This is a curated list of the biggest economic news in Ukraine for the past week.
This week has been all about COVID 19 again. Cases are spiking with almost 6000 registered cases this morning and in the 24 previous hours. A new lockdown is in all likelihood coming, and there is still abundant vaccine scepticism. Before we go there, we will look at another problem that, like the pandemic, is a worldwide headache for many people.
It doesn’t matter what you do – if you are producing physical products to sell, you are dependent on deliveries. We interviewed the CEO of ICT A/S, Leif Pedersen, about the current situation on the world market of transport and logistics. He gives his insights into a world of overbooked ports, shortage of containers, drivers and equipment and when this is going to end (Not soon).
“There has not been a single thing, that has become easier over the past year. There are some smart people who says that it will be better in 2022, but I say “forget it.” The only thing that can solve this is if the international trade will dwindle, but GDP is showing the complete opposite is happening. It is a critical situation,” says Pedersen.
“The situation right now is, that 14 days ago, 370 something ships were laying outside ports all over the world not able to get into the ports, because they are overbooked. Right now, some ports are at 95 percent of capacity, making it a problem to get goods in and out of the ports,” says Pedersen.
The problem is worst in Asia, but according to Pedersen, the problem is the same all over the world and with the world being so interconnected as it is, problems in the supply lines in China translates into problems in supply lines in Ukraine. Definitely a story worth keeping an eye on.
Dreams of cold olympics
While we wait for the container crisis to be solved, President Zelensky has voiced his dreams of Ukraine hosting the Winter Olympics.
“The new motto of the Olympic Games is “Faster, Higher, Stronger – Together.” We believe that together we will achieve that our dream comes true. The big dream is the Olympic Games in Ukraine. And I really believe in it. I am sure that our great state deserves to host the Olympic Games,” Zelensky said, according to the Presidential office.
Zelensky said that a lot of things would need to change for that to happen. Obviously, Ukraine would need a better economy and better stadiums and infrastructure, but Zelensky also said that Ukraine would need to improve athletes’ facilities. He pointed out that many athletes are leaving Ukraine due to the “state’s negligent attitude towards athletes.”
“… We have started to renovate and build the sports infrastructure. First of all, for children. This is very important because love for sports should be nurtured since childhood,” the head of state said and revealed more details about his plan.
How realistic this dream is, is hard to tell. Ukraine have previously hosted the UEFA Euro 2012, but that was a football event and it was done together with neighbouring Poland.
One dream sent flying, one put down
While Zelensky did air one new dream of Ukrainian Winter Olympics, at the same time another one of his dreams were shot down – at least temporarily – as judges obstructed his long awaited judiciary reform.
The Council of Judges were supposed to pick three representatives for the Ethics Council, who will be in charge of suspending High Council of Judges members. It is one of two central tools in the judiciary reforms to clean up the judiciary, which in Ukraine has been linked to corruption in several cases.
“I will not allow sabotage of Ukraine’s main reform, which I promised to the Ukrainians and initiated,” he said. “Each unlawful action aimed at blocking judicial reform will be met with an immediate assessment and response. I will not allow judges who thwart reform and the cleansing of the judiciary to deprive the Ukrainians of the right to justice,” said Zelensky following the vote.
In the world of banks, something has also been happening in Ukraine. First and foremost, the National Bank of Ukraine has raised the key interest rate to 8.5 percent in an attempt to slow down inflation which is twice as high as the target rate.
Raising the key interest rate will make loans by banks more expensive, encouraging consumers to save money instead of consuming, which in turn will help slow down the inflation rate.
Inflation has been made a global product by the COVID-19 pandemic. In Ukraine it is expected to slow down in the end of the year, but the cold seasons might still prove hard for many Ukrainians, as the prices on electricity and gas has risen dramatically.
IMF is coming
Another money lender, the International Money Fund, is expected to start work on the revisition of the Stand-By Arrangements with Ukraine, said the Ukrainian fund representative, Vladyslav Rashkovan,
“The mission could start work in 10-12 days,” he said at a conference in Kyiv on Saturday.
The work will be done remotely, but there is still a chance that the chief of the mission, Ivanna Vladkova Hollar, will arrive in Kyiv. This is dependent on the developments in regards to COVID-19.
No news without the virus
There is no way getting around a full week of news without mentioning COVID19. The Ukrainian Cabinet of Ministers has tried giving special treatment in the all too well-known world of restrictions that is on its way. In yellow zones, people who have received the first jab will be exempt from restrictions, while people with both doses will be exempt from restrictions in the red zones.
More than 56 percent of all Ukrainians are still not willing to let themselves vaccinate, according to a recent poll from the Ilko Kucheriv Democratic Initiatives Foundation, the Kyiv Post reported. Most Ukrainians are against vaccination because “vaccines are not sufficiently tested.”
A new route and a few suggestions
Looking for something to do in Kyiv? Soon, you can go on a river boat trip down the Dnepr river from Kyiv to Karniv. The State Agency for Tourism Development of Ukraine plan on launching a test run of the Kyiv-Kaniv river route along the Dnepr.
“According to the plan, it will be September 19. We will interview people: how much they are ready to pay for it, how comfortable they are. We recruited very different people in focus groups: both young people and those who work in large companies. This is the first stage to make detailed calculations and make a state program for the resumption of river transport,” she said during a conversation with reporters on Friday.
While you wait for that, the article has other recommendations for stuff to do in Kyiv as well.
The Ukrainian government has approved a draft for the 2022 budget, UBN reports. In it, there is a deficit of 3.5 deficit. GDP is down 5.5 percent compared to last year, and growth is expected at 3.8 percent. Inflation is expected to go down to around 6.2 percent.