- UIA To Restore Flights to NY, Toronto, Delhi
- Dnipro Starts 3-year, $141 Million Airport Rebuild
- With Kyiv Hotel Rooms Averaging $57, Normalcy Seen in 2022
- SkyUp Bets on EU Travel This Summer
- At Check In: Vaccination Passport?
UIA restores flights from Kyiv to New York, Toronto, Delhi, Cairo and London-Heathrow, according to a new summer schedule that starts in time for the May holidays. The new schedule also restores a host of EU cities and increases frequencies to existing EU destinations.
Ukraine hopes to sign its long-delayed Open Skies agreement with the EU in 10 days, when Charles Michel, president of the European Council, visits Kyiv, Prime Minister Shmyhal tells Ukrinform. Fresh from a 2-day visit to Brussels, Shmyhal says: “At a face-to-face meeting, [EU Foreign Minister Josep] Borrell confirmed there were no issues with Ukraine.”
Dnipro airport, Ukraine’s largest airport construction project of the year, will be rebuilt by Kyiv’s Altis-Construction LLC. With a $141 million bid for the three-year project, Altis beat six other companies in an open tender by the Infrastructure Ministry. The government has budgeted $50 million this year, almost 60% of all government airport work for the year. Altis is to build a new, 3.2 km runway, long enough for Boeing 777s. Separately, Oleksandr Yaroslavsky’s DCH group is building a new terminal. While work continues, Dnipro airport will keep operating, using the old Soviet-era terminal and concrete runway.
In a survey of 172 hotels across Ukraine, 23% predict business will return this year to 2019 levels and 57% predict a full return in 2022, reports the Ukrainian Hotel & Resort Association and Horwath HTL Hungary. Last year, two thirds of hotels cut room rates and hotel staff. More than 60% of hotel managers said their revenues shrank by more than 40%. To increase revenue, one quarter rented rooms as temporary offices and one third invested in digital marketing. Revenues grew at seven hotels – all rural retreats.
In January, hotel occupancies were: Lviv – 35%; Kharkiv – 31%; Kyiv – 23%; and Odessa – 19%. The average room rate in Kyiv was $57, according to Hotel Matrix, a web-based analytics program connected to 150 hotels nationwide.
Due to controls surrounding coronavirus, the world tourism industry lost $935 billion during the first 10 months of 2020, reports United Nations World Tourism Organization. To allow safe travel, the EU and Israel are working to introduce ‘vaccination passports.’
Despite corona controls, Ukraine’s Border Service registered 11.2 million exits by Ukrainians last year, potentially one quarter of the nation’s adult population. Top destinations were: Poland – 4 million; Hungary – 1.6 million; Russia – 1 million; Turkey – 965,000; Egypt – 730,000, Romania – 626,000; and Belarus – 496,000.
Ukraine received 3.4 million visits by foreigners. The top countries were Ukraine’s land neighbors: Moldova – 933,000; Belarus – 463,500; Russia – 390,000; Poland – 272,000; Romania – 229,000; and Hungary – 217,000. By air, the top countries were: Turkey – 149,000; Germany — 74,000; Israel – 57,000; and the United States – 42,000.
The number of Kyivstar subscribers who traveled abroad during the Dec. 24-Jan. 10 holiday season was down 81% yoy, reports Ilya Polshakov, New Business Director for Kyivstar, Ukraine’s largest mobile phone company. According to the company, the top five destinations were: Egypt, Turkey, Poland, Moldova and Romania. Dropped from the 2019 top five were two EU countries largely closed this winter to Ukrainian tourists: Germany and the Czech Republic. Polshakov studied the domestic and international travel patterns of 300,000 Kyivstar SIM card holders during the holiday period.
One year after coronavirus controls shut down air travel, the Infrastructure Ministry wants to give $18 million in tax and airport rent relief to the four Ukrainian airlines that carried evacuation flights last year. With jets flying largely empty one-way, a total of 170 evacuation flights were carried out by: Azur Air Ukraine, SkyUp, UIA and Windrose.
On March 28, Mykolaiv airport wins back its lone scheduled flight, a Windrose Airlines flight to Kyiv. On March 1, Windrose resumes its charter flights from Mykolaiv to Sharm el Sheikh, Egypt.
For summer travel, Pegasus Airlines will launch six routes from Ukrainian cities to Turkish resort towns. With flights starting as early as April, the Turkish discount airline will fly from Kyiv Boryspil to Bodrum, Dalaman and Izmir. Pegasus also will fly to Bodrum from Kharkiv, Lviv and Zaporizhia.
SkyUp, Ukraine’s largest discount airline, started last year with double the fleet – all Boeing 737s – but carried only 1.2 million passengers, half its forecast. Despite a bad year, the airline retained most of its staff and is holding to its 5-year plan: add 5 to 7 new jets, open new bases and win 50% of Ukraine’s air passenger market.
This spring, SkyUp starts service from Kyiv Boryspil to two Polish cities popular with Ukrainian workers: Katowice and Lodz. At the end of May, as the tourism season starts, SkyUp plans to start service from Kyiv to Hannover, Marseille, Malta and Nuremburg. Adding new cities and new countries in June, the airline announces: “We are preparing to start flying from Kyiv and the regions to Poland, Germany, Denmark, Jordan, Sweden, Serbia and the Netherlands.”
Airlines are betting on Ukraine’s enduring love affair with Italy. Starting in late May, SkyUp will expand its Kyiv flight network to nine Italian cities: Bari, Bergamo, Bologna, Catania, Lamezia Terme, Naples, Rome and Rimini. In June, Lumiwings, a Greek company, plans to start flights between Odesa and two Italian cities – Forli and Perugia. At the end of April, UIA starts daily flights from Kyiv to Milan, Rome and Venice.
A sign of summer travel: people who want to visit Italy’s Sardinia island will have to present a coronavirus vaccination certificate, Governor Christian Solinas tells L’Unione newspaper, according to ANSA. Prior to boarding a plane or ferry, travelers will have to show a certificate of having received the two shots – and having tested negative.
The start date of vaccinations against Covid-19 in Ukraine is slipping by 2-3 weeks, Andriy Slavutsky, head of UNICEF health programs said at a vaccination training event. Due to paperwork delays, “the Pfizer should arrive in late February or early March,” he said. Moldova also hopes to start vaccinating in early March, By contrast, Ukraine’s EU neighbors –Poland, Slovakia, Hungary and Romania – already have vaccinated 5-6% of their populations, according to the Financial Times vaccine tracker. Russia has vaccinated 2.7%. Belarus started vaccinating last month with the Russian-made Sputnik V vaccine.
Miss flying? For $95, UIA offers on Sunday, March 7 a “Flight over Kyiv”. This 70-minute excursion features a view of Chornobyl nuclear plant from 900 meters and an overflight of Antonov’s airport at Gostomel, home of the world’s largest airplane, the An-225 Mriya. Off duty UIA pilots will mingle in the passenger cabin of the 100-seat Embraer 195, answering questions about flying over Kyiv. (Two on duty pilots are to stay in the cockpit). UIA proposes some sample questions: “Is it possible to fly without engines? What is turbulence and is it worth it to be afraid?”
- Strong Iron and Steel Prices Boost Metinvest Capex
- China’s Stranglehold on Rare Earths Gives Ukraine Big Mining Opportunities
- Japan, Canada FTA Action
- State Railroad Plans WiFi For Intercity Trains
- Black Sea to Baltic Rail Corridor Takes Shape
Metinvest, Ukraine’s largest private company, plans to increase its capital expenditures this year by about 25% yoy, to $800-850 million, Oleksandr Lyubarev, corporate finance and treasury director, said in an analyst call on the company’s 2020 results. Thanks to strong steel prices, the integrated mining and steel conglomerate starts this year with a cash pile of $826 million. Metinvest’s EBITDA in 2020 increased by 74% YoY to $1.8bln. While mining was little changed, at $1.1 billion, metals contributed an extra $900 million, compared to 2019.
Dragon Capital writes: “Metinvest’s 2020 results were expectedly strong thanks to a surge in iron ore and steel prices in 2H20…During the call, management sounded optimistic about the prospects for 2021, with both iron ore and steel prices remaining strong.”
With China accounting for 80% of rare-earth imports into the U.S., Ukraine could benefit from Washington’s growing nervousness about supplies, mining experts say. Rare earths are essential for production of goods ranging from smart phones to fighter jets. “China is exploring whether it can hurt U.S. defense contractors by limiting supplies of rare-earth minerals that are critical to the industry,” the Financial Times reported. Chinese rare earth producers told the FT that Chinese government officials had asked them how badly US and EU companies would be affected if China restricts rare-earth exports during bilateral disputes. Earlier, Bloomberg outlined the threat in a lengthy report: “How China Overpowered the U.S. to Win the Battle for Rare Earths.”
Mining World.com argues that Ukrainian miners focus on the easy pickings: vast deposits of high quality iron ore. “Ukraine is developing its raw material potential one-sidedly,” reports the website. “A limited range of minerals used in the coal–iron ore –steel chain. The industry still has untapped reserves of rare-earth materials left intact.”
“Ukraine harbors significant reserves of non-ferrous and rare-earth metals including unique deposits of beryllium, zirconium, tantalum, and a complex of phosphoric rare-earth and rare-metal ores,” reports MiningWorld.com. “Ukraine’s confirmed reserves of lithium are the largest in Europe. The country also has a real opportunity to enter the global market with pure and ultra-pure metals such as gallium, indium, thallium, lead, and tin…Ukraine just needs to harness its mineral resources to thrive. For this to happen, new technologies and large investments are needed.”
“Deposits of less-common metals and rare-earth group are of special value,” reads the World Data Center’s National Atlas of Ukraine. “Geologists have [mapped the] Perha deposit of beryllium in Zhytomyr Oblast, large Azov deposit of rare-earth group in Donetsk Oblast, Polokhivka and Stankuvate deposits of lithium in Kirovohrad Oblast.”
A Japan-Ukraine free trade pact and cooperation between the Japan Space Agency and Dnipro’s Pivdenne Design Bureau are on the horizon for the 2020s, Serhiy Korsunsky, Ukraine’s Ambassador to Japan said at a Kyiv forum on bilateral relations. “There have already been several dozen such meetings – this is the beginning of negotiations on a free trade agreement,” said Korsunsky, who arrived in Tokyo last fall. He said work is advanced on updating a Soviet-era convention on avoiding double taxation, Ukrinform reports.
Canada and Ukraine plan to start talks this year to expand the 2017 Canada-Ukraine Free Trade Agreement to cover services and investments, Ukraine’s Foreign Ministry reports. On Tuesday, Marc Garneau, Canada’s new Foreign Minister, had an extensive telephone call with Dmytro Kuleba, Ukraine’s Foreign Minister, to review the bilateral relationship.
With train passenger rider volumes at half the levels of one year ago, Ukrzaliznytsia plans to lay off 30,000 workers, about 11% of the 260,000 total, Vadim Bubnyak, chairman of the Trade Union of Railway Workers and Transport Builders of Ukraine, told reporters. Wednesday, employees of the state railroad staged a protest in front of the Cabinet of Ministers.
Aiming to introduce Wi-Fi Internet on all intercity trains, Ukrzaliznytsia plans to launch a pilot project shortly on one of the most popular routes – Kyiv-Kharkiv-Kyiv, announces Volodymyr Reznik, the railroad’s IT Director. “Intercity + trains are often used as offices on wheels, so in these trains it is first of all important to ensure high-quality Internet access,” he says. “If this project is successful, we will introduce Wi-Fi in all trains, ensuring uninterrupted communication throughout the journey of trains through Ukraine.”
Offering Ukraine as a transport corridor for shipment of goods between Turkey and Sweden, Ukrzaliznytsia has proposed specific routes, Edwin Berzins, head of the railroad’s Liski terminal in Kyiv, told web conference co-sponsored with the Polish port of Gdansk: “Creating a new corridor between the Baltic and Black Seas.” He said last week: “We have proposed an exact calculated route – Turkey-Ukraine-Poland – together with partners in this project.”
Poland’s PKP Cargo wants to develop a border terminal at Medyk as a transit point for Europe’s East-West trade with China. Located three kilometers west of Lviv oblast, the Polish terminal has two parallel sets of tracks: EU gauge and the wider gauger of the former Soviet Union. “The company can reload containers that should appear in the near future, thanks to new intermodal lines from China through Ukraine,” Witold Strobel, a PKP board member, tells the Center for Transportation Strategies.
China surpassed the U.S. last year as the EU’s top trading partner, Eurostat, the EU’s statistical office, reported. “In 2020, China was the EU’s main partner,” the agency reported. “This result was due to an increase in imports (+ 5.6%) and exports (+ 2.2%).” The EU’s trade deficit with China rose to $219 billion last year, from $199 billion in 2019. With more and more cargo moving by rail, Belarus and Ukraine are competing to win this transit traffic.
- Cold Snap Exposes Ramshackle Power System
- Aslund: Don’t Hold Your Breath for IMF Deal
- China’s DiDi Taxis Coming
- Kyiv Sikorsky Airport to Expand: Bigger Planes = Fewer Planes
A cold weather spike in electricity consumption, a lack of coal, and power plant breakdowns are forcing Eastern Ukraine to import electricity from Belarus and Russia and Western Ukraine to import electricity from Slovakia, Romania and Hungary, reports Ukrenergo, the national power distribution company. As of Monday, 19 thermal power plants were offline, pulling 6,270 MW out of the system, Volodymyr Kudrytskyi, Ukrenergo’s chairman told a forum in Kyiv.
Electricity consumption last week was 6.5% more than forecast. But coal reserves fell to one third of required minimums. Thanks to imports, Kudrytskyi does not predict immediate power shortages.
DTEK Group, Ukraine’s largest private power producer, called on the government “to abolish price caps, which are an obstacle to the liberalization of the electricity market.” The company cited the example of the EU, where the cost of electricity production during peak loads can increase significantly. DTEK said: “We call on the government to intervene in the situation and immediately hold an anti-crisis headquarters with the participation of the Prime Minister.”
Ukraine’s Energoatom will soon stop sending spent nuclear fuel to Russia for processing and storage, Petro Kotin, the company head, said. In July, the Centralized Spent Fuel Storage Facility will open, he said. At the same, time, Energoatom is completing a 43 km rail connector to the facility, built by Holtec, a US company, near Chornobyl. Nuclear supplies about half of Ukraine’s electricity.
With demand strong for Ukrainian government bonds, the Finance Ministry depressed yields on all five hryvnia bonds sold at auction, the Ministry reported. With yields dropping from six to 44 basis points, the final range was 9.15% for 3-month bonds to 12.05% for 3-year bonds. The government sold hryvnia bonds for the equivalent of $213 million. Also posting results on Facebook, the Ministry says it sold $42 million worth of 2-year dollar bonds at 3.9% and €70.5 million worth of 1-year euro bonds at 2.5%.
Looking beyond the bland public statements surrounding Ukraine’s recent suspension of talks with the IMF, Anders Aslund, a veteran IMF observer, writes in an Atlantic Council blog: “No agreement was concluded between the IMF and the Ukrainian government recently because they fundamentally disagree about pretty much everything.” Offering the only way forward, Aslund writes that President Zelenskiy “urgently needs to refocus on the anti-corruption messages that enabled him to win landslide election victories in the presidential and parliamentary votes of 2019.” Without real actions, he writes, the IMF “has no compulsion to offer credits to the dishonest.”
DiDi, China’s giant online taxi service, plans to launch this year in Ukraine, reports AIN.ua news site. With 550 million users, tens of millions of users and billions of dollars in revenues, DiDi entered Russia last year, a first step in a plan to expand across Eastern Europe. Last week, DiDi posted on the GRC job search website that is looking for a manager to launch in Ukraine.
DiDi will compete with Bolt, Uber and Uklon for Ukraine’s taxi market, estimated by Uklon at $800 million a year. Uber, the first mover in Ukraine, now operates in seven Ukrainian cities and claims that 4.3 million Ukrainians have downloaded its mobile app. Uklon operates in 19 cities and claims nearly 3 million users. Bolt operates in 10 cities and claims 2 million users.
Taxi services got a boost when the Rada overwhelmingly approved a bill raising the penalty for drunk driving to $608. For repeat offenders, the fine is doubled to $1,216, licenses are suspended for three years and vehicles can be seized. The Rada also tripled the fine – to $60 – for drivers caught breaking the national speed limit of 50 km per hour in populated areas.
McDonald’s Ukraine plans to expand a pilot program of restaurant waste recycling to all 96 restaurants in the country by the end of this year, the company announced Wednesday. As part of a worldwide McDonald’s drive to switch from plastics to paper by 2025, the restaurants in Ukraine switched last year to paper cups for drinks and paper boxes for salads.
Kyiv’s 11th Regus office work space opens in Podil next month, reports the parent company, Luxembourg-based IWG Plc. Despite last year’s economic recession, total occupancy of the 10 existing Regus work spaces in Kyiv is 78%, Yulia Lytvynenko, Ukraine director of IWG, tells Interfax-Ukraine. Predicting that several large leases will be signed in coming weeks, she predicts that the overall occupancy will rise “to 83% by March.” The new Regus will occupy three floors of the new Volodymyrsky business center on Poshtova Square, near Poshtova Metro station and the Kyiv Funicular. Lytvynenko says: “The highlight, surely, will be beautiful views of the Dnipro River on the one hand and the [Volodymyrska Hill] park on the other.”
Kyiv’s Sikorsky Airport is to add 500 meters to its runway, allowing Wizz Air, its primary user, to use larger jets. By moving to Airbus 321 jets, Wizz Air says it can reduce frequencies and noise in the capital’s Zhuliany neighborhood. Wizz Air has ordered 190 Airbus 321s, which carry 30% more passengers than the Airbus 320s, currently the workhorse of Wizz Air.
Mayor Klitschko signed an order last week for design work to start on a 5-year upgrade of the airport. By expanding the runway to 2,810 meters, upgrading lights and adding an instrument landing system, the airport is to be certified to land jets in bad weather, avoiding diversions to Boryspil. Ukraine’s second busiest airport, after Boryspil, Sikorsky handled 2.6 million passengers in 2019. The City Council is mulling a second expansion: increasing the airport’s territory by 5%, to 278 hectares.
- Abu Dhabi Deals Total $3 Billion
- Ukraine’s Trade Deficit Plummets by 93%
- No IMF Money, ‘No Catastrophe’
- Defying EU and US, NABU Chief to be Sacked
A total of $3 billion worth of deals and memorandums were signed over the last two days by Ukrainian company executives and officials in the United Arab Emirates, the third largest economy in the Middle East, after Turkey and Saudi Arabia. President Zelenskiy led a delegation of executives from 18 Ukrainian blue chip companies, including: BGV, DTEK, Dragon Capital, Epicenter, EastOne, Fortior, Horizon Capital, Interpipe, Mais, Metinvest, Oschadbank, OdesaGas, TAS Group, UMG and Unit.City.
After Sunday’s defense production deals, most of the wednesday contracts were signed with Mubadala Investment Fund, the oil-rich nation’s sovereign wealth fund. With $232 billion in assets under management, Mubadala aims to double in size in this decade to half a trillion dollars, Bloomberg reported last month. “[This] plan will vault it into the top ranks of the world’s sovereign wealth funds,” Bloomberg reported in a story headlined: “Abu Dhabi’s $232 Billion Mubadala Wants to Take Crack at Top 10.” To start, Mubadala last year increased its new investments by 51%, to $11.5 billion in 2020.
“Ukraine has very promising potential for foreign investment, and the signing of memorandums with leading entities of Ukraine represents a commitment to explore potential investments and areas of cooperation on a case-by-case basis,” Faris Al Mazrui, head of the fund’s investment program for post-Soviet countries, told WAM, the Emirates’ news agency. “We are impressed by the quality and caliber of Ukrainian businesses.”
Deal highlights are:
DTEK CEO Maksym Tymchenko signed a memorandum of understanding with Masdar, Mubadala’s renewable energy company. Masdar CEO Mohamed Jameel Al Ramahi noted that Masdar has projects in 30 countries and added: “Our business model is based on forging strong partnerships in the sectors and geographies in which we operate, and we look forward to exploring potential areas of collaboration with DTEK in Ukraine.”
Oschadbank, or State Savings Bank of Ukraine, signed an agreement with Mubadala “to identify potential initiatives for joint investment in Ukraine,” reports the bank’s press service.
Abu Dhabi is setting a goal of “increasing trade and investment in agro with Ukraine 10 times over several years, that is, to bring it to $2 billion a year,” Zelenskiy economic advisor Timofei Milovanov wrote on Facebook after meeting with Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of the UAE. To implement this, Roman Leschenko, Ukraine’s new Agriculture Minister, signed a bilateral food trade and ‘agro hub’ memorandum with UAE’s Ministry for Food and Water Security.
Abu Dhabi’s INTELMAX Management Consulting will set up a Kyiv office to work with Ukraine’s Finance Ministry to create a platform for the exchange of intellectual property based on Fantom blockchain and to introduce blockchain technologies in state processes and public services.
Dubai Ports World showed President Zelenskiy their proposal to create several new terminals in Yuzhny, Ukraine’s busiest port. DP World has drawn up plans to build terminals for general grains, minerals, timber, liquid and roll-on/roll-off. Last June, DP World bought a majority stake in Yuzhny’s TIS Container Terminal. At yesterday’s meeting at Dubai Maritime City, Zelenskiy invited DP World to build a hotel/marina in Odesa and to participate in upcoming concession tenders for four state-owned ports.
Dmytro Sennychenko, chairman of Ukraine’s State Property Fund, and Sergiy Tsivkach, executive director of UkraineInvest signed memorandums with Mubadala to create possibilities for large scale investments in Ukrainian state companies that are coming up for privatization.
Ukraine’s trade deficit in goods and services shriveled last year to $255 million – 93% below the level of 2019, reports the State Statistics Service. The most dynamic factor was the 12.5% drop in imports of goods, to $59.3 billion. Exports of good fell by a smaller amount, by 7.8%, to $59.04 billion.
Asia was Ukraine’s fast growing export market, the Economy Ministry reports on its website. “The most important indicators are the phenomenal growth of exports of Ukrainian products to Vietnam and China – by 93% and 98%, respectively,” Economy Minister Igor Petrashko. For the first time in several years, exports to the EU decreased, dropping by 10%. Ukraine trade deficit with the EU grew to $4.8 billion.
Ukraine’s economy returned to normal at the end of last year with fourth quarter GDP down only 0.7% below the fourth quarter of 2019. Despite the weekend lockdowns in November, consumer demand was a major force in pulling economic activity back to normal, the Economy Ministry reported on Facebook. Real wages were up 9.6% yoy.
No IMF tranches “will not be a catastrophe” for Ukraine, Danylo Hetmantsev, chairman of the Rada’s Committee on Tax and Customs Policy, told reporters. The IMF announced that it would take a break in reviewing Ukraine’s Standby Arrangement, after six weeks of remote conversations. “It will be much harder for us to pass 2021 without the next tranche of the IMF, but it will not be a catastrophe in any case,” he said. “We have the right resources. We have the right opportunities to do it. There will be no catastrophe. Budget commitments will be fulfilled. There will be financial stability in the country. There will be currency stability.”
The Cabinet of Ministers submitted a bill to the Rada to fire Artem Sytnyk, head of the National Anti-Corruption Bureau of Ukraine, or NABU. Funded largely by the EU and the US, the bureau is key to Ukraine continuing to receive foreign aid. The Kyiv Post reports anti-corruption activists charge that Sytnyk is to be fired because he angered President Zelenskiy by pursuing a bribery case against the president’s deputy chief of staff, Oleh Tatarov, and for investigating possible embezzlement by the Health Ministry in the purchase of Covid-19 vaccines from China.
- UAE Signs $1 billion in Defense Deals with Ukraine
- Food, Space Technology To Follow
- EU Bank Loans €270 Million to Rebuild Boryspil’s 50-year-old Runway
- IMF Takes a Break after Six Weeks of Zoom Talks
Yuriy Gusev, Ukroboronprom’s director general, signed $1 billion worth of agreements and contracts in the United Arab Emirates with the country’s two leading military equipment manufacturers, the EDGE Group and Tawazun Economic Council. “We are delighted with the opportunities for the UAE and Ukraine to cooperate, exchange and benefit from the military and the technical capacity of the two countries,” said EDGE CEO Faisal Al Bannai, according to Zelenskiy’s presidential website.
Nicknamed “Little Sparta” by former US Defense Secretary James Mattis, Sunni-dominated UAE is a close ally of Saudi Arabia and faces Shia Muslim Iran across the Strait of Hormuz. Government-owned EDGE specializes in drones, long range missiles, cyber defense, and electronic warfare. It has 12,500 employees and $5 billion in annual revenues. The Stockholm International Peace Research Institute ranks EDGE 22nd in its list of world’s largest arms companies. SIPRI researcher Pieter Wezeman writes: “EDGE is a good illustration of how the combination of high national demand for military products and services with a desire to become less dependent on foreign suppliers is driving the growth of arms companies in the Middle East.”
With the UAE’s Hope probe now in Mars orbit, Ukrainian space and high tech companies could contribute to boosting bilateral trade, Zelenskiy said in a meeting with Sheikh Muhammad bin Zayed Al Nagayan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. The two countries vowed to increase trade “several times” from the 2019 level of $1.65 billion. Zelenskiy said high level Ukrainian delegations are coming to the Emirates for two big trade fairs – Gulfood in Dubai, and IDEX, or the International Defence Exhibition and Conference, in Abu Dhabi.
“Ukraine can and will become a guarantor of food security in the Emirates,” Zelenskiy told WAM, the Emirates News Agency, shortly after arrival. “We are among the world leaders in the export of wheat, corn and barley.” With a population of 10 million, the Emirates has an economy three times bigger than Ukraine’s, but imports 85% of its food – $2 billion worth last year. Last year, Ukraine exported $252 million worth of food to the UAE. Zelenskiy noted that Ukraine’s pavilion at the World Expo that opens in Dubai in October will be shaped like a 15-meter high sheaf of wheat. He said: “The yellow color on our flag symbolizes the wheat field and readiness to contribute to world food security.”
The six-month Expo ideally will promote Emirates investment and tourism in Ukraine, Zelenskiy said. In 2019, 250,000 Ukrainians flew to Dubai, the Emirates’ largest city, using four airlines – flydubai, UIA, SkyUp and Air Azur Ukraine. Zelenskiy said 15,000 Ukrainians live in the Emirates and 200 Ukrainian companies have offices there.
The European Investment Bank will lend €270 million to rebuild Boryspil airport’s 50-year-old western runway, the EU bank announced at its Luxembourg headquarters. In addition to replacing the obsolete 3,500 meter long concrete runway, the 20-year loan will go to improving de-icing, airfield lighting, and instrument landing. Looking beyond today’s coronavirus travel restrictions, Prime Minister Shmyhal said in Luxembourg: “The loan signed for Boryspil International Airport will ensure the development of infrastructure and strengthen the position of the international hub.”
The EIB also is loaning Ukraine €50 million to buy Covid-19 vaccines and modern refrigeration equipment to store them, the bank reported. Earlier, the World Bank announced it would loan Ukraine $89 million to buy vaccines.
Vaccinations started in Ukraine, Viktor Lyashko, chief sanitary doctor and deputy health minister, said. Over the next 10 weeks, 367,000 people are to be vaccinated – largely soldiers and Covid-19 doctors. By the end of this year, the Ministry hopes to vaccination almost half of the nation’s adults.
After six weeks of remote talks, an IMF team in Washington suspended its work with Ukraine, awaiting “more progress.” Needed steps include adopting legislation to restore anti-corruption bodies, cleaning up the courts and phasing out price controls on natural gas. Goesta Ljungman, the IMF representative in Kyiv, said: “The discussions were productive, but more progress is needed to support completion of the first review under the program. Discussions will continue.”
At stake are soft loans of: $2.9 billion from the IMF, $750 million from the World Bank and €600 million from the EU. With $29 billion in foreign currency reserves and manageable debt repayments through the summer, many analysts say the government does not feel pressure.
Hours before talks were suspended, Dragon Capital wrote: “Moderate fiscal funding needs in the coming months suggest no urgency about IMF financing…We expect a $0.7 billion second tranche in July-August and identical third disbursement closer to year-end.”
With Eurobond rates low, Ukraine may not feel urgency, analysts say. With the Biden Administration forming its policy and team for Ukraine, the IMF may be waiting to get clear signals from the US, its largest shareholder.
Tim Ash writes from London: “It’s always a frustration in Ukraine that in times of flush global market liquidity reform momentum stalls…Markets can of course turn… Ukrainian policy makers would thus be well advised not to bet everything on markets remaining open to them this year, and to try and get back to proper talks with the IMF ASAP.”
In response, President Zelenskiy promised to submit to the Rada needed draft bills to improve the judicial system and “insist” lawmakers debate them “quickly.” Finance Minister Serhiy Marchenko emailed Bloomberg to say: “Ukraine remains committed to its reforms agenda and fruitful partnership with the IMF.” Underlining the lack of urgency, presidential advisor Timofiy Milovanov, a supporter of reforms, told Interfax-Ukraine: “Financial and macroeconomic stability is maintained. There are no systemic risks. The situation with the budget is normal.”
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.
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