Industrialists and entrepreneurs have expressed their support for the draft Export Strategy of Ukraine, which was presented by the Ukrainian Ministry for Economic Development and Trade as a roadmap for the strategic development of foreign trade. As is known, the event took place in Kyiv with the participation of the Ukrainian government, businesses, international financial institutions, and the European Union.
“There has been no export strategy in Ukraine for 25 years. The strategy tells us which direction to go, what needs to be done for this,” Trade Representative of Ukraine Nataliya Mykolska said pending the event.
It must be mentioned that the business community had insisted for several years on the adoption of the export strategy that would outline key mechanisms to support exporters, provide them with loans and insure trade operations. Such proposals are stipulated in the anti-crisis program of joint actions by the government and businesses.
As was stressed by entrepreneurs in the framework of the presentation of the strategy, main problems faced by Ukrainian producers – the replenishment of working capital, including the modernization, liberalization of administration, real tax reform, and other issues – should be resolved immediately. According to them, Ukraine now is the major exporter of not even raw materials, which account for 70% of total exports, but its manpower – specialists. For example, the neighboring Poland alone employs 1 million Ukrainian labor migrants.
President of the Ukrainian Chamber of Commerce and Industry Gennady Chyzhykov, in turn, said that the strategy itself is a positive event. This is an opportunity to use the synergy of the government, the corporate sector, business associations and work together more efficiently to boost exports. “It is important that the focus of the strategy is oriented towards small- and medium-sized businesses. Some 32-35% of such enterprises in the European Union are export-oriented. Our share is a mere 10%,” he said.
The business community noted that not only volumes but also the structure of exports should be changed. Currently, raw materials account for 70% of exports, which means that exports are entirely dependent on fluctuations in the markets. Accordingly, it is necessary to focus on the production and export of value-added products, ensure that this process is conducive to the creation of new jobs in the domestic market and is an incentive to its development.
The Ukrainian League of Industrialists and Entrepreneurs says that the launch of the export and credit agency is a top priority now. The law on the agency was passed last year. There are still questions regarding the insurance of export and import operations.
“It’s important that this strategy is accompanied by a clear and detailed action plan. Also, it is necessary to solve main problems of domestic producers for its successful implementation: access to loans at adequate interest rates, the creation of a favorable climate for investment in the modernization of production, etc.,” President of the Ukrainian League of Industrialists and Entrepreneurs Anatoliy Kinakh has said.
International experts share his opinion. They say that the export strategy is a very positive message to partners and investors from abroad. But the main thing is to put its provisions into practice.
The strategy will involve all government agencies, the customs, entrepreneurs and business associations. The document also outlines priority markets for the country.
The first signs of stabilization of the national economy – 2.3% GDP growth after a long-lasting decline, an increase in budget revenue, etc. – are still insufficient and do not indicate the end of the crisis. Businesses are concerned about a shortage of working capital, expensive loans, the fiscal burden, growing tariffs and a trend towards a lack of specialists in the domestic market. These and other unresolved issues put the brakes on the development of the business environment, inflows of investment, an increase in the solvency of the population. Instead, exports are on the decline, and the economy is still oriented to raw materials. The business community has called on the government and its head, Volodymyr Groysman, to set a course for rapid economic growth and work in this direction together with the corporate sector. This was discussed at the Ukrainian Business Forum with the participation of the prime minister, Cabinet members, lawmakers and most influential associations of the Ukrainian business community.
Participants in the Forum highlighted some positive trends in 2016. This is largely due to the open dialogue between the government and entrepreneurs. Some tasks outlined at the first Ukrainian Business Forum have been fulfilled during that period: the launch of the electronic register of VAT refunds, the partial liberalization of forex regulations, and the adoption of the law on the export and credit agency.
However, these are only some steps that must be maintained as part of the common economic policy. The urgent tasks include the fight against corruption, a reduction in the fiscal burden and excessive regulation of small businesses and direct state controls on economic activities of enterprises. Despite the reforms, GDP per capita almost halved last year compared to 2013 (from $4,000 to $2,200), exports began falling again, and raw materials account for 70% of shipments abroad. Business suffers from a lack of working capital, which is related to drawbacks in the banking policy: banks designated by the National Bank of Ukraine (NBU) as insolvent are unlikely to return deposits to the corporate sector, while interest rates on loans are still high.
“Economic development amid the need for large-scale modernization, upgrading of fixed assets, the introduction of advanced technologies is impossible when there is a lack of financial resources. We therefore propose an immediate meeting of the Cabinet of Ministers of Ukraine with the participation of Parliament, the NBU, to hammer out needed business solutions in the credit and financial sphere. It is necessary to immediately establish a program to let industrialists and entrepreneurs have access to loans, involving such mechanisms as critical import and tax bills,” President of the Ukrainian League of Industrialists and Entrepreneurs Anatoliy Kinakh has said.
Prime Minister Groysman agreed with the proposal and announced joint preparations for such a meeting. “Access to resources is a matter of national competitiveness, and thus it is among priorities to be addressed,” he said.
The prime minister also shares the position of the business community that economic growth need to be accelerated, which requires the adoption of relevant programs and strategies. Groysman expressed confidence that joint efforts will help solve key economic problems.
The participants in the Forum agreed that the implementation of programs for public-private partnership, namely the modernization of the energy and utilities sectors and the upgrading of Ukrzaliznytsia’s rolling stock, should become the focus of the government and businesses. It is necessary to update the export policy along with the creation of a system of financial support for the transition to new European standards as well.
Following the second Ukrainian Business Forum, the participants adopted a declaration, which highlights main problems of the businesses and proposals with their solutions. The document, in addition to the direct dialogue with government officials, will be used by the country’s leaders to organize joint work in the economic field in the future.
KYIV. April 14 (Interfax-Ukraine) – Kharkiv Bearing Plant (HARP), part of UPEC Industrial Group, has resumed deliveries to Lithuania and plans to expand supplies, taking into account the increasing number of dealers in this country, UPEC’s press service has reported.
“The Lithuanian market is very promising for us. Many agricultural machines produced in the Soviet Union are being used there. And many agrarians prefer choosing agricultural machinery manufactured by reliable producers from CIS countries rather than foreign producers,” the press service said citing manager for foreign economic activity Olena Sviachenko.
The UPEC press service told Interfax-Ukraine the last time HARP delivered its products to Lithuania in 2015.
HARP presented a wide range of products at the “Ka pasesi…2017” exhibition held in Lithuania on March 30-April 1, during which the company specialists negotiated with local dealers that are ready to supply the plant’s products to the Baltic market.
According to Sviachenko, currently HARP products in Lithuania are represented by JSC IGNERA, with which a contract for cooperation was signed in March 2017.
KYIV. April 14 (Interfax-Ukraine) – Ukraine’s Cabinet of Ministers has entered into arrangements with U.S. Bitfury Group to create the e-Governance system on a Blockchain platform for Ukraine.
According a posting on the company’s website, the main areas of partnership being explored for the pilot project are using Blockchain in national registers, public services, social security, public health and the energy sector. Once the pilot is complete, the program will expand into all other areas, including cybersecurity.
“Blockchain technology, among other benefits, will help improve the protection of state-managed databases against unauthorized interference, reduce cost to citizens, improve overall efficiency, improve investment in Ukraine, and help reduce corruption across the board,” the company said.
Head of the State Agency for eGovernance of Ukraine Oleksandr Ryzhenko signed the memorandum with Bitfury.
“We understand that there’s no alternative way instead of bringing to public services latest technologies. Blockchain has proved itself as a good ground for cost reduction, government efficiency & transparency to help reduce corruption,” Bitfury Group CEO Valery Vavilov said.
He said that partnership with the Ukrainian government is about making the lives of the Ukrainian people better.
“The Blockchain is a transformational technology that is easy to use, inexpensive, and much more secure than current systems,” he said.
