10 REDUCING MARKET DISTORTIONS FOR A MORE PROSPEROUS UKRAINE Recognizing the need to increase productivity and facilitate private-sector-led growth, the government has launched important reforms in recent years. These e昀昀orts have focused on three areas: (i) privatization, with the government and the State Property Fund working on a 14 privatization plan; (ii) energy, with recent reforms attempting to open the electricity market to 15 competition; and (iii) digital technology, with the approval of a roadmap to increase productivity by introducing new information and communications technologies (ICT) and leveraging public-private partnerships to invest in broadband internet infrastructure.16 Further reforms will be necessary to build a robust and competitive market economy. Certain sectors and even speci昀椀c SOEs remain protected from restructuring despite operating in markets that can sustain private 昀椀rms. For example, Energoatom, which holds a market share of over 90 percent in the electricity-generation subsector, is just one of many SOEs protected from 17 privatization by a 1999 law. Moreover, many key pro-competition reforms have only been partially implemented. For example, the state-owned oil and gas company Naftogaz is currently unbundling its transmission functions, yet otherwise it remains fully vertically integrated. While the government has undertaken important reforms under very di昀케cult circumstances, Ukraine’s regulatory frame- work continues to restrict competition. Further improvements in competition policy could boost economic growth by promoting allocative e昀케ciency and encouraging private investment. 14 The new Law on the Privatization of State and Communal Property became e昀昀ective in March 2018. The government has indicated that the 21 largest SOEs are scheduled to be privatized during 2018, including SOEs in the energy, chemicals, engi- neering, and agricultural sectors. 15 These measures include the unbundling of electricity transmission and distribution, with the goal of establishing a liber- alized wholesale market by July 2019 and liberalized household electricity prices by December 2018. See: The Law on the Electricity Market (13.04.2017 #2019-VIII) available at http://zakon3.rada.gov.ua/laws/show/2019-19 16 Ministry of Economic Development and Trade, cited by Ukraine Digital News at http://www.uadn.net/2018/01/24/ ukrainian-government-approves-digital-economy-strategy-for-ukraine/ 17 The Law on the List of Objects of State Property Not Subject to Privatization