In Ukraine, the economy has collapsed due to war

The region has been devastated, millions have been evacuated, the territory is still at stake, and the Ukrainian economy has been under enormous pressure since Russia invaded the country three months ago. rice field. The European Bank for Reconstruction and Development (EBRD) predicts that GDP will decrease by 30% in 2022. As the war intensifies in Donbus, the list of destruction given to the country continues to grow. The latest assessment provided by Ukrainian authorities reports that 24,000 km of roads were blocked and 38.6 million square meters of homes were destroyed. Eleven million residents, including seven million in the country, have been evacuated. “Great labor market turmoil”Confesses Taras Kachika, acting on behalf of the Ukrainian Minister of Economy. “People lost their jobs where they used to live and couldn’t find their current location. This issue needs to be resolved quickly.”, He continues. According to the European Bank for Reconstruction and Development (EBRD), half of the population is no longer functioning.

From the first day of the aggression, the government responded swiftly and lifted a series of measures aimed at mitigating the impact.Capital restrictions have been enforced to limit the purchase of foreign currency associated with so-called imports “Essential”. In the west, where military power has been loose since the withdrawal of Russian troops from Donbus and the South, society has learned to agree on the reality of new armed forces. “We are moving forward every week”Guarantee Tatiana Chevrolet, which imports cosmetics from French brands to Kieu. Of the 110 employees, about 40 sellers and deliverers took leave and about 15 left the country. “There are people working from home in Bulgaria, Poland, Romania, Denmark and even France.”She says.

Prior to the Russian invasion, the product was sold throughout Ukraine, but almost half of its sales locations are no longer in operation, destroyed or too dangerous. Retro Building Mall, “A very beautiful project that just sees the light of day” In the suburbs of Kyiv and elsewhere in Odessa, there is nothing. “In areas where there were battles such as Boutcha, Irpin and Mariupol, all stores were affected or disappeared altogether.”Add Tatiana and blame “Systematic looting” Goods by the Russian army. We launched online sales to make up for the shortfall, which is equivalent to half of normal sales. Companies with less geographical and material constraints, such as IT companies, tend to recover. Many have moved west to Kyiv or Lviv, about 50 km from the Polish border, and transformed into a rear base for humanitarian aid.

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“Start over from scratch”

The metallurgical sector is the most affected. Mariupol’s giant Azovstal ironworks, the flagship of the country’s industry, remained established until the collapse of the city, the last Ukrainian fighter, but it is nothing more than a giant smoking corpse. This place was bombarded by Russian artillery without interruption for weeks. Already in 2014, a clash between Ukrainian troops and Russian separatists in Donbus urged many inhabitants to leave the area. Originally from Lugansk, the capital of the state that bears his name, Igor Ritzi abandoned the coal mining business when under the leadership of Moscow.He settled in the Kyiv region for everyone “Start from zero”.. But in March, one of the wood processing plants in Zhitomyr, west of the capital, was completely destroyed by bombardment. The contractor says he is determined to rebuild everything. “It’s a matter of principle. You need to set an example and lead.”He says.

The collapse of Mariupol, the siege of Odesa, and Russia’s military activities in the Black Sea have also robbed Ukraine of one of its key sources of income. Agriculture, a pillar of the Ukrainian economy, accounts for 15% of GDP and employs 20% of the working population. However, a naval blockade by the Russian Navy in the Black Sea made exports impossible, closing ports in Odessa, Chornomorsk and Mykolaiv, and closing 90% of domestic grain exports and oilseed. Of the 5 million tonnes still stored in Ukrainian silos, 20% of the grain was able to leave the territory primarily by rail to the western border.


If you can’t sell, you need to borrow money from the bank or cut costs


However, due to the incompatibility between the Ukrainian railway network and European railways, this route is very long and expensive. Once at the border, the container should be transferred to a truck or wagon suitable for Union Railroad. It’s urgent. Farmers want to avoid crop rot, but they must also be able to release silos to make room for the next crop. This delay also causes a shortage of income, while prices for fuels, which are becoming increasingly scarce in the market, continue to rise. According to the Food and Agriculture Organization of the United Nations, 20% of agricultural companies had enough diesel to plant this spring.

“I can put up with it until October”Guarantees Alex Lissitsa, owner of an agriculturally owned IMC that grows 120,000 hectares of wheat, corn and sunflowers in Smee, Chernihiv and Poltava in the eastern part of the country. “If you can’t sell, you have to borrow money from the bank or cut costs.”He warns.

Another 40 billion

The European Union and the United States have been thinking for weeks on solutions to restore Ukraine’s logistical advantage over Russia’s enemies. 27 people proposed to establish “Corridor of solidarity”.. Several routes are planned to allow the influx of aid in other directions as well as to take goods out of the country. Options for Ukrainian military intervention against the Russian Navy are also on the table. Europeans, who have shown full support for Ukraine since the beginning of the conflict, could release a new envelope of € 9 billion. The country has lived for three months under the infusion of international aid. According to the EBRD account, Ukraine has already received € 4.5 billion from the EU. In mid-May, the US Congress resolved to give the country an additional $ 40 billion, including $ 13 billion in financial and food aid. This package will add 13.6 billion already paid in April.

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“For us, every week is a new challenge for public finance. Without international aid, the economy would have collapsed., Thanks to Minister Taras Kachika. Kieu estimates the country’s monthly external funding needs to be $ 5 billion. “The European Union intends to be a major donor to Ukraine and take the lead in supporting Ukraine for both emergencies and long-term recovery.”, Elysée. The Ukrainian government, which recently announced the creation of a council dedicated to reconstruction, relies on Western funding to revive the country. “Aid is provided in the form of loans from the EU budget guaranteed by the budgets of member countries on very favorable terms.”We say in Paris.

However, kyiv hopes this support will be released in the form of donations. “At some point, our debt could be unsustainable if all support was only loans.”Warn Dimitar Bogov, an economist specializing in Ukraine at the EBRD. Estimated at hundreds of billions of euros, this reconstruction could constitute an opportunity to provide the country with the European standards essential for its ultimate accession to the EU. “Better features of the Anti-Corrupt Practices Act”Is one of the priority projects that Europeans expect, and Dimitar Bogov emphasizes. However, this process is expected to be limited as long as domestic combat continues.