Investing in Human Capital: IMF and World Bank Spring Meetings

On April 5, the Minister of Finance Sergii Marchenko participated in the Human Capital Project event. Ministerial Conclave 2021 discussed investing in human capital for environmental and sustainable full recovery in the post-pandemic period. The event was held as part of the IMF and World Bank Group Spring Meetings 2021 in an online format.

Participants at the conclave included representatives from 80 countries, partners, donors, private sector representatives, and others who are involved in human capital issues.

"Epidemics, climate change, political conflict, and migration are just some of the challenges the world faces today. In this diversity of challenges, human capital development is a necessity, something we strive for and work for. According to the World Bank's rating, Ukraine's Human Capital Index in 2020 (0.63) was 54th among 175 countries. While this is above average for countries with similar levels of economic development around the world, it is below average for Europe and Central Asia. For Ukrainians to realize their potential to 100%, we need to invest more in education, health, and social protection,"- said Sergii Marchenko.

The main topics of the discussion were:

• Restoring human capital in healthcare, education, solving the problems of jobs. Country representatives talked about investing in fighting inequality and the disproportionate impact of the pandemic on the poor and vulnerable;
• Building sustainable service delivery systems through smart financing as well as improving and modernizing social safety nets;
• How investing in human capital can create comfortable jobs: expanding economic opportunities while ensuring environmental and fiscal sustainability.

The Minister shared Ukraine's experience in dealing with the effects of the COVID-19 pandemic and the development of human capital in the country. The first and foremost issue to ensure economic development in 2020 was to create conditions for successful adaptation of certain sectors of the economy to the significant quarantine restrictions imposed as a result of the COVID-19 pandemic. Mr. Marchenko also spoke about changes in legislation on state support for culture, tourism, and the creative industries, which suffered great losses last year. Another achievement that was voiced is the digitalization of the economy - digital technologies allowed to support economic activities remotely.

"Today the Government of Ukraine is implementing reforms aimed at increasing the productivity and competitiveness of human capital through the creation of modern jobs capable of producing goods and services with high added value. These reforms relate to all key areas contributing to the increase of human capital: education, health, and social protection", - stressed Sergii Marchenko about the actions that continue to be implemented today.

The Minister of Finance also shared Ukraine's experience in reforming education during the pandemic. Our country has implemented measures to support distance learning: broadcasting video lessons on TV and online remote learning platforms. Information campaigns such as "School, we are ready" have been conducted jointly with UNICEF to inform teachers, students, and parents about the guidelines for safe and sustainable learning in a pandemic environment. In addition, together with the World Bank, Ukraine is now preparing a project aimed at supporting learning continuity and operational sustainability in higher education through initiatives to expand digitalization.

"Regarding financing issues, Ukraine has taken measures to protect expenditures on education in 2021 by increasing transfers to local governments; providing further support and social protection for teachers by increasing salaries (subventions from the state budget to local budgets)," the Minister said.

In the end, the Minister talked about the issue of gender equality in Ukraine and spoke about the implementation of gender-oriented budgeting based on the Swedish model.

He added that in 2020 the country became a full member of the Biarritz Partnership to combine efforts for equality of women and men. This has already yielded results in the form of new obligations on parental leave for both mother and father, the implementation of legislation to combat domestic, sexist, or sexual violence.

Investment in human capital remains an urgent issue that requires quick and effective solutions to combat inequality, poverty, and economic empowerment in Ukraine.

Additional information
Ukraine is one of the first countries which introduced the World Bank's human capital development project. Within the framework of COVID-19 Social Safety Nets and Health Project, Ukraine got additional financing from the World Bank - USD 450 million and USD 135 million respectively. The money was used to save lives, build capacity to support the most vulnerable, and save jobs.