Rostyslav Shurma, Deputy Head of the Office of the President of Ukraine, speaking at the Rebuild Ukraine conference in Toronto, Canada, spoke about the conditions for the recovery of the Ukrainian economy.
“We believe that Ukraine’s economy should recover primarily at the expense of private business. However, due to military risks, any projects will be difficult for private investors to implement. That is why they should be built on the basis of public-private partnerships,” Shurma explained, the press service of the President’s Office told Interfax-Ukraine.
According to him, today there is a positive example of Germany and France, which have provided state insurance for all their corporations that have invested in Ukraine.
“We believe that this type of partnership will allow us to achieve two key goals. On the one hand, you will be able to get a return on your investment because Ukraine has many natural advantages. On the other hand, your governments will mitigate the risks arising from the war,” he said.
According to Mr. Shurma, there are two opportunities for Canadian investors to make money in Ukraine right now. The first is related to the country’s and economy’s recovery. The second is that Ukraine has natural advantages.
As an example, Shurma cited the experience of Westinghouse, which supplies nuclear fuel to Ukrainian NPPs. “We are converting one reactor after another to Westinghouse fuel. And we are determined to purchase one hundred percent of the fuel only from them,” he said.
Another possible area for investment, he said, is the Ukrainian agricultural sector, which is a huge consumer of fertilizers, crop protection products, seeds and agricultural machinery, and therefore a market for Canadian producers.
“We will be interested not only in supplying these products, but also in localizing their production in Ukraine,” Shurma said.
According to him, any agricultural product produced in Ukraine will have advantages in the international market. “Chicken produced in Ukraine is one of the cheapest in the world. This is due to the natural resources of our country,” he emphasized.
Ukraine also has significant natural gas reserves, he noted. The country has a huge potential for solar, wind and hydrogen production. It has the largest lithium and uranium reserves in Europe.
“We are ready to work together with Canadian investors to develop these resources. We can use such tools as export credit agencies and guarantees from the Canadian government for this purpose,” says Shurma. In his opinion, real investment can only come in something that will be commercially successful. “The Ukrainian people really appreciate Canada’s assistance. That is why we are looking forward to you investing in our country,” said the deputy head of the Office of the President of Ukraine.
Number of dead and wounded civilians in Ukraine from 24.02.2022 till 28.08.2023 un data
Source: Open4Business.com.ua and experts.news
The European Parliament has agreed to open an office in Kyiv at the request of Ukrainian President Volodymyr Zelenskyy.
According to the European publication Euractiv, this is stated in a document of the European Parliament’s bureau.
The decision, approved on Monday evening, is intended to facilitate relations with the Ukrainian parliament, in particular, to establish its contacts with the “relevant committees” of the European Parliament, as well as to facilitate administrative work.
The Bureau is the body of the European Parliament responsible for making administrative decisions on the internal functioning of the institution.
Reportedly, the European Parliament has a liaison office for each member state, which helps the parliament to establish links with them, for example, by communicating with stakeholders, organizing events and maintaining links with local media.
Group DF, which consolidates the assets of Ukrainian businessman Dmitry Firtash, including nitrogen chemicals companies of Ostchem holding, has signed a memorandum with Korean construction company Hyundai Engineering Co., Ltd on cooperation in Ukrainian projects in the construction and reconstruction of chemical plants for the production of fertilizers.
According to the holding’s release, cited by Interfax-Ukraine, the document provides for the creation of joint investment projects in the fertilizer industry both in Ukraine and in other jurisdictions. It is about the construction of new and reconstruction of existing chemical plants of Group DF. It is emphasized that the parties will cooperate in good faith and make all necessary efforts to achieve the common goal of rebuilding Ukraine.
“Group DF is developing a strategy to restore the chemical industry in post-war Ukraine and plans to meet the pent-up demand from the Ukrainian agricultural sector. With the support and cooperation of Hyundai Engineering Co, we will contribute to the revival of Ukraine’s economy and strengthen the chemical industry. The Group is also considering all kinds of cooperation with Hyundai Engineering Co. in projects to restore and expand its logistics infrastructure,” said Robert Shetler-Jones, CEO of Group DF International GmbH.
“The company is ready to consider options for participating in the post-war recovery of Ukraine’s chemical industry. We sincerely believe in the prospects of infrastructure restoration, reconstruction and construction of gas processing plants,” said Lim Seung Jae, Senior Vice President of Hyundai Engineering Co., Ltd.
Hyundai Engineering Co, Ltd is a Korean multinational contractor for the engineering, procurement and construction of oil and gas processing plants, including fertilizer and chemical plants.
Group DF consolidates Dmitry Firtash’s assets in the gas distribution, chemical, titanium and port industries, as well as in agriculture and media.
Ostchem is Group DF’s nitrogen holding company that unites the largest mineral fertilizer producers in Ukraine. It includes Rivne Azot, Cherkasy Azot, as well as Sievierodonetsk Azot and Stirol, which are not operating and are located in the occupied territories.
This year, the largest investment forum FIT for Ukraine: Annual Meeting.
The goal of the forum is to attract private investment to rebuild Ukraine.
Everyone who wants to invest in Ukraine and take part in its reconstruction received the most up-to-date analytical data on investment incentives, regulatory changes, practical aspects of project implementation, and discussed the most important issues facing investors in Ukraine.
On the agenda
Private sector financing for the transformation of the Ukrainian economy
Restoration of Ukrainian regions and industry with the participation of the private sector: government support and incentives
Successful cases, investment plans for 2024
The event was held as part of ReBuild Ukraine, the largest exhibition for the reconstruction of Ukraine.
FIT for Ukraine is a series of investment forums for businesses interested in rebuilding Ukraine. In 2023, more than 7,000 people from 65 countries attended FIT for Ukraine events.
Key messages of the speakers
– the war is not an obstacle to investment activity in Ukraine, on the contrary, those businesses that start planning their projects now will be among the first to start implementing them after the victory – David Arakhamia – Member of Parliament of Ukraine (faction leader); Chairman of the Supervisory Board of UkraineInvest
– Italy wants to see Ukraine become an EU member as soon as possible, and in 2025 it wants to host the Ukraine Recovery Conference – David La Cecilia – Special Envoy for Ukraine’s recovery; Ambassador Extraordinary and Plenipotentiary of Italy to Ukraine 2016-2021
– Norway plans to provide long-term support for Ukraine’s recovery and reforms. Recently, the Government of Norway made a grant contribution to the World Bank’s Ukraine Recovery, Rehabilitation and Transformation Trust Fund (URTF) in the amount of $190 million to support Ukraine’s capacity to rebuild and reform. Christian Søse – Special Representative for Ukraine, Ministry of Foreign Affairs of Norway, to support the Government of Ukraine’s capacity to deliver services, including investments in repairing damaged infrastructure
– The EBRD cannot finance the state budget, but we can and should support the real economy of Ukraine. Since the beginning of the full-scale Russian aggression, together with international donors, we have created a program that envisages investments of three billion euros in Ukraine this year and next year – Matteo Patrone, EBRD Director for Eastern Europe and the Caucasus
– The U.S. Corporation for International Development (DFC) is helping the government of Ukraine attract public and private investment to rebuild the country. To provide support, DFC uses several instruments at once: direct lending, risk coverage, and war risk coverage. Currently, DFC is interested in financing and insurance in key sectors of Ukraine’s economy, including energy projects – Agnes Dasiewicz, Chief Operating Officer, DFC
– IFC’s Board of Directors has approved a $2 billion financing program to help strengthen the resilience of Ukraine’s private sector. The response package includes financing from IFC’s own account and leveraged funds from donor governments over the years 2023 and 2024 – Marcelo Castellanos, Senior Sector Manager, Europe, IFC
– BlackRock is advising on the creation of a special fund for economic recovery in Ukraine. The fund aims to attract billions of dollars of private investment to help with the reconstruction. It will serve as a risk mitigation mechanism and create the potential for large-scale private capital mobilization,” said Matthias Wirwall, Managing Director, Financial Markets Advisory (FMA) Group, BlackRock
– Oschadbank is expanding its business support. 15% of the Ukrainian economy is currently financed by Oschadbank. Examples of international cooperation include the guarantee program with the European Investment Bank and the grant program of the German government company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH – Serhiy Naumov, Chairman of the Management Board of Oschadbank
– Ukraine can count on full international support in its reconstruction efforts. Investments will go hand in hand with reforms that will support Ukraine on its European path – Adrian Stone – Head of Private Finance, Ukraine’s Early Recovery and Reconstruction Department (UERRD)
– CSIS initiated the creation of the Commission for Economic Reconstruction of Ukraine. The main goal is to attract private sector investment. To this end, CSIS is convening a number of working groups that will address specific issues critical to the modernization of the Ukrainian economy, including agriculture, energy, transportation and logistics – Daniel Rand – Senior Vice President, Center for Strategic and International Studies (CSIS)
– Ukraine needs at least USD 400 billion for recovery and reconstruction. To accelerate the access of private capital to rebuild infrastructure, we are developing an effective legal mechanism, following the example of the existing British PPP model – Ihor Marchuk, Member of Parliament of Ukraine
– Attracting investment and energy-efficient technologies to Ukraine should be the basis for reconstruction. We are talking about saving millions of hryvnias in community budgets, competitive business, new jobs, and the well-being of every family – Hanna Zamazeyeva, Head of the State Agency on Energy Efficiency and Energy Saving of Ukraine
– PPPs are perhaps the only tool for attracting large companies to reconstruct cities to perform socially important functions. It would be more interesting for investors to invest in projects such as heat generation and distribution, and waste recycling. PPPs in the development of industrial parks are also promising. Dnipro is a city that will accompany every investor and provide all possible conditions in its industrial parks, allocate land plots, and connect to city communications – Volodymyr Miller, Deputy Mayor of Dnipro
– The Business Ombudsman Council is designed to ensure an open and transparent dialog between business and the state. We need formal and informal incentives to be the same, so that development opportunities are a priority – Roman Vashchuk, Business Ombudsman in Ukraine
– Poland has created a program to restore Ukraine with the participation of Polish business. The insurance covers a wide range of risks, in particular, it protects Polish companies from losses caused by non-payment for goods delivered or services rendered. It also includes reinsurance of transport insurance and a guarantee that protects banks issuing letters of credit – Dariusz Szymczykha, First Vice President of the Polish-Ukrainian Chamber of Commerce
– France has allocated €40 million in recovery assistance to Ukraine in 2023. France’s goal, in addition to bank guarantees and support for initiatives, is to help the private sector and build partnerships with Ukrainian companies. We have also committed ourselves to assisting in the reconstruction of Chernihiv region. We are very pleased to have been able to provide support for several specific projects: six bridges and assistance in demining the territories – Matilde Arjakovski, Deputy Head of the Financial Department, French Treasury
– We see a renewed interest from the French commercial sector in working in Ukraine, so France’s decision to provide guarantees for companies interested in rebuilding Ukraine is a signal that it is worth entering the Ukrainian market more actively. The insurance covers up to 95% of the loss of investor’s assets or receivables – Emma Hooper, Head of Export Development in the International Expertise Coordination Department, Bpifrance Assurance Export
– Among the advantages for investors who will come to Ukraine even before our victory are cheaper entry, which is associated with undervalued assets and a larger selection of investment objects; greater openness and flexibility of local partners; systemic support from the authorities and maximum assistance in work; lower operating costs; the opportunity to take a significant market share and increase their presence before other players come,” said Sergiy Gaidachuk, founder and president of CEO Club Ukraine and CEO Club London.
– Kingspan, with the support of UkraineInvest, is implementing a large investment project in Ukraine worth more than USD 300 million, in accordance with the law on state support for investment projects with significant investments. An important element of the project is the creation of more than 700 jobs. Kingspan is a world leader in the production of high-tech energy-efficient building materials. Ukraine will need them to rebuild destroyed housing, industrial facilities, and other infrastructure. This will also help raise the standards of production processes in Ukraine to the level of the best international practices,” says Anthony Dougherty, Kingspan’s In-House Legal Counsel
– For Ukraine, the woodworking and furniture industry is an engine of revival. We did not stop our investment activities during the war. We built and launched a logistics center in Kalynivka, Kyiv region, worth more than EUR 20 million. We invested over EUR 100 million in a plant in Rivne region. We are also developing the first private industrial park in the region. As part of our long-term goals, we are working to develop Ukrainian woodworking as one of the leading clusters for the production of furniture and building structures in Ukraine. Ukraine should become one of the world leaders in the production of high value-added wood products and furniture – Natalia Pokinska, CEO of Kronospan Ukraine
– Long before the full-scale war, Bayer invested about 200 million euros to set up corn seed production at a plant in Zhytomyr region. With its plant, Bayer is one of the largest investors in the region, with taxes accounting for about 25% of the local community’s budget. During 2022, our company decided to continue investing in the expansion of seed production, and in April 2023 announced its decision to increase it to 60 million euros,” Oliver Hirlichs, CEO of Bayer Ukraine
– “Astarta will resume construction of an additional deep soybean processing line at its Globinsky processing plant in Poltava region. The project was announced in 2021 at a cost of USD 50 million, and is now estimated at around USD 60 million, adjusted for inflation. The investment will be spread over three years. The plant is capable of producing approximately 160,000 tons of high-protein soybean meal, 40,000 tons of soybean oil and 9,000 tons of pelletized shell annually – Yulia Bereshchenko, Director of Sustainable Business Development and Investor Relations, Astarta-Kyiv Agro Holding
– Our Chicago Atlantic impact investing strategy supports international efforts to rebuild a prosperous Ukraine. The strategy invests in projects, companies, and organizations that create measurable social impact and promote development, focusing on residential and industrial real estate. Chicago Atlantic plans to implement a number of investment projects aimed at rebuilding Ukraine. UkraineInvest supports these projects under a bilateral Memorandum of Understanding,” says Matthew Taylor, Partner and CEO of Chicago Atlantic Trident
– Even during the war, retailers EVA and Varus have ambitious business development plans – a large project to build 1 million square meters. These are four hubs in Ukraine – Lviv, Odesa, Dnipro, and Kyiv. Their construction is scheduled to be completed in 2028. Approximately 200,000 square meters of logistics sites are currently under construction. At the same time, we are negotiating with Western investors who want to enter the project as partners,” says Olena Zubarieva, Director of Strategic Communications and Development, TerWin Group
– In 2003, Studiopack was the first company in the Ukrainian market to launch aluminum foil packaging, an environmentally friendly packaging that is 100% recyclable. Since the beginning of Russia’s full-scale invasion of Ukraine, the company has withdrawn from the Russian and Belarusian markets. Recently, the company was approved for a grant from the Ministry of Economy of Ukraine to purchase equipment to expand into a new market niche – the production of biodegradable packaging – the equipment has been purchased and partially commissioned,” says Vadym Gurzhos, Chairman of the Board of Directors, co-founder of StudioPack Group, Chairman of the Association of Ukrainian Aluminum Producers “Ukraluminiy”
– Ukrainian business is leading by example and encouraging foreign partners to invest in the Ukrainian economy. Total modernization of the infrastructure after the war, free and fast connection to electricity and gas networks when investing in new production, conditions for fair competition and business cooperation, and investment attraction are the fundamental principles of the new state economic policy of Ukraine – Andriy Dligach, Doctor of Economics, Founder and Chairman of Advanter Group, Founder of the international business community Board, Chairman of the Board of the Coalition of Business Communities for the Modernization of Ukraine
The article summarizes and analyzes the main macroeconomic indicators of Ukraine. In connection with the entry into force of the Law of Ukraine “On Protection of the Interests of Business Entities during Martial Law or a State of War”, the State Statistics Service of Ukraine suspends the publication of statistical information for the period of martial law and for three months after its termination. The exception is the publication of information on the consumer price index, separate information on statistical indicators for 2021 and for the period January-February 2022. The article analyzes open data from the State Statistics Service, the National Bank, and think tanks.
Demographic indicators of Ukraine
According to Ella Libanova, Director of the Ptukha Institute for Demography and Social Studies. Ella Libanova, depopulation is an inevitable scenario for Ukraine. A labor shortage is absolutely inevitable.
According to the estimates she presented at the Regional Economic Forum, as of the beginning of this year, the population in the government-controlled areas was 31.6 million people, and now it has slightly increased.
Libanova pointed out that the population forecast for the beginning of 2033 within the borders of 1991 Ukraine ranges from 26-35 million people.
According to her, the potential for demographic growth has been exhausted, and this is compensated for by migration.According to her, the potential for demographic growth has been exhausted, and this can be compensated for by migration.
Economic recovery
Ukraine’s gross domestic product (GDP), after declining by 10.5% in the first quarter of 2023 compared to the first quarter of 2022, started growing in the second and third quarters.
“At the same time, the World Bank forecasts Ukraine’s GDP to grow by 3.5% in 2023 and 4.0% in 2024, which is 1.5 percentage points (p.p.) and 0.5 p.p. higher than the June estimates, respectively,” said Maksim Urakin.
The key risk for our economy remains a longer duration and intensity of the war, as well as a decrease in the volume or loss of rhythm of international assistance, the resumption of a significant electricity shortage due to further destruction of the energy infrastructure and other risks.
Analysis of Ukraine’s foreign trade
Maksim Urakin also drew attention to the factor of the growing negative foreign trade balance, which has been observed since the beginning of the war.
“The negative balance of Ukraine’s foreign trade in goods in January-September 2023 increased by 3.2 times compared to the same period in 2022 – to $19.402 billion from $6.026 billion. This means that the cost of purchasing the goods Ukraine needs is almost $19 billion higher than the income from exporting Ukrainian goods to other countries. “, emphasized Urakin, PhD in Economics.
Ukraine’s financial situation in 2023
According to the expert, the main factors that characterize the state of the Ukrainian economy are public debt, international reserves and inflation.
“According to the calculations made during the preparation of the draft state budget, the projected amount of public debt calculated in national currency will amount to UAH 8,183,862.1 million and will be 104.6% of GDP. The state-guaranteed debt will amount to UAH 476,671.9 million and will be 6.1% of GDP,” said Maksim Urakin.
According to the expert, the main source of funding for Ukraine’s budget is still related to foreign aid.
“Half of the budget is financed through taxes and fees, while the other half is financed through international grants and loans,” he emphasized.
“Ukraine’s international reserves as of October 1, 2023, according to preliminary data, amounted to $39 billion 708.2 million,” the analyst added.
As for inflation, it continues to decline.
“Consumer prices in Ukraine increased by 0.5% in September 2023 after a decline of 1.4% in August and 0.6% in July, according to the State Statistics Service. At the same time, inflation was recorded at 1.9% in September 2022, so in annual terms in September 2023 it decreased to 7.1% from 8.6% in August and 11.3% in July,” Urakin said.
Thus, the economic situation in Ukraine, according to the founder of the Club of Experts, continues to require close monitoring and adaptation of strategies in response to changing conditions.
