The amount of direct losses incurred by Ukraine’s infrastructure from full-scale Russian military aggression has already reached $119 billion, work is underway to compensate for them at the expense of the seized gold and foreign exchange reserves of the Central Bank of the Russian Federation, First Deputy Minister of Economy of Ukraine Denys Kudin has said.
“When the president’s office yesterday or the day before yesterday announced over $100 billion, this figure is somewhat clarified. It is $119 billion. Unfortunately, it will grow with every next day of the war,” he said on Ukrainian TV channels.
According to Kudin, one of the ways to compensate for losses and restore infrastructure is to work through cooperation with Western governments. “Western governments have already seized the gold and foreign exchange reserves of the Central Bank of Russia in the amount of $415 billion. In fact, this amount is almost enough to cover these direct one-time losses,” the first deputy minister said.
According to him, the Ministry of Economy expects that in the near future, together with partner governments of other countries, a legal mechanism will be found, how this money can go to Ukraine for further recovery.
The first deputy minister said that the Ministry of Economy from the first day began to count the losses that the state suffered due to Russian aggression. According to him, in addition to the direct approach to determining the damage (how much it will cost to restore bridges, roads, infrastructure facilities, hospitals, kindergartens, schools destroyed by Russia), there is a second approach – the amount of GDP losses.
“We see that in cities and towns where active hostilities are taking place, economic activity has decreased by 75%. In the rest of Ukraine, only every second business operates. This is a loss of 50% of economic activity,” Kudin said.
He added that most of the metallurgical plants, most of which are located in the east of the country, have ceased their activities. “The blocking of sea routes by the Russians, of course, does not make it possible to fully export corn, wheat, sunflower oil – traditional agricultural export products,” the first deputy head of the Ministry of Economy said.
According to him, among other ways for Russia to compensate for these losses is the judicial, claims work of the government of Ukraine against the Russian Federation in international courts. “We are talking about the International Criminal Court, and about the ECHR, and about commercial arbitrations around the world. In each of these courts, Ukraine files lawsuits against the Russian Federation,” Kudin said.
He said that the collection of evidence from Ukrainians about the destruction has begun in electronic form, since it is important to document every fact of destruction jointly by all the people so that this becomes the material basis for claims.
The first deputy head of the Ministry of Economy also named a third way to receive compensation for damage from the aggressor – “the way of reparations after the signing of a peace treaty and the actual surrender of the enemy.” “They [reparations] can be in two forms – in cash and in kind. In the form of reparations, they could receive energy resources and other types of material values that Ukraine needs,” Kudin said.
As reported, Ukraine’s GDP in 2021 for the first time amounted to about $200 billion.
Minister of Agrarian Policy and Food of Ukraine Roman Leshchenko called the adoption of bill No. 2194 on amendments to the Land Code of Ukraine fateful, and the implementation of land reform will become a real indicator of changes for the better in the country. “Now the right to dispose land has been transferred to local communities finally and irrevocably. From now on, the State Service of Ukraine for Geodesy, Cartography and Cadastre is only a service organization, the most deregulated, with the elimination of corruption powers in land management,” he wrote on Facebook.
The minister said that bill No. 2194 provides for the reform of the management system in the field of land relations and the removal of artificial restrictions on economic activity to simplify access to land resources for the population and business; cancellation of unnecessary permits and duplication of checks of land management documentation; as well as introduction of independent control over land management documentation through public expertise or peer review.
According to him, other key points of the document are the provision of the status of public, open and public data to the information contained in the documentation on land management; integration and unification of land management, topographic, geodetic and cartographic activities; introduction of professional liability insurance for land management workers as an alternative to state control; reducing the cost of work and the length of time spent on the implementation of procedures related to land management; and reducing the risk of bribery and corruption.
“This is a historically fateful event, one of the most important laws in my life, which confirms the inevitability of land reform, for which I am responsible in our state,” the minister said.
As reported, the Verkhovna Rada approved amendments to the Land Code and other laws to improve the management and deregulation system in land relations.
The gradual approximation of the regulatory environment and digital development of Ukraine to the level of the European Union as part of integration into the EU Digital Single Market will affect the productivity and economic growth of the country, according to a Tuesday statement on the website of the Ministry of Digital Transformation.
The study entitled “Ukraine’s integration into the EU Digital Single Market: potential economic benefits” was carried out by the Trade+ Center for International Trade Analysis at the Kyiv School of Economics and NGO Ukrainian Center for European Policy and was ordered by the Ministry of Digital Transformation.
The results of the study contain expert assessments and real calculations of the potential profit for the country’s economy from integration into the EU Digital Single Market.
According to the study, the gradual approximation of the regulatory environment and digital development of Ukraine to the EU level within the framework of integration into the EU Digital Single Market will influence bilateral trade: an increase in exports of goods from Ukraine to the EU is expected by 11.8%-17% ($2.4-3.4 billion), services – by 7.6%-12.2% ($302.5-485.5 million).
It will also impact the productivity and economic growth of Ukraine: GDP growth in Ukraine is expected at the level of 2.4-12.1% ($3.1-15.8 billion), the welfare of citizens – by 3.6-7.8%.
It is also expected that the export of goods from the EU to Ukraine will grow by 17.7-21.7% ($4.1-5 billion), and services by 5.7-9.1% to ($191-305 million).
According to the study, an increase in the level of digitalization by 1% will lead to an increase in Ukraine’s GDP by 0.42%.
“Various scenarios of integration into the EU Digital Single Market show that the size of potential benefits will depend on the scale of regulatory and digital transformations in Ukraine. The faster and more efficiently we implement the necessary transformations, the faster we will be able to realize the benefits of integration into the EU Digital Single Market,” Deputy Minister of Digital Transformation for European Integration Valeria Ionan said.
According to the study, the main economic benefits for Ukraine from integration into the EU Digital Single Market are: reduction of transaction and trade costs in trade in goods and services between the EU and Ukraine; growth of business efficiency, economic productivity and GDP of Ukraine; growing well-being of citizens of Ukraine and the EU: better access and lower prices for digital innovative goods and services, consumer protection; development of innovative products and services of digital infrastructure.
In addition, bringing Ukraine’s legislation and standards closer to EU legislation and standards will reduce regulatory differences between Ukraine and the EU in the digital sphere and accelerate Ukraine’s digital development.
The Ministry of Economic Development and Trade of Ukraine has promulgated a draft law that proposes raising financial support for tour operators by 10 times and introducing fines for illegal use of categories by hotels.
According to the text of the draft law posted on the ministry’s website, the amount of financial provision for a tour operator should be at least 5% of the annual sales volume for the previous year, but not less than EUR 200,000 for the operator offering outbound tourism services (against EUR 20,000 in current legislation), not less than EUR 100,000 for tour operators of inbound and domestic tourism (against EUR 10,000), not less than EUR 50,000 for operators of domestic tourism. At the same time, financial support for travel agents must be at least 5% of the annual sales volume, but not less than EUR 20,000.
The size of guarantees for newly established tour operators is equal to the lower threshold depending on the chosen type of tourism, or EUR 10,000 per travel agent.
The Ministry of Economic Development and Trade also proposes stipulating fines for violators of tourism legislation, in particular, for illegal use of tourist infrastructure categories and not providing tourist entry and departure under the contract in the amount of 100-500 non-taxable minimum incomes of citizens, and for repeated violations during the year some 800-1,000 non-taxable minimum incomes of citizens.
