Oleksandr Danchenko: Digital economy in Ukraine is being used as a tool of populism

Over the past six months, the higher echelons of Ukrainian politics have been actively discussing the digital economy and the need for its implementation at all levels. Oleksandr Danchenko, chairman of the Parliamentary Committee on Informatization and Communication, commented on the main myths surrounding this phenomenon and the peculiarities of the digital economy.

What is the digital economy really like and why is it so frequently talked about?

I’m closely following the rhetoric of the ruling elite, and I get the impression that everyone just likes the fancy collocation “digital economy” – while only a few really understand its essence. The processes that are currently taking place in society were called by the World Bank in its report “Digital dividends” – “a magnificent information and communication revolution”. Its main “weapon” is knowledge, innovation, technology, uninterrupted access to information, and not just IT and software, as it is often believed in public authorities. The basis for the development of the digital economy is transparent legislation, a good investment climate, investment, attention to education and health care. The World Bank experts say that the states that have not provided this foundation can neither count on the development of the industry nor on the reduction of social inequality. The governments that supplement the investment in new technologies made by business with large-scale economic reforms can count on the growth in the standard of living of their citizens.

What does Ukraine lack to become a truly digital country?

Let’s start from the very beginning. Legislation. The work in the parliament has long turned into a farce. Talking about basic fundamental legislation for the ICT industry – which ensures the development of the digital economy – the parliamentarians has had no time to consider these documents since 2015.

The same thing happens with other reforms. And we have a paradoxical situation when the President and the Prime Minister are talking about the importance of innovations and digitalization, while the deputies are engaged in their own ambitions and business interests.

For example, there is a Cybersecurity Strategy approved by the President, but it cannot work without a legislative framework. And the parliament simply finds no time to consider the bill “On Cybersecurity”.

Or let’s talk about an internal investor. The business is ready to invest in the development of the state in the form of social projects, the introduction of various e-tools, the development of infrastructure. How does the state respond? It doesn’t respond anyhow at best; at worst – it responds with sabotage. In February, the Verkhovna Rada passed the law “On Infrastructure”; however, three ministries have not yet managed to develop subordinate legislation and, consequently, the law does not work. The entire market expects this document; in fact, the market developed it. The ICT industry suffers from the petty tyranny and exaction of local officials, who prevent the infrastructure from development and modernization. And the government does not care.

The Cabinet has already launched a 4G connection. What are its prospects?

The prospects that modern high-speed communication opens up to us are unlimited. However, in their desire to develop a telecommunications network, operators again and again have to resolve various issues with local officials. Recently, the Committee held a meeting together with the management of operators, who were asked why there is still no 3G coverage in some regional/district centers. And there was one and the same answer – we are not allowed to build base stations or the fees for the right to install them are exorbitant. Do you understand the irony? It’s not that the business doesn’t see benefits in the deployment of the network; these are the local authorities that do not allow business to do this! How can we talk about effective attraction of external investments if we cannot work with the internal ones?

A similar situation can happen with 4G. Operators will buy a license, invest in equipment, and some local chairman will put an end to all the innovative progress.

Why so? Because the three ministries are sabotaging the law passed by the Verkhovna Rada.

Administrative reform and the Digital Ministry – why does Ukraine need yet another executive body?

We are not talking about the creation of a new department, we are talking about optimization. Communication and informatization issues in the executive branch are covered by structural units in four ministries and by separately created bodies (altogether there are about 18 structures). We suggest doing away with this structural disorder, and, accordingly, reducing expenditures from the budget for their functioning. A digital agency is necessary as an effective professional alternative to all existing disjointed structures. The first and most important thing is to protect the interests of the industry in the executive branch. I have already proven the need for such an “advocate”. Now we have a specialized Committee in the Verkhovna Rada, and together with the market we are working in the legislative field. But it is half the battle to adopt a necessary law – what is really needed is the control over its implementation.

The second and no less important thing is that we need owner of the process, talking in terms of business. No one doubts that the digital economy is the future of the state, but there is no one who would control the process at all stages. Ukraine is a unique country because different elements of the digital economy are taken care of by those indifferent: volunteers, public organizations, businesses, some state bodies, some politicians seeking popularity. However, if we collect all their developments together, we still won’t have a single unified system.

Recently I have met with a member of the European Parliament, Michal Boni. By the way, he was once the first minister of digitalization in Poland. His experience is extremely important and useful for Ukraine. So, Mr. Boni has repeatedly stated that such an agency is important for Ukraine to ensure that the process of transition to the digital economy is systematic, without any chaotic interventions. However, one must understand that at the first stage digitalization will go very slowly, because, in its essence it kills corruption. In Ukraine, unfortunately, not everyone is ready to abandon corruption schemes.

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