- Corona Controls Coming
- Ze’s Confrontation With Court Fizzles
- China’s Doubles Purchases of Sunflower Meal
- Kernel, Metinvest Profit from Lower Bond Yields
- UZ Plans $1 billion Capital Spend
With new coronavirus cases approaching 10,000 a day, the government is drawing up new controls that could be implemented. “The Ukrainian economy should not suffer from a total lockdown,” Prime Minister Shmygal told reporters. After talking to French and German epidemiologists on how to break the chain of human transmission, the government is considering these steps: elderly shopping hours, weekend lockdowns of cafes and restaurants, and a mass levy of $6-9 fines for not wearing masks in enclosed public places. Large cultural activities as well as gyms and swimming pools may stop.
Ukraine’s new infections tripled over the last six weeks. But, Ukraine is a part of a second wave that is provoking new lockdowns across most of the EU. In Worldometer’s index of new cases per 1 million inhabitants, Ukraine is on the low end compared to its six land neighbors. Here are the rates: Hungary – 9,834; Ukraine – 9,864; Belarus 10,933; Russia – 11,375; Poland – 12,336; Slovakia – 12,587; Romania – 14,422.
With Ukraine’s hospitals filling up, the Cabinet of Ministers has ordered regional authorities to set up makeshift hospitals in Kyiv, Kramatorsk and Odesa. “No matter what amount of beds we add, the coronavirus is spreading much quicker,” Health Minister Maksym Stepanov warned the Rada Tuesday. “We have reached the point of no return and are close to disaster.”
In Kyiv, where new infections are almost 1,000 a day, Mayor Klitschko has ordered police to strictly enforce rules on wearing masks in buses and subway trains – a major vector for corona infections. Nationwide, schools are to stay open. But 912 already have switched to distance learning, reports Health Minister Stepanov. Since Ukraine’s schools reopened two months ago, 5,000 pupils and 10,500 teachers have fallen ill with coronavirus.
Responding to the pandemic, 39% of Ukrainian CEOs polled by KPMG have accelerated digitalization of their business, and 42% plan to reduce office space, according to a new study for the international accounting and consulting firm. Of 74 surveyed managers, 30% indicated that their investment in digitalization put the companies ahead for years to come.
While the pandemic hurt hotels, restaurants and airlines, delivery companies saw their business boom. Last week, Lviv-based Meest Express told Interfax-Ukraine: “With the likely [re]introduction of a lockdown, we expect an increase in demand for most of our services and products, since most of them are extremely relevant under strict quarantine.”
The government’s standoff with the Constitutional Court has settled into an impasse.
NV reports that the four judges who voted against the controversial Oct. 27 decision on anti-corruption legislation have temporarily refused to participate in the Court’s work. At the same time, the Rada is to recess without voting on purging the court or adopting replacement legislation. Under the current calendar, Ukraine’s parliament reconvenes Nov. 16. That week, it is to vote to restore anti-corruption laws quashed by the Constitutional Court.
Prime Minister Shmygal asserted to reporters that the IMF is understanding of the situation: “Because Ukraine clearly declares and shows its European intentions, intentions to continue and actively pursue anti-corruption reform and all the reforms that are spelled out in our international obligations.” There was no comment from the IMF.
China nearly doubled its imports from Ukraine of sunflower meal during the marketing year that ended in August. China boosted its imports of this protein rich food additive to 1.8 million tons, 43% of all of Ukraine’s exports, reports, Stark Shipping. From Ukraine, the top shippers were: Kernel – 999,000 tons; Bunge – 672,000; Alfa Trading – 275,000; COFCO – 257,000; Garsan – 248,000; and Cargill – 233,000.
Allseeds Group, a major Ukrainian manufacturer and exporter of vegetable oils and meals, has debuted in the American capital market, raising $10 million in commodity financing arranged by Kyiv’s Skarb & Statok. Eying the growing Indian market, Allseeds opened an office last month in Mumbai.
Sunflower seed refineries are working at reduced capacity in Ukraine, the source of 55% of internationally traded sunflower oil, reports the national sunoil producers association. Due to drought, sunoil production could drop 15% yoy, to 6 million tons. APK-Inform consultancy quotes a producer association official as saying: “There is no raw material. The refineries are half-loaded.”
Kernel, the world’s largest sunflower oil producer and exporter, has agreed to buy back early $287 million of its 2022 bonds, placed at 8.75%. The company will pay $303 million for the bonds, largely covered by $300 million raised last month with the placement of 7-year bonds at 6.75%.
Metinvest’s new 2027 Eurobond joins three other Metinvest dollar denominated bonds on JPMorgan’s corporate emerging markets bond index – CEMBI Broad and CEMBI Broad Diversified. Inclusion on the index affords greater visibility, greater liquidity and better pricing for bonds of the Ukraine’s largest steelmaker.
Ukraine has the potential to attract as much as $73 billion in green bonds during this decade, Deputy Energy Minister Yaroslav Demchenkov says, citing calculations by the World Bank’s International Finance Corporation. The Ministry and the State Energy Efficiency Agency are drawing up a draft concept for a green bonds market. The Ministry press service notes that the government and municipalities, financial and non-financial corporations can issue green bonds. Funds can be directed to alternative energy, energy conservation, recycling, and mass transit.
Ukrzaliznytsia plans to spend nearly $1 billion next year on capital improvements – locomotives, freight cars, passenger cars, and electrification of two sections of track – Volodomyr Zhmak, the new CEO of the state railroad, said at a transportation conference. He said: “Ukrzaliznytsia is one of the foundations of the Ukrainian economy. The health of our [investment] campaign is an indicator of the health of the entire economy.”
DTEK is investing $10 million this year to construct Ukraine’s first fully automated electric substation. Increasingly common in Western Europe, this kind of substation is entirely enclosed and controlled by a dispatching console – features designed to minimize outages. Located in Odesa’s densely populated Kyivskiy neighborhood, the substation will supply 52 MW to 5,000 apartments, reports Oleksandr Fomenko, general director at DTEK Odesa Grids.
- Finance Minister: Rogue Court Threatens $5 billion in IMF, EU and World Bank Aid, Plus Early Repayment of $13 billion
- Despite Popular Support, Ze’s Attack on Court Stumbles
- Foreign Investors Reactivate Ukraine’s Only Gold Mine
- Cell Phone Cos: Less Talk, More Data
- Plastic Bags Destined for Dustbin of History
Finance Minister Sergiy Marchenko warns that Constitutional Court decisions to nullify anti-corruption agencies threatens $5 billion in IMF, EU and World Bank aid scheduled for Ukraine over the next year. In addition, the dismantling of the anti-corruption agencies could trigger “the risk of early repayment requirements” of $13.3 billion. “Without a legal settlement of this issue, international partners will block all financial agreements for us,” the Minister warns in a guest piece for Channel 24 TV. Referring to the Constitutional Court of Ukraine, the headline reads: “Financial isolation: how the CCU destroys Ukraine’s international reputation.”
“Anti-corruption factors of these agreements are inviolable,” the Finance Minister writes of contracts for multi-lateral aid to Ukraine. “Any of our attempts to block anti-corruption reforms are considered by our partners to be a black mark…These achievements and agreements, which are crucial for the state, are in danger of being disrupted.”
Specifically, a $300 million World bank loan to counter COVID-19 was scheduled for negotiations on Nov. 16, and approval by the World Bank Board on Dec. 11. “However, due to the decision of the CCU, these issues are blocked,” Marchenko writes. The World Bank board “believes Ukraine is violating its obligations.”
President Zelenskiy’s Rada bill to fire the entire Constitutional Court is failing to win parliamentary support. Instead, the Anti-Corruption Committee has endorsed a bill to restore the online system of declaration of assets.
Concorde Capital’s Zenon Zawada writes: “We expect parliament to approve gradually the necessary legislation to meet EU requirements. However, it’s another issue of whether the courts – particularly the Constitutional Court – will recognize the validity of the legislation, which we believe will be challenged by the same Kremlin-aligned cohort behind the Oct. 27 ruling.”
60% of respondents to a new poll do not trust the Constitutional Court and an equal number support Zelenskiy’s bill to purge the membership. Among respondents who are familiar with the Court’s recent decisions, distrust rises to 80% and hostility to its rulings rises to 83%. The Rating Sociological Group interviewed 2,000 people across Ukraine.
Abolition of visa-free travel to the EU – a threat aired by EU officials – is opposed by 55% of adults interviewed by Rating. Highest negativity was registered among: young people, residents of Kyiv and the West, and supporters of European Solidarity, Freedom, the Voice and the Servant of the People parties.
German investors believe that the main problem in Ukraine is not corruption, but courts and judicial agencies, Germany’s ambassador to Ukraine Anka Feldhusen tells Interfax-Ukraine. “What always scares our investors is bad examples when even large German companies in Ukraine are under pressure from law enforcement agencies,” she says in an interview. “This is closely related to judicial reform. Our investors tell me that corruption is no longer such a big problem.” While big German companies can afford to fight the lawsuits and raid attacks, small and medium companies are scared away, said the Ambassador who is on her third posting to Kyiv since 1994.
Avellana Gold is investing $5 million to clean up 130,000 tons of waste in order to re-launch production at Ukraine’s only gold mine. The waste was left a decade ago by the previous producer at the site in Muzhievo, 70 km east of Uzhgorod, near the Hungarian border. The Cyprus-based consortium of US, UK and South African investors plans to produce gold, silver, lead, and zinc. Avellana CEO Brian C. Savage says: “The metal from our mine will be enough to produce 300,000 batteries a year and will cover the country’s need for zinc imports.” Avellana plans to process 500,000 tons of ore per year, employing 500 workers. Investment was slowed by a raider attack.
PrivatBank is asking the National Police to investigate threats of personal violence received by its “top manager.” In 2016, the bank was nationalized after auditors discovered a $5.5 billion hole in accounts. Today, the previous owners, Igor Kolomoisky and Gennadiy Bogolyubov, seek to regain control of Privat, the largest of Ukraine’s 75 banks in terms of number of clients, assets value, and loans.
Creating a digital enclave economy, Ukraine plans to more than triple the IT share of Ukraine’s GDP, from 3% today to 10% by the end of Zelenskiy’s term, in 2024, Mikhail Fedorov, Digital Transformation Minister, told reporters. The goal is to more than double the number of Ukraine’s IT workers, from 200,000 today, to 450,000 in 2024. To get there, the government submitted bills to the Rada that will create a virtual ‘Diya.City’. Under this umbrella, companies could be registered in minutes, workers would pay 5% income tax rates, and employers would enjoy liberalize labor codes.
Ukraine’s stores and restaurants would be banned from distributing conventional plastic bags within 14 months, under a bill that the Rada has approved for second reading. Starting Jan. 1, 2022, retail establishment would be required to hand out bags of ‘oxo-biodegradable’ plastic.
Ukrainian cell phone operators will lose up to $35 million this year due to the loss of roaming revenue stemming from the corona-era drop in travel, Olha Ustynova, director general of Vodafone Ukraine, tells Interfax-Ukraine. The data portion of revenue increased to 60%, from 50% one year ago, said the director of Ukraine’s second largest mobile company. Previously, talk was the revenue mainstay.
Rebuilding Dnipro airport will get one third of $157 million of budget money dedicated to upgrading airports next year, Infrastructure Minister Vladyslav Krikliy writes on Facebook. Other money will go to selecting a site for a new airport for Zakarpattia region. With four sites under consideration, the goal is to move flights away from the current airport, located on Ukraine’s international border with Slovakia.
Targeting two countries that still allow Ukrainian visitors, SkyUp will make three flights to Uzbekistan this month and will start flights to Istanbul in December, from Lviv and Odesa. To enter Uzbekistan, Ukrainians need to have a negative Corona PCR test taken less than 72 hours from arrival.
Ukrainian airlines have let go about 30% of their employees over the last six months, Infrastructure Minister Vladyslav Krykliv tells Ukrinform. Last summer, SkyUp said it had lost $30 million and UIA said it had lost $60 million. Neither airline has received state aid.
- EU Warns: Court Rulings Threaten Aid and Visa-Free
- Solutions for Court: Purge, Resignations, or Curbs by Rada
- Climate Change Benefit? Year Round Shipping on Dnipro
- Exports and Migrant Worker Remittances Recover from Corona Controls
Constitutional Court rulings to destroy Ukraine’s anti-corruption agencies threaten EU aid and the visa-free regime for Ukrainians to visit the EU, Peter Stano, the EU’s foreign affairs spokesman, warned. Alluding to recent court rulings to block Western-inspired and funded anti-corruption units, the spokesman said: “The fight against corruption is one of the key benchmarks and commitments that Ukraine has taken in the framework of the Association Agreement, the recently agreed Macro-Financial Assistance program between the EU and Ukraine and the visa liberalization process.”
With no resolution in sight, Adamant Capital concludes there will be no more IMF aid this year. “Such a rollback also means that the country no longer fulfills the necessary requirements to continue receiving support from the IMF and other IFIs,” the Kyiv-based financial firm wrote of the $5 billion Stand-By Arrangement signed last June with the IMF. “The probability of Ukraine receiving donor support this year is quickly becoming very slim.”
With 15 serving members, the Constitutional Court ruled since August to freeze several anti-corruption agencies. Now, the Court says it will review: Ukraine’s fledgling farm land market; the law that allowed the closing of 100 banks in 2015-2016; Ukraine’s language law; and the one-year-old High Anti-Corruption Court.
Reflecting growing polarization, the Court increasingly is seen as an agent of Kremlin interests. “Was the Constitutional Court chosen by chance?” Fedor Venislavsky, a ruling party Rada member and President Zelenskiy’s representative to the Court, asked in parliament. “No, not by accident. Because there is a group of judges in the Constitutional Court who openly sympathize with the Russian Federation.” In April 2014, Oleksandr Tupytsky, the Court Chairman, ruled that the Court had no business ruling on the Russia-organized secession referendum in Crimea. He is currently under investigation for buying property in Russia-controlled Crimea, a violation of Ukrainian law.
At least 200 Rada members have signed a petition demanding that all Constitutional Court judges resign. Venislavsky, the Rada member, threatened: “If they do not do that, the parliament will do it. And if the parliament does not do that, the street can do it.” A judge can only be fired through a vote of two thirds of his or her colleagues. Another Rada bill would raise the quorum for a ruling to 17 judges. Virtually a law until itself, the Court can reject as unconstitutional any law passed by the Rada to restrict its powers. It is unclear if Zelenskiy has the 226 votes in the Rada for a bill that would fire all the judges.
The Constitutional Court is digging in its heels. One judge, Ihor Slidenko, told UNIAN news agency that Zelesnkiy, by threatening to dismissed the entire bench “has talked his way into 150 years in prison.” Ignoring the fact that Ukraine is already at war with Russia, he added: “Next comes the collapse of Ukraine and war, because, besides those 226 (votes) – no one will recognize them.” Tupytsky, the Court Chairman, told reporters: “Zelenskiy’s law on the reform of constitutional law shows signs of a constitutional coup.” Without the court, he warned: “Any oblast would gain the ability to vote on the level of the oblast council for self-determination or secession from Ukraine.”
“Zelenskiy is fighting back against state capture,” headlines an editorial in the Financial Times. “Pro-Russian and oligarch-linked politicians have been using a corrupt court system to abolish or weaken anti-graft bodies and rules put in place following the 2014 pro-democracy revolution,” the FT writes about a string of recent court rulings. “These challenges look like a systematic attempt to trigger a breach with the IMF and EU. A cash-strapped Ukraine might then fall back into Russia’s orbit.”
Reviewing Zelenskiy’s choices, the FT advises: “He needs to work with other parties and civil society to build as wide a consensus as possible. As a textbook populist, Mr Zelenskiy seemed to expect instant solutions without making hard choices. But institution building needs skill and dedication. Ukraine’s future is at stake.”
In one sign the confrontation could have an economic impact, Ukraine’s central bank sold $150 million last week to defend the hryvnia. The national currency is slowing devaluing, currently trading at 28.57 to the dollar.
Emboldened by the warmest October on record, Infrastructure Minister Vladyslav Krikliy proposes investing in improved river locks to allow year round shipping on the Dnipro. “Our plans are to carry out navigation on the Dnieper throughout the year, if the weather conditions are favorable for this,” he said. Last year, the Kyiv locks closed on Nov. 15 and reopened on March 30. Nibulon and other shipping companies complained that the Dnipro was largely ice-free through early January. Today, repair work is being done on four of the six locks on the Dnipro: at the Kyiv, Kaniv, Kamianske and Kakhovka hydroelectric dams.
A $20-40 million rebuilding project is needed for all six locks, Ukrvodshlyakh, or Ukrainian Waterways, reported last year, concluding that all are “unusable for normal operation” or in “emergency” state. Last spring the Rada took away $2.7 million in lock maintenance money to add to the Covid Fund. “But we found a way out of this situation and, with the financial support of our European partners, we continue to carry out these works,“ Krikliy said, referring to €7 million in aid that arrived in August. The government believes that if an “Inland Waterways” bill is passed this month by the Rada, river user fees will pay for much of the lock maintenance.
October’s exports were up 1.3% yoy and up 10.4% over September, Taras Kachka, deputy minister of Economic Development, Trade and Agriculture, writes on Facebook. October’s exports of $4.7 billion reduced fall in exports for the first 10 months of this year to 4.8%. With imports down by 12.2% this year, Ukraine’s 10-month trade deficit has been cut in half year over year, to $4 billion.
Helping Ukraine’s balance of payments, migrant workers sent home $1 billion in September, up 6% over August, TSN reported, citing new National Bank of Ukraine numbers. Despite the obstacles created by the fight against coronavirus, Ukraine’s migrants workers sent home $8.5 billion through September, about 5% below the level of last year.
By raising yields, the Finance Ministry was able to raise last Tuesday its volume of bond sales almost five-fold from the volume sold at last week’s auction. Totaling the hryvnia equivalent of $68.5 million, almost all sales were for 4-month bonds, which carried yields of 7.5%, up from 7.3% at the last auction.
Kyiv intends to issue hryvnia bonds for the total dollar equivalent of $53 million. The four series of bonds will carry annual yields up to 11%. Fitch Ratings assigned the expected long-term rating “B (EXP)”.
Ukrainians continue to migrate from cash to cards, according to the latest numbers from the National Bank of Ukraine. For the first nine months of this year, the number of transactions was up 18% yoy, to 4.3 billion. Over the same time, the hryvnia total of transactions was up 8.7%, to UAH 2.8 trillion – $98 billion. Through this September, the number of point of sale terminals increased by 8% yoy, to 360,400.
- Constitutional Court Attacks Two Pillars of Western Reforms
- Ze Warns of ‘Bloody Chaos’ if Rada Rejects His Court Purge
- Corona Kills Corporate Profits
- With 74% of Kyiv’s Corona Wards Full, Health Ministry Moves to Set up Field Hospital in Palace of Sports
- Ukraine Slashes Visa Fees
Ukraine’s Constitutional Court plans to plow ahead with measures seen by President Zelenskiy as economic sabotage: review of a law that allowed the closing of 100 banks during the 2014-2015 banking crisis and review of a law passed last March allowing a limited farmland market. Both constitutional reviews come in response to petitions by a group of 50 parliamentarians seen as pro-Russian.
Ruling that the Deposit Guarantee Fund is unconstitutional would have a cataclysmic impact on Ukraine’s financial system, Kyrylo Shevchenko, Governor of National Bank of Ukraine, warned the Constitutional Court Sept. 15. The central bank head said: “I am absolutely sure that the recognition of this law as unconstitutional will destroy the system of guaranteeing individuals’ deposits, undermine confidence in the banking system, make the system as vulnerable as possible and harm the interests of millions of depositors.”
In face of these threats, President Zelenskiy plans to put to a Rada vote on law to ‘reboot’ the court by removing all 15 members. Although his Servant of the People party technically has a majority of 240 members, it is unclear if he will be able to muster the needed 226 to pass the bill. One opposition leader, Yulia Tymoshenko calls the bill “a coup d’etat.”
To rally his party, Zelenskiy warned Ukraine could slide into “bloody chaos” if the Rada does not vote to purge the court and restore anti-corruption reforms seen as essential to keep foreign aid flowing. Showing a new hardline, he said: “We will try to reboot the entire system, because the time for talks is over. The time for persuasion and gentle manner is over. It is necessary to make tough decisions on the Constitutional Court. It is obligatory. It is not even a request. There are no any requests when values are destroyed.”
“Zelenskiy faces pivotal moment in confrontation with constitutional court,” headlines the Financial Times in a report from Kyiv. Veteran Ukraine reporter Roman Olearchyk writes: “Activists say the ruling is part of a systematic attempt by the court to dismantle anti-corruption institutions driven by pro-Russian politicians and lawmakers allied to powerful oligarchs who want to wreck Kyiv’s relations with the IMF and EU.”
Concorde Capital’s Zenon Zawada predicts: “The president’s legislation won’t be approved by parliament, with even a sizable portion of the members of The People’s Servant faction being opposed. Instead, we expect parliament will eventually hammer out a bill that meets the approval of Western institutions…This solution won’t involve dismissing all the court’s judges, which could be gradually removed by law enforcement bodies.”
Ukraine’s corporate profits took a beating during the first half of this year, falling by $3.3 billion on a cumulative basis, reports the State Statistics Service. After plunging by $4.4 billion during the first quarter, profits rebounded by $1.1 billion in the second quarter. By contrast, during the second half of last year, profits were up by $14.7 billion.
Russian gas transit through Ukraine’s pipeline system is down 38.4% this year, to 45 billion cubic meters, Sergiy Makogon, head of Ukraine’s Gas Transmission System Operator, wrote on his Facebook page. At this rate, Ukraine will move 55-56 bcm this year, about 15% below the 65 bcm amount contracted with Gazprom for this year. Under the new, 5-year contract Gazprom promises to pay for shipping the full amount, whether it is shipped or not.
Gazprom booked more capacity on Ukraine’s pipelines this fall, Andriy Kobolyev, Naftogaz’s chief executive, told Reuters last week in Washington. Kobolyev reads this as Gazprom reacting to US sanctions pressuring the Nord Stream 2 gas pipeline project, the stalled Russia-Germany trans-Baltic direct link.
With 74% of Kyiv’s 2,806 Covid hospital beds filled, the Health Ministry is moving to set up a field hospital in the Palace of Sports, Viktor Liashko, deputy health minister and chief sanitary doctor, told Segodnya. Health Minister Maksym Stepanov said 1,200 medical specialists will work at this field hospital treating 500 patients. The goal, Liashko said, is to avoid ‘sanitary sorting’, or triage.
- Johnson & Johnson, the US pharmaceutical giant, may launch a third clinical phase trial of their vaccine in Ukraine.
- Ukraine has joined the WHO’s COVAX program which should guarantee affordable vaccines for Ukraine’s 20% most vulnerable people. For these 8 million Ukrainians, each vaccination would cost between $1 and $4.
- The positive rate on Ukraine’s Covid tests averages 18-19%. Ukraine expects to hit 50,000 polymerase chain reaction tests a day this month and 75,000 by the end of December.
- A round-the-clock national coronavirus contact center opened. Operators advise callers on Covid questions and treatment. The toll-free number is 0-800-60-20-19.
A massive An-124 Antonov ‘Ruslan’ cargo jet inaugurated Ukrposhta’s improved parcel service to the US, carrying 50 tons of packages from Kyiv to New York. Ukrposhta will now send a weekly flight to New York, using various aircraft and carrying 20-50 tons of cargo, says Igor Smelyanskiy, head of Ukrposhta. “Do you know what 125,000 parcels look like?,” asks Smelyanskiy in a press release accompanied by a photo of the mammoth plane, its nose cargo door left open to show thousands of packages stuffed inside. So far this year, Ukrposhta has flown 3,000 tons of packages out of Ukraine, supporting “tens of thousands of Ukrainian export-oriented small and medium-sized entrepreneurs,” Smelyanskiy said.
October was the warmest in Kyiv since record keeping started in 1881, the Central Geophysical Observatory reports on its Facebook page. With the temperature hitting 22C (72F) on Oct. 4, Kyiv’s ‘meteorological summer’ stretched to Oct. 14, an unprecedented length. In the early morning of Oct. 21, the temperature fell to 2.5C (36.5F) but then it climbed up again for the rest of October.
Ukraine slashed the fee for an electronic visa to $20, from $85. In addition, Ukraine now offers double entry e-visas for $30. Valid for 30 days, e-visa are available for citizens of 45 countries. They can be obtained by filling out forms at this site. Starting three months ago, visa-free entry to Ukraine became available for six new countries: Australia, New Zealand, Bahrein, Kuwait, Oman and Saudi Arabia. In addition, Ukraine started an experimental visa-free regime for Chinese citizens, effective through Jan. 31, 2021.
Kyiv pole vaults. In one year, Kyiv jumped 52 places in Resonance Consulting’s ranking of the World’s Best Cities. Today, Kyiv ranks in 87th place, just below New Orleans and Kuwait City and just above Hannover and Perth. “The city—a 1,500-year-old living encyclopedia of Slavic history—is as colorful and vibrant as its nation’s flag, with buildings painted like Ukrainian Easter eggs and the skyline topped with gold domes gleaming up the hills from the Dnipro River,” bubbles Resonance, based in Vancouver (34th place). “The city appears in our Top 100 for the first time in 2021, powered by its #28 ranking in our Sights & Landmarks category, led by All. Those. Churches.”
- Showdown in Rada Over Anti-Corruption Agencies
- Power China Signs $1 billion Deal for Donetsk Wind Farm
- Ukraine Weathers Corona-Recession Better Than Expected
- Health Minister Wants $9 million for Corona Field Hospitals in Kyiv
With Western support hanging in the balance, the Rada is to debate a bill tomorrow to dismiss all 15 judges of the Constitutional Court and to annul their ruling that shut down the online registry of assets belonging to high officials. President Zelenskiy ordered the registry reopened and registered the bill to purge the court. The Court’s ruling stripped most power from the National Agency for Preventing Corruption, an entity that was investigating five judges, or one third of Constitutional Court.
On registering the bill, Zelenskiy warned of the consequences of failure: “We will not have money. We will not have support. Projects on which agreement was reached will be cancelled, as well as World Bank support. We will have a big hole in the budget.”
“Ukraine is under attack – not just at its borders, but also at the heart of its democratic institutions,” President Zelenskiy wrote in an essay in the Financial Times. “This process is an attempt to destroy an essential part of the anti-corruption achievements of the 2014 Revolution of Dignity, built by Ukrainian civil society with the active support of our western partners… As President of Ukraine, I will never allow these dark forces to succeed in their attempt at a counter-revolution.”
The IMF sees restoring the anti-corruption agencies as key to compliance with $5 billion Stand-By Arrangement signed last June, an IMF spokesman tells Ukrinform. “The launch of a comprehensive electronic system for asset and income disclosure by high-level officials in 2016 was, and remains, a critical step forward in anti-corruption efforts and should not be dismantled…Maintaining and enhancing the effectiveness of all of Ukraine’s anti-corruption institutions is key to unlocking stronger and more equitable growth and is therefore an essential commitment under the IMF-supported program.”
Without restoration of the corruption fighting agencies, “not only visa-free travel will be affected,” Foreign Minister Dmytro Kuleba warned in Savik Shuster’s Freedom of Speech TV program. “We will lose the support of the countries with which we have the largest trade turnover, which support Ukrainian reforms the most, which support us the most in the fight against Russian aggression.”
Foreign investment in Ukrainian government hryvnia bonds has dropped by almost one third since the start of the year, according to the National Bank of Ukraine. Foreigners currently hold UAH 78.6 billion, the equivalent of $2.7 billion, down 32% since January.
Power China and WindFarm signed a contract for the construction of an 800 MW, $1 billion wind farm 25 km west of Mariupol, Donetsk Region. The continuation of a project originally developed by DTEK Renewables, the wind farm would stretch over the Manhush and Nikolske districts of Donetsk, becoming the largest land-based wind farm in Europe. WindFarm reports that the project will be undertaken without the benefit of a green tariff. The release did not mention where financing will come from.
Ukraine’s IT companies posted 6,000 vacancies in September, a record figure for the last three years, according to a study by GlobalLogic. “The IT market began to recover,” Denis Balatsko, vice president of GlobalLogic, told Tech.Liga.Net news site. “GlobalLogic alone opened more than 600 positions in Ukraine in September.” In the last two months, an estimated 2,000 Belarusians fled police violence at home and took jobs in Ukraine.
Signs that Ukraine is weathering the corona depression better than expected.
- Through September, construction is up 0.2%, reports the State Statistics Service. While residential housing construction plummeted by 19%, infrastructure – largely roads – was up 8% and commercial construction held steady at 0%.
- Taxes on sales of electronic and household appliances could be up by one quarter in hryvnia this year, reports the Statistics Service. With the January-September sales taxes figures just below the level for all of last year, the Service expects that about $425 million will collect.
- Exports in September were up 2.9% yoy, hitting $4.2 billion, reports the National Bank of Ukraine. Q3 exports were $12 billion, up 14% over Q2.
- Ukrzaliznytsia carried a record 895,000 tons of cargo on Friday, reports Volodomyr Zhmak, CEO of the state railroad. “We are confidently moving towards the level of a million tons,” he said.
- Real wages have been growing since May, hitting 6% yoy in September. “This indicates that job redundancies have been limited and some of them have been recouped,” writes Alfa-Bank Ukraine. “Layoffs now are concentrated in rather small sectors like HoReCa [hotel, restaurant and café].
The Radisson Blu Hotel in Kyiv’s Podil lost $1.8 million January-September this year, compared to a $100,000 profit last year, according to the company’s statement to National Securities and Stock Market Commission. The 173-room hotel is owned by Veon Plus, a company owned by Sergiy Tigipko.
A Ukrainian has successfully declared bankruptcy for the first time, according to a Ukrainska Pravda report on a decision last summer by Kyiv’s Economic Court. Previously only a legal entity or sole proprietor could declare bankruptcy. After a new law on bankruptcy came into effect one year ago, 142 individuals have filed for bankruptcy. The pioneer sought to reschedule a foreign currency mortgage. “The court created a precedent according to which the Ukrainians were able to settle their financial problems – the debtor can pay off debts on a comfortable schedule and not lose his property,” said Georgy Grigoryan, co-founder of the law firm BezBorgiv [Without Debts]. “Ukrainians now have a legal opportunity to zero their debt. Previously, only legal entities and private entrepreneurs could go bankrupt in Ukraine.”
Health Minister Maksym Stepanov asked the government for $9 million to create temporary corona wards in Kyiv’s Palace of Sports and city exhibition centers. With Kyiv reporting 700 new infections daily, the city’s corona hospital wards are now at 69% of capacity. The Minister is asking the Rada to approve this week a 4-month-old bill to provide for $8 fines not wearing masks in public buildings.
Over the last three days, Ukraine has reported an average of 8,341 new cases. Ukraine’s infection rate doubled in October, tracking similar upsurges this fall in the EU and Russia. On Saturday, Poland reports 21,897 new cases. Poland and Ukraine have about the same population – 37 million.
Daniel Tonkopiy, co-founder of Ukrainian electric bicycle company Delfast, writes on Facebook that President Zelenskiy promises to support his plan to build an electric bike factory, probably in the Kyiv Region. The President and the Kyiv-based entrepreneur met last week. Tonkopiy, who says he has tens of thousands of orders from around the world, said Zelenskiy told him: “My team will help.”
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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