Signed by Volodymyr Zelenskyy: Which Reforms Did the President Support

Exactly one year ago, on May 20, Volodymyr Zelenskyy took power from the previous President of Ukraine Petro Poroshenko. In his inaugural speech, he noted that “we have chosen the path to Europe” and also outlined his priorities: “… I ask you to adopt: 1. The law on the abolition of parliamentary immunity. 2. Law on Criminal Liability for Illegal Enrichment.3. Long-suffering Electoral Code and make open lists.”

We decided to see if Zelenskyy had made progress in these areas and, in general, what reforms he had initiated and supported during his first year in office.

For analysis, we took data on all the laws that President Zelenskyy initiated or signed and the decrees that he issued since the beginning of his term. To identify regulations that create the conditions for the progress or rollback of reforms, we used data that Reform Index by VoxUkraine received from experts during regular surveys.

We analyzed the results of the President’s cooperation with the Parliament of the VIII convocation, where there was no pro-presidential mono-majority, and with the Parliament of the IX convocation, where the “Servant of the People” party won 254 seats. During the first year of his rule, Volodymyr Zelenskyy was involved in 89 reforms (laws of the Verkhovna Rada and presidential decrees), another 63 reforms were adopted by resolutions of the Cabinet of Ministers of Ukraine and the National Bank of Ukraine.

Priority laws

In his inaugural speech, Volodymyr Zelenskyy identified three laws as priorities. We checked whether the president managed to secure their approval.

The law on the abolition of parliamentary immunity has been adopted.

The norm of parliamentary immunity appeared in the first edition of the 1996 Constitution. Ukrainians did not like this rule from the very beginning, so politicians added promises to abolish it during every election. One of the six issues in the 2000 referendum also concerned the abolition of parliamentary immunity, but the results of the referendum were never implemented.

In 2017, President Petro Poroshenko submitted to the Verkhovna Rada a draft law on amending the Constitution, which was to abolish parliamentary immunity. This draft law received an opinion from the Constitutional Court and was sent to the committees of the Verkhovna Rada. But the case did not end until the end of Petro Poroshenko’s term.

This draft law became a base for President Volodymyr Zelenskyy. On September 3, deputies of the ninth convocation voted to limit their immunity, and on September 11, the President of Ukraine signed a law amending the relevant article of the Constitution.

On December 27, the President signed an additional Law № 388-IX, which created mechanisms for the abolition of parliamentary immunity. This law received negative evaluations by Reform Index experts (-2.0 points), because the key decisions in criminal proceedings against people’s deputies will be made by virtually one person — the Prosecutor General. This greatly facilitates the possibility for this person or for third parties (through him) to put pressure on parliamentarians.

The law on criminal liability for illicit enrichment has been adopted.

The Verkhovna Rada of the VIII convocation has already tried to introduce criminal punishment for illegal enrichment of officials. However, in February 2019, the Constitutional Court declared the article legalized by it unconstitutional, citing the presumption of innocence enshrined in the Constitution.

Therefore, President Volodymyr Zelenskyy submitted a new draft law, which again proposed to punish civil servants for dubious assets, but acquired after the adoption of the law (ie the law has no retroactive effect). On October 31, the Verkhovna Rada voted to return to the Criminal Code an article providing for punishment for illicit enrichment, and on November 25, Zelenskyy signed the law.

Electoral Code and open lists – accepted.

Work on the Electoral Code began in 2015, in 2017 it was adopted in the first reading, and in July 2019 — already during the term of Volodymyr Zelenskyy — the Verkhovna Rada of the VIII convocation passed a law introducing a proportional system of open parliamentary elections in the second reading.

But Volodymyr Zelensky vetoed the law and returned it to parliament for reconsideration. In particular, his propositions contained remarks on the groundlessness of a citizen’s loss of the status of a subject of the election process in connection with the cancellation of his registration as a candidate. The Code also removed the rule on the possibility of removing a candidate from the election race after the law enforcement agency sends information about him to the Central Election Commission. In particular, it concerns reports on violations of the law by the candidate. In December 2019, the Verkhovna Rada approved amendments to the Electoral Code, which the president signed. This law received +1.0 points from Reform Index experts.

Next, we consider what other reforms have been adopted since the inauguration of the sixth President.

Zelenskyy without a mono-majority

 Duration: May 20 — August 28 (3 months)

13 bills were initiated, 0 of them were reforms.

None of these bills was adopted by the Verkhovna Rada of the VIII convocation. Subsequently, six of these 13 bills were submitted again and voted by the deputies of the IX convocation (they were included in the next section of the article).

11 laws were signed, 4 of them were reforms.

Number of reform decrees — 1.

On the day of the inauguration, the President dissolved the Verkhovna Rada of the VIII convocation, but it continued to work until the election of a new Rada.

It took the new president exactly a month to get up to date and make the first reform. It resulted in the repeal of 61 decrees, mainly concerning various aspects of economic regulation (Reform Index 112). For example, the abolition of the fine for violation of cash discipline — non-receipt and exceeding the cash limit, as well as the abolition of the minimum amount of payment for notary services. Also, outdated decrees issued during the time of the first President of Ukraine Leonid Kravchuk (on temporary urgent measures to “strengthen the fight against speculation and illegal trade” from 1991, and “payment of state duties on promissory notes” from 1993. year) were canceled. The same package includes the abolition of compulsory school uniforms for children.

During the period from the end of May to September, the President signed 4 reform laws (Fig. 1). All of them were initiated by deputies of the Verkhovna Rada of the VIII convocation.

It is:

• the law on professional higher education (Reform Index 113), that is a framework law on the activities of colleges and technical schools. He introduced elements of corporate governance for these institutions, rules for the election of the head, restrictions on his tenure, mechanisms for financing institutions from the state budget, and so on. The law provides opportunities for the education of adults who have long since finished school and want to change their profession. To this end, the law provides for the possibility of admission not only based on the results of the external independent evaluation, but also on the basis of tests in the institution.
• a law that synchronized a number of rules on technical regulations and conformity assessment of products with EU law (Reform Index 115). Due to this, the results of testing and certification of products in Ukraine will be recognized in the EU. These changes are one of the conditions that Ukraine must meet to start working with the European Commission on the ACAA Agreement (so-called “industrial visa waiver.”)
• The law on the sale of electricity by households at the “green tariff” (Reform Index 115) corrected technical inconsistencies that appeared in April 2019 after the adoption of the law on “green auctions”. Then there was a rule that to obtain a green tariff, domestic solar power plants had to be installed only on roofs, facades of buildings and other capital structures (previously it was without location restrictions). This restriction discriminated against private electricity producers, so the norm was abolished.
• the law on infrastructure for electric cars (Reform Index 115) has slightly changed traffic rules and state building codes to regulate the equipment of parking spaces and charging of electric vehicles.

Zelenskyy and the mono-majority

Duration: August 29 — May 17 (9 months)

Laws were initiated — 63 (28 of them were signed), reforms — 11.

12 were vetoed, 5 of them were finalized and adopted (including the amendments to the Electoral Code described above).

A total of 180 laws were signed (including those initiated by the president), of which 84 were reforms.

Number of reform decrees — 0.

On August 29, the newly elected deputies of the Verkhovna Rada convened for the first session, during which they appointed a new Cabinet of Ministers of Ukraine. The government was headed by Oleksiy Honcharuk, who previously worked as the Deputy Head of the Office of the President of Ukraine.

The change of parliament accelerated reforms, so over the next nine months, Volodymyr Zelenskyy signed 84 reform laws. Of these, 11 were initiated by him (Fig. 2).

 

Three areas became a priority in terms of the number of reforms and the overall pace of progress: the business environment, public finances and governance.

Since September 2019, the Verkhovna Rada has adopted 34 laws that have changed the rules of the game in the business environment (average score for the law — +1.18). Two of them were initiated by the president (average score — +1.37). Among the biggest positives in this area

• the law on the circulation of agricultural land (Reform Index 133, +3.0 points), which ensures the implementation of the constitutional rights of citizens to freely dispose of their property and creates transparent conditions for the purchase of agricultural land. From July 2021, the right of ownership of agricultural land with an area of up to 100 hectares can be acquired only by citizens of Ukraine. From January 1, 2024, such an opportunity will also be given to legal entities owned by Ukrainians. For them, the limit is 10,000 hectares. But the question of whether to give foreigners the right to buy land under this law will be decided in a referendum.
• law on the introduction of a national electronic transit system (Reform Index 118, +2.5 points). The common transit regime allows exporters from the 35 countries that have joined it to transport goods with a minimum of formalities. It is enough to draw up a customs declaration, and with it the carrier can cross any border between these countries without additional documents. In order to receive an invitation to join the common transit regime, an electronic transit system must be operational in Ukraine for a year.
•  a law that abolishes the share contribution during construction and establishes compensation for the minority shareholders (Reform Index 119). It should raise Ukraine by 15 points in the Doing Business ranking. This law improves the legislative field in three directions at once and together received +4.1 points, 2 of them — in the business environment.

The most important of the changes initiated by Volodymyr Zelenskyy in this direction was the law on the abolition of the state monopoly on alcohol production (Reform Index 124, +2 points). Prior to that, almost all types of alcohol, except bioethanol (a type of biofuel), could be produced only at state-owned enterprises. Due to the lack of competition, distilleries used outdated technologies and overestimated the cost of alcohol. The new law is gradually removing restrictions on private spirit production. To support domestic production, alcohol imports are limited to January 1, 2024.

The sphere of “Public Finance and the Labor Market” had 19 important laws (average score for the law — +1.28), none of which was initiated by the President.

Two reforms that broke away from the others by the number of points:

• the law on higher education (Reform Index 126, +2.5 points) allows combining university studies with internships (dual education), introduces a system of key performance indicators for rectors, allows online licensing of universities, abolishes the concept of “state diploma” and strengthens sanctions for student plagiarism — for which the graduate may be deprived of the degree.
• the law on the use of electronic registrars of settlement operations and checks (Reform Index 120) modernizes the administration of settlement operations, allowing to do so by software (for example, installed on a smartphone). Previously, the law contained an exhaustive list of devices that businesses can use to register cash payments. They had to be sealed so that accounting could be controlled. Experts rated the law at +2.5 points (+2.0 in the direction of “public finance”, +0.5 — business environment).

Amendments to the legislation on public procurement (lowering of thresholds) (Reform Index 120), the law on transplantation (Reform Index 125), changes in the administration of excise duties on alcohol and fuel (Reform Index 125) were awarded +2,0 points each.

One third (9 of 29) governance reforms initiated by Volodymyr Zelenskyy. The average score for the law in general is +0.85, for the law initiated by the president — +1.26 points.

Among the most important changes:

• the law on the start of the Supreme Anti-Corruption Court (Reform Index 118, +2.0 points). When the court opened, it turned out that the workload of judges was too high and did not allow them to deal effectively with corruption cases among high-ranking officials. On average, one judge had to manage about 100 cases at a time. A law passed by the president solved this problem. The Supreme Anti-Corruption Court considers only those cases of top corrupt officials that were investigated by the National Anti-Corruption Bureau of Ukraine and the Specialized anti-corruption prosecutor’s office. The workload on judges has decreased more than tenfold.
• the law on “wiretapping” of NABU and abolition of the monopoly of state institutions on examination (Reform Index 120, +2.0 points). In order to interrogate the suspects, NACB and the State Bureau of Investigation had to have a relevant court decision and acquaint the Security Service of Ukraine with it. Due to this, there were cases of information leakage during the investigation of anti-corruption crimes and NACB operations were disrupted. This issue is now resolved.
• the law on penalties for illicit enrichment mentioned in the section on priority laws (Reform Index 123, additional survey, +2.0 points).

These three laws were initiated by the president. Another important law was initiated by the deputies of the IX convocation of the Verkhovna Rada – the law on concessions (Reform Index 120, +1.8 points). He eliminated the contradictions that did not allow in practice to conclude concession agreements, and supplemented the list of activities for which concessions are possible. Among other things, these are socially important services that can be attractive to investors (e.g. transport). The law establishes simplified land allocation procedures for concession projects and provides additional guarantees for concessionaires and creditors. For example, a concession agreement may provide for the possibility of replacing one concessionaire with another.

Not without anti-reforms. Three laws received negative assessments by Reform Index experts. All these anti-reforms have similar problems — they somehow upset the balance between the branches of government and affect the independence of state bodies.

Experts negatively assessed the abolition of the independence of the energy regulator. The law signed by the President subordinated the National Commission for State Regulation of Energy and Utilities to the Cabinet of Ministers (Reform Index 125, -1.8 points). The law on the abolition of parliamentary immunity, which aimed to simplify the procedure for prosecuting deputies, made them dependent on the Prosecutor General, who in turn is controlled by the president. This violates the independence and balance of power (Reform Index 125, -2.0 points). Deputies’ assistants were allowed to combine this activity with other work or running their own business. They have significant powers — they are free to enter not only the premises of parliament, but also any other state institutions and even state enterprises. The decision increased the risk that deputies’ assistants would use these opportunities to promote their business (Reform Index 125, -1.0 points).

Thus, after the election of the new Verkhovna Rada and the appointment of the Cabinet of Ministers headed by Oleksiy Honcharuk, the reforms accelerated. But in the spring the pace of reforms in Ukraine has decreased significantly. We attribute this to the need to adopt a large number of regulations to combat the medical and economic crisis caused by the coronavirus.

With the new Rada, the President managed to pass the laws he spoke about in his inaugural speech (however, not all of these laws have a positive assessment). The move towards the EU has also continued. The new Verkhovna Rada finalized and adopted laws prepared by deputies of the VIII convocation (some of them were adopted in the first reading, but did not have time to pass the second). Among the most important are the law on the introduction of the national electronic transit system, the law on the voluntary use of national standards, the law on the authorized economic operator at customs, the law on protection of intellectual property in import or export and the law on market surveillance. These laws bring Ukraine closer to the adoption of the ACAA agreement, the so-called “industrial visa-free regime”.

Zelenskyy vs Poroshenko

Both presidents faced crises in the first year of their term.

In 2020, the global coronavirus pandemic and quarantine restrictions caused a medical and economic crisis. According to the United Nations, the world economy will fall by 3.2% this year, while in October 2019 the International Monetary Fund forecast its growth of 3.4%.

In 2014-2015, the crisis in Ukraine was local, but no less serious: in 2014, the Russian invasion and hostilities in eastern Ukraine began. The loss of territories and the industry focused on them, the growth of military spending, led to falling GDP and high inflation. The economic crisis has forced the newly elected parliament of the VIII convocation to pass many reform laws — the beginning of 2015 was the time of the highest values of the Reform Index. After the introduction of the “turbo mode” in the fall of 2019 the index also rose.

To compare the work of the two Presidents, we chose the periods when each of them received a “new” parliament and Cabinet. For Petro Poroshenko it happened in December 2014, for Volodymyr Zelenskyy — at the end of August 2019.

For Volodymyr Zelenskyy, we took the period from August 29, 2019, when the Verkhovna Rada of the IX convocation took the oath and appointed the Government, to May 17, 2020 – 262 days.

For comparison, we took a similar period for Petro Poroshenko. On December 2, 2014, the Verkhovna Rada of the 8th convocation appointed the Cabinet of Ministers headed by Arseniy Yatsenyuk. Reform Index has been tracking important regulations since December 28, 2014. We added 262 days to this date and received on September 16, 2015.

During this time, Petro Poroshenko managed to join 97 reforms (in particular, he initiated 8 laws and issued 3 reform decrees), and Volodymyr Zelenskyy — up to 84 reforms (initiated 11 reform laws). However, not only the number of reforms is important, but also their significance. Therefore, we compared the progress in the areas of Reform Index provided by these reforms  (Fig. 3).

Fig. 3 shows that in all areas greater progress was made during the term of Petro Poroshenko. However, in the field of “business environment” the difference is not too big. In this direction, Volodymyr Zelenskyy joined more reforms than Petro Poroshenko, which may indicate the priority of this area for the sixth President of Ukraine.

If we compare the significance of individual reforms, the changes adopted during the term of Volodymyr Zelenskyy are, on average, more significant in two directions out of five: Public Finance and the Monetary System. Although this did not help Zelenskyy catch up with Poroshenko at the pace of reforms, it may become a good practice to create elaborate bills that significantly change the “rules of the game” in the country.

Conclusion: At the beginning of his term, Petro Poroshenko managed to work more effectively on changes in the “rules of the game” in the country compared to Volodymyr Zelenskyy. However, the latter has four more years to implement other long-awaited reforms (e.g/, new labor legislation). With political will, neither war nor the “coronavirus crisis” will be able to prevent this.