28 REDUCING MARKET DISTORTIONS FOR A MORE PROSPEROUS UKRAINE FIGURE 28 Restrictiveness of Product Market Regulations Pertaining to State Control, Ukraine and Comparators, 2018 (index scores from 0 [least restrictive]to 6 [most restrictive]) 4.0 3.0 57% 2.0 33% 33% 1.0 0.0 o y y ia y eru via aziltia as ica ica key ageoniaageP ador xict agua enia oa aine fr tinagypt ndia er er e La Chile emala aguav Br r r oland oliviaurChinaE unisiaI v Estv alvepublicM anama t epublicepublic C Uk omania JamaicaP cuadorB T gen T Hungar icarP olombiaarSlo R BulgarUruguaosta RE r El S N LithuaniaGuaC P hilippinesHondur C outh A A ak R P S op 5 A ech R v T OECD A z C Slo ominican R D Source: Markets and Competition OECD-WBG PMR indicators; 2018 PMR scores for Ukraine. Note: The top 5 performers are the Netherlands, the United Kingdom, the United States, Austria, and Denmark. Restrictive regulatory frameworks in network industries—where many Ukrainian SOEs operate—limit the entry of private firm in segments where competition is viable. Ukrainian law defines certain segments of the electricity, gas, and transportation sectors as nat- ural monopolies, while the postal services, railways, alcohol production, and water distribution 50 markets are all legal monopolies. While natural monopolies can, in principle, be efficient, legal monopolies may restrict entry in markets where competition would be both viable and beneficial. The entry of new 昀椀rms is explicitly capped in several services markets. Bilateral agreements impose quantitative limits on the entry of foreign 昀椀rms in the road passenger transportation sub- sector, and the participation of foreign investors in the 昀椀xed-line telecom sector is limited. These caps ultimately reduce competitive pressure both in markets subject to regulatory restrictions and in substitute markets. 50 Ordinary letters weighing up to 50 grams and simple postcards are carried by Ukrposhta, which is designated as the national postal services provider under Art. 15 of the Law on Postal Services of 04.10.2001 #2759-III (http://zakon2.rada.gov.ua/laws/ show/2759-14). Passenger and freight railroad transport services are provided by Ukrzaliznytsia, which is designated as the national basic railroad service provider under Art. 4 and 9 of the Law on Railroad Transport (http://zakon2.rada.gov.ua/laws/ show/273/96-%D0%B2%D1%80) .Ethyl alcohol is produced by SOEs in line with Art. 2 of the Law on State Regulation of the Production and Sale of Ethyl, Cognac, and Fruit Alcohol, Alcoholic Beverages, and Tobacco Products (http://zakon3.rada.gov. ua/laws/show/481/95-%D0%B2%D1%80)