Ukrainian industry is one of the sectors of the economy most affected by the war. Since February 24, many large enterprises, primarily in the east and south of the country, have lost their production capacities, and the staff was forced to evacuate. At the same time, individual production facilities were transferred to the western regions, where they are being restored on the basis of more modern industrial facilities, such as industrial parks that appeared shortly before the war.
The Open4business portal spoke about the future of Ukrainian industry and the prospects for the restoration of production with Igor Stakovychenko, an expert in the field of economics.
According to the expert, the production of goods with high added value should become a priority for the development of the economy for decades to come.
“Before the aggression, our industry worked mainly according to standards that were not particularly modernized in 30 years of independence. This is the so-called canonical model, when you have raw materials, workshops, shipping, logistics, and so on. And there must also be stable consumers who will always buy products. Many plants with such a system failed the market test and closed down. Mostly giants remained, who more or less adapted. After the war, it will definitely not be possible to rebuild production in the same form, a fundamentally new model is needed, ”Igor Stakovichenko is sure.
The expert noted that in the modern world, the modernization of production involves the introduction of new management methods, as well as the creation of more adaptive sites, such as industrial zones or parks.
“If you have a workshop for the production of one specific part, which is itself part of a complex and long chain for creating the final product, then the situation above is rather precarious in modern conditions since you depend on many factors: suppliers, market situation, current conjuncture. If you have, for example, a 3D printer that can produce any shape to order for a specific client, then the situation is more stable for you, since you can quickly reorient yourself when the market changes. In the modern world, the industry is striving for greater universalization,” explained Igor Stakovichenko.
According to him, the restoration of the industry should begin now and be based, firstly, on the creation of industrial parks in safe regions, and secondly, on the modernization of existing industries for new models. As an example, Stakovichenko cites the development of this concept in Poland or the Czech Republic, where industrial zones already provide up to 50% of GDP.
“The government is now acting in the right direction, providing tax incentives to such industrial zones, this will lay the foundation for the rapid restoration of the country’s industrial potential in the post-war period,” Stakovichenko summed up.
ECONOMY, IGOR STAKOVICHENKO, INDUSTRY, MARKETS, PRODUCTION, STAKOVICHENKO
Yesterday, the Cabinet of Ministers included the pharmaceutical industry in the list of priority sectors of the economy, thereby strengthening state support in this area. Since the beginning of the war, the main pharmaceutical companies in Ukraine have generally maintained their production capacities, while several enterprises suffered as a result of Russian strikes, in particular, in March, the warehouses of the Farmak pharmaceutical plant burned down in Makarov, Kyiv region. The damage then, according to the enterprise, amounted to about 1.5 billion hryvnia.
How important is state support for pharmaceutical manufacturers now, and will the industry be able to provide Ukrainians with medicines in full? Igor Stakovichenko, an expert in the field of economics, answered these and other questions for the Open4business portal.
In his opinion, now the production of medicines should be equated by the state with the provision of the army, since in a warring state medicine is one of the foundations of a stable situation at the front and in the rear.
“It is hard to imagine that the army will be able to fight effectively if it is not provided with high-level medical support. At the same time, the production of its own medications is strategically important for the state. Supplies from Western partners are good, but having your own working pharmaceutical industry in such a difficult time is much better And this is understood in the government,” Igor Stakovichenko believes.
According to the expert, pharmaceutical production in Ukraine today is able to provide both the army and the population with a significant part of the necessary medicines. Igor Stakovichenko believes that the government’s timely decisions taken since the beginning of the war made it possible to quickly adapt the industry to new conditions.
“In particular, back in the spring, amendments were adopted to the law “On Medicines”, limiting the export of certain vital drugs. In addition, they significantly simplified the registration of pharmaceuticals during the war, creating an emergency procedure. This was done literally on the third day. In general, the government’s decision on The inclusion of pharmaceutical production in the list of priority industries is a continuation of the policy of supporting the industry, which has been outlined since the beginning of the war. Such support should remain at the level of the main state priorities,” stressed Igor Stakovichenko.
ECONOMY, MARKETS, MEDICINE, PHARMA, STAKOVICHENKO, ИГОРЬ_СТАКОВИЧЕНКО
The export IT industry in January-May 2022 provided foreign exchange earnings to the Ukrainian economy in the amount of $3.2 billion, the IT Ukraine Association reported.
“During the three war months – March-May – the volume of exports of computer services increased by 6% compared to the same period of the previous year. In the first five months of 2022, the export IT industry provided foreign exchange earnings to the Ukrainian economy in the amount of $ 3.2 billion. On June 1, 2022, IT companies and individual entrepreneurs working in the IT industry transferred taxes and fees in the amount of about UAH 30 billion,” the association’s website said on Thursday.
According to the ITU, among other things, the stable operation of the industry allowed the IT sector to allocate more than UAH 1 billion for humanitarian purposes and support for the Armed Forces of Ukraine.
“At the same time, the IT industry is fighting on several fronts. 3% of professionals serve in the Armed Forces of Ukraine, approximately 12-15% are involved in the cyber front,” the association notes.
As reported, IT Ukraine notes the high resilience of the Ukrainian IT market in the conditions of the active phase of hostilities: during the war, 77% of IT companies attracted new customers, more than half of the companies plan to grow by 5-30% in 2022.
IT Ukraine is the largest association of IT companies, uniting 118 members and more than 80 thousand IT specialists.
In its new video, the YouTube channel “Club of Experts” analyzed the situation in the Ukrainian economy before the start of the Russian aggression. As you know, the State Statistics Service of Ukraine has temporarily suspended the publication of statistical information for the period of martial law, as well as for three months from the moment it ends. The exception is the publication of data on the consumer price index, separate information on statistical indicators for 2021, as well as for the period January-February 2022.
If we return to the indicators of the beginning of the year, at that time we could talk about economic growth and recovery after the recession caused by the COVID-19 pandemic, says the founder of the Club of Experts, Candidate of Economic Sciences Maxim Urakin.
“Officially, the number of unemployed in the country, according to the State Employment Center, as of January 2022, was just over 358,000 people. In this direction, there was a positive trend and the recovery of jobs after the labor market crisis that was caused by the pandemic,” he explained.
In addition, the expert noted that according to the State Statistics Service, Ukraine’s GDP in 2021 grew by 3.4% after a decline of 3.8% a year earlier. At the same time, there was an increase in industrial production and retail trade within the country.
“Industrial production in Ukraine in 2021 increased by 1.1% after a 5% drop in 2020. At the same time, in 2021, compared to the twentieth, the retail trade turnover increased significantly, by more than ten percent and amounted to more than one trillion four hundred forty-three billion hryvnia,” Urakin added.
All this, according to the founder of the Club of Experts, may indicate that in the pre-war period the country’s economy showed positive indicators of development.
The full video can be viewed on the YouTube channel “Expert Club” at the link:
Foreign direct investments in the economy of Ukraine in the iii quarter of 2021 (operations, $ million)
NBU
The total amount of direct documented damage to Ukraine’s infrastructure as a result of the Russian military invasion has reached almost $88 billion, Head of the President’s Office Andriy Yermak said in a telegram.
“Over the past week, direct losses to the Ukrainian economy due to destruction and damage to civilian and military infrastructure have increased by $3.1 billion,” he wrote, referring to the “Russia will pay” project implemented by the KSE Institute with the support of the Office of the President of Ukraine, the Ministry of Economy, the Ministry of Reintegration and the Ministry of Infrastructure.
Yermak noted that the total losses of the Ukrainian economy – direct and indirect – due to the war range from $564 billion to $600 billion.
“Russia must be responsible for all crimes and destruction in our state, and it is at the expense of the aggressor, in addition to international assistance and money from our budget, that Ukraine must be restored,” the head of the Office of the President of Ukraine stressed.
He clarified that this estimate of the cost of losses from the ongoing war has so far been made only on the basis of public sources.
According to the data he cited, as of today, at least 23 thousand km of roads, 277 bridges and bridge crossings, 11 military airfields, 1 airport have been destroyed or seized.
In addition, 535 kindergartens, 866 institutions of secondary, higher and higher education, 231 medical institutions, 173 factories and enterprises, at least 75 administrative buildings were damaged or destroyed.
