Ukrainian diplomats, government officials and businesspeople can predict the situation on the domestic and European markets after the full-scale launch of a free trade area between Ukraine and the European Union as of January 1, 2016, but so do representatives of the EU. Their reasons are: they are interested in a strong domestic market in Ukraine with a fair level of public purchasing capacity and a developed economic sector. To achieve this, the country should use all the capabilities it has available, namely to restore its industrial capacity.
This opinion was expressed by Head of the Delegation of the European Union to Ukraine, Ambassador Jan Tombinski at a roundtable meeting in Kyiv and it correlates fully with what Ukrainian industrialists have been insisting on for a long period of time.
“The European Union can provide Ukraine with the necessary infrastructure and modern production facilities. Currently, many Western countries have moved their industrial capacities to Asia, namely China or other regions. The proximity of Ukraine to the EU, its status as an active partner will attract European investors, here is a unique chance for your country,” Tombinski said.
In his words, although Europeans will only think about successful exports to the Ukrainian market after January 1, 2016, it is important that this market should be capable of paying — with a high level of public prosperity. Thus, the country should utilize all its available resources and develop as an economy.
The European Ambassador in fact repeated the view that has long been circulating in the business environment of Ukraine. In particular, the need for the revival of industry and a modern industry-oriented policy has become one of the priorities stipulated in the anti-crisis program of joint actions of the Ukrainian government and businesses, which was prepared by leading business associations, analysts and community activists in Ukraine. In fact, as of today, this is the only comprehensive economic development plan which has already been submitted to the government and will soon be presented to the European community in Brussels.
Restoration of industrial capacity, manufacturing value-added, high-technology products will guarantee the competitiveness of the economy and exports, according to Ukrainian industrialists. To achieve this, Ukraine should pursue a modern industry-oriented policy, in particular through appropriate government-supported programs. This applies primarily to engineering and car building and the defense industry. Such actions will activate the related industries, which will be able to create jobs for hundreds of thousands of Ukrainians.
“We have got what to offer to the world, of course, provided there is a reasonable state approach to the restoration and development of the industrial sector, support of domestic producers, creation of conditions for long-cycle production,” they underline.
As of now, Ukraine has experienced a 15% decline in production. The development of the industry is hindered by the lack of incentives for the production of goods, and there is a need for better access to loans, as the Central Bank’s current refinancing rate is 22%.
