This is a curated list of the most important economic news for the past week.
Today is the first day of a Ukraine with a relatively free land market. The ban on sales of farmland was lifted today, and all though several restrictions are still in place, technically, land can now be sold and bought. However, the restrictions are specifically aimed at foreigners and companies, which of course means that Scandinavians with agricultural business in Ukraine can not buy.
Only Ukrainian citizens are allowed to buy farmland, and each person can own a maximum of 100 ha. of farmland. In three years, companies will be allowed into the land market, and maybe in the future, foreigners can also buy land. That will have to be decided by a referendum, so it is not in the works yet.
Still, the restrictions might keep land prices low, which would incentivise holding on to the land for the current owners. So far, the vast majority of land owners show no desire to sell, but the law is still monumental, as it is the first step towards a functioning land market that in time is hoped to increase both efficiency and investment in the Ukrainian agriculture.
Other than that, this past week has been slow. The country, the politicians and the international friends and foes are all staying quiet these days. With the temperature hovering around 30 degrees, summer has come and with it the slow news days.
New judicial reform
The long await, much struggled for and against, and essential judicial reform has passed it’s second reading in parliament. Importantly, the second reading gives a lot of space to foreign experts in picking new judges to serve. This has been required by many international partners as well as local institutions.
“We welcome lawmakers’ decision to give independent international experts a crucial role in the selection of the High Qualification Commission,” said Mykhailo Zhernakov, head of legal think-tank DEJURE, according to Kyiv Post “… However, the bill leaves room for manipulation by the corrupt High Council of Justice.”
The judiciary reform in Ukraine is high on President Zelensky’s agenda, but the reform still needs final approval and implementation. Zelensky has previously tried to reform the Ukrainian judiciary back in 2019, but it stranded and never got implemented.
Danish company created own solution during shortage of electric components
Ukraine Nu interviewed CEO of EKTOS Jesper Holst about the lack of electric components which is becoming a worldwide problem. The interview can be found here, where you can see how EKTOS deals with supply problems. Maybe even more notably, Holst also mentions more companies moving out of China:
“People want it as green as possible and that also means reducing transportation. Ukraine is a country close by, with low wages and skilled labor which is interesting for many,” he says, “Ukraine has good chances to benefit from this green wave.”
Holst, however, mentions that a problem for Ukraine is the lack of subcontractors.
“Electronic products consist of many different components and they are often difficult to get in Ukraine. We still have to import much from China,” says Holst, “In China, you can normally get everything that you need within 50 kilometers from the manufacturing centers. In Ukraine, it is not possible for advanced electronics. Ukraine needs to do something about this.”
Scania wins court battle
Swedish truck manufacturer Scania has won a court battle filed against them by an Ukrainian company. The company sued Scania for loss of profit, because Scania terminated a contract between the two companies.
The Ukrainian company, Zhuravlyna, was supposed to service Scania trucks and buy Scania spare parts at a discounted rate from Scania. However, they used cheaper off brand parts, which according to Scania was in violation with the country, which is why they, Scania, terminated the contract.
Open skies agreement with EU
Ukraine and the European Union are both ready to sign an open air agreement. In short, the agreement will make air travel between EU and Ukraine better and cheaper for both private costumers and operators.
“The Council is now ready to sign four important aviation agreements that will improve market access for airlines and enhance connectivity and freedom of movement for citizens. At the same time, they will ensure the highest level of safety and security and provide for a level playing field,” said Pedro Nuno Santos, the President of the Council.
The European Council greenlighted ‘open skies’ agreements with Ukraine, Armenia, and Tunesia and an air transport agreement with Qatar.
China will invest in infrastructure
China will soon sign a deal with Ukraine about investments in infrastructure. It became clear yesterday at a press conference with Chinese Ambassador to Ukraine Fan Xiangong, who said that the relationship between China and Ukraine would need to be strengthened. The two countries, therefore, are looking to do more deals.
It is still unclear in which infrastructure projects and how much the Chinese are willing to invest, but Xiangong promised to reveal more in the coming days. China are already invested in ports and railways in Ukraine.
Apple will open office in Ukraine
The Ukrainian Minister of Digital Transformation Mykhailo Fedorov announced yesterday that Apple will soon open an office in Ukraine. It will make it possible for Apple to better control stores around the country and for the company to import its products directly to Ukraine, says the minister.
“Apple’s presence will strengthen the image of Ukraine on the international market and will help to attract investments in the future,” Fedorov said.
The move by Apple has been expected for some time and has been a poorly kept secret after the company in May started looking for employees. It is still unknown how many people will work at the office and how it will affect local Apple dealers. Still, the move comes after other international companies such as Swedish Ikeas have opened stores in Ukraine.