Annual Report 2017

From the editor

Hi! It’s awesome that you are interested in what we do here at VoxUkraine. Read on, and you’ll find more details about our work: what we did, when we did it, why we did it, and how much did it cost. (If you are short on time, please watch this 90-seconds video, which pretty much explains everything.)

Competition

We love competition in our work. It makes us faster, stronger, and more creative. And we eagerly support competition in economics. Competition makes companies reduce their prices, it drives consumer demand. To satisfy this demand, the companies invest in their production and technologies, they hire more employees. Competition is the mother of efficiency. And all these changes are reflected in the growth of GDP and population welfare.

If you don’t trust economic theory, look at the positive changes that happened to Ukrainian taxi service Uklon after Uber, the world’s largest taxi company, entered Ukrainian market. Competition, and nothing but fair market competition can help Ukrainian companies become global power players.

Level playing field

“All animals are equal, but some animals are more equal than others”. It looks like in modern Ukraine people forgot where this false commandment had led the protagonists of the Animal Farm by George Orwell. Here’s a quick reminder: it led them to a moral breakdown and creation of a totalitarian “state”. Ukrainian markets are full of exceptions, special conditions, and preferences; they are characterised by limited and complicated access, unequal taxing, and selective application of justice. All this distorts the markets, makes them inefficient, impairs competition, and results in slowing down the economy and depriving most Ukrainians of the chance to prosper. We follow the principle of the “level playing field” in our own lives, too. For example, the process of peer review is obligatory to all our writers — from student to Nobel laureates.

Sustainable and inclusive growth

Over the past 40 years, rich economies (GDP per capita over $ 20,000) grew by an average of 3.85% per year, while some of the poorest economies (GDP per capita less than $ 2000) grew by 3.91%. Complete nonsense? No, it isn’t. The thing is that rich countries fell less frequently and recovered more quickly. That’s why we support structural reforms and creation of institutions able to ensure a sustainable growth, and we are skeptical of the miraculous recipes to boost the economy before elections.

Merit-based approach

There’s a word and a phenomenon in Ukraine that is not quite familiar to foreigners — nepotism. And, unfortunately, it’s difficult to translate into Ukrainian the expression “merit-based approach”. We also have a saying that goes, “Many talented people were born in Kyiv, but almost none of them died here”. This saying perfectly explains the situation; oftentimes, those who become successful are not the most qualified, but the most loyal; not the most talented, but the most convenient; relatives, friends, and countrymen of those in power steal the place of the smartest. Talented people are simply leaving for the countries where they won’t have to spend their time and energy on fighting against nepotism, “dear friends” of those in power, and Lady Justice who lifts her blindfold when needed. The same goes for the economy; if the markets are distorted to the point they don’t reward those most creative and most efficient, but recompense those in a position of power and those engaged in illegal schemes, then real entrepreneurs would rather fulfill their full potential elsewhere.

Transparency

It’s good to be transparent, especially it Ukraine; transparency is a powerful weapon and a powerful protection tool. It’s very difficult to discredit a civil society organisation, a company, a political party, or a ministry, if the information about these institutions is open, if their work processes are transparent, and if they are good at communication.

There’s a couple of classic examples in Ukraine, like ProZorro public e-procurement system. National transparency correlates with the level of the country’s economic development and population welfare. Quoting an IMF study, “Transparency and accountability are critical for the efficient functioning of a modern economy and for fostering social well-being”. If you don’t trust the IMF, take a look at the countries that made it to the top of the Open Budget Index rankings— New Zealand, Sweden, and Norway.

Our annual report will help you decide for yourself how transparent VoxUkraine is. Enjoy the reading.

Areas of work

Development of the economic debate

VoxUkraine has been created as an open platform for a substantive debate and search of solutions to economic issues of Ukraine. We don’t hold discussions for the sake of it, our purpose is to develop sound economic solutions. To ensure high quality of the discussion we need a “solutions infrastructure” — professional and unbiased legislative and executive power, universities with teaching scholars, think tanks with analysts, expert round tables and debates, and cooperative media helping spread information to millions of people. Unfortunately, many links in this chain are missing in Ukraine. That’s why we have a lot of work to do.

What did we focus on this past year?

Captured state. We kicked off the year by focusing on an issue important to Ukraine — captured state and the influence of oligarchs. Six researchers from Ukraine and abroad havy fully examined this issue. We didn’t limit ourselves to articles. We went as far as organising a discussion of the book by Chrystia Freeland, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. Aivaras Abromavičius, Ukraine’s ex-Minister of Economy and Trade, and Dmytro Yablonovsky, Senior Economist of center for Economic Strategy, took part in the discussion.

Calculating the GDP. In spring 2017, we started a discussion on the accuracy of calculations of the GDP in Ukraine. Our study showed an abnormally high difference (600 bln UAH) between the value added (essentially, GDP) calculated using different methods. The study sparked a vivid discussion among experts — we received about 10 comments and articles. We also held an offline discussion featuring senior officers of the State Statistics Service of Ukraine. They heard our arguments and initiated an unscheduled examination of the methods of calculating the GDP, and found a mistake in one of the methods. Unfortunately, the right method showed the lowest GDP.

Ukrainian labor market. Last summer, we paid our attention to the labour market in Ukraine. This sphere requires a thorough and in-depth study. Currently there’s no unbiased data on the size of the salaries or the number of employees. We shed some light on this. We researched the “costs” of different skills at the labour market, and found out how rapid increase of the minimum wage influenced this market.

Inflation. Inflation didn’t escape our attention, too. The rise in prices was 1,5 times higher than the NBU target. VoxUkraine researched the reasons behind this, as well as peculiarities of Ukrainian pricing policy. For instance, we found out which segments of Ukrainian population experienced faster price growth.

Facebook impact. Last month, we launched a new project (product) — ranking of the impact of Ukrainian politicians on Facebook. What politicians’ use of social media has to do with the economic discussion promoted by VoxUkraine? It turns out, it has a direct impact; politicians, whether we like it or not, make part of this discussion. In Ukraine, Facebook is quite a powerful tool; almost all Ukrainian politicians take an active part in communication and advertising campaigns on Facebook. They invest quite a lot of money into growing their audience, creating content, and communicating with their followers. Our partners from Artellence helped us find out who is the most efficient on social media. Moreover, Facebook has become a battlefield for the hearts and thoughts of Ukrainians, and this fight involves using not only acceptable methods, but also armies of bots. we were the first to determine how many bots are there on the Facebook page of Petro Poroshenko.

Big talk. “Ukraine 139” is another project launched by VoxUkraine in 2017. Ukraine was ranked 139th in the ranking of countries by GDP per capita (PPP). We asked the best economists from Ukraine and abroad why our country had ranked so poorly, and how Ukraine can make it to the top of the list.

Of course, the list of the topics we discussed in 2017 goes on and on. The first one that comes to mind is the huge debate around the healthcare reform, sea port tariffs, monetary policy, and nationalization of PrivatBank, to name but a few.

We aim not only to discuss important issues, but to change the culture of economic decision making in Ukraine.

Quantitative indicators:

How people read us this past year

Where our readers come from

Who are our readers

What people say about us

VoxCheck: we made politicians say the truth

VoxCheck checks statements by Ukrainian politicians and debunks economic myths spread by them. In 2016, its first year of existence, we at VoxCheck have tried and tested our fact-checking methodology. In 2017, we focused on expanding the project; our team grew from 2 to 5 analysts, we started monitoring politicians on a weekly basis, we launched an internship program and a couple of new fact-checking projects.

Qualitative results:

1. We checked the statements by Ukraine’s top politicians:

IMoRe monitored the reforms

The main purpose of the project

To inform the society about the pace and depth of the country’s reform process. We assess Ukraine’s only index for monitoring reforms based on regular assessment provided by more than 40 experts who evaluate the impact of government decisions (changes in the regulatory environment) on the reforms.

Qualitative results

The iMoRe has long become a reliable source of unbiased and quantitative information (which makes this project unique). It has been referred to by Ukrainian and foreign think tanks, experts, civil society leaders and even the President in his annual address to the Parliament. In 2017, іМоRе presented Ukraine with several new projects; based on iMoRe database, VoxUkraine has built the Reforms Support Index — a tool to assess the MPs’ support of the reforms. We’ve also created a Guide of Reforms, which includes six major achievements and failures of the reform process since the Revolution of Dignity. The ministries ranking, also based on iMoRe, has revealed which ministries were the most efficient in initiating reforms.

Publications

According to the survey results we published 24 releases. Starting from the second quarter of 2017, we carried out and published updates on the reforms on a quarterly basis. iMoRe releases have been regularly published by the leading media, including KyivPost and Новое время.

Relevant events etc.

In January 2017, we analyzed how ministries had initiated the reforms, and we put up a ranking of reform initiators. The Ministry of Economic Development and Trade, the Ministry of Finance, and the Ministry of Justice made it to the top of the ranking.

In late 2017, we summed up the results of the reforms that had taken place in 2015-2017, and published a Guide of Reforms, where you can read about the major achievements and failures of the key reforms.

We assessed and controlled the authorities

Ukrainians want the government and the parliament to be efficient and make decisions that reform and develop the country. However, there’s a challenging task — how do we assess the contribution of a ministry or a MP into the reform process?

Our DataVox project might be a partial solution to this problem. It studies political processes and activities of the Verkhovna Rada using open data and mathematical treatment.

Today, data-driven information is very relevant and important, because Ukrainian media are full of comments, news without facts, thoughts, value judgements etc. There’s a critical shortage of a thorough, verified, and accessible analysis. We believe that Ukrainians should have access to trustworthy and high-quality analytics. In 2017, we continued analysing political processes and decision-making models in Ukraine using unbiased digital data.

This past year, we’ve carried out 10 large research data-driven projects. Using machine learning algorithms, we explained and assessed the work of the Verkhovna Rada and the Cabinet of Ministers, analyzed the political processes and efficiency of the banking system.

The most popular special projects among our readers

Efficiency of the MPs

We love and respect statistics, and that’s why we always refer to it. Here’s a fun fact: 80% of Ukrainians don’t trust the members of parliament.

At every election, Ukrainians don’t make a good choice, and one of the reasons is the lack of clear criteria for assessing the work of MPs. Parliamentary elections are planned to be held in 2019. To help Ukrainians make a more informed choice, we’ve launched the project «Efficiency of the MPs». It is based on the Reform Support Index — an unbiased and convenient tool for assessing how deputies supported the reform laws. The Reform Support Index shows the maximum possible contribution of a MP to the adoption of progressive or anti-reform laws that were used in the iMoRe index during the 8th convocation of the Verkhovna Rada. These laws have been selected and assessed by more than 40 independent experts.

The page of the project Efficiency of the MPs, which contains a convenient database of Ukrainian MPs, has been visited by more than 1000 readers per month. In total, the Index has been viewed more than 11,000 times, it triggered an active discussion on social networks, in particular, a public reaction of at least 11 MPs. We shared the results of the project on two radio- and TV broadcasts.

The Efficiency of the MPs database will be updated during each parliamentary session before the elections. We carried out this project with the help of our readers — more than 120 people invested more than UAH 150,000 into this project.

Ministries’ ranking

In 2017, VoxUkraine continued to assess activities of the Ukrainian government. This past spring, a year has passed since Volodymyr Groysman was voted in as the Prime Minister of Ukraine and the new Ukrainian Cabinet of Ministers was formed. Which ministries were actively implementing reforms, and which simulated their activities?

The ministries didn’t have clear KPIs and criteria for assessing the work of the government. VoxUkraine experts, using a specially developed methodology, assessed the efficiency of various government departments. The ranking consists of four major components: assessment of the program of the Cabinet of Ministers of Ukraine for each ministry, assessment of the implementation of the Cabinet of Ministers program, expert assessment of the reform activities of the ministries, and the responses of the ministries to the VoxUkraine requests for information.

After one year of work of the Groysman government, the Ministry of Finance, the Ministry of Health, and the Ministry of Education and Science made it to the top of the ranking.

We would like to sincerely thank our devoted team of top experts and analysts who work pro bono on this project: Svitlana Rusakova (Dragon Capital, VoxUkraine), Yaryna Basystyuk (University of Pennsylvania, VoxUkraine), Oleh Ivanov (iMoRe expert), Dmytro Maznev, Larysa Hryhoryeva, Alina Zubkovych (The International Center for Policy Studies), Oleksandr Zholud (VoxUkraine editorial board member), Yaroslav Kudlatskyi (KSE), and Vadym Bizyaev (KSE).

Educational projects

In 2017, VoxUkraine launched a project to develop high-quality economic journalism in Ukraine. We partnered with the Kyiv School of Economics to create the Center for Excellence in Economic Journalism, and developed a free online course «“How to write about the economy without errors”». EdEra online education platform, Oschadbank, and Energy Resources of Ukraine, provided financial support of the idea.

You can register for our open online course for free by following this link. All participants who have completed the course and passed the tests will automatically receive a certificate of completion.

Qualitative results

VoxConnector

This project was launched in early 2017. Its purpose is to provide the large audience of the local media with an access to an unbiased analysis about economy and the real course of the changes in the country. VoxConnector has also been building communication between regional media and the Kyiv expert community.

Qualitative results

The efforts of the project were aimed at: 1) raising awareness of the local media on the economic processes and reforms; 2) building relationship between the Kyiv expert community and the regional media.

A major qualitative result is providing enough expert analysis to the local media space. Over the period of a year, analysts of the project published their comments 1169 times in the local print and online media. On average, 500 readers viewed one comment.

Video comments by VoxConnector were viewed 90,000 times.

Events

1. On 2 March 2017, we organized a major conference Transformation’17. What Will Reforms Change in the Life of Ukrainians.

The purpose of the conference was to bring together representatives of the regional media, professional experts, and representatives of the government to discuss the key changes that were to affect the daily lives of Ukrainians in 2017.

149 media and NGOs representatives took part in the event.

26 speakers of the conference included Volodymyr Groysman, Prime Minister of Ukraine; Marie Yovanovich, US Ambassador to Ukraine; Oleksandr Danyliuk, Minister of Finance of Ukraine; Ivan Mikloš, the co-chairperson of the Strategic Advisory Group for Supporting Ukrainian Reforms; Hennadii Zubko, Deputy Prime Minister of Ukraine, Minister of Regional Development, Building, and Housing of Ukraine; Yuriy Vitrenko, Director for Business Development at the National joint-stock company Naftogaz of Ukraine; Uliana Suprun, Acting Minister of Health of Ukraine; Ruslan Ryaboshapka, NAPC member; Tomas Fiala, CEO Dragon Capital; and other distinguished guests and reputable experts.

2) On 26 October 2017, we co-organized the conference What Can We Expect From the Autumn of Reforms.

The conference was initiated by the Center for Economic Strategy, and it was held thanks to the support of the Reforms Delivery Office of the Cabinet of Ministers, the Reanimation Package of Reforms, and VoxConnector. The purpose of the conference was to launch a wide discussion about the land, pension, education, healthcare, and privatization reforms.

More than 50 media representatives took part in the event.

Our plans for 2018

Elections 2019. We don’t like that reforms, budget, economic processes, and welfare of a large part of the population depend on the electoral cycle in the country. But this is the reality we live in. We want to maximize our social utility for the voters. We’ve already launched or are in the process of launching a number of “election” projects.

1. The first-ever ranking of liars and manipulators in Ukrainian politics.

2. Efficiency of the MPs. We will continue assessing and reporting the work of each and every MP. That’s important.

3. Budget WatchDog. Ukrainian authorities have a sad tradition — to “tear apart” the state budget in the year prior to election, trying to appease the voters. It is detrimental to the economy.

4. iMoRe will assess to which extent the new regulatory acts are reformative and determine the biggest successes (or failures) in their implementation.

5. We’ll study even more closely the work and shortcomings of the parliament. Within our joint project with UNDP we’ll identify the weakest sides of the Ukrainian parliamentarism and offer a remedy.

Not by elections alone. We’ll continue developing our online education projects for journalists. We plan to create at least one more new course. VoxConnector is launching the Editors Club — a community of journalists and editors who will be provided access to practical education and the best experts. And, of course, to a wealth of top-quality analytics. In 2018, we plan to initiate and raise the bar of the discussion around at least six topical issues, including populism, migration, industrial politics, state ownership etc. If you want to be heard, you’re welcome to send your article to us via [email protected].

Financial performance

Transparency and openness are among our core principles. We’re ready to openly speak about the sources of our money — how we get it, who gives it to us, and how we spend it.

Below is the structure of our receipts and disbursements in 2017:

We would like to express our sincere gratitude to:

International agencies and funds:

Companies:

Friends of VoxUkraine (in 2017, more than 1000 people supported us financially):

Our team

These are the people that had done all that you have just read about:

Creation, development, and work of VoxUkraine would be impossible without members of the editorial board, who invest a huge amount of their time and effort to our project on a pro bono basis.

Thank you!

All that you’ve read on the pages of this report had been made possible thanks to support and cooperation of our readers, contributors, editorial board, donors, volunteers, and the rest of the team. We’re sincerely grateful to all those who supported us, inspired us, and provided their constructive feedback. Our biggest achievement is the ever-growing VoxUkraine community. It’s our highest value, which motivates us to achieve more. Thank you for staying with us!