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8:39 AM Thursday, October 19, 2017
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UBJ AM Sept. 22, 2017
​Poroshenko meets Trump, claims US support for economic reforms; Delphi opens car parts factory to employ 2,000; Ukraine's shadow economy shrinks
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

• After meeting US President Donald Trump in New York on Thursday, Ukrainian President Petro Poroshenko claimed White House backing for Ukraine’s free market economic reforms. Poroshenko said: "It was important for me as president of Ukraine and, I think for all Ukrainians, to hear the full, very strong support for the reforms that are taking place in Ukraine and the positive assessment of the results we have achieved due to these reforms."

Poroshenko meets Trump in a bilateral on the sides of the UN General Assembly (UNIAN)

• In October, British car parts company Delphi Automotive PLC is to open a EUR 10 million wiring and cable factory in Vinnytsia. By the end of 2018, the company expects to employ 2,000 workers, with many commuting by company buses from a 50 km radius. Average salaries will be $250 a month, about 25 percent higher than the local average, Valery Korovoy, head of the Regional Administration tells My Vinnytsia news site. Currently, he said, about 30 percent of people in Vinnytsia work off the books.

• Ukraine’s shadow economy shrank to 27% of GDP in the first quarter of 2017, down six percentage points compared to Q1 2016. The Ministry of Economic Development and Trade said: "All four methods used to assess the level of the shadow economy showed a decrease in the level compared to the first quarter of 2016.”

• UK-based CyanConnode has won a $29 million order to deliver 1 million smart electric meters to Ukraine through 2020. CyanConnode, of Cambridge, hopes this will be the start of more orders, noting that Ukraine has 16.5 million households with electricity.

• Ukrainian industrial production increased in August by 1.2% compared to the same month last year, according to the State Statistics Service, Gosstat. In the first eight months of 2017, industrial production fell by 0.4% compared to the same period in 2016. While mining registered a decrease of 6.5%, the processing industry grew by 3.5%, output of chemicals up 33%, machinery up 10.4%.

• Cargo transported by truck is up 8.5% through August, compared to the same period last year, Gosstat reports. Growth materials were: cement up 1.4%, ferrous scrap by 16.4%, construction materials up 22.0%, grain and grinding products by 29.4%, oil and petroleum products by 39.1%.

• Ukraine’s coal output shrank by almost 10% during the first eight months of the year. Largely mined in the East, production of thermal and coking coal shrank by 37.5% in 2015, against 2014. In 2016, coal production grew slightly, by 2.8%, to 40.864 million tons.

• Russia is running test trains filled with grain and iron ore down a new, 137 km “Ukraine bypass.” The Kremlin wants to stop sending Black Sea bound freight through a small section of Ukraine. To end this, it spent $1 billion to build a two-track electrified line, known as the Zhuravka-Millerovo line.

• China and Ukraine have signed a deal on cooperation in movie and media industries, Xinhua reports. Under the deal, four Chinese TV series and several movies will be aired this fall in prime time by the Public Broadcasting Company of Ukraine. The majority of the productions will be dubbed into Ukrainian, while several movies will be broadcasted in Mandarin with subtitles. Zurab Alasania, director general of Public Broadcasting said that Ukrainian films will be aired in China and that he hopes China will shoot movies here.

At the Ukrainian Financial Forum in Odesa on Thursday, three economists from three countries, offered their views on Ukraine’s path ahead:

• Lajos Bokros, who as finance minister in Hungary, authored the Bokros privatization and liberalization plan: “To maintain momentum, you need to have a goal – the goal for Ukraine should be to join the European Union…The government has to move ahead on a broad front. The experience of the reforming countries show unfortunately that reforms are reversible, everything is reversible.”

• Sergei Aleksashenko, a Russian economist who is a nonresident fellow at Brookings: “In the current world, Ukraine has to run faster…Ukraine’s GDP per capita is 15 percent that of Europe. Do you want to be the last country in Europe?... You will never catch up with Europe. You have to allow Russian investment to come to increase your growth rates…Ukraine is not a jaguar, maybe a horse.”

• Markus Brunnermeier, Princeton economics professor, from Germany: “Ukraine is at a critical juncture for continuing structural reforms. There is huge potential for Ukraine, but nothing is guaranteed if there is complacency.”


For comments and story tips, email UBJ Editor in Chief James Brooke at james.brooke@theubj.com

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