Blue Ribbon Advisory and Analytical Centre

TERMS OF REFERENCE

National Consultant for the provision of the Study and Recommendations for the Government of Ukraine on “Evaluating the Size of Shadow Economy in Ukraine”

1. Background

Shadow economy in Ukraine is considered to be one of largest in the world. According to various estimates, informal sector accounts for 40-60% of GDP. Ukraine’s economy is a very open one – foreign trade accounts for 50-60% of GDP, but there is no (typical for other economies) feedback between export growth and development of production – this is just one of indicators confirming the existence of a considerable informal sector.

While de-shadowing of the economy should unquestionably be the long-term priority for Ukraine and international community, it is nonetheless important to build capacity for assessment of existing informal sector, improve methodologies for such assessments to allow for relevant adjustments to national development forecasts and thus strategies. Not only the share of shadow economy, but also its direct and indirect implications should be analyzed and used for projections of Ukraine’s economic development.

This task requires a thorough analysis on how the patterns and shares of the informal sector develop in Ukraine, and how it responds to various institutional, political, legislative, social and economic factors.

2. Scope of the Task and Expected Output

In light of the above the consultant is requested to prepare a Report entitled “Evaluating the Size of Shadow Economy in Ukraine”. The Report, based on comparative analysis of the dynamics of the informal sector over recent 10 years, should cover the following issues:

2.1. Analysis of Ukraine’s shadow economy components; comparative analysis of methodologies for determination of shadow economy size, and selection of the one most relevant for Ukraine.

2.2. Modernization of the methodology for evaluating the size of the informal sector using GDP energy intensity indicators.

2.3. Evaluation of the size of the shadow part in Ukraine’s economy over 2000-2006.

2.4. Comparison of the results with the calculation made in 1995, comparative analysis of the share of informal sector in Ukraine’s GDP, determination of factors behind changes.

2.5. Clear and detailed conclusions from the comparative analysis of the dynamics of the the share of shadow economy in Ukraine’s GDP.

The purpose and objective of the Report are to show to Ukrainian stakeholders, very clearly and comprehensively, but concisely: (a) that the modernized methodology is more adequate in reflecting the size of the shadow part in Ukraine’s economy: (b) how and for what reasons the share of informal sector in Ukraine’s GDP was changing; (c) which measures were more efficient to move informal business into legal economy.

It is very important to ensure that the Report is not an academic or purely descriptive piece. Its purpose is to make a difference and create firm understanding. Hence, the language, phrasing and overall text of the Report should be insightful, capturing, stimulating its reading and intuitive memorizing of most important points.

The Report should be written in the Ukrainian language (to be subsequently translated into English).

3. Tentative Schedule and Logistics

In delivering the output, the consultant will undertake the following tasks:

3.1. receive briefing in UNDP Country Office in Ukraine and Blue Ribbon Advisory and Analytical Centre (1 day) on expected outputs, and UN and UNDP agenda on private sector and SME development;

3.2. hold meetings with representatives of relevant Government authorities, private companies and associations thereof, donor community and other stakeholders as appropriate (3 days);

3.3. analyze the components of Ukraine’s shadow economy, conduct comparative analysis of methodologies for determination of shadow economy size, and select the one most acceptable for Ukraine (25 days);

3.4. modernize the methodology for evaluating the size of the shadow part in the country’s economy based on GDP energy intensity indicators (15 days);

3.5. using various methods, evaluate the size of the shadow part in Ukraine’s economy over 2000-2005 (15 days);

3.6. compare the results with the calculation made in 1995, determine the reasons of differences/discrepancies, produce detailed comparative analysis of the shadow economy’s share in Ukraine’s GDP (10 days);

3.7. make conclusions from the comparative analysis of the dynamics of the shadow economy’s share in Ukraine’s GDP (10 days);

3.8. Produce draft Report and PowerPoint slideshow, and present them at a meeting at UNDP Country Office in Ukraine (10 days).

3.9. based on comments and suggestions from the meeting, edit/improve the Report and submit final product to UNDP Country Office in Ukraine (5 days).

Note: the number of working days mentioned above is tentative and may be adjusted in the course of the assignment

The work shall start as soon as possible and be completed within six months. The consultant, who should be an experienced expert in economics, will coordinate with Oleksandr Shevtsov, UNDP Senior Program Advisor, from whom the list of tentative references to sources of information and other guidance will be available. Where necessary, UNDP Country Office in Ukraine will facilitate the appointment of meetings needed for preparation of the Report.

4. Minimum qualifications for the candidate:

• Ph.D. in economics with solid record of similar in-depth studies in the area of macroeconomics;

• profound knowledge of Ukraine’s macroeconomic trends

• proven experience of advisory services to senior decision-makers;

• ability to work with a wide cross-section of partners, Governments, NGO’s, communities;

• ability to present independent views and new concepts in a challenging environment;

• knowledge of English is an important asset.

Applications (most recent CVs) in English language with the reference “National Consultant on Evaluation of the Shadow Economy” are to be submitted to e-mail address: yuliya.vydrenko@undp.org

Please mention the minimal salary level expected in your application/CV.

DEADLINE FOR APPLICATIONS IS 8 JUNE 2007

UNDP will use a transparent and competitive screening process, though will only contact those applicants in whom there is further interest. Applications may only be submitted for specific vacancies. We regret that we will not be able to acknowledge all unsolicited general applications for employment.