Donbas Economic Transformation Strategy Support UA2002, phase II

The project aims to support the Ministry of Reintegration of Temporarily Occupied Territories of Ukraine (MTOT) in its efforts to prepare a Donbas Economic Transformation Strategy focused on government-controlled areas of the region. Phase 1 of the technical assistance will enable the MTOT to prepare an outline national support framework for the region. The framework will provide the critical parameters and thematic elements of the strategy and lay out the GOU's approach to re-energising economic growth, facilitating domestic/foreign investments, and delivering tangible economic benefits to citizens in the region.

Phase 2 of the technical assistance will enable the MTOT to prepare the Donbas Economic Transformation Strategy documents package (including strategic environmental assessment, budget impact assessment and elaboration of policy initiatives); draft legislation changes needed for its implementation (including draft government decisions and regulations); and offer an advocacy and communication support needed for the Strategy implementation.

Since the Project shall deliver a Strategy for the region with unique economic, social and security conditions special attention will be paid to conflict sensitivity and embedded political-economy analysis to mitigate potential risks and avoid conflict escalation. Phase 2 will be implemented from 15 April through 15 July 2021. Based on the analysis and inputs acquired in Phase 1, the follow-up phase of the project will deliver a coherent Donbas Economic Transformation Strategy in the form of a Government of Ukraine draft decree.

To submit the draft strategy for approval by the Government of Ukraine, it should be accompanied by a specific set of supporting documentation, such as budget impact analysis and other types of analysis, which the project will deliver. Some of the policies within the strategy would require amendments to laws (e.g. tax code). Therefore, these draft laws will be produced in the second phase of the project to expedite implementation of said policies (output 6). These policy design and legislation drafting processes will be supported by extensive stakeholder consultations and public communications to ensure interests of key stakeholders and society groups are considered (output 7).

Ultimately, the second phase of the project will deliver three outputs: a package of strategy documents (including environmental and budget impact assessment and policy initiatives assessments) - output 5, necessary legislative amendments - output 6 and provide advocacy and communication support for adoption by the CMU and implementation of the Donbas Economic Transformation Strategy - output 7. The project has a special focus on GESI-related analysis, including a review of the current situation from the perspective of women, IDPs and vulnerable groups, as well as impact assessment of the suggested policies to avoid any harmful effect on vulnerable groups or improving their current condition.