Business news from Ukraine

UKRAINE INCREASES EXPORTS OF IT SERVICES IN 2019 BY 30% TO $4.17 BLN

Ukraine has increased exports of IT services in 2019 by 30.2%, to $4.17 billion, according to a posting on the website of the IT Ukraine association, referring to data of Ukraine’s balance of payment.
“The export of computer services in 2019 increased 30.2% compared to the previous year and amounted to $4.17 billion. Accordingly, the amount of taxes and duties paid to the national budget of Ukraine increased by 28% and amounts to UAH 16.7 billion (an increase of 28.5%),” the association said.
The IT Ukraine association said that, in fact, taxes on the export of IT services for 2019 can cover a third (32%) of the national budget of Ukraine for education for the specified year.
“IT export grows by 20-25% annually. To maintain the current growth rate amid fierce global competition for talents, first of all, we need a balanced government approach to reviewing existing tax models and developing IT education,” Executive Director of IT Ukraine Association Kostiantyn Vasiuk said.
According to IT Ukraine, the growth factor of Ukrainian IT exports is, first of all, the high demand of the global market for IT solutions and the preservation of the contract model in the interaction between companies and IT specialists.
The IT Ukraine Association was founded in 2004. The association includes export IT companies that develop software and products with a total staff of more than 160,000 employees, which together account for 50% of the industry’s total revenue in Ukraine.
The IT Ukraine Association is the silver sponsor of the Ukraine House.

UKRAINIAN TOUR OPERATORS RECORD NO DECLINES IN TOURIST FLOW AND EARLY BOOKED TOURS TO EUROPE

Ukrainian tour operators have not yet recorded declines in tourist flow and early booked tours to Western Europe cancellation due to new coronavirus spread, but the number of early bookings may be cut, experts have told Interfax-Ukraine.
“There are no epidemics in Europe yet, the situation in Italy does not affect tourism volumes and flows. Perhaps if in the future the situation gets out of control and becomes threatening, then we will review programs related to Europe trips in order to restrict them. However, there are no cancellations, nor fear. We are working as usual,” Oleksandr Novikovsky, the Director General of Tez Tour operator, said.
At the same time, tourists, who early booked tours to Italy would like to know, how to cancel the trip, Mandruy travel agency said.
“With regard to the news about coronavirus spread in Italy, customers who had early booked tours there began to be interested in option of cancellation, especially for tours to the Northern part of Italy. Basically, they are only specifying the possibility, since the competent authorities did not officially forbid visiting Italy. The air flights have not yet been canceled, as happened earlier, for example, with China,” the company said.
According to the Director of Tourism Development Center, Volodymyr Tsaruk, it is likely that the number of early bookings may be cut.
“It may be supposed that the demand for early booking will decrease, although in 2020 the level of early booking was already much higher than in 2019 and 2018. Due to the fact that it is not clear how the situation will develop, people will be careful even with regions of traditional trips that haven’t suffered so far, like Turkey and Spain. So I think there will be a quiet period, it’s not yet clear how European countries will react,” he said.
As reported, from February 24, there is an obligatory temperature screening of citizens who arrive by direct flights from Italy to Boryspil and Kyiv international airports.
According to Italian media, the Italian authorities are ready to take emergency measures related to the outbreak of Wuhan coronavirus Covid-19 in the north of the country.

ENVIRONMENTALLY INTERESTED PUBLIC DEMANDS FROM UKRAINIAN GOVT DIVISION OF ENERGY AND ENVIRONMENTAL PROTECTION MINISTRY

The Ministry of Energy and Environmental Protection should be divided and the Ministry of Environmental Policy and Sustainable Development should be created, Chairwoman of the NGO All-Ukrainian Ecological League Tetiana Tymochko.
“The merger of the Environmental Protection ministry with the Energy Ministry, the enterprises under management of which are biggest polluters of environment, initially put the conflict of interest behind this and created the basis for abuse,” Tymochko said at a press conference at Interfax-Ukraine on Tuesday.
She said that since the merger of the Ministry of Ecology and Natural Resources in September last year with the Ministry of Energy and Coal Industry, very little attention has been paid to environmental issues.
“Only 10% of the employees of the merged ministry have their functional responsibilities of being involved in preserving wildlife,” the expert said.
At the same time, she drew attention to the fact that since the merger, most of the nearly three dozen directives on environmental obligations to the European Union were not considered by the ministry, and no draft legislative act was proposed regarding the preservation of the environment.
According to Tymochko, it is also alarming that in the report of the government on its activities submitted to the Parliament, in the Ministry of Energy and Environmental Protection section, only six out of 28 pages relate to environmental issues, the rest concern energy.
“The activities of the ministry in the direction of environmental protection are paralyzed,” Tymochko said.
The head of the environmental league pointed out the need to adopt a project to reform the environmental industry, developed by the environmentally interested public.
“This project was developed back in 2014, and is transferred to each new minister, prime minister and president. But the environmental sector is not being reformed at all, although the issue of its reform is very urgent. The basis for reform should be the separation of functions in all public bodies that are represented in the industry,” Tymochko said.
At the same time, according to another participant in the press conference, Chairman of the National Ecological Council of Ukraine Oleksandr Chystiakov, the environmental situation in the country is disastrous, and Ukraine currently occupies the fourth place in the world in terms of mortality from poor ecology.
According to him, for example, only a third of the effluents discharged into the water bodies of Ukraine last year were treated.
“Given the level of pollution of water bodies, the World Bank put Ukraine in 125th place in the world in terms of freshwater per capita,” Chystiakov said, quoting the data.
At the same time, he criticized the imposition of a moratorium on environmental audits of the business, which, he believes, contributes to the pollution of water by industrial effluents and the appearance of unauthorized landfills.
“There are already 35,000 illegal landfills in Ukraine, covering an area of over 14,000 square kilometers. This is more than the territory of Zakarpattia region,” the expert said.
Mykhailo Zakharchenko, the head of the public council at the State Environmental Inspectorate of Ukraine participating in the press conference, for his part drew attention to the inadmissibility of the fact that the head of the State Environmental Inspectorate has not been appointed based on the results of the competition for several months.
“The State Environmental Inspectorate has not been fulfilling its functions for more than four months, five candidates were selected for the post of head of the inspectorate at the competition, but so far no one has been appointed,” Zakharchenko said.
Mykhailo Romanyshyn, who entered into the Guinness Book of Records as a swimmer-record holder of the #Vplavdnipro project, who sailed 985 km along the Ukrainian part of the Dnipro River from the border with Belarus to the Black Sea, in particular, to draw attention to the state of the Dnipro River waters, believes that the issue of this river pollution requires very quick and competent response, otherwise the consequences will be devastating.
In addition, the participants in the press conference criticized the E-40 project (the project to create a shipping lane of more than 2,000 km long along the Vistula, Pripyat and Dnipro rivers to connect the Baltic and Black seas), as well as the fact that the Ministry of Energy and Environmental Protection did not oppose the government’s implementation of these plans. According to Chystiakov, the dredging of Prypiat will raise large volumes of radioactive substances, which are buried under a 60-80 cm layer of mud in the riverbed, and will entail serious pollution.
Tymochko also drew attention to the fact that the Ministry of Energy and Environmental Protection does not monitor the impact of military operations on the environment in the Donbas and does not state any position regarding the flooding of coalmines closed in Ukrainian areas that are not under the control of the Ukrainian government and the consequences of this for the country’s underground waters.

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ZELENSKY SETS TASK TO REDUCE COAL AND ELECTRICITY IMPORTS

President of Ukraine Volodymyr Zelensky has set a task to Energy and Environment Protection Minister Oleksiy Orzhel to reduce coal and electricity imports.
“What kind of import can we talk about when the countries from which we import do not allow us to enter their markets?” the president said at the meeting of the workers of coal industry in Kyiv on Tuesday.
He said that import is possible exclusively regarding definite brands of coal, which are not extracted inside the country.
“Therefore, our coal, our miners, our electricity comes first,” Zelensky said, adding that there is no place for coal imports in the Ukrainian coal industry.

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HEAD OF EU DELEGATION TO UKRAINE SAYS RULE OF LAW, COMBATING CORRUPTION ARE MAIN PRIORITIES FOR UKRAINE

The main priorities for the Ukrainian government are establishment of the rule of law and combating corruption, Head of the EU Delegation to Ukraine Matti Maasikas said. During a “Reform Forum: On the Way to Vilnius”, he said many challenges are ahead, but the rule of law, its establishment and combating corruption will remain priority ones.
The diplomat stressed that after lustration of the bank sector further efforts to restore confidence in the financial sector are needed.
“Many reforms are still ongoing. Land reform, labor market reform, education reform. If implemented, they will make Ukraine a much more efficient country,” he said.
Among the achievements of the reforms in Ukraine, Maasikas mentioned that the macroeconomic situation has stabilized, the banking sector has been largely purified, the Naftogaz Ukrainy has been unbundled, and the government is improving access to various services for citizens.
The EU Ambassador stated that the EU was ready to support the government and people of Ukraine, and is ready to accompany the process of implementation of the Association Agreement and the agreement on the Deep and Comprehensive Free Trade Area between Ukraine and the EU.

UKRAINIAN RDS GROUP WANTS TO ENTER EUROPEAN MARKETS

The RDS road construction group invested almost UAH 170 million in the upgrade of its machinery fleet in 2019 and ready to enter the road construction markets of Poland and Romania, the co-owner of the group, Yuriy Shumakher, has said.
“The acquisition of modern machines, mechanisms and vehicles cost the company UAH 167.16 million. For several years now, we have been investing annually about $8 million in the renewal of our fleet of road machines,” he said in an interview with Interfax-Ukraine.
According to him, in 2019 the company’s fleet was expanded with 114 units of road machines and equipment.
Shumakher said that RDS uses its own funds, funds borrowed from Ukrainian banks and leasing companies to upgrade its fleet. Also, part of the equipment is bought through financing of manufacturing companies such as Wirtgen and Zeppelin.
The co-owner of the group said that RDS purchases mainly foreign equipment from leaders in modern engineering.
“We have ambitions to participate in tenders abroad,” Shumakher said.
According to him, unlike Ukraine, tenders in Europe have very strict criteria and a mandatory requirement, in particular, is experience in the European Union for at least three to five years.

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