Ukrainian President Volodymyr Zelensky orders privatization of Ukrspyrt, Ukraine’s monopolist in producing potable alcohol. The Cabinet of Ministers will prepare the state company for privatization, Zelensky said at a meeting with Ukraine’s ministers and members of parliament on Feb. 4. Apart from privatising Ukrspyrt, Ukraine will take steps in fighting the illegal production and sale of alcohol in Ukraine. Ukrspyrt has long suffered from entrenched corruption, inefficiency and decaying production facilities — despite maintaining its monopoly position for years. Ukraine abolished the state monopoly on spirits on Jan. 1, 2020. The goal was to create a transparent alcohol market in the country, UNIAN reports.
Rakuten, the owner of messaging app Viber, will open its second office in Ukraine. The second office will focus on research and development and will be located in Kyiv, the Japanese tech company announced after its meeting the representatives of the Ministry of Digital Transformation late on Feb. 4. The company’s first office is in Odesa, where it employs 120 people. Rakuten also plans to initiate internships and educational projects for students as well as to support local entrepreneurs.
Ukraine exported 19% more agricultural goods in 2019. The exports grew to $22.2 billion, according to a report by the Ukrainian Agribusiness Club. Imports of the agricultural goods increased too – by 14% in 2019 – and reached the benchmark of $5.7 billion. Ukraine’s balance of trade in agricultural products is positive and amounts to $16.5 billion, which means that the country exports more agricultural products than it imports. Agricultural products made up 44% of Ukraine’s total exports in 2019 compared to 39% in 2018.
Ukraine exports 9.4% more fruits, vegetables, berries and nuts in 2019. The country exported $339 million worth of horticultural products and achieved a historical record, the Ukrainian Horticultural Association (UHA) stated on Feb. 4. The country has thus overcome the shock of Russia’s embargo on Ukrainian horticultural products imposed in 2016. Instead, Ukrainian farmers have learned to export their products to countries with higher requirements for food quality and safety. Such countries tend to pay higher prices for Ukrainian products than Russia, according to UHA.
Ukrainians keep 8% more money in local banks protected by the State Deposit Guarantee Fund. The total amount of money stored across 74 ensured Ukrainian banks was Hr 474.44 billion ($19.2 billion) as of Jan. 1, 2020, the fund stated on Feb. 4. This included national currency deposits worth Hr 279.5 billion ($11.3 billion) and foreign currency deposits worth Hr 195 billion ($7.9 billion). The fund ensures deposits in its client banks from Hr 10 to Hr 200,000 ($0.40-$8,106) opened by both individuals and private entrepreneurs.
Parliament passes bill on financial leasing in first reading. Passed on Feb. 5, the bill aims to improve the leasing industry in Ukraine. In particular, it is designed to eliminate conflicting definitions and interpretations describing leasing, as well as to eliminate conflicts between the general civil legislation and specific financial legislation. “We are proposing a bill that is very necessary for the industry,” said Danylo Getmantsev, head of the Verkhovna Rada committee on finance, taxation and customs. The leasing industry boasts a volume of Hr 15 billion ($608 million), which is about 1% of the country’s gross domestic product, according to Getmantsev. Meanwhile, in developed countries, leasing accounts for 2–5% of GDP.
Ukraine’s parliament moves to run a forest inventory in the country. The Verkhovna Rada passed amendments to the Forest Code on Feb. 5, which will allow the country to count its stock of forest. THe last time Ukraine inventorised its forests was back in 2011 and “now there is no relevant information on the forests of Ukraine,” the authors of the bill said. The results of the inventory will be used to manage forest resources and fight deforestation. “Until now, we have not had comprehensive information on the condition and dynamics of forests, on the quantitative and qualitative characteristics of the forests, on the needs for planting,” explained Oleksiy Orzhel, minister of energy and environmental protection.
Ukrainian railway operator Ukrzaliznytsya and its German counterpart Deutsche Bahn sign memorandum on cooperation. The companies aim “to develop a concept for providing Ukrzaliznytsya with the necessary managerial and technical support in the sphere of cargo and passenger traffic, infrastructure, services and equipment maintenance,” according to the Cabinet of Ministers of Ukraine. The parties will sign a strategic partnership agreement detailing the scope and the framework of cooperation. The goal of the agreement is to ensure gradual transformation of the Ukrainian railways to the European model of railway transport services.
Zelensky directs $2.9 billion from arbitration win against Russian energy company Gazprom to infrastructure, medicine and energy efficiency. “We are planning to direct additional funds to the construction of roads – this is our infrastructure priority, to other infrastructure projects, to the medical sector and energy efficiency. One of our plans is to build 200 hospital admission units across Ukraine,” the president said during his meeting with Ukraine’s ministers and members of parliament on Feb. 4. In 2018, Ukrainian state gas company Naftogaz won the money in an aribtration case against Gazprom over gas transit contracts in the Stockholm arbitration court.
The monthly business activity index has fallen by 8.3 points to an indicator of 40.3. The National Bank of Ukraine (NBU) introduced the index in August 2019. On a scale of 1 to 100, an indicator of below 50 reflects contraction, while one above 50 reflects expansion. According to the latest data, business sentiment was down in January due to “traditional slowing of business activity at the start of the year, in particular, due to holidays and a small number of business days,” the NBU explained. Industrial companies have held pessimistic expectations for the outcome of their work for four month in a row, the NBU concluded. The research has also revealed that the business sentiment in construction has fallen the lowest – to 34 points and that respondents expected decreased numbers of employees in their enterprises “under conditions of decreased business activity.”
