This is a curated list of all the biggest stories on Ukrainian economy this week.
The past week has yet again been heavily dominated by stories about COVID19. In the past week, three major Ukrainian cities – Lviv, Odesa and Kyiv – have entered a full lockdown again, with Kyiv thinking about shutting down public transportation entirely.
As of today, Thursday, the highest number of cases have been registered in the past 24 hours since the virus came to Ukraine. Almost 16,700 people have been tested positive for the virus.
The government now also requires everyone to wear a mask at all times while in public places if you are in a red zone. This includes being outdoors, meaning that as soon as you leave the apartment or hotel in either Lviv, Kyiv, Odesa, Zakarpattia, Ivano-Frankivsk, , Sumy and Chernivtsi you have to wear a mask.
To stop the spread of the virus, the Ukrainian government has also applied new rules for travelers. Anyone who wants to enter Ukraine needs to show a negative PCR-test not older than 48 hours, no matter where they come from.
Previously, travelers from countries on the government’s green list did not need to show a negative test, but that rule now applies to all travelers. There are only a few exceptions, such as for kids under 12 years old and airline crew.
Professor Olha Golubovska, Head of the Infectious Diseases Department at Bogomolets National Medical University, has said that the government needs to act.
“I believe it needs to be introduced across the country. Because if we do not have it throughout the country, it means the regions that are now calm will break out later. The same was with measles. Luhansk and Donetsk regions were the last to break out,” she said in an interview.
Danish companies are prepared
Two Danish companies in Ukraine are ready for the lockdown and come prepared. In an interview with Ukraine Nu, representatives from Danfoss and Guldman both told, that they were anticipating it.
“Since Guldmann-Ukraine is a production company, we remained operational during lock-downs in back in March-May, 2020 and now. We achieve this by implementing safety measures, such as masks, disinfectants, and temperature control, provision of transportation for company employees to/from work, vitamins provision, and offering free flu vaccination. However, the most important in my view – constant encouragement of employees to remain home with the slightest COVID symptoms,” says Taras Yurynts, Managing Director for Guldmann, which is a company working with development, manufacture, and sales of welfare technology in Ukraine.
It is a similar situation in Danfoss, says Andriy Berestyan, Managing Director for Danfoss in Ukraine. Danfoss will also rely on safety measures.
“We are already adopted to lockdowns. Definitely, it affects some businesses, especially wholesalers, which are selling vis outlet shops. It is closed in lockdown, and of course, it affects the business. As Danfoss, we, of course, follow legal UA regulations, at the same time, use corporate regulations. It is mainly related to the number of people present in the office, distance, customer visits, etc.,” he says, “If customers accept visits, we are visiting customers, as most of them are tired from online communication. At the same time, we have a recommendation to avoid F2F visits in red zones if there is no critical need.”
New chamber of commerce
A new Danish chamber of commerce is on its way. The chamber of commerce is going to be headed by Antonina Leth Møller, a native Ukrainian living in the Danish capital Copenhagen, a press release from the Chamber of Commerce states.
Her job will be aiding Ukrainian and Danish companies in identifying partners, analysing markets and work out export strategies in addition to helping with the paperwork connected to establishing and registering a company, paying tax etc.
DCFTA, the free trade agreement between the European Union and Ukraine, that initially was a corner stone in the Revolution of Dignity, came into force in 2017. Since then, Ukrainian goods have had an easier way into the EU.
Meanwhile, the recent pandemic has made it a priority for several companies to pull back their production from countries in Asia and place them closer to home, in countries like Ukraine, where labour is cheap and distance is small.
“Ukraine and Denmark has a lot to offer each other as export markets, as production partners, as a basis for recruiting and as sharers of knowledge. Only the sky is the limit,” Leth Møller says.
Ericsson to help internet in Ukraine
It has been almost a year since Ericsson agreed to advise the Ukrainian Ministry of Digital Transformation on fixing and implementing the 4G and 5G networks across the country. Yaroslav Nitsak, Vice President and Country Manager in Ukraine for Ericsson, says to Ukrainenu that Ericsson is happy to help.
“We at Ericsson Ukraine are committed to providing consultative support to the government with regards to spectrum strategy, licensing policy, and roadmap for future network development based on a global experience,” says Nitsak.
Previously, Ukrainenu has written about the internet speed in Ukraine, which is getting better every year. According to Cable.co.uk, Ukraine is number 82 out of 208 countries worldwide when it comes to having the best internet. The Ukrainian government has previously estimated that 70 percent of the population has access to the internet; however, it is often a slow connection – which is not acceptable, according to the government.
Ukraine wants to develop the agricultural sector
Ukraine remains one of the world’s largest exporters of agricultural products. Despite droughts and floods last year, Ukraine still managed to export more than 25 million tons of grain in 2020 and became increasingly important for food security. The Ukrainian Prime Minister Denis Shmyhal says that the Ukrainian government will do everything to help the sector grow even more in the years to come.
“Our priority remains the development of the agricultural sector. This means opening and liberalizing the land market, improving land-reclamation infrastructure, and improving the quality and safety of food. Ukraine must become one of the centers of food security for the world, and we call on investing in this,” Shmyhal said at the fourth Ukrainian-German Economic Forum.
A corner stone in this process is lifting the moratorium on sales of agricultural land, a reform that is in effect from the first of July this year. However, not everyone are so certain that the government will pass the needed legislation in time.
It is unclear what the procedure for the assessment and sale of land is, the Verkhovna Rada Committee on Agricultural and Land Policy, Serhiy Labazyuk, said in a statement on the website of the For The Future Party.
“The next six months after the opening of the market, the Rada and the Cabinet of Ministers will be obliged to urgently finalize the legislation and pass the bills that we recommended last year. So, a full-fledged launch of the land market is possible only in this format. Based on my projections, this won’t happen before 2022,” he added.
New anti-corruption unit
SBU, the central intelligence service, is being stripped of some responsibilities and other major institutional changes are on the way in the world of tax and finances. A new bureau in the sphere of anti corruption is closer to seeing the light of day.
The Bureau of Economic Security wil be a new unit doing analytical work, analysing financial transactions looking for violations of the law.The new unit will not be doing actual law enforcement, but is strictly a measure of detection.
BEB is taking the powers of SBU and the State Tax Police and will be put under the command of the Cabinet of Ministers. At the same time, the State Tax Police is being shut down and liquidated over the next four to five months.
Merkel sees potential
The German Chancellor, Angela Merkel, spoke on a German-Ukrainian business conference, where she said that the potential in Ukraine is big.
“Ukraine is an important trading partner, and it is also a place into which you should channel your investments. We appreciate it. Two thousand German companies and their representative offices actively work in Ukraine now,” said Merkel.
“Ukraine has highly qualified personnel in the industrial sphere, primarily in mechanical engineering and aircraft construction, as well as in the agricultural sector. IT also plays an increasing role.”
Putin bans Ukrainian land ownership in Crimea
According to several Ukrainian news outlets, Russia has decided to ban that foreigners can own land in Crimea. They refer to a decree signed by Russian president Vladimir Putin, prohibiting foreign ownership in 19 out of 25 regions in Crimea.
Zelensky: Ukraine can become a member of EU
The Ukrainian President Volodymyr Zelensky has said many times that Ukraine needs to become a member of the EU at some point. Due to the war in Donbas and the Russian annexation of Crimea, some have called EU-membership an illusion, but according to Zelensky, Ukrainian membership in the EU is not just a distant dream.
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Nationwide quarantine might come soon
A nationwide quarantine might be imposed soon. That is according to the Secretary of the National Security and Defense Council, Oleksiy Danilov, who according to Ukrainian Business News spoke to BBC Ukraine about it.
“The Council will soon hold a meeting regarding the epidemic. However, it is not known whether the introduction of a lockdown will be considered. So far, all decisions remain to be made by the regions. When we completely close the regions, this is already an exceptional case. If the development of events does not follow the optimistic scenario, then I do not rule out that the whole country may be closed,” the NSDC chief said.
National Bank officials risk charges
A leading member, Kateryna Rozhkova, of the National Bank of Ukraine have a criminal case mounting against her, along several staff members working on the 2016 nationalization of Privatbank. They have yet to be charged.
They are facing potential charges of treason and embezzlement, Kyiv Post writes. According to Kyiv Post, it happens because the NBU shared information with international companies hired to help with the process.
Failure to get IMF money increases inflation
The hryvnia might be severely weakened, if Ukraine fails to secure financial aid from the International Monetary Fund, IMF, Ukraine Business News writes from the statement of the Deputy Chief of NBU, Dmitry Sologub.
“Refusal to cooperate with the IMF will most likely lead to an increase in debt service costs, a reduction in the inflow of foreign investment, and pressure on the foreign exchange reserves of the National Bank,” Sologub said.
“The government should reduce the budget deficit, thus the hryvnia exchange rate will weaken in order to neutralize the negative impact on the balance of payments, respectively, inflation will accelerate,” said Shologub.
