As part of the OECD Eastern Europe and South Caucasus Initiative (see box on the next page), a sector competitiveness review was conducted for the Republic of Ukraine to improve sectoral competitiveness and enhance its policy convergence with OECD investment instruments. The Sector Competitiveness Report is part of a wider project following a three-phase approach over five years (2009-14): first, by developing a sector competitiveness strategy (Phase I), secondly, by implementing specific aspects of the recommended policies to address the existing constraints (Phase II), and finally, by putting in place the mechanisms to embed sustainable reform (Phase III). The aim of the first phase of the project, co-financed by the Swedish International Development Agency and the Polish government, is to enhance the country’s productivity level by identifying policy barriers that should be removed to boost the competitiveness of selected economic sectors.