Among 136 company executives surveyed by the European Business Association, some 45% of companies are ready to continue operating even in the event of a Russian military invasion of Ukraine, another 17% of companies consider the relocation to the western regions, some 10% think of leaving the country in the worst-case scenario, while 7% fear that external aggression may lead to the closure of their business.
“A quarter of the EBA member companies see the situation on eastern borders as a psychological attack through disinformation in the media. Meanwhile, the majority, namely 67%, believe that Ukraine and the international community should stay alert,” the EBA said in a press release on Friday following results of the survey conducted among member companies on January 24 to January 27.
However, some 40% of EBA member companies have their contingency plans, some 40% think of preparing ones, and 15% are currently without any plans. Companies note the difficulties of plan preparation as there are too many potential scenarios to be considered.
Most of the companies with “plan B” formed it with consideration of the following priorities: the first is providing safety for people (employees, their families and customers), the second is the security of assets, documents, data, financial stability, while the third is ensuring the viability of the company and business continuity.
With regard to the safety of people, companies are considering relocation, evacuation, information and support, the association said.
Common plans for the preservation of assets include the physical protection of property and equipment or its relocation to other regions, strengthening information security, withdrawal of funds, and insurance, the EBA said.
Some 58% of companies plan to retain their team, while for 14% this is not even a question, they continue to hire and develop people. Only 14% say they will resort to laying off some employees or sending them on unpaid leave, while 4% think of reducing the salaries, according to the survey data.
“We also asked companies what factors will be most important for their business in the case of an emergency. For most respondents (91%), it is a stable operation of the infrastructure which includes telecommunications, financial, ground-based logistics. Meanwhile, 62% consider it important to have constant communication and enough information from country leaders. For 60%, the most essential is to have a smooth and coordinated work of state agencies and services,” the EBA said.
The association urged the authorities to pay attention to these aspects that can heavily impact business operations at a critical moment.
“Also communicate more with companies because this is what helps to reduce misinformation and tension” the EBA said.
The expenses of the Ministry of Finance of Ukraine under the “payments on value recovery instruments (VRI)” item in December 2021 amounted to UAH 4.635 billion, the State Treasury said in a report on the execution of the state budget on Friday.
According to the National Bank’s average official hryvnia-to-U.S. dollar exchange rate for December, this corresponds to about $170 million, which was probably used to buy out VRI on the market.
The Ministry of Finance did not comment on these December changes in the item of state budget expenditures to Interfax-Ukraine.
In total, over the past year, expenses under this item totaled UAH 5.633 billion, with an updated plan for the year of UAH 6.755 billion, while the original plan was UAH 1.155 billion.
Within its framework, in May, Ukraine, according to the Ministry of Finance, made the first payment on VRI issued as part of the restructuring of Ukraine’s public debt in 2015, which amounted to $40.751 million.
The May report of the State Treasury indicated the amount of expenses UAH 1.123 billion, but a month later it was reduced by 11%, to UAH 997.72 million, probably taking into account the partial buyout of about 11% of VRI by the Ministry of Finance in August 2020.
VRI were issued as part of the restructuring of Ukraine’s public debt in 2015 instead of eurobonds for a nominal amount of about $3.239 billion (20% of the restructuring volume) and are not part of the country’s public debt. Payments under VRI are made annually in cash in U.S. dollars, depending on the growth dynamics of Ukraine’s real GDP in 2019-2038, but after two calendar years, that is, between 2021 and 2040.
If GDP growth for the year is below 3% or real GDP is less than $125.4 billion, then there will be no payments on securities. If the growth of real GDP is from 3% to 4%, the payment on securities will be 15% the value of the GDP growth between 3-4%, and if it is higher than 4%, then 40% of the value of the GDP growth above 4% is paid. In addition, payments are capped at 1% of GDP from 2021 to 2025. The absence of any restrictions on payments after 2025 in the event of rapid GDP growth has been criticized by individual politicians and experts within the country.
Quotations of VRI in December fluctuated within 90.7% -95.3% of the nominal value – one of the lowest levels in the past year. At the same time, as a result of the escalation of the situation around Ukraine and the sale of Ukrainian assets caused by it, the value of VRI decreased in January 2022 and dropped to 66.7% of the nominal value this week. This is the lowest level since the beginning of the summer of 2019, not counting the short dip in value at the beginning of the COVID-19 pandemic. On Thursday, January 27, amid positive news, VRI rose by 9.4% to 73.5% of the nominal value.
Taking into account the quotes in December and the volume of expenditures made, it is possible to roughly estimate the volume of new purchases of VRI at about 5.7% of their total volume.
The growth of Ukraine’s GDP for 2021 is estimated by the National Bank of the country at 3%, which means no payments in 2023.
The Innovative Campus for the training of IT specialists, implemented with the support of the UFuture holding, has opened on the basis of the National Technical University Kharkiv Polytechnic Institute.
According to the press release, under the project, a two-story building of the former university canteen with an area of 2,700 square meters is being renovated. The campus is designed for 300 students.
The first floor of the building includes a training cluster and a conference hall, on the second floor there are club offices and co-working spaces. The work is scheduled to be completed in 2022.
“The new campus should help young people who want to develop and connect their future with Ukraine. The world is changing rapidly, we need more such projects. Regardless of external or internal circumstances, we will continue to create an innovative infrastructure,” the founder of UFuture, Vasyl Khmelnytsky, said.
The construction of the campus is financed, among other things, by investments from UFuture and Kharkiv-based IT company NIX Solutions in the amount of UAH 8 million. Khmelnytsky’s K.FUND also allocated UAH 10 million for the purchase of equipment.
According to the press service of UFuture, the new technology for training IT specialists used on the campus provides for the transition from a declarative to a project-based learning scheme, and received support from the Ministry of Education and Science of Ukraine.
UFuture is a holding company that brings together Khmelnytsky’s business and social projects. It has a diversified portfolio of assets in real estate, infrastructure, industry, renewable energy, pharmaceuticals and IT. The value of UFuture’s assets is estimated at $500 million. The total capitalization of the businesses in which it has invested is up to $1 billion.
First Deputy Prime Minister of Ukraine, Minister of Economy Yulia Svyrydenko and Minister of International Trade, Export Promotion, Small Business and Economic Development of Canada Mary Ng during an online meeting on January 27 announced the launch of negotiations to modernize the Canada-Ukraine Free Trade Agreement (CUFTA).
“Canada and Ukraine will seek to negotiate new obligations in areas, including services, investment, digital trade, labour, and the environment, while advancing an inclusive approach to trade that aims to facilitate new opportunities for small and medium-sized enterprises,” the Ministry of Economy said in a statement.
Vinnytsia city territorial community was the first in Ukraine to proclaim the Green Deal as the basis of urban development and joined the practices of the European Green Deal, which aims to turn Europe into the first climate-neutral continent by 2050.
According to the Vinnytsia city council’s press service, the relevant declaration was signed by Mayor of Vinnytsia Serhiy Morhunov during a city council’s session, attended by high-ranking officials of the government of Ukraine, the Ukrainian parliament and Ambassador of the European Union to Ukraine Matti Maasikas.
Such a step will allow the regional center to engage new mechanisms and innovative ideas to improve urban space, address environmental issues, raise additional investment, including for energy and industrial renewal of enterprises and city life support systems.
Morhunov said the accession of all Ukraine to the Green Deal is at the stage of forming the roadmap. However, Ukrainian cities are already moving in the right direction.
The Green Deal of Vinnytsia is a logical continuation of the long-term plans of the society, fixed both in the Vinnytsia Concept of Integrated Urban Development until 2030, and Strategy 3.0, a plan for the development of communities throughout the region. The priority is the “green” economy, smart specialization, affordable, safe and environmentally friendly environment,” the city mayor said.
He said that Vinnytsia is implementing advanced European experience not for the first time. Thus, in 2015, the city was the first in Eastern Europe to receive the European Energy distinguishing feature and in 2019 confirmed the high status of an energy-efficient regional center. Programs for the efficient consumption of energy resources, the launch of environmentally friendly urban transport, trams and electric buses, are being developed here now.
“We are striving to involve international experts and financial resources for the implementation of green projects that we have in our plans,” Morhunov said.
In turn, Maasikas said that on such a highly urbanized continent as Europe, cities, towns and citizens play a key role in responding to climate change.
Maasikas said he is pleased that the Ukrainian city and people are actively working on the green transformation of society. According to the diplomat, since the announcement in 2019 of the European Green Deal, it has set the direction for transformational change and this is the new growth strategy of the EU. It reflects the idea of transitioning the entire economy to a green economy. He also said that Ukraine shares these hopes.
Ukrainian banks’ cash exchange rates on 28/01/22
Source: Interfax-Ukraine
