Azerbaijan’s Fiscal Policy after the Oil Boom

Azerbaijan’s current fiscal stance is quite strong; however, this stability is completely based on oil-related revenues. In the meantime, the situation with alternative sources of fiscal revenues is uncertain. A large part of fiscal management is built on opacity and an assessment of budget spending efficiency has never been done. It is likely that Azerbaijan will only be able to maintain its fiscal stability through the next ten years or so, i.e. until the end of the active oil-extraction period. In the more distant future, a substantial fiscal correction will be necessary.Institutional reforms, Eastern Europe, Caucasus and Central Asia, Azerbaijan

Agriculture Income Assessment for the Purpose of Social Assistance: the Case of Ukraine

Ukraine belongs to the group of countries which are known for the widespread phenomenon of subsistence and semi-subsistence farming. Individual farmers are not obliged to produce financial reports and their incomes belong to the category of unobservable incomes. When checking the eligibility for social assistance the level of their incomes needs to be estimated. In a country, where poverty rate is quite high, the coverage of the poor with financial aid is relatively low and public finances under constant control, the importance of a fair and justified methodology for income imputation is particularly strong. In this situation, an outdated and unfair current system of agriculture income estimation in Ukraine calls for immediate changes. This paper presents recommendations for the Ukrainian government in the area of agriculture income imputation, where several methods of estimating farm income were proposed (including the one based on Household Budget Survey). The recommendations were preceded with the analysis of five countries' practices in this area: Kazakhstan, Kyrgyzstan, Moldova, Russia, and Poland. A review of different means testing methods, including direct means testing and proxy means testing, served as an introduction to the topic.subsistence and semi-subsistence farming, hard to verify income, farm household income, income (agro-income) imputation, means testing methods

Prospects for EU-Ukraine Economic Relations

This report looks at the prospects for economic integration between Ukraine and the European Union. The so-called Orange Revolution of late 2004 saw the question of Ukraine’s future geopolitical orientation re-emerge, and the idea of closer integration with the EU received wide social support. Yet, already by mid-2006 the political support to the idea of Euro-Atlantic integration seem to diminish. It is not clear if, how and when the idea of deeper integration with the EU will be put into action. Although the main steps have been charted at the official level (Ukraine becoming WTO member and both sides start to gradually lower barriers to trade in manufacturing goods), neither their timing, nor the steps going beyond them can be specified with any degree of certainty. This report aims at showing the possible and optimal policy options.Ukraine, European integration, trade, reforms, transition

What should be the economic priorities in post-war Ukraine?

Key messages: Ukraine must first win the war. But if it can successfully expel Russia from all of its territories, it needs to accelerate its post-Maidan, pre-war tempo of reforms. Ukraine must build what it has long been lacking: the rule of law. In order to do this, it must build the rule of law from scratch, reforming its judiciary, unabashedly protecting property rights, and continuing its highly successful decentralization reforms. During the transition from war economy to market economy, simplification of nearly every facet of interaction with the government should be undertaken – and kept in place. This will encourage not just hanging on to foreign charity, but also encourage investments needed for growth. These steps will help Ukraine move towards Europe and continue its march towards Euro-integration even if (and especially if) accession to the European Union is a longerterm goal Ukraine’s survival after the war is dependent on making policy reversals incredibly difficult to implement. This requires substantial political will