Economic Overview: No invasion this time

This is a curated list of all the biggest stories on Ukrainian economy this week.

Last week, Russia started pulling back troops from the western parts of Russia. Naturally, this has doused the flames a bit in the conflict between East and West that threatened to rekindle the war between Ukraine, the Russia-backed separatists in Donbas and Russia in Crimea.

While the situation is definitely more calm now, tensions on a political level remain. Russia, for instance, is shutting off more parts of the Black Sea for foreign government ships. In the meantime, they have also resumed the construction of Nord Stream 2 – a gas pipeline very strongly opposed by Kyiv.

YouTube have shut down the channels of the Ukrainian pro-Russian oligarch, Viktor Medvedchuk. In the meantime, president Volodimir Zelensky is trying to have a meeting between him and Vladimir Putin arranged.

Hello, normal life

Naturally, COVID19 has also been a main star of the show in the past week. But for once, finally, the news are better this week than they have been for most parts of this year. Saturday, the lockdown restrictions in Kyiv will be lifted, reopening bars, gyms, restaurants and public transportation for the public again.

A new batch of the AstraZeneca vaccine also landed in Ukraine. In total 367,000 new doses with more to come. In May, Kyiv is expecting the arrival of around one million doses of the Pfizer vaccine.

COVID stole the profit

The state-owned company Naftogaz, which is the largest taxpayer in Ukraine, reported losses of 19 Billion hryvnias, around 680 million dollars, in 2020. The company reported a profit of 2.6 Billion hryvnias, about 94 million dollars, in 2019, and Naftogaz blame the pandemic and the economic crisis with low gas prices for the bad result.

“All key global mining companies recorded losses in 2020. At the same time, Naftogaz’s management responded to the crisis in a timely manner and prevented unprofitable work in the segment it had a direct impact on,” wrote Andriy Kobolyev, CEO of Naftogaz, on Facebook.

Yuriy Vitrenko has since replaced Andriy Kobolyev as CEO. The cabinet of ministers fired Kobolyev after the reported loss.

Anniversary for Chernobyl

This week also marked 35 years since an explosion in Reactor 4 of the Vladimir Ilyich Lenin Nuclear Powerplant in Chernobyl. The accident set off a nuclear disaster of terrible proportions, leaving a large area uninhabitable and forcing Ukraine to clean up the area for the next hundred years.

Thousands of people are believed to have died from the accident. Now, the Ukrainian minister of culture, Oleksandr Tkachenko, wants the area to be put on the UNESCO world heritage list – a list of sites that should be protected as they have interest for not only a single people, but all of mankind.

More land reform criticism

In two months, the moratorium on sales of agricultural land are formally lifted, introducing a market for farm land in Ukraine. However, the legislation supposed to support the law is not yet in place.

This, and poor infrastructure, poses a risk of “negative consequences” for the “Ukrainian statehood,” the director of the Ukrainian Barometer sociological service Viktor Nebozhenko said to Interfax-Ukraine.

“Ukraine needs land reform, but it must be complemented by a judicial reform that would regulate possible conflicts. This is important. There is a risk of banditry with landlessness in the future. For example, there is a farmer who owns fertile land, and tomorrow he is shown documents that the land is no longer his. And with the judicial system that is now in Ukraine, it will end badly,” Nebozhenko said.

JP Morgan predicts growth