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  • Covid in Ukraine: Up 7 Times in 3 Months
  • As Hospitals Fill, Stricter Quarantine Returns
  • China’s Sinosteel Builds $250 million Plant for Arcelor
  • Germany’s Kostal Builds €40 million Plant near Boryspil
  • UK Export Finance Raises Ukraine Loans, Insurance to £2.5 billion
  • IMF Watches and Waits

Over the last three months, the daily toll of new coronavirus infections and new deaths has increased seven fold. New infections inched up to 5,397 and daily deaths to 93. By comparison, on July 7, the Health Ministry reported 807 new infections and 13 deaths. Overworked doctors interviewed by the Associated Press for an article – “Virus Wallops Ukraine” – predicted that a looming shortage of hospital beds would force the government to re-impose a strict quarantine next month.

More than 20,000 people are hospitalized with coronavirus, Health Minister Maksym Stepanov warned in a televised briefing. He said: “The medical system will simply not stand it if we all, without exception, simply do not begin to adhere to the rules.” With patients filling about 75% of Kyiv’s coronavirus hospital beds, Kyiv, Ukraine’s largest city, will be demoted from “yellow” to “orange” level of quarantine. At the new level, all hostels, gyms and cultural institutions are to close. Restaurants must close after 10:00 pm. Kyiv is closing schools on Oct. 21, two days before the scheduled start of traditional late October weeklong break.

As the virus moves east, hospitals fill up. Nationwide, the highest hospital occupancy rates were: Donetsk region – 95%; Luhansk region – 90.5%; and Odesa region – 78%. Yesterday morning, the largest numbers of new cases were recorded in: Kharkiv region – 576; Kyiv city – 422; Odesa region – 367; Sumy region – 312; Dnipropetrovsk region – 306; and Donetsk region – 294.

With 5% of the Rada’s 424 members and 75 Rada employees out sick with coronavirus, plenary sessions have been postponed. Rada committees are debating next year’s budget. Next year, there will not a dedicated coronavirus budget, only increased funds for the Health Ministry and $100 million for a national vaccination program, Rada chairman Dmytro Razumkov said on the “Breakfast with 1 + 1” TV program. Of this year’s $2.3 billion Covid Program, half was diverted to road construction.

If coronavirus controls slow Ukraine’s economic recovery, the central bank may lower the prime lending rate from its current level of 6%, Kyrylo Shevchenko Governor of the National Bank of Ukraine, tells ZN.UA in a lengthy interview.The biggest risk today, in our opinion, is the aggravation of the pandemic,” he said. “If the coronavirus crisis has a significant impact on the economy, and we see that the rate of economic growth is significantly slowing down, the NBU may decide to further reduce the key policy rate.”


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China’s Sinosteel started work last week on a 3-year, $250 million project to build a new metal pelletizing plant at ArcelorMittal Kryvyi Rih, Ukraine’s largest integrated steel company. The plant is part of $700 million that ArcelorMital, Ukraine’s largest foreign investor, is spending to replace or rebuild Soviet-era equipment – largely sinter mills and blast furnaces. The investments will save energy and reduce air pollution by 78,000 tons a year, Volodymyr Tesliuk, deputy director for mining, said at the groundbreaking ceremony.

Germany’s Kostal is building a €40 million automotive electronics plant that is to employ 900 workers when it opens next April in Dudarkiv, 15 km north of Kyiv Boryspil Airport. With the new plant, Kostal will double its production in Ukraine. For the last five years, the company has employed 1,000 workers at another electronic components factory, in Pereiaslav, 65 km south of Dudarkiv.

Next year, foreign investors will be able to take advantage of ‘Diya.City’ – “a virtual free economic zone,” Prime Minister Shmyhal told foreign ambassadors Wednesday. “Favorable tax rates, no bureaucracy, a convenient digital platform for doing business and getting all the necessary services online – these are the advantages of the project ‘Diya.City,’” he said of an investment regime the government wants to push through the Rada this fall. In addition, the government plans to open a single investment window – ‘Invest in Ukraine’ – and to win Rada approval of the ‘investment nanny’ project.

Britain’s UK Export Finance agency is resuming loans and insurance for major British exports to Ukraine, supporting up to £2.5 billion, Ukraine officials reported from President Zelenskiy’s visit to London. Britain’s Minister for International Trade, Ranil Jayawardena, signed a memorandum with Ukraine to identify investment in defense, farming, infrastructure, energy, and healthcare.

Through September, Ukraine’s exports of goods were down 5.6% yoy, to $35 billion, reports the press service of the State Customs Service. Imports fell 11.8% yoy, to $38 billion. Due to the sharp drop in imports, the trade deficit in goods fell in half, to $2.9 billion. For the first nine months of this year, Ukraine’s trade with China – $10.6 billion – was nearly double trade with Russia – $5.4. Figures for trade in services come out later this month.

The IMF signaled that it is watching the government’s efforts to purge the last two Board Members of the Central Bank from the 2015-2016 bank clean up era. “The framework has served the National Bank of Ukraine – and the Ukrainian economy – well by strengthening the confidence in the NBU as an independent and professional central bank,” Goesta Ljungman, resident representative of the Fund, said in a press statement.

In London, President Zelenskiy told investors in Ukrainian government bonds: “The National Bank was, is, and will remain independentWe are grateful to the IMF, the EU and the World Bank for financial support packages for our country and support for important reforms in Ukraine.”

A different view in London came from Timothy Ash, strategist at BlueBay Asset Management: “It is hard to see any IMF review or indeed disbursements until this issue is resolved.” After disbursing $2.1 billion from a $5 billion, 18-month standby program last June, the IMF has not sent to Kyiv a review team. Alluding to the summer purge of the central bank’s Board, Ash adds: “It is fair for the IMF and markets to take some time to assess the new team and their actions.”

Ostensibly, the Central Bank shakeup was driven by Zelenskiy’s desire for lower interest rates and a cheaper currency. In the last year of Yakiv Smoliy as Governor, the prime rate dropped from 18% to 6%. The hryvnia now trades at 28.3 to the dollar, its weakest level in almost three years. Ash warns: “A less generous interpretation is that the NBU Council is being driven by a different agenda with oligarchic interests represented therein trying to clear out the former Gontareva/Smoliy teams as they want a different agenda on banking reforms – indeed, looking to reverse the reforms enacted from 2015-2020, with former owners being compensated for the loss of their failed banks.”

 

  • UK Extends £1.25 billion loan for 10 Fast Attack Navy Boats
  • Used Car Imports Jump 56%
  • UIA Cuts its Jet Fleet by 20%
  • Finance Ministry Raises Yields to Sell Hryvnia Bonds
  • PrivatBank is Ukraine’s Most Profitable Bank

President Zelenskiy is to a sign a memorandum for a 10 year, $1.6 billion (£1.25 billion) loan to build 10 new fast attack boats for Ukrainian Navy for use in the Black Sea. Armed with eight ship-killer Neptune missiles and carrying a crew of 35, the 56-meter Barzan class boats are to have a range of 1,800 nautical miles, the equivalent of the voyage from Odesa to the Kerch Strait and back. The first two boats are to be built by BAE Systems Maritime, possible at the Portsmouth Naval Shipyard. The other six are to be built in Ukraine.

The deal was hammered out last month during a visit to Kyiv by British Defense Secretary Robert Ben Lobban Wallace. Wednesday, the Royal Navy destroyer HMS Dragon docked in Odesa for a five-day visit. There is to be joint training aboard the British vessel.

Pivdenny, Ukraine’s largest and most efficient sea port, increased its cargo by 21% yoy through September. By handing 47 million tons in the first nine months of this year, this Odesa region port increased its market share to 43%. By contrast, the next three ports on the Black Sea all suffered falls: Mykolaiv – down 9%, to 21.7 million tons; Odesa – down 3%, to 17.6 million tons; and Chornomorsk – down 7%, to 17.5 million tons.  Cargo increases were registered at the two Azov ports: Mariupol was up 16% to 5.3 million tons; and Berdyansk was up 28%, to 1.7 million tons.

Cracking down on overloaded trucks, Transport Safety agents and National Police stopped 500,000 trucks, ticketed 10,500 and levied $3.5 million in fines through September, reports Infrastructure Minister Vladyslav Krykliy. Most of the overweight trucks were stopped in Kherson, Mykolaiv and Odesa – home to all of Ukraine’s Black Sea Ports. This year, Ukraine is spending a record $3 billion on road construction and repair. To protect new roads, the Transport Safety Service, or Ukrtransbezpeka, plans to have 54 Weigh-in-Motion automatic checking devices operating on highways by the end of this year.

Used car imports jumped 56% yoy in September, to 35,900, reports Ukravtoprom, the vehicle industry association. Used cars accounted for 82% of first time registrations last month. The top brands are: Volkswagen, Ford, Renault, Skoda and Opel.

September’s month-long ban on foreigners entering Ukraine decreased the demand for international flights, reports UkSATSE, the national air traffic control agency. Last month, international flights were down 55% yoy and flights by foreign airlines were down by 63% yoy. By contrast, domestic flights – 2,710 – were virtually unchanged from September 2019. As Ukrainian airlines put their planes to use on domestic routes, the overall number of flights by national airlines was down by only 44% yoy. International airlines are not allowed to carry passengers between cities in Ukraine. Blaming travelers’ worries about changing corona rules, the air traffic control agency predicted: “The recovery of intensity of flights until the end of the year will be significantly slower than predicted at the beginning of the quarantine.”

Through September, Kyiv Boryspil’s passenger traffic is down by two thirds, to 4 million passengers. At this rate, Ukraine’s busiest airport may finish this year at the level of 2006, when it handled 4.6 million passengers. “The high season of 2020 for the aviation industry is over,”  Boryspil general director Pavel Ryabikin told the Center for Transportation Strategies. “The hub model has become unrealistic: we will be missing about 3 million transfer passengers. Quarantine restrictions of countries continue to be a stop factor for passengers.”

During the second half of this year, Boryspil-based UIA is cutting its fleet by 20%, to 28 jets, airline president Eugene Dykhne tells Biznes.Tsenzoru. Last spring, UIA was operating 120 regular flights a day. Now it is operating 100 regular and 200 charter flights a week, he said.

 

Winter Breaks:

Azur Air Ukraine will operate charter flights from Kyiv Boryspil to Cancun, Mexico and to Male, Maldives during the Christmas-New Year holidays. The airline will use Boeing 767-300ER jets for the long haul flights.

Lviv airport announced its international winter flight destinations – all subject to shifting corona controls. Wizz Air will fly from Lviv to Bratislava, Tallinn and Vilnius. Ryanair will fly to Krakow, Memmingen, Poznan and Warsaw. SkyUp will fly from Lviv to Dubai, Naples, Paris Beauvais, Prague and Tel Aviv.

Ukraine drops duties on wine imports from the EU next year, Yekateryna Zvereva, development director of the Ukrainian Horticultural Association, tells InterfaxUkraine. Duties are currently 30 to 40 Euro cents per liter. Ukraine last year imported $147 million worth of wine from the EU. Ukraine exported $12 million worth of wine to markets around the world.

The Finance Ministry raised almost four times as much revenue from bond auction, compared to the week earlier. The price was increased yield rates for hryvnia bonds. The government sold $135 million worth of 6-months dollar bonds at 3.39% – a rate unchanged from the last auction. But, to raise $120 million worth of hryvnia bonds, the Ministry had to raise yields. The new yields were: 3-month bonds: 7.19%; 1-year bonds: 9.89%; and 3-year bonds: 10.95%.

Concorde Capital’s Evgeniya Akhtyrko writes: “Like a week ago, MinFin hiked the interest rates for UAH-denominated bonds. However, that didn’t result in a significant jump of UAH auction receipts. We suppose that most of the UAH auction receipts were generated by state-owned banks….Rising interest rates amid the relatively low inflation means the current government policy is failing to improve business confidence.”

Ukraine’s Central Bank Governor defended the official reprimands of two of his deputies amid concern over the bank’s independence and a delay in IMF aid. The two deputy governors violated the “one-voice policy” of the National Bank of Ukraine, Governor Kyrylo Shevchenko told Bloomberg Television in London. “Any central bank around the world has a communications policy, and that’s really sensitive and really important,” he said. “If different board members give different statements to the market, it can lead to a mess.” He said the official reprimand does not mean the two Board members, Kateryna Rozhkova and Dmytro Sologub, should resign.

Almost four years after nationalization, PrivatBank is Ukraine’s most profitable bank, recording $65 million in profits through August, according to the data on the website of the National Bank of Ukraine. Ukraine’s largest bank, PrivatBank was taken over by the state after central bank auditors found that the previous owners, led by Ihor Kolomoisky, created a $5.5 billion hole in the bank’s balance sheet. Since July, the central bank’s leadership has changed. Kolomoisky, Zelenskiy’s main media backer in the 2019 presidential campaign, has stepped up his legal campaign to get ‘compensation’ for the bank he bankrupted.

 

  • EU Signs €390 Million in Soft Loans, Aid to Ukraine
  • With UK out of EU, Open Skies Could Start Next Year
  • Ze is in London to Sign Post-Brexit Trade Pact with UK
  • Central Bankers Won’t Go Quietly
  • Abromavičius is out at UkrOboronProm

The EU and Ukraine signed deals for loans and aid totaling €390 million at the annual EU-Ukraine summit in Brussels. The signing ceremonies contrasted with growing warnings from aid-weary Europeans that “the EU is not an ATM machine.”

  • The European Investment Bank, the EU’s bank, is lending €300 million to increase the energy efficiency of 1,000 public buildings in Ukraine – schools, hospitals and cultural centers. Administered by the Communities and Territories Development Ministry, the building improvements will cut heating bills.
  • The bank is also lending €30 million to start the modernization of Ukrposhta’s logistics. Ihor Smilianskyi, General Director of the national postal operator, said the loan is the first part of €100 million in financing for “the largest modernization in the history of Ukrposhta.”  This will include a general IT upgrade and building eight sorting hubs and 62 regional depots. “The new logistics centers will be fully automated and moved out of the city, which will significantly speed up the shipping process and improve connections,” he said. Asserting the investments will create 5,000 new postal jobs, he said: “Capacity will increase to three to four times its current levels.”
  • EIB Vice-President Lilyana Pavlova said: “An efficient, affordable and modern postal service is crucial for faster, sustainable long-term economic development, as it unlocks new business opportunities, creates jobs and makes trade easier and more profitable.”

Ukraine and the EU will sign an open skies agreement “early next year,” President Zelenskiy told reporters after the summit. Expected to boost post-Covid air travel, the deal has been held up for a decade over Britain’s dispute with Spain over Gibraltar’s airport. With Britain withdrawing from the EU on Dec. 31, this issue will no longer hold up signing of the Ukraine deal.

The final joint statement glossed over recent EU complaints that the Zelenskiy government is backsliding on anti-corruption reforms, undermining institutions designed and funded by the EU in the 2015-2019 period. The statement highlighted the 65% growth in EU-Ukraine trade since the January 2016 implementation of the Deep and Comprehensive Free Trade Area. Viewed as a bloc, the EU is Ukraine’s largest trading partner.

Without offering Ukraine the concrete possibility of EU membership, the EU loses leverage over Ukraine to promote a more pro-Western path, Peter Dickinson argues in a new Atlantic Council blog on EU-Ukraine relations. “For Ukraine, the ultimate objective has always been EU membership,” he writes. “However, Brussels has remained reluctant to discuss this possibility in specific terms.”

To remind Ukrainians that there is an alternative to the East, Viktor Medvedchuk, chairman of Ukraine’s leading pro-Russia party, Opposition Platform – For Life, flew to Moscow to meet with President Putin. Photos of Medvedchuk talking to Putin were released to coincide with photos of Zelenskiy meeting the EU leaders in Brussels. Putin said Russia is ready to provide Ukraine with its new vaccine against the coronavirus, but Kyiv authorities must ask for it.

President Zelenskiy signed a “strategic agreement” ensuring that Ukraine’s trade benefits with Britain continue after UK completes its withdrawal from the EU, scheduled for Dec. 31. The new deal does not change Britain’s longstanding requirement that Ukrainians obtain visas to visit. Last year, bilateral UK-Ukraine trade was $2.6 billion. Trade analysts say this figure could go higher in the 2020s if the UK and Ukraine negotiate free trade in food. Britain, with a growing population, is Europe’s largest food importer. Ukraine, with a shrinking population, is Europe’s largest food exporter.

Kateryna Rozhkova, the veteran Central Bank number two, snapped back at a move to push her and another deputy to resign denouncing it as “a triumph of the past over the future” and “an alarming signal for National Bank independence and common sense.” Rozhakova and fellow deputy governor Dmytro Sologub are the last survivors of the Central Bank leadership that shut down 100 insolvent banks in the wake of the 2014-2015 crisis. In a Facebook posting, Rozhkova said the bank council voted the reprimand because of an interview the pair gave the Kyiv Post last month. In a separate interview, Sologub told Interfax-Ukraine that last summer’s purge of the central bank Board reduced the IMF’s trust in the bank to “ground zero.”

Concorde Capital’s Alexander Paraschiy writes: “This could also be the latest episode in the Zelenskiy administration’s tactic in removing top officials, holdovers from the Poroshenko presidency, who behave independently and are supported by international financial institutions…it’s the very dismissal of Rozhkova and Sologub, the only NBU board members who have long-standing relations with the IMF, that will reduce the fund’s trust in the NBU to ‘ground zero.’”

Timothy Ash, of BlueBay Asset Management, writes from London: These are two Deputy Governors who have worked their backsides off over the past five years to transform a central bank that totally lacked the confidence of the market to an institution which was, until recent changes, absolutely trusted and had the confidence of the market. It’s simply perverse.”

In a poll gauging trust levels in government, the Central Bank ranks below Zelenskiy, but above the Rada and the Cabinet of Ministers, the Center for Social Monitoring reported. In a nationwide poll of 3,014 people completed last week, the categories ‘rather do not trust’ and ‘do not trust at all’ add up to: Zelenskiy – 56.5%; central bank – 65.3%; Cabinet – 71.5%; and Rada – 75%.

Another well-known pro-Western reformer dropped out of the government, when President Zelensky replaced Aivaras Abromavičius as director-general of UkrOboronProm, the state-owned defense production conglomerate. His successor is Ihor Fomenko, a top member of the Abromavičius team. The choice won cautious praise from the Independent Anti-Corruption Defense Committee, or NAKO. This Kyiv-based think tank wrote on Facebook: “The NAKO team sincerely hopes that under Fomenko, the corporatization reforms and the inception of anti-graft standards of the OECD will continue to be effectively introduced.”

Last August, Abromavičius clashed with Oleh Uruskiy, minister of the newly created Strategic Industries ministry. With almost three decades of work in and out of Ukraine’s defense industry, Uruskiy wants to bring UkrOboronProm under his control. Reformers say if Uruskiy implements the Abromavičius plan of creating several transparent corporations, NATO arms manufacturers will be able to work with UkrOboronProm.

 

  • Kernel Markets Mega Bond
  • Kernel’s Credit Rating Rises Above Ukraine’s
  • Central Bank Purge Almost Complete
  • Defying Recession, Sea Port Cargo Is Up
  • Covid Crosses the Dnipro

Ukraine’s Kernel Holding S.A., the world’s largest sunflower oil manufacturer and exporter, plans to start investor calls to place $300-350 million in Eurobonds for terms of 5 or 7 years, Bloomberg and Interfax-Ukraine report. In parallel, Kernel is buying back up to $350 million of its Eurobonds 2022. J.P. Morgan is the sole global coordinator and joint bookrunner and Crédit Agricole CIB and Natixis are joint bookrunners.

Standard & Poor’s Global Ratings raised the long-term credit rating of Kernel to ‘B+’ – one notch higher than Ukraine’s sovereign rating. The rating upgrade from ‘B’ came with a stable outlook. In the universe of Ukraine’s 25 most traded corporate bonds, no other bond wins a ‘B+’ rating from S&P. “We positively assess the issuance of new senior unsecured bonds to refinance bonds maturing in January 2022,” S&P said, referring to this week’s marketing of new Eurobonds for Kernel. “The stable outlook reflects our view that the low risk of disruption to export volumes due to the COVID-19 pandemic and significantly lower capital expenditures in fiscal 2022 should support cash flows.”

Some of the new money is to go to retire debt and some to Kernel’s ambitious $270 million capital expenditure program for the fiscal year ending next June.  These include bringing on line a new oilseed processing plant in Western Ukraine, completion of several biogas energy plants and increasing the capacity of Kernel’s new TransGrainTerminal trans shipment complex in Chornomorsk sea port.

Bolstering investor confidence in Kernel are a series of numbers released: FY2020 EBITDA was up 28% yoy to $443 million; grain exports were up 30% last year to 7.9 million; and exports are to increase another 20% in the year ending June 31. Although drought is cutting this year’s sunflower harvest by 14%, rising prices may compensate. “Competition for raw materials will intensify,” Andrey Verevsky, Kernel’s chairman, predicts in the new annual report. “The upward trend in global commodity prices will partially offset the downward pressure on profitability of all our segments in the new season.”

Interpipe, the steel pipe and railroad wheel company, announced that it has redeemed at par value with accrued interest $32.4 million of its 2024 Eurobonds. Remaining debt on the bonds is $81.3 million.

Ukreximbank has bought $485 million in hryvnia bonds from Ukravtodor, the state highways agency, reports Interfax-Ukraine. In three placements, the state-owned bank agreed to a 10.5% yield for one year bonds and 9.99% yields for two and three year bonds. Of the $3 billion budgeted for the government’s ‘Big Construction’ roads program this year, 22% is to come from loans with state guarantees, 37% from the Road Fund, and 41% from the Covid-19 Fund.

Intent on purging the entire 6-member central bank Board within 90 days, the National Bank of Ukraine Council approved reprimands and votes of no confidence in the two last Board members remaining from the 2015 bank cleanup era. The two, Yekaterina Rozhkova, the first deputy governor, and Dmitry Sologub, a first deputy governor, became familiar figures to Western investors and IMF missions over the last five years. Although the Council decisions are non-binding, the central bank’s new Governor, Kirill Shevchenko, voted for the motions, reports Interfax-Ukraine. As a result, both veteran central bank officials are expected to resign.

Cargo moving through Ukraine’s sea ports was up 3.7% yoy through September, compared to first nine months of last year. Easing the corona recession, exports were up 5.6%, to 91 million tons. Other directions were: imports down 3.1%, to 18 million tons; transit down 5.5%, to 7.7 million tons; and cabotage, or shipment between two Ukrainian sea ports, was up 31%, to 1.8 million tons. Container traffic was up 8.3%, to 773,000 boxes.

After six months in western Ukraine, Covid-19 has decisively moved east, making eastern Ukraine the current infection hot spot, Health Minister Maksym Stepanov told reporters. In the 24 hour period ending Monday morning, the top areas for new cases were: Kharkiv oblast – 446; Kyiv city – 286; Sumy oblast 282; Donetsk oblast – 226; Dnipropetrovsk oblast – 206; and Zhytomyr oblast 185. Kyiv and Dnipropetrovsk straddle the Dnipro.

By Friday, Ukraine will be recording 6,000 new infections a day, the Health Minister predicts. In the latest high profile infection, Ukraine’s most successful soccer club, Shakhtar Donetsk, is self-isolating for two weeks after two players tested positive on Sunday. Despite this setback, Kyiv Mayor Vitali Klitschko announced that city stadiums will reopen this month for spectators to watch international matches. Attendance is capped at 30% of seats.

Ukraine’s hotel operators will need two years to recover from the last six months of corona crisis, Natalia Chystiakova, consulting director for Colliers International (Ukraine), predicts in an interview with Interfax Ukraine. Last summer the average occupancy of Kyiv’s hotels fell to 20%. Four- and five-star hotels were hard hit because of the loss of conference and difficulty of closing and losing trained staff. If strict quarantine and air travel controls return, she predicts, several hotels could close permanently.

 

Airline News:

Windrose Airline started flying between Kyiv Boryspil and Zagreb, Croatia. The two-hour flight will be twice a week, on an ATR-72-600 turboprop.

On Sunday, Oct. 25, low-cost Air Arabia resumes flying between its home base in Sharjah, UAE and Kyiv Boryspil. Sharjah’s airport is 25 km east of Dubai’s far larger airport.

Ukraine’s discount carrier SkyUp plans to open Lviv and Odesa’s first flights to Amsterdam Airport Schiphol, Europe’s busiest airport in terms of aircraft movements. Amsterdam is a major transit hub for flights to London and Paris and to five North American cities – New York, Atlanta, Detroit, Toronto and Minneapolis/St. Paul.

 

  • WHO: Corona Could Double in Ukraine by End of This Year
  • Ukraine Already is 5th in World for New Infections
  • Tight Corona Controls after Oct. 25 Election Would Put Economy on W Path
  • Microsoft Inks Digital Alliance With Ukraine
  • UIA Postpones NY Flights to Spring

Coronavirus cases will double to 9,000 new cases a day by the end of this year, Dr. Jarno Habicht, representative in Ukraine for the World Health Organization, predicts in an interview with Suspilne (Public) TV. Last week, Ukraine registered four successive days of record new infections, culminating with 4,661 on Saturday. “Our research shows that only one person in four washes their hands regularly,” Habicht said. “We also see that every third person does not maintain physical distance when attending various events.”

Ukraine ranks 5th in the world for daily new corona infections – after India, US, Russia and Mexico, according to the Worldometer daily tally of new cases. With 36 million people, Ukraine ranks about 40th worldwide in population size.

Presidential chief of staff Andriy Yermak predicts Ukraine will face rising infections this fall and winter. Summer was a big factor – people relaxed a little,” he told Ukraine 24 TV. “All this has led to growth. And what is more: it’s the beginning of autumn. It always means an increase in infectious diseases, flu.” In a nationwide Ratings Group poll conducted last month, 45% of the 2,000 said the government’s coronavirus response was “optimal,” 23% said  measures were too soft, and 18% found them too strict.

Andriy Kobolyev, CEO of Naftogaz, the state-owned oil and gas company, has tested positive for coronavirus, he wrote on Facebook. Ukraine’s largest taxpayer, Naftogaz paid $3.5 billion to the national budget through August, 17% of total budget revenue.

Former President Poroshenko is fighting double pneumonia in a Kyiv hospital where he is being treated for coronavirus, his wife, Maryna, writes on the Facebook page of their party, European Solidarity. Maryna Poroshenko, a City Council candidate in Kyiv, also noted that one of their daughters has contracted coronavirus.

Ivan Venzhynovych, a doctor featured in a coronavirus public information campaign, died last week of coronavirus in his native Ternopil. After an AP reporting team visited his hospital, his photo became nationally known through black and white billboards posted across the country with the slogan: “We thank you. We support you. We help you.”

To date, about half of actual spending from the government $2.4 billion Covid-19 Fund has gone for fixing roads, Finance Minister Serhiy Marchenko tells RFE/RL in an interview. As of Sept. 19, only 35% of the Fund had been spent, about half for roads and about half for medical supplies and salaries. Calling this a ‘normal’ decision, he said money had been moved to roads due to “ineffective usage by some ministries” responsible for fighting Covid.

Last spring, the government amassed the Covid war chest intending to divert much of the money to roads, Oleksandr Gumeniuk, investigator for StateWatch, tells RFE/RL, this NGO released a letter from Internal Affairs Minister Arsen Avakov asking Prime Minister Shmyhal to release $70 million from the Covid Fund to pay police salaries.

Returning to strict quarantine controls would reverse the economic recovery, sending Ukraine into a ‘W-shaped’ trajectory, warns Ministry of Economic Development, Trade and Agriculture. During the second quarter – April-June – Ukraine’s GDP plunged by 11.4% yoy. If the recovering holds, this year will have a horseshoe-shaped recovery, falling by 5% yoy in 2020 and growing by almost that rate in 2021.

In the latest AmCham survey, one quarter of 94 companies participating said that all or almost all of their employees are working at home. In the poll, half of companies said their revenues dropped during the pandemic, 61% said they have not changed salaries, and 77% said the number of employees has not changed. Almost half of companies predict their clients will not feel safe taking part in face to face company events before 2021, according to the poll conducted jointly by Deloitte Ukraine and the American Chamber of Commerce in Ukraine.

With three quarters of companies offering remote working, Olena Boichenko, director of Deloitte’s Human Capital Advisory, said: “The new format of work has adversely impacted the mental health of people and the quality of interaction within teams, thus turning emotional burnout, difficulties in team communication, and uneven distribution of work between teams into the biggest challenges in the area of human capital.”

The US Microsoft Corp. and Ukraine’s Ministry of Digital Transformation have agreed to cooperate in what would grow to become a $500 million partnerships to put much of Ukraine’s digital information inside Microsoft’s Azure cloud. One of the priority goals of our ministry is to digitize 100% of public services in two and a half years,” Mykhailo Fedorov, Digital Transformation minister, said at the signing of a joint memorandum of understanding in Kyiv. “This cannot be done if there is no data center in which this data will be stored in our country. In fact, Microsoft may become the first large-scale project that will help us realize our ambitious goal.” The partnership is also to contribute to the upgrading of skills 100,000 Ukrainian IT workers through 2024.

The central bank sold a net $200 million to prop up the hryvnia last month, the regulator reported on its website. This was the third largest amount of sales in the first nine months of this year. Diminished foreign investor interest in Ukrainian government bonds coupled with increased demand by Ukrainian importers “led to a slight weakening of the hryvnia against the [U.S.] dollar”, said the National Bank of Ukraine.

Due to the war between Armenia and Azerbaijan and the use of anti-aircraft systems around Yerevan airport, UIA and SkyUp have cancelled their Kyiv Boryspil – Yerevan flights. Last January, at a time of high US-Iranian tensions, an anti-aircraft crew in Tehran shot down a UIA Boeing 737-800, killing all 176 on board.

UIA is postponing the resumption of direct Kyiv-New York flight until next April, the airline announced. Citing its hub model for filling long haul flights, the airline noted the pandemic in Israel and its cancellation of flight to Yerevan, Baku and Tbilisi. UIA temporarily stopped flights to Tel Aviv from Dnipro and Kharkiv.

Don’t Breathe Deeply: Next spring, Chornobyl exclusion zone will open its first bicycle path, the government portal announces. Following old roads, this 45 km route will run from Zeleny Cape checkpoint through the villages of Kupovatoe, Opachichi, Otashiv and Plyutovishche. “We hope that the cycling route will allow visitors to the exclusion zone to see the unique world of the Chornobyl reserve,” said Maksym Shevchuk, deputy director of the Exclusion Zone Management Agency. In addition, the agency and tour operators have worked out a 30 km route to be conducted in a Sherp, a Ukrainian-made all-terrain amphibious vehicle.

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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