UNDP and Ministry of Economic Development and Trade launch a project to strengthen SME business membership organizations in Ukraine

Aug 28, 2015

Kyiv, 27 August 2015 – The United Nations Development Programme in Ukraine (UNDP), in cooperation with the Ministry of Economic Development and Trade of Ukraine (MEDT) and with the financial support of the Government of Switzerland, launched a project “Strengthening SME business membership organizations”.

The development of a competitive, high added value and innovative SMEs sector is crucial for successful economic growth and prosperity of Ukraine. SMEs make the economy flexible and strong, and play an important social role as they create new jobs and provide a source of income for large groups of the population.

However, SME contribution to GDP in Ukraine is significantly lower than in developed economies, where this figure would exceed 70%. This is explained by extremely unfavorable macroeconomic environment, limited access to financial resources, excessive regulations and inconsistencies in the norms and requirements governing business. Administrative set-up and business support structures are weak and specialized services for SME competitiveness, innovation, product development and export promotion are limited.

While the most important actors to influence the SME environment are public institutions, the SME business associations play crucial role in developed economies. Being intermediaries, they are able to articulate, channel and advocate for the problems and interests of SMEs with public institutions, sustain continuous and effective dialogue between private and public sector, and provide much needed business development services to SMEs.

The project ‘Strengthening SME Business Membership Organizations’ will work to accelerate the development of the SMEs sector in Ukraine by strengthening the capacities of the business membership organizations that will contribute to the reinforcement of a much needed dialogue between the private and public sectors.

“The business associations in Ukraine are fragmented, have low membership and are unable to ensure representation of the interests of small and medium businesses including in the SME development strategy, shaping of legal environment and SME infrastructure in Ukraine. We hope that the project that we are launching today will help build more robust associations, which will mobilize the SMEs, represent their interest and in future will become the basis for establishment of powerful SME self-regulatory organisations. I would like to particularly thank to UNDP, the Government of Switzerland and Swiss Cooperation Office in Ukraine for supporting this important initiative” – said Ms Yuliya Klymenko, Deputy Minister of Economic Development and Trade of Ukraine.

The project aims its efforts to design and deliver a tailored capacity development programme to business membership organizations throughout Ukraine to help improve their institutional, organizational and financial capacities to represent interests of the private sector and facilitate a more active, responsive and professional cooperation between public and private sectors. The project will implement four fundamental interlinked components:

·         building organizational capacity and increasing membership of business membership organizations;

·         improving services provided by Business Membership Organisations to SMEs;

·         enhancing advocacy and mediation potential of business membership organizations;

·         supporting and promoting public-private dialogue.

We expect the project will positively impact on the capacity of business associations to operate effectively, will improve their organizational and financial sustainability and help them grow to be able to perform their natural role as part of SME support infrastructure’- says Mr Janthomas Hiemstra, UNDP Country Director in Ukraine. ‘Yet, building the capacity of business-associations is not an end in itself, but a means for achieving specific private sector goals, such as business enabling reforms through public-private dialogue and strengthening services to SMEs. UNDP has now been working for more than 20 years in Ukraine to overcome poverty, reduce inequality and improve living standards in particular by supporting private sector development initiatives, and we stand ready to further provide all possible technical assistance to the Government’s reform efforts.” – he added.

Within the newly adopted Swiss cooperation strategy 2015 – 2018 for Ukraine we aim to help establish a more business-friendly environment. Interventions will be geared towards reducing administrative burdens and procedures that impede business operations in the private sector. To ensure that these reforms take into account the needs of various stakeholders, the State Secretariat for Economic Affairs of Switzerland has allocated USD 1 million to support the capacity development of business membership organisations which could adequately represent the interests of SMEs and of all macro-regions of Ukraine, including the eastern regions’ – said Mr Guido Beltrani, Head of the Swiss Cooperation Office in Ukraine.

The project will be implemented in 2015-2018 by UNDP in cooperation with the Ministry of Economic Development and Trade of Ukraine and with the financial support of the State Secretariat for Economic Affairs of Switzerland.

Contact information

For more information please contact Yevgeniy Zelenko, UNDP Communications Officer, Yevgeniy.Zelenko@undp.org, +380442539363

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The Swiss Confederation in Ukraine

In 1997 the Swiss Confederation and Ukraine signed a bilateral agreement for technical cooperation, in the framework of which the Swiss Cooperation Office was opened in Kyiv to coordinate the cooperation programs in Ukraine. The Swiss Cooperation Office in Ukraine operates on behalf of three governmental organizations - the Swiss Agency for Development and Cooperation (SDC) and the Human Security Division (HSD), which are part of the Swiss Federal Department of Foreign Affairs, and the State Secretariat for Economic Affairs (SECO), which is part of the Swiss Federal Department for Economic Affairs. The Swiss support to Ukraine in 2015 – 2018 focuses on Sustainable Economic Development, Sustainable Energy Management and Urban Development, Governance and Peacebuilding as well as Health. Besides, the Swiss Confederation provides humanitarian assistance to the regions and target groups affected by the conflict in the East of Ukraine. The yearly budget of the Swiss Cooperation Program in Ukraine amounts up to CHF 25 million. For more information please visit http://www.swiss-cooperation.admin.ch/ukraine/

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