About LINC

USAID Local Investment and National Competitiveness Project

Task 3-a: Improve Economic Governance in Crimea

Task 3-b: Pilot the Development of a Unified Property Registry

Task 3-c: Undertake a Competitiveness Enterprise Development Program

PROJECT PURPOSE

To assist progressive communities, working with local industries and potential investors, to bring about significant growth in investment and job creation, even to the point of influencing the national competitiveness of Ukraine.

PROJECT COMPONENTS

Component 1: IMPROVING THE BUSINESS ENABLING ENVIRONMENT

Objective: To assist governments at the national, regional, and community level undertake specific improvements to the business enabling environment, and to demonstrate how such improvements can increase investment activity.

Component 2: ENHANCING PRIVATE ENTERPRISE COMPETITIVENESS

Objective: In support of municipal and regional economic strategic plans (Component 1) enhance the competitiveness of industries and enterprises so as to accelerate Ukraine's integration into international markets.

Component 3: IMPROVING CRIMEA’S BUSINESS ENABLING ENVIRONMENT AND INDUSTRY COMPETITIVENESS (LINC CRIMEAN INITIATIVE)

The LINC Crimean Initiative consists of one additional component that is carried out in concert with LINC components 1 and 2. Tasks proposed under the LINC Crimean Initiative are not to be implemented in isolation of the tasks spelled out under LINC components 1 and 2. For example, it is expected that many of the economic development strategic plans, and grants for public-private partnerships will be implemented in Crimea.

TASKS UNDER COMPONENT 1

Task 1-a: Promote Economic Reform at the National Level

Expected Result:

Significant improvement in Ukraine's national scores in recognized international indexes such as "Doing Business" and WEF Competitiveness Index.

Activities aimed at achieving this result:

• Liaise with relevant government ministries, business associations, NGOs, etc., to encourage policy improvements.

Task 1-b: Support Strategic Planning for Economic Development

Expected Results:

1. At least 25 municipalities and 5 economic regions engaged in efficient and effective support of enterprise development and investment, primarily in Southern and Eastern Ukraine, with particular emphasis on Crimea.
2. In assisted regions and municipalities, there is a significant reduction in transaction costs and time required by businesses to meet regulatory requirements, achieved through better practices in licensing, permitting, registration, and regulation as envisaged within Ukraine's permit system law.

Activities aimed at achieving these results:

• Propose selection criteria for partner municipalities and economic regions;
• Assist partner municipalities and economic regions form and develop strategic economic plans;
• Support the implementation of the plans.

Task 1-c: Assist Localities Alleviate Administrative and Regulatory Barriers to Investment (with Particular Emphasis on Property Markets)

Expected Result:

Barriers to investment significantly reduced through improvements in the functioning of local property markets.

Activities aimed at achieving this result:

• Create an inventory of key public and privately-owned land parcels;
• Adjust regional economic targets with available land inventory;
• Introduce procedures for community input into land use decisions;
• Provide skills to enhance investment competitiveness.

Task 1-d: Promote Domestic and Foreign Investment

Expected Result:

National, regional, and/or local investment promotion agencies providing effective services to domestic and international investors.

Activities aimed at achieving this result:

• Provide technical assistance to investment promotion bodies at the national, regional and local levels, including:
• effective outreach campaigns promoting the advantages of investing in economic regions and municipalities;
• greater availability of information concerning pertinent business-related legislation and regulations for investors;
• accessible and clear information regarding the steps investors need to bring an investment to completion; and
• assistance to investors by helping to expedite permits and approvals, and smoothing the investor's path to project completion.

Task 1-e: Foster Public Private Partnerships

Expected Result:

Public-private partnerships (including 2 GDAs) employed as techniques for stimulating and sustaining economic development.

Activities aimed at achieving this result:

• Reserve approximately 10% from LINC's total budget for the Partnership Fund. Activities that can be funded out of this account include (illustrative list):
• Global Development Alliances between cities and local industry;
• Subcontracts or other awards to local consulting companies, NGOs, and associations for analysis of local investment opportunities for municipalities.

TASKS UNDER COMPONENT 2

Task 2-a: Encourage Adoption of International Quality and Productivity Standards

Expected Result:

Introduction and application of internationally-recognized quality and productivity standards for Ukrainian products and enterprises.

Activities aimed at achieving this result:

• Develop and implement a strategy for facilitating standards harmonization for small and medium enterprises as a way of enhancing product competitiveness;
• Facilitate the acceleration of demand for international standards through working with business associations and through public awareness;
• At the regional and local level, .explore whether additional inspection and other public sector capacity building will be necessary to ensure standards are sustained, and provide technical assistance if needed.

Task 2-b: Industry/Sector Competitiveness Enhancements

Expected Result:

Industry leaders, including both enterprises and associations, and other entities actively promoting and adopting policy and operational changes that enhance overall industry/sector competitiveness.

Activities aimed at achieving this result:

• Provide industry/sector competitiveness upgrades that enhance the quality, productivity, and long-term viability of dominant or growth-oriented industries within that region or community and that are consistent with municipal and regional economic development plans (Task 1-b).

Task 2-c: Market Integration through Trade Facilitation

Expected Result:

Administrative barriers to trade reduced by introduction of more efficient procedures for bringing products into Europe and other international markets.

Activities aimed at achieving this result:

• Produce an assessment of the existing administrative barriers at key customs areas, particularly those most relevant to partner municipalities and economic regions and their industries.

TASKS UNDER COMPONENT 3

Task 3-a: Improve Economic Governance in Crimea

Expected Results:

1. Delivery of all government business services in Crimea will be comparable with best practices.
2. Full and open disclosure of sub-government business services will be made available electronically and in government offices.
3. All government business services in Crimea – that are possible to deliver through one stop shop type mechanisms – will be delivered that way in at least 50% of all raions, the capital and the city of Sevastopol.

Activities aimed at achieving these results:

• Undertake a systematic survey of governments provided business services using the Doing Business Methodology;
• Based on the survey findings, select partner municipalities for one stop shops, and commence work with local governments and businesses to improve service delivery through introduction of higher service delivery standards;
• In close coordination with the Government of Crimea and Crimean municipalities, provide focused assistance in adopting best practices for implementing one stop shop permitting and licensing systems.

Task 3-b: Pilot the Development of a Unified Property Registry

Expected Results:

1. Property registry feasibility and Crimean land market assessment.
2. Pilot property registries in one urban and two rural Crimean raions.

Activities aimed at achieving these results:

• Analyze social, economic and ethnic constraints and identify a credible path for increasing the transparency and efficiency of the land market in Crimea;
• If supported by the assessment, undertake activities to implement property registries;
• If supported by the assessment, provide the necessary technical assistance and the goods required to support the establishment of the pilot registries.

Task 3-c: Undertake a Competitiveness Enterprise Development Program

Expected Results:

1. Increased export linkages and sales of targeted sectors.
2. Increased domestic market linkages and sales between Crimea and other parts of Ukraine.
3. Significant alternative employment generated in the city of Sevastopol.

Activities aimed at achieving these results:

• Undertake a sector/value chain study of at least three but no more than five Crimean economic sectors including Crimean tourism and agriculture;
• Undertake a systematic implementation program including:
• developing industry standards;
• assistance to develop linkages with target markets;
• training and market facilitation.