While Ukraine continues to report relatively few cases of COVID-19, its businesses and the housing market are feeling the pain from quarantine measures. Almost a third (29%) of Ukrainian companies have suspended their trading activity and 6% have completely closed down, OpenDataBot, a site that monitors Ukrainian state registries, reported on April 6.
Ukrainian micro-enterprises have reported a 90-100% drop in income since the beginning of the quarantine. Data also shows that these businesses have had to dismiss up to 50% of their staff. Owners of small and medium enterprises reported 25-50% losses as compared to the pre-quarantine period. They also reduced their number of workers by nearly 25%.
Large businesses are also suffering and have lost up to 25% of their profits and are expected to dismiss nearly 25% of their staff. The entertainment and transport industries are the hardest hit. These enterprises have no sources of revenue during the quarantine, as the government canceled all mass gatherings, suspended fights, shuttered subways and banned buses in a bid to ward off the spread of COVID-19.
There’s bad news for the housing market too. According to the Dobovo housing rental service, rental prices in Ukraine have fallen three-fold. Nataliya Romanyuk, the CEO of Green Way Property in Kyiv, told the Kyiv Post on April 8 that, although the prices for commercial spaces are down, people are opting to rent houses outside of the city.
Despite the pain, more and more businesses in Ukraine are opening their pockets and writing checks to help in the fight against COVID-19. Despite estimates that businesses may see their cash flows halved in 2020 compared to the previous year, during the crisis scores of large companies have been donating hundreds of millions of hryvnias to provide hospitals with much-needed ventilators, diagnostic tools and protective equipment. Others have arranged free transportation and communication services for medical workers, as well as critical food and medication deliveries to at-risk populations. Read more here.
The job market is also frozen, with unemployment and sick leave increasing as companies close or put their activities on pause. To stay afloat during the quarantine, Ukrainian businesses are opting to cut salaries and dismiss staff. According to Factum Group Ukraine, 20% of Ukrainians have been forced to take unpaid sick leave during the quarantine. The number of job offers is also in decline. Ukrainian job search website Work.ua reported that, during the first two weeks of quarantine, the number of job openings decreased by a factor of 1.8.
To mitigate some of the job market damage, state road agency Ukravtodor said it would create 150,000 new jobs this year. The agency says it needs more manpower working on $2.75 billion worth of planned repairs and construction projects throughout Ukraine’s dilapidated road network. “If we are talking about the entire financing project in the amount of UAH 75 billion, we are talking about 150,000 jobs created in our industry and directly in related ones. The average salary is about UAH 16,500,” agency head Alexander Kubrakov said, in answer to questions from LIGA.net.
Ukraine International Airlines (UIA) has started to pay compensation to families of passengers who were killed in the crash of a Boeing 737 in Tehran, the capital of Iran. UIA President Yevhen Dykhne told Interfax-Ukraine: “The first part of compensations has been paid to certain passengers’ [families]. This procedure is not so fast, but it has to be completed,” he said.
Ukraine International Airlines (UIA) has asked the state for stabilization loan of $50 million at a rate of 5-6%. UIA President Yevhen Dykhne told Interfax-Ukraine: “We wrote to all the authorities that could influence the situation, described the problems of the market, reported that we expect direct losses from downtime of $60 million in our company. We proposed a solution that provides for not direct subsidies to businesses, as in economically successful countries, but more loyal to the situation Ukraine – to provide us with a stabilization loan.”
Dykhne also noted concerns over how Iran was conducting its crash investigation and allegedly not cooperating with Ukraine. “It is unpleasant to state that today we are facing a dead end with regard to the technical investigation which was conducted in Iran,” he said. “They did not pass the flight data recorders to any laboratories, there are no reports on the completion of the investigation, as well as no information about successful intergovernmental agreements regarding payment of compensations by Iran.”
Businessman Oleksandr Yaroslavsky, the former co-owner of UkrSibbank, could acquire Bank Credit Dnipro, which is currently owned by Ukrainian oligarch Victor Pinchuk. The Antimonopoly Committee of Ukraine (AMC) told Interfax-Ukraine that the agency allowed Yaroslavsky to purchase more than 50% of the shares in the bank.
Ukrgasbank sees net profit rise by 630 percent in the first quarter of 2020. State-controlled Ukrgasbank’s January-March 2020 profit amounted to UAH 340 million, which is 6.3 times more than in the same period last year (UAH 54.3 million), the bank’s website reports. The bank noted that it continues to actively lend to Ukrainian businesses, in particular, since the launch of the Affordable Loans 5-7-9% program in February, it has issued over 120 loans to entrepreneurs for business development. Ukrgasbank recalled that its net profit in 2019 exceeded UAH 1 billion. State-owned banks in Ukraine pay much of their profits to the state budget as a form of tax.
Police in Ukraine have served a suspicion notice against a man who allegedly set fire to parts of the Chornobyl exclusion zone. On April 8, roughly 35 hectares of forested area inside the radioactive zone close to the abandoned town of Pripyat continued to burn. More than 220 tons of water was dropped by helicopters and planes to try and extinguish the smoldering fires. A spokesperson for the National Police said they had one suspect and would prosecute: “It is a 27-year-old resident of the village of Rahivka with criminal records. The man explained to the policemen that he set the grass in several spots near the local abandoned farm on fire for fun.”
