This is a curated list of the biggest economic news in Ukraine for the past week.
The past week was a normal one in Kyiv. But that was shattered yesterday with an assassination attempt on the top aide of President Volodymyr Zelensky, Serhiy Shefir. Around 18 bullets were fired. 12 of them hit the car of Shefir and three bullets godt lodged in his driver, who is likely to survive his injuries. Still, the attack sent shock waves through the Kyiv elite.
President Zelensky rushed home from New York, where he was speaking in front of the United Nations General Assembly, and some quickly linked the attack to the memory of the oligarch wars, that previously plagued the country. Still, even the president does not know who did it. In a video recorded speech he distributed on Telegram, he said that the shooters might be external or internal, meaning either oligarchs or Russians were behind the attempt.
Yesterday or today, the Ukrainian parliament was supposed to vote for a new law on de-oligarchisation, which by many has been attributed as the reason behind the shooting. The president still promised that “the course of the President’s Office on the de-shadowing and de-oligarchisation of Ukraine will not change, and no insidious actions will affect it.”
In the sphere of anti-corruption, Ukraine is set to liquidate and close an infamous bureau known for wide spread corruption. The so-called State Architectural and Building Inspectorate, who are responsible for granting and denying building permits, has been shut down and all employees – almost 200 – have been fired.
The grey market of issuing building permits was around 3.7 million USD in January 2020 according to the previous Prime Minister, Oleksiy Honcharuk. There are strong allegations against the bureau, who are accused of issuing permits to the people, who paid them under the table instead of considering city planning concerns.
If the government will be successful in establishing a new, transparent and productive system for issuing building permits, this will be very good for businesses who are looking to expand but not willing to bribe their way through the system. One of these businesses is the Danish pig producer, Goodvalley.
Since the times of Viktor Yanukovich, they have been struggling with acquiring building permits. According to Tom Axelgaard, the man behind the Goodvalley brand, money had to be sent to the administration in Kyiv, before the process of issuing would be started, he told Ukraine Nu in a 2020 interview (in Danish).
The banks are better
After a stress test by the National Bank of Ukraine, they concluded that the Ukrainian banking sector is more resilient, and the banks are improving.
“The banking sector is now quite resilient and ready for the planned increase in capital requirements, despite the impact of last year’s crisis,” the National Bank of Ukraine wrote.
“However, a number of banks need to take steps to strengthen their resilience to possible crises in the future,” wrote the National Bank, “Although the number of banks for which the results of stress testing revealed risks to capital has not changed significantly compared to 2019, the estimated need for capital has decreased significantly.”
The National Bank of Ukraine concluded that 20 out of the 30 banks had some capital risks that need to be sorted, but many of them are minor problems. The bank wrote that problems often come from such things as high cost and short term financing, high administrative costs, and an unsatisfactory financial condition of some large borrowers.
New routes and a recommendation
Travel is slowly becoming a part of everyday life again. Ryanair СEO, Michael O’Leary, recently said that Ryanair could operate flights from 12 airports in Ukraine and that he sees enormous potential in the country.
“The one market I would point to is Ukraine… I would think we will be a major investor in Ukraine when they join up to European Open Skies,” said O’Leary at an investor call following the company’s annual general meeting in Dublin on Sept 16.
To all the people that Ryanair expects to fly to Ukraine, Ukraine Nu last Friday wrote a recommendation: Go visit Chernobyl before it is too late! Wildfires and lack of maintenance is becoming an increasingly large problem in the area. It has been 35 years since the accident and the whole Chernobyl area is slowly falling more and more apart. Especially the old buildings are becoming more and more decrepit, so unless this is fixed, now would be a good time to go see the Chernobyl Exclusion Zone.
In the article there is a thorough guide to getting the most out of the visit, a historical reminder for those people who needs it and ideas for further resources to look into, if the Chernobyl Accident is interesting for you.
Of course: COVID
It wouldn’t be a normal week of news in Ukraine, if we didn’t include the current pandemic. This week, especially two news stories stuck out. Still, the tendency of rising numbers of new registered daily cases is only going one way, but there are positive news to be found as well in the pandemic.
The companies in Ukraine are recovering. That is the conclusion from a new survey done by the American Chamber of Commerce in Ukraine with Citi Ukraine. The survey asked 100 CEOs and managers about the current state of their company, and 62 percent said they are set to meet their planned financial results, and 28 percent are set to achieve more.
In contrast, only ten percent of the company’s are having financial problems, the survey found. Moreover, at the end of 2021, 65 percent said they expect an increase in revenue compared to last year. In other words, the companies are recovering after Covid-19.
While the pandemic is rising up again in Ukraine, and while the business outlook is promising, what is worrying is the state of vaccination. According to the Chief State Sanitary Doctor in Ukraine, Igor Kuzin, 98 percent of the hospitalized patients in Ukraine are not vaccinated. Still, there are no signs of vaccine scepticism to dwindle.
New tech park
A new industrial park is set to open in the Ukrainian capital, Kyiv. The National University Kyiv-Mohyla Academy has gotten together with the Bureau of Investment Programs, BIP, to build a technology park for 50 million UAH in the city.
“According to our preliminary estimates, about UAH 50 million of investment is required to restore the building and infrastructure for a modern technology park. After restoration, the territory can accommodate about 40 resident companies and coworking spaces for students,” Director of BIP Oleksandr Bondarenko said in a press release.
“Next steps are project evaluation, concept development, and search for investors,” said the National University Kyiv-Mohyla Academy in the press release.
The project aims to earn money for the university while also facilitating the creation of IT products, employ students and create a scientific base for entrepreneurship. The park will be located at 2/4, Glazunov Street, and will be around 1,700 square meters.
The National Security and Defense Council on Sept. 17 decided to impose sanctions on 86 Russians, who Ukraine claim has been involved in having the Russian parliamentary elections in Crimea and the Donbas.
Kyiv Post wrote that the list included “33 State Duma (Russian parliament) candidates and 53 Russian territorial electoral commission members.” The list may be expanded later on, said Oleksiy Danilov, the Security Council Secretary in Ukraine.
Less debt, more money for the digitalization
In October, the Ukrainian parliament will vote for the new state budget, where the aim is to decrease the deficit and increase spending on the effort to digitalize Ukraine. Revenue next year is expected to grow by $6 billion to $47 billion, while expenditures will increase by $3.8 billion to $55 billion. As a result, it will reduce the government’s budget deficit to 3.5 percent from the current 5.5 percent during 2022.