting with Mr. Tihipko

Working meeting with Sergiy Tihipko, a Vice Prime Minister of Ukraine

    At the request of Vice Prime Minister Serhiy Tihipko, IBSER prepared expert comments regarding the budgeting progress in Ukraine and improving the efficiency of state budget expenditures. To present and discuss these comments Mrs. Iryna Shcherbyna, IBSER’s Director General, held a working meeting with Mr. Tihipko on April 27, 2011.

    During the meeting the participants noted the recovery of growth in the Ukrainian economy, but mentioned that per capita GDP in Ukraine remains one of the lowest (EUR 700 per citizen), which is one tenth of that in the EU states.

    The experts also noted that according to the World Bank (“Improvement of Intergovernmental Relations and Government Expenditures Strategy in the Area of Health Care and Education in Ukraine” Research: selected issues) *:

- “black” expenditures by the public for health care in 2005 reached 2.8% of GDP, while the consolidated budget allocated 3.5% of GDP for health care needs;

- public expenditures for education in the form of own payments (excluding higher education) constitute approximately 0.7 – 0.8% of GDP (consolidated budget – 6.1% of GDP).

     Today experts say that the situation is worsening - informal public payments for health care and education grow yearly.

     At the request of Mr. Tihipko IBSER prepared comparisons of structural expenditures of Ukraine and the EU states. This enabled them to draw conclusions regarding the consistency of the Ukrainian budget structure with budgets of European countries – the 27 member states of the European Union, including Germany, Estonia, Poland, and Slovakia.

     IBSER also prepared a general overview of budget expenditures and submitted summary head-notes with proposals on further reforming of the budgetary system (please see the annex attached).

     Mr. Tihipko thanked IBSER for providing expert information and announced that on the basis of the comments he received, he intends to start a dialogue with the Prime Minister and the President of Ukraine concerning the further raising of the efficiency of budget expenditures. Also, he showed interest in constant cooperation with IBSER.