Business news from Ukraine

Deputy Foreign Minister of Ukraine Dmytro Senik on Saturday, February 27, began a working visit to Qatar, where he got acquainted with the infrastructure and technical capabilities of the Qatari seaport Hamad, which is one of the largest ports in the Middle East and the Gulf.
“The deputy minister held a meeting with the leadership of the port, as well as negotiations with the leadership of the Qatari company Milaha and the port operator QTerminals. The parties discussed the state of implementation of the agreement between the Infrastructure Ministry of Ukraine and the Qatari company QTerminals on concession of the Ukrainian port Olvia (Mykolaiv),” the press service of the ministry reports.
In addition, Senik invited Qatari partners to visit Ukraine and get acquainted with the investment potential in the infrastructure sector.

An exclusive interview of Ambassador of the State of Qatar to Ukraine Hadi Al-Hajri to the Interfax-Ukraine agency

– How does Mr. Ambassador assess the level of cooperation between Ukraine and the state of Qatar in political and economic spheres? In which sectors of the economy is cooperation developing, in which not, and why?

– In general, relations with Ukraine are important for our country and they are based on mutual respect. We note the positive development of these relations at all levels. In recent years, we have achieved significant development in the political sphere thanks to cooperation between our countries on various regional and international issues, as well as through the exchange of visits by high-ranking officials of both countries. We are witnessing the development of economic relations through the signed agreements, which are considered the legal basis for the implementation of many joint projects and an increase in trade exchange.

I believe that there are broad prospects and opportunities for expanding economic cooperation that have not yet been realized in many areas. The current level of trade exchange does not meet the expectations of the two countries, as there are opportunities in the areas of infrastructure, energy security, food security, tourism, sports, education and other areas in which we see opportunities for expanding cooperation.

I also want to note that the pace of cooperation in recent years gives us great hope that we are on the right track to double the trade exchange between the State of Qatar and Ukraine, taking into account that we have signed many agreements to facilitate cooperation. For example, we signed an agreement on avoidance of double taxation and the one on protection of investments. There is a Joint Commission on Economic, Trade and Technical Cooperation between the governments of the two countries.

– In August last year, the Infrastructure Ministry of Ukraine and the Qatari company QTerminals signed an agreement on the concession of Olvia seaport. Are you and the investors satisfied with the start of this project? Are there any difficulties?

– This investment project is of great importance for our two countries, and this is a step that will undoubtedly strengthen economic cooperation between Qatari, Ukrainian and international companies in general. Also, this project will facilitate the maintenance of maritime operations between the ports of Ukraine and the port of Hamad in the State of Qatar, which is a great achievement for QTerminals. Moreover, QTerminals, a Qatari port management company, is pursuing its business strategy by expanding foreign investment.

This project is also an important investment opportunity in the most famous Ukrainian ports on the Black Sea.

There is no doubt that all the development work that QTerminals will do in the port of Olvia will contribute to the maintenance of operations, shipping and logistics services associated with the port in accordance with the best international standards, thus increasing the port’s operating income and ensuring all chances of success to become an international terminal specializing in grain trading.

As you know, this project is one of the largest foreign direct investments in the port industry in Ukraine since the declaration of independence, and the term of the concession agreement is 35 years, until 2056, according to which QTerminals will invest about $ 140 million in the port development over the next five years. Of this amount, $ 3.5 million will be allocated to restore local infrastructure in the city.

We hope that this project will benefit the city of Mykolaiv, its residents and Ukraine as a whole.

I think that this project is the beginning of other projects between Ukraine and the State of Qatar, which will raise cooperation between the two countries to a higher level. We hope that the coronavirus epidemic will end and we will resume visits by high-ranking officials of both countries and the implementation of various projects.

– According to statistics, the largest suppliers of LNG to the European market are the State of Qatar, the United States, and Russia. Does the State of Qatar consider Ukraine as a possible market for the supply of its gas and as a possible center of activity for accepting this gas and further sending it to European countries?

– The problem of gas and the energy sector as a whole is one of the important areas in which cooperation between our two countries can be achieved, since as you mentioned, Qatar is among the largest exporters of LNG to the European market, and the Ukrainian side is striving to diversify energy supplies and achieve energy security.

There are many problems that impede direct access of Qatari gas to the Ukrainian market, but these difficulties can be overcome through bilateral meetings between energy sector representatives of the two countries.

– What is the trade balance between our countries? What is the nomenclature of exports-imports in 2019, the first half of 2020? What are the trends for each product group?

– As I said above, there are broad prospects for increasing the level of trade between our two countries, and there is a positive trend in economic relations, since the trade turnover in 2019 amounted to about $ 90 million.

Although this is a modest figure, it is a good figure, especially if we look at previous years, in which the volume of trade between the State of Qatar and Ukraine did not exceed $ 20 million. During this year, despite the coronavirus pandemic hitting the world and having a widespread impact on the economies of various countries, we reached $ 76 million in the first six months alone.

If we look at the most important export and import goods between our two countries, then Qatari exports mainly include plastics, polymers and inorganic chemicals, while Ukrainian exports to Qatar mainly consist of agricultural products such as grain, fats, oils, milk, dairy products, eggs, minerals.

I want to point out the possibility of diversifying the volumes of exports and imports between our two countries in various fields, which will benefit the peoples of both countries.

– In mid-2020, Qatar Petroleum signed agreements to reserve the capacity of South Korean shipyards for building more than a hundred tankers for transportation of liquefied natural gas. Have you studied the possibilities of Ukraine in this regard? Is it possible to implement joint projects to revive the Ukrainian shipbuilding industry with your help in Odesa, Mykolaiv, Kherson?

– The agreements you mentioned are important agreements and some of the largest deals in this area. With these agreements, the State of Qatar reaffirms its commitment to expanding projects in the North field, even in the light of the desperate times in which the world lives today. The implementation of these projects will increase the State of Qatar’s LNG production capacity from 77 million tonnes per year today to 110 million tonnes per year in 2025 and to 126 million tonnes per year in 2027 to ensure a reliable supply of additional clean energy around the world.

As for cooperation with Ukraine in this area, I would like to note that the State of Qatar is open to various investment projects.

– The Qatar Investment Authority (QIA) intended to increase investments in technology companies. What is the method of selecting such companies, can Ukrainian IT companies be of interest to the State of Qatar?

– Technologies have become widespread in almost all areas, even in conventional investment areas such as real estate. The technology sector is one of the important sectors in which the State of Qatar will focus investments over the next ten years, in addition to infrastructure and healthcare.

Ukraine is a promising market in the field of technology, and Ukrainian IT companies and specialists in this field have a worldwide reputation, so we are closely monitoring this issue and are looking for various opportunities for cooperation and partnership in this very important sector at the present time.

– What airlines and how often fly between our countries?

– Qatar Airways opened direct flights to Kyiv twice a day in August 2017. This was an important event, thanks to which our countries got opportunities for becoming closer. The number of Ukrainians visiting the State of Qatar or Ukrainians using Doha as a transit to other countries, as well as the number of visitors from the State of Qatar to Ukraine increased.

Unfortunately, the coronavirus pandemic affected this area, and flights between our two countries were suspended, but Qatar Airways resumed flights to Ukraine from December 19, 2020 with a frequency of four flights per week, and in 2021 the number of flights is to be increased to seven per week.

In the context of this issue, I would like to refer to the signing of the protocol on amendments to the air services agreement between the State of Qatar and Ukraine. This important agreement allowed regulating air traffic between Ukraine and the State of Qatar, as well as expanding the access of airlines of both countries to the air transportation market. The agreement removes restrictions on the number of flights, types of aircraft, as well as destinations in both countries.

I think that when the pandemic ends, we will see important steps in the development of cooperation between the two countries in this area.

– How many Ukrainian citizens visited Qatar in 2019, the first half of 2020? What are the dynamics for 2015-2020? Does the Qatar leadership have plans to stimulate more interest of Ukrainian citizens in visiting the country for tourism and business purposes?

– As I mentioned earlier, relations between Qatar and Ukraine over the past five years have shown positive dynamics in both political and economic spheres, which, in turn, influenced the movement of citizens of the two countries, which also doubled due to the signing of a visa-free regime between the two countries.

I want to note that the State of Qatar opens its doors for Ukrainian tourists who can visit and get to know our country better. I also believe that Ukraine is a beautiful country where hospitable people live, where there are many attractions and tourist places worth visiting, so there is an opportunity to increase the number of Qatari tourists in Ukraine.

I will add that the State of Qatar is open to workers and specialists in various fields, and over the past three years, our country has taken unprecedented steps in the field of protecting workers’ rights.

Laws on minimum wage, which protect workers from any extortion, facilitate the movement of workers between employers, have been passed and these laws have been ratified by His Highness the Amir of the State of Qatar, Sheikh Tamim bin Hamad Al Thani.

– Qatar acts as an active mediator in establishing inter-Afghan dialogue and peace in Afghanistan. Do you see similarities and differences in solving the Afghan problem and the problem of establishing peace and territorial integrity in Ukraine?

– I want to emphasize that our country has succeeded in playing the role of a mediator in ensuring a happy end to many crises and problems in the region in recent years. This mediation was not limited to the Arab region, but also extended to the African continent.

Over the past ten years, Qatari mediation has been successful, whether at the level of conflicts between conflicting countries, political groups, armed groups, or opposition forces, including an agreement between the government of Sudan and the Sudan Liberation Movement, the release of Djiboutian prisoners from Eritrea in 2016, the release of kidnapped Lebanese soldiers in 2015, the Lebanese reconciliation agreement, the signing of a peace agreement between the two tribes in Libya and the 2013 Darfur Peace Agreement. And the latest efforts concern the establishment of peace in Afghanistan.

As for your question, I think that the Afghan conflict and the conflict in Donbas, in eastern Ukraine, are different from each other, and each of these conflicts has its own characteristics and the sides that influence them.

For us, the negotiating table is the way to resolve any conflict, it is the only way to get rid of the language of weapons and violence, which only complicate the situation.

Our country supports the peaceful efforts led by the United Nations and the Normandy format to find a solution to the conflict in eastern Ukraine, and we hope that Ukraine and its people will live in friendship and peace.

– What restrictions have been applied by the Qatari authorities in connection with the coronavirus pandemic in the country? What is the situation like now?

– The State of Qatar, like most countries in the world, sought to implement preventive measures against the spread of the coronavirus, therefore, a contact center was created at the Ministry of Public Health to counter the coronavirus.

Since the first day of the outbreak of the pandemic in Qatar, our country has worked to strengthen the medical sector and support this sector with human resources, financially and technically. All ministries and government agencies have made efforts to combat this virus, provided free quarantine places for citizens and residents, and also worked to evacuate their citizens from affected countries free of charge.

As for the current situation, it is under complete control, we have an unprecedentedly low mortality rate from coronavirus, no more than 0.2%.

Our country has taken many measures to support citizens and companies affected by this pandemic. We also provided emergency humanitarian assistance to partners and friendly countries such as Ukraine, which received humanitarian aid to support efforts to combat the coronavirus in line with the directives of His Highness the Amir of the State of Qatar.

Qatar’s humanitarian aid, which has been sent to more than 20 countries around the world, contained medical equipment and field hospitals. Qatar also funded numerous health institutions developing vaccines for $ 140 million.

– Over 2019, Ukraine dropped by 11 points (to the 65th place) in the annual Paying Taxes 2020 ranking of ease of paying taxes, which is compiled by the World Bank and PwC audit company. At the same time, Bahrain, Hong Kong and Qatar topped the rating. Tell us about your tax payment system.

– The State of Qatar is one of the few countries in the world that levy a low tax rate, making it an attractive work environment for individual and corporate expatriates.

In the State of Qatar, there is no personal income tax, which means that employees receive their salaries without withholding any taxes.

With regard to corporate taxes, the tax rate is 10% of the company’s total income, and is paid annually.

There are also many tax exemptions that apply, for example, to small businesses, as well as the income of companies operating in agriculture, fisheries, sea and air transport on a reciprocal basis, as well as other benefits.