EU, EBRD to allocate grants for SME development in Ukraine
The representatives of small and medium-sized enterprises can receive development grants from the European Union through the EU4Business initiative, which is partly implemented in Ukraine by the European Bank for Reconstruction and Development (EBRD). The relevant programs for Ukrainian entrepreneurs were presented by EBRD representative Timur Khalilov at the RE:think. Invest in Ukraine forum in Mariupol.
To improve their business, the entrepreneurs can receive a grant of between 75% and 90% of the project cost, depending on who will be a company consultant. Khalilov added that the EBRD offered loans to Ukrainian businesses. According to the analyst, over 1,000 projects have been implemented since 2010 thanks to the EBRD grant support to small and medium-sized enterprises for consulting projects. According to the EBRD, overall 65% of Ukrainian companies have reported an 80% increase in turnover. They have also created over 6,500 new jobs and attracted over EUR 81 million in outward investments.
As reported, an agreement was signed between the EU and the EBRD in 2016, according to which EUR 40 million was allocated for consultancy, training, information and other support to small and medium-sized enterprises in Ukraine. The EBRD has planned and is currently implementing 160 consulting projects this year.
Average salary to reach UAH 12,500 in 2020 - Mylovanov
The Ministry of Economic Development, Trade and Agriculture has projected in its macroeconomic forecast that the average salary in Ukraine will grow to UAH 12,500 in 2020. Minister of Economic Development, Trade and Agriculture Tymofiy Mylovanov wrote about this on Facebook. “According to the macroeconomic forecast of the Economic Development Ministry, the following average salaries are projected for the following years: UAH 12,497 in 2020; UAH 14,187 in 2021; UAH 16,047 in 2022,” Mylovanov wrote.
The minister reminded that the average salary totaled UAH 10,687 in Ukraine in September 2019.
Economic Development Ministry forecasts 5.5% inflation in 2020
The Ministry of Economic Development, Trade and Agriculture has predicted that inflation will be at the level of 5.5% in Ukraine in 2020. Minister of Economic Development Tymofiy Mylovanov wrote about this on Facebook. “According to the Ministry’s baseline forecast (scenario one), inflation forecast (consumer price index) for the next 3 years will be the following: 5.5% in 2020; 5.3% in 2021; 5.1% in 2022,” Mylovanov wrote. He also added that under the Ministry’s optimistic scenario, inflation is expected to reach 5.8% in 2020, 5.0% in 2021 and 2022. “The difference between baseline and optimistic forecasts is in the share of investments in the economy. The optimistic scenario envisages 3 billion more foreign investments. This scenario requires a better business climate, no corruption in government and local government, efficient judicial system, reforms (including the liberal land market and privatization),” the minister wrote. According to Mylovanov, the optimistic scenario predicts higher inflation by 0.3% in the first year due to a larger percentage of investments. “In the coming years, inflation will be slightly lower, by 0.3% and 0.1%, respectively. This will take place due to an increase in production and added value in the economy after investments take effect,” the official concluded. As Ukrinform reported, the National Bank of Ukraine (NBU) stated in its quarterly inflation report for October 2019 that inflation will fall to 6.3% at the end of 2019 and come to the target range (5% ± 1 p.p.) in early 2020 and reach the mid-term target of 5% at the end of 2020. At the same time, Ukraine's economy will grow by 3.5- 4% in 2019-2021. Also, the Board of the National Bank decided to reduce the discount rate from 16.5% to 15.5% per annum from October 25, 2019.
Ukraine ready for conclusion of FTA with UK, and hard Brexit – trade representative
Ukraine is ready for conclusion of a free trade agreement with the United Kingdom and for economic cooperation in the face of hard Brexit. "A free trade agreement [between Ukraine and the United Kingdom] is actually ready for conclusion," Deputy Economic Development, Trade and Agriculture Minister, Trade Representative of Ukraine Taras Kachka said at the conference "Trade Wars: The Art of Defense", an Ukrinform correspondent reports. He added that it provided fairly liberal access to the UK market. At the same time, the Trade Representative of Ukraine noted that a major methodological problem was the definition of the trade flow between Ukraine and the United Kingdom. Kachka explained that transactions carried out directly between Ukraine and Britain are only a part of real trade flow since too many transactions are consummated as exports to Poland, Germany or the Netherlands while the products are supplied further to Britain, being currently the only customs territory of the EU. "This is the biggest challenge. As soon as we find a solution to this methodological problem and the tariff parameters, we will also agree on the parameters of partial liberalization for certain categories of agricultural products. But in general, the British side and we are ready to conclude this agreement as soon as possible. Another thing is Brexit itself and its format. It is unknown when it will happen and on what conditions," Kachka noted. According to him, Ukraine is also ready for hard Brexit when there are no agreements: neither between Ukraine and the UK, nor between the EU and the UK. "The tariff that will be applied by Britain in case of hard Brexit is rather liberal and will not really harm the existing goods flow [between Ukraine and the UK]. But this is extreme situation. We follow all these processes," the Trade Representative of Ukraine summed up.
EBRD: Land market reform is historic opportunity for Ukraine
EBRD Managing Director for Eastern Europe and Caucasus Matteo Patrone has clarified his position on land reform and confirmed that he fully supports the land market reform in Ukraine. “We [EBRD] are also obviously completely in favour of reforming the land market. This is a historic opportunity [for Ukraine]. That is why we want to make sure it is implemented correctly and the right safeguards are put in place,” Patrone posted on Facebook after the meeting with Economic Development, Agriculture and Trade Minister of Ukraine Tymofiy Mylovanov. According to him, Ukrainians deserve to have transparent and fair agricultural land market and to be defended from corruption and abuse.
On November 9, EBRD Managing Director for Eastern Europe and Caucasus Matteo Patrone said at the Kyiv International Economic Forum that the implementation of land reform in Ukraine in haste might cause irreversible mistakes. As reported, the ban on farmland sales was introduced in Ukraine in 2001. Since 2002, the moratorium has been extended repeatedly. In December 2018, the Verkhovna Rada of Ukraine extended the moratorium on farmland sales until January 1, 2020.
Ukraine-EU agricultural products turnover reaches record $7.5 bln
In January-September 2019, the agricultural products turnover between Ukraine and the European Union made up $7.5 billion, which is by 23% more compared to the relevant period in 2018, according to the National Scientific Center Institute of Agrarian Economics (IAE). "In January-September 2019, the trade turnover of agricultural products between Ukraine and the European Union grew by 23%, to a record high $7.5 billion. The positive balance totaled $3.2 billion,” reads the report. The top seven trade partners of Ukraine in the EU remain the same: the Netherlands, Spain, Poland, Italy, Germany, France, and Belgium. In particular, the significant share in the ranking belonged to Belgium, with which the volume of Ukraine’s mutual trade in agricultural products grew by 19% compared to the relevant period last year, up to $401 million. The total share of these seven countries makes up about 4/5 of the total agricultural products turnover. The key export items supplied to the European Union’s markets were grain, oilseeds and sunflower oil and remnants of the processing industry. In January-October 2019, domestic exporters fully used duty-free quotas for supplies of honey (main and additional quotas), sugar, barley and flour, processed starch, canned tomatoes, apple and grape juices, corn (main and additional quotas), wheat, poultry, and butter.
Arakhamia: Google may move its headquarters from Europe to Kyiv
Ukraine has been actively negotiating with large foreign companies such as Apple, Google, PayPal, Rakuten, Binance, Amazon on possible entering the country.
"We have agreed with Rakuten [parent company of Viber]. We have been talking to Binance, the largest cryptocurrency exchange. We are now talking to Amazon about entering Ukraine. We are talking about a data center. We and Google discuss moving their headquarters from Europe here," David Arakhamia, the head of the Servant of the People party faction in the Verkhovna Rada, said in an interview with Liga.net.
Arakhamia doubts Facebook will enter Ukraine, stressing that this is linked, among other things, with the factor of Russia. "Facebook won’t [enter Ukraine]. They have a position that they do not need R&D [department] as it is concentrated in the US. And they have a sales office in Russia," he said. In addition, according to Arakhamia, the Russian factor influences negotiations with PayPal. The head of the Servant of the People party faction also stressed that negotiations with all mentioned companies are in active stage but their internal bureaucracy somewhat slows down the specific result. He believes that faster results should be expected from talks with individual businessmen, not the companies.
"We have an active stage of negotiations everywhere. But they have a lot of bureaucracy. Unfortunately, such investors are geared to credit ratings and compliance. Much faster, agreements are made with rich people from countries with authoritarian regimes," Arakhamia said.
Deputy minister Kachka: Ukraine has done much for ACAA agreement at legislative level
The Ukrainian authorities have made many decisions at legislative level concerning the Agreement on Conformity Assessment and Acceptance of Industrial Products (ACAA), the so-called "industrial visa-free regime." "Ukraine has done much to pass the relevant legislation [for "industrial visa-free regime"],” Deputy Minister of Economic Development, Trade and Agriculture of Ukraine Taras Kachka announced at the 3rd International Forum of Associations in Kyiv, an Ukrinform correspondent reports. At the same time, according to Kachka, now European companies which import goods from the EU to Ukraine ask the Ministry of Economic Development why they need to undergo similar procedures in Ukraine after they have already completed them in the European Union. The Deputy Minister considers that the long-term encouragement of Ukraine on part of the European Commission related to synchronization of legislation under the Agreement on Conformity Assessment and Acceptance of Industrial Products now creates some obstacles to common trade. Later, Deputy Managing Director at the European External Action Service Luc Devigne noted that Brussels had not promised Kyiv an "industrial visa-free regime."
At the same time, he noted that the trade relations between Ukraine and the EU had already become successful even without the ACAA Agreement. As reported, President of Ukraine Volodymyr Zelensky signed the law of Ukraine on amendments to certain legislative acts of Ukraine in connection with the adoption of the Law of Ukraine “On Standardization” which was passed by the Verkhovna Rada on September 20, 2019.
This law is one of the key to Ukraine's "industrial visa-free regime" with the EU.
Minister of economic development outlines five priority directions of work
Minister of Economic Development, Trade and Agriculture Tymofiy Mylovanov has outlined five priority directions of the ministry’s work, which includes reforming the labor market, fighting against monopolies, developing international trade, promoting investment and agricultural sector. The minister stated this in an interview with the Priamyi TV channel. “The first direction, labor market reform, is the most important for me: so that there can be less structural unemployment and people can find jobs faster and so that there can be professional development and the like. The second direction is antimonopoly policy: so that we have less monopolies and more competition in the market. The third direction is export and import, international trade so that we can be more successful due to exports. The fourth is everything related to state property, management, as well as investment and the business climate, that is, the private market," said Mylovanov.
And the fifth priority direction, according to the minister, will be the land market, “food security”, “food safety”, as well as “rural development”. “I want us to think strategically about how we will develop agro[sector],” Mylovanov said.
Mariupol Port can attract significant investments – Razumkov
Mariupol Sea Commercial Port can attract significant investments, Verkhovna Rada Chairman Dmytro Razumkov has stated. He said this during a working trip to the city of Mariupol on November 21, the press service of Mariupol City Council reported.
“Chairman of the Verkhovna Rada of Ukraine Dmytro Razumkov arrived in Mariupol today ... According to him, the purpose of the visit to Mariupol is to familiarize with the situation in the Sea of Azov and the region. The speaker expressed confidence that Mariupol Sea Commercial Port could attract significant investments,” the statement says.
Razumkov also touched upon the problem of road and rail communications. He recalled that the Mariupol-Zaporizhzhia highway had already been repaired, and similar projects would be implemented in the future. As reported, on November 21, Chairman of the Verkhovna Rada of Ukraine Dmytro Razumkov made a working trip to Mariupol.
Permanent Cadastre Committee in EU gives observer status to Ukraine
Ukraine has received the status of an observer with the Permanent Cadastre Committee (PCC) in the European Union, according to the State Service of Ukraine for Geodesy, Cartography and Cadastre. "On November 21, 2019, at the plenary meeting of the Permanent Cadastre Committee in EU, members of the committee unanimously voted for granting Ukraine, represented by the State Service of Ukraine for Geodesy, Cartography and Cadastre, the status of an observer,” reads the report. Ukraine has become the first of Eastern Europe’s countries, which is not a member of the EU, to hold the status of an observer with the Permanent Cadastre Committee in EU, created on October 14, 2012.
“Our country has access to the best European practices, which will serve as an auxiliary tool for the qualitative reorganization of the Ukrainian cadastre in line with European standards. Therefore, membership of the Committee shows that our state has great potential and significance at the international level,” reads the report
Ukraine intends to join memorandum on cooperation in maritime sector
Ukraine plans to join the Memorandum of Understanding between the International Maritime Organization (IMO) and the European Bank for Reconstruction and Development (EBRD) on cooperation in the maritime sector, according to Infrastructure Minister Vladyslav Kryklii. “Ukraine is interested in joining the Memorandum of Understanding between the International Maritime Organization and the European Bank for Reconstruction and Development on cooperation in the maritime sector. Ukraine's participation in the implementation of this Memorandum is supported by IMO. We have addressed the EBRD with a proposal to include Ukraine in the list of target countries,” Kryklii said, the Infrastructure Ministry’s press service reported. He added that the Infrastructure Ministry is also interested in attracting EBRD funds to support the development of inland waterways.
Over 1.5 mln unemployed registered in Ukraine in H1 2019
Over 1.5 million unemployed people were recorded in Ukraine in the first half of 2019, according to the Minister for Development of Economy, Trade and Agriculture Tymofiy Mylovanov. In a post on his Facebook page, he wrote: "The number of unemployed people aged 15-70 years, according to the State Statistics Service: 1,528,400 people in the first half of 2019, 1,578,600 people in 2018, and 1,847,600 in 2014”. In 2018, the unemployment rate in Ukraine made up 8.8%, which is half that of Greece but higher than in Poland, where the figure made up 3.9%.
EIB gives Ukraine EUR 400 mln loan to support farmers
The European Investment Bank (EIB) has launched a new project to support the agricultural sector in Ukraine and opened a EUR 400 million credit line for this purpose, according to a statement posted on the EIB website. "The European Investment Bank (EIB) has launched the Agri-Food Value Chain Project, which is backed by a loan of up to EUR 400m from the EU bank, along with donor-backed technical assistance, in order to support small and medium-sized enterprises (SMEs) and mid-caps in Ukraine. The programme is intended to help Ukraine benefit from the opportunities offered by the Deep and Comprehensive Free Trade Area (DCFTA) established under the Association Agreement with the European Union (EU)," the statement reads. The cereals, oil seeds and aquaculture/fisheries value chains are being targeted by the programme, as they have been identified as being best placed to satisfy domestic demand for quality produce and to increase the competitiveness of the sector and its exports to the EU and global markets.
Ukraine, IMF agree on three-year cooperation program
Ukrainian President Volodymyr Zelensky has held a phone conversation with IMF Managing Director Kristalina Georgieva, according to the website of the head of state.
"The head of state told about the reforms currently implemented in Ukraine and discussed the terms of the new cooperation program with the Fund. The head of the IMF praised the economic achievements of the new government and the progress made in implementing reforms by the government led by Prime Minister Oleksiy Honcharuk," the report reads.
Following the conversation, the parties noted that Ukraine and the IMF had reached a staff-level agreement on a new cooperation program. "I assured the President of the IMF's readiness to support the authorities’ policy agenda to maintain macro-economic stability and lift the economy to a path of higher, sustainable, and inclusive growth, including with a new IMF-supported program. [...] IMF staff has reached agreement with the authorities on the policies to underpin a new 3-year, SDR 4 billion (about US$ 5.5 billion) arrangement under the Extended Fund Facility," Georgieva said in a statement. Zelensky noted that the new program of cooperation with the IMF aims to accelerate economic growth, actively eradicate corruption and improve well-being of every Ukrainian. "We are 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," the president said.
