RESOLUTION OF THE CABINET OF MINISTERS OF UKRAINE

of July 28, 2003 No. 1174

About approval of the State program of development of the industry for 2003-2011

In pursuance of Article 2 of the Presidential decree of Ukraine of February 12, 2003 N 102 "About the Concept of the state industrial policy" the Cabinet of Ministers of Ukraine decides:

1. Approve the State program of development of the industry for 2003-2011 (further - the Program).

2. To the ministries, other central executive bodies - executives in charge of actions for program implementation to submit annually till January 20 to the Ministry of industrial policy information on the course of their implementation.

3. To the ministry of industrial policy:

in coordination with the Ministry of Economy and European Integration, other interested central executive bodies to submit in case of need annually till December 15 of the Cabinet of Ministers of Ukraine offers concerning modification of the Program and actions for its realization;

establish control of implementation of the specified actions and annually till February 20 to inform the Cabinet of Ministers of Ukraine on the state of affairs.

4. Declare invalid the resolution of the Cabinet of Ministers of Ukraine of February 29, 1996 N 272 "About the Concept of the state industrial policy of Ukraine".

Approved by the resolution of the Cabinet of Ministers of Ukraine of July 28, 2003 No. 1174

The state program of development of the industry for 2003-2011

I. General provisions

This Program is based on the Concept of the state industrial policy approved by the Presidential decree of Ukraine of February 12, 2003 N 102, President's letters of Ukraine to the Verkhovna Rada of Ukraine "The European choice. Conceptual bases of strategy of economic and social development of Ukraine for 2002-2011", "About domestic and external situation of Ukraine in 2002" and the Program of activities of the Cabinet of Ministers of Ukraine.

The program is directed to creation of the competitive industrial complex capable in the conditions of integration and globalization to solve the main tasks of social and economic development and approval of Ukraine as high-tech state.

Acceleration of development of the industry is provided to be performed by system attraction of modern organizational, intellectual, material, information, personnel and other resources.

In Ukraine there are 47, one thousand industrial enterprises, from them 37,6 of one thousand small. 18,8 of percent of all occupied population works at the companies and it is made products and services for more than 70 subindustries of the industry.

Industrial production of the country provides more than third of total amount of gross domestic product, nearly 50 percent of goods and services, and also 80 percent of export products.

Industrial enterprises are the basic backbone elements of many other vital spheres of the state, in particular such: in economic - basis of formation of cost; byudzhetnoyistochnik of filling; territorial - gradoobrazovatel; scientific and educational - development engines, consumers and sources of knowledge; social - places of realization of human opportunities and providing with subsistence; tax - sources of receipts; in financial - animators of money.

The powerful contribution of industrial complex to economy which promotes gradual approach of quality of life in Ukraine to the level of technology developed countries determines its leading role and the place in ensuring the major strategic interests of the state.

Positive dynamics of development of the industry occurs from the middle of 1999. For 2000-2002 the production volume grew by percent 38,4, the labor productivity raised on percent 54,8. Investment appeal of the industry improved. If in total amount of investments into fixed capital in 1990 the share of the industry constituted percent 34,5, in 1995 - 38, that in 2002 increased to percent 40,6.

Economic transformations, creation of market bases of functioning and development, change of patterns of ownership of the companies and their restructuring (more than 80 percent of the companies of non-state pattern of ownership) significantly extended possibilities of development of industrial complex.

However the undertaken reforms did not change technology ukladnost of the industry.

In the industry the third and fourth technology ways dominate, their share in industrial production constitutes 95 percent. The basis of these ways is constituted by metallurgical, chemical, light industry, fuel and energy complex, the majority of industries of mechanical engineering. The share of the fifth and sixth technology ways does not exceed 5 percent. Basis of these ways is the electronic industry, computer, fiber-optical facilities, the software, telecommunications, robotics, information services, biotechnologies.

In industrial complex there are problems which are caused by the following factors: imperfection of structure of the industry, low level of conversion and high resursozatratnost of production, conservative technology way and as a result - limited solvency of subjects of the domestic market, insufficient capacity of financial credit system, the big general tax load and imperfect normative legal support.

The share of export of industrial output in gross domestic product constitutes about 40 percent, however its structure is unsatisfactory because of dominance of raw component which exceeds 60 percent. Products of high-tech and knowledge-intensive industries in total amount of export constitute only 15 percent.

The amount of the attracted foreign investments for the beginning of 2002 made only 2, 1 billion US dollars. On one inhabitant in Ukraine he does not exceed 100 dollars that is 15-25 times less, than in developed countries.

The technical regulatory policy is performed on the basis of national standards which are insufficiently harmonized with world.

Participation of the industry in processes globalization is meanwhile minimum: practically there are no domestic multinational companies which would work at the global markets, small part in Ukraine of affiliated enterprises of global manufacturers, the low level of the international cooperation backgrounds.

However the scientific and technical, potential and resource production of the industry gives opportunity to implement range of benefits of the international economic cooperation, in particular participation of domestic enterprises in implementation of large-scale international projects, development of transfer of high technologies and the sale of licenses, creation of joint businesses on production belonging to the fifth and sixth technology ways and multinational corporations, and also participation of our specialists in work of the international organizations concerning industry development.

The entry of Ukraine into the ILO which will accelerate adaptation of the industry to competition conditions in the world markets is especially important for development of integration processes.

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