Business news from Ukraine

UKRAINE AND IMF AGREE ON NEW COOPERATION PROGRAM

Ukraine and the International Monetary Fund (IMF) have reached agreement on a new cooperation program in a telephone conversation between Ukrainian leader Volodymyr Zelensky and IMF Managing Director and Chair of the Executive Board Kristalina Georgieva, the press service of the head of state reported on Sunday.
“The IMF head praised the new [Ukrainian] administration’s economic achievements and the progress in the introduction of reforms made by the government led by Prime Minister Oleksiy Honcharuk. The sides noted following the discussion that Ukraine and the IMF had come to the Staff Level Agreement on a new cooperation program,” the press service said.
Zelensky said that he and Georgieva had a very constructive discussion.
“I am glad that we have reached full understanding and our turbo-mode has been praised by the IMF. I am grateful to the Parliament, the Government and our entire team for their tireless work for the sake of Ukraine. The new program of cooperation with the International Monetary Fund aims to accelerate economic growth, actively eradicate corruption and improve well-being of every Ukrainian,” the president’s press service quoted Zelensky as saying.
The head of state said that Ukraine is not satisfied with the current rate of economic growth, therefore, in order to accelerate economic growth, “we, together with our international partners, will continue reforms to catch up with our neighbors in terms of economic development and prosperity.”
According to the press service, Georgieva said that she commended the extraordinary progress that Zelensky and his government have made over the past few months in promoting reforms and continuing reasonable economic policy.
“I assured the President of the IMF’s readiness to support the political plan of the government for macroeconomic stability and boosting the economy to higher, sustainable and comprehensive growth, among other things, with new IMF support. IMF staff has reached an agreement with the authorities on a policy of supporting a new three-year arrangement in the amount of four billion Special Drawing Rights (SDRs) within the IMF Extended Fund Facility,” Georgieva said.
According to a statement of Georgieva on the website of the IMF, this agreement is subject to IMF management approval and to approval by the Executive Board.
“I was pleased to note that IMF staff has reached agreement with the authorities on the policies to underpin a new 3-year, SDR 4 billion (about $5.5 billion) arrangement under the Extended Fund Facility. This agreement is subject to IMF management approval and to approval by the Executive Board, and effectiveness of the arrangement will be conditional on the implementation of a set of prior actions,” she said.
She said that the Ukrainian President and she agreed that Ukraine’s economic success depends crucially on strengthening the rule of law, enhancing the integrity of the judiciary, and reducing the role of vested interests in the economy, and that it is paramount to safeguard the gains made in cleaning up the banking system and recover the large costs to the taxpayers from bank resolutions.

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LATVIA TO RESUME WORK OF INVESTMENT AND DEVELOPMENT AGENCY IN UKRAINE IN 2020

Latvia will resume the work of the Investment and Development Agency (LIAA) in Ukraine in 2020 after a three-year break, Deputy Prime Minister for European and Euro-Atlantic Integration of Ukraine Dmytro Kuleba has said following a meeting with Minister of Economics of the Republic of Latvia Ralfs Nemiro, according to the government’s press service.
“The office of the Latvian Investment and Development Agency in Kyiv will promote a daily dialogue between Ukrainian and Lithuanian businesses and will provide a strong impetus to the development of bilateral investment cooperation. The resuming of office’s work after a three-year break is a clear message that foreign investors see positive changes in Ukraine. There will be more investment and more trade with our friend and EU member Latvia,” Kuleba said.
Nemiro reported that the office would resume its work next year after the completion of technical procedures.
The ministers also agreed to reform the work of the Ukrainian-Latvian Intergovernmental Commission on Economic, Industrial, Scientific and Technical Cooperation.
The co-chairs of the Commission agreed that the next meeting would be held in May 2020 in Kyiv. Among the priority issues on the agenda will be digitization, agriculture, pharmaceutical industry and logistics.
Kuleba suggested holding a special business forum in the framework of the Commission’s meeting that would contribute to building connections between Ukrainian and Latvian entrepreneurs.
“Business contracts entail international contacts, hence they should not only promote establishing links between governments but also facilitate building more productive relations directly between the entrepreneurs of the two countries,” Kuleba said.
In turn, Nemiro supported the idea of holding such a forum.
As of July 1, 2019, Latvia invested in Ukraine $41.5 million, in particular $9.6 million (23.1%) in professional, scientific and technical activities, $8.2 million (19.6%) in financial and insurance activities, $5.7 million (13.8%) in industry. Ukrainian investment in the Latvian economy over the same period amounted to $72.1 million.

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PHARMACY SALES IN UKRAINE IN JAN-OCT AMOUNTES UAH 66.663 BLN

Pharmacy sales in Ukraine in January-October 2019 in monetary terms decreased by 3.37% compared to the same period in 2018 and amounted to UAH 66.663 billion. Business Credit told Interfax-Ukraine over the period pharmacy sales in natural terms decreased by 9%, to 1.139 billion packages.
According to the company, retail sales of medicines in January-October in monetary terms fell by 4.79%, to UAH 53.987 billion, in natural terms by 16.8%, to 693.988 million packages.
The average weighted price of all categories of pharmacy retail products in January-October amounted to UAH 58, medicines some UAH 77.79.

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INSTITUTE FOR EDUCATION DEVELOPMENT OPENS IN UKRAINE

The Education and Science Ministry of Ukraine has announced the opening of the Ukrainian Institute for Education Development which will be in charge of the implementation of the New Ukrainian School Project. “The Ukrainian Institute for Education Development has opened. This agency will replace the Institute for Education Content Modernization to implement the New Ukrainian School Project and later all of the latter institution’s functions will be passed to it,” the ministry said.
Education and Science Minister Hanna Novosad noted that the Institute for Education Content Modernization was not always effective and successful during the implementation of the New Ukrainian School Project.
Vadym Karandiy has been appointed as Head of the new Ukrainian Institute for Education Development.
He headed that Ukrainian Center for Education Quality Assessment from 2015 until 2019, according to the ministry’s press service.
The ministry also said that the transformation of the old institution will be held until 2021.
The priority tasks of the Ukrainian Institute for Education Development will be coordination of the introduction of new education standards for students of the 3rd and 4th grades, assessment of quality of pre-school education with the help if the international tool ECERS, participation in the development of the national standards for secondary education and a typical secondary education program, support for professional development and growth of teachers, development of effective procedures for assessment of study books and piloting them during the selection of 4th grade students.

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UKRAINE DECREASES GAS PRODUCTION

Production of natural gas in Ukraine in January-October 2019 decreased 0.4% (by 67.5 million cubic meters, mcm) compared to the same period in 2018, to 17.237 billion cubic meters (bcm), the Ministry of Energy and Environment Protection has reported. According to the ministry, enterprises of NJSC Naftogaz Ukrainy saw 1.6% decline (214.7 mcm) in gas production, to 13.432 bcm. Gas production by PJSC Ukrgazvydobuvannia amounted to 12.459 bcm (2.3% lower from January-October 2018), by PJSC Ukrnafta to 966.8 mcm (8.6% up), and PJSC Chornomornaftogaz – 5.8 mcm (7.9% down).
Other companies increased gas production by 4% year-over-year (by 147.2 mcm), to 3.805 bcm.
Other large gas producers were PrJSC Naftogazvydobuvannia (1.367 bcm), PrJSC Ukrnaftoburinnia (608.42 mcm), ESKO-Pivnich LLC (448.45 mcm), JV Poltava Petroleum Company (222.39 mcm), PrJSC Natural Resources (154.23 mcm), PrJSC Ukrgazvydobutok (132.21 mcm), Regal Petroleum LLC (122.52 mcm), KUB-Gas LLC (111.76 mcm) and PrJSC Davon (82.1 mcm).
As reported, Ukraine in 2018 increased gas production by 0.5%, to 20.898 bcm.

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BILL CANCELLING STATE ALCOHOL PRODUCTION MONOPOLY IN UKRAINE PASSES SECOND READING

Presidential bill No. 2300 on the abolition of a government monopoly on alcohol production from July 1, 2020, has passed its second reading and has been adopted as a whole. It was backed by 284 lawmakers, namely 229 MPs from the Servant of the People parliamentary faction, three from Batkivschyna, 19 from the Holos (Voice) Party, 14 from the For Future parliamentary group, and 19 independent lawmakers. Bill No. 2300 on amendments to the law on state regulation of the production and sale of ethyl, cognac and fruit alcohol, alcoholic beverages, tobacco and fuels provides for the abolition of a government monopoly on the production of alcohol from July 1, 2020.
In addition, the bill allows business entities – regardless of their form of ownership – to produce alcohol with an appropriate license, and also provides for the full liberalization of alcohol exports from Ukraine.
A license for the production of ethyl alcohol is issued to enterprises with established round-the-clock video surveillance systems for the production and distribution of products. Disabling video surveillance systems is the basis for the refusal to issue a license or its recall, the document says.
At the same time, to protect the local commodity producer, the bill provides that only state-owned enterprises authorized by the Cabinet of Ministers will be able to import ethyl alcohol until January 1, 2024.
In addition, the bill provides for a ban on commissioning new alcohol production facilities before July 1, 2021. It also introduces an obligation to maintain jobs at privatized enterprises at 70% of the total number of employees for this period.
The bill also introduces mandatory denaturation of bioethanol with petrol from 1-10% for use in the domestic market.

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