There is a bright future for Ukraine after all the “blackouts”– AGMM

Every November, the European Business Association gathers its community at the Annual General Membership Meeting. This year was no exception, and, as usual, the AGMM brought together business leaders, government officials, and public figures to summarize the results of the year and discuss expectations for 2023. Moreover, for the first time, the event featured more than 30 speakers within 3 expert panels.

Macrofinancial panel

"The situation is better than in countries where there is no war"

The International Monetary Fund forecasts that the real sector of Ukraine’s economy will shrink by one-third in 2022. At the same time, the next few months will be extremely difficult for businesses and the economy due to energy challenges.

Experts do not expect a full blackout, as well as a new full-scale invasion, so in 3-4 months the economic situation will be stabilized.  

The IMF predicts that in 2023 the Ukrainian economy may reach the level of moderate growth. There are also forecasts that the situation will normalize if active hostilities cease by the third quarter of next year. However, in the current conditions, any forecasts should be taken with a grain of salt. Much depends not only on the situation on the battlefield but also on the support of our international partners. Thus, in early November, the EU agreed to provide Ukraine with up to 18 billion euros of soft loans for 2023. Besides, the second mission of the IMF has recently started, which cooperates with the NBU and the Ministry of Finance on a number of issues to maintain macro-financial stability in the country. In general, with the help of partners next year, Ukraine can attract up to $ 42 billion. This will allow increasing the NBU’s foreign exchange reserves to $ 28 billion, which is a comfortable level. The exchange rate in 2023 will average 38.5 UAH to the US dollar.

The panelists commended businesses for paying taxes to the budget, which is vital for the country at war. The state is aware of the problems faced by entrepreneurs, so it is working on the respective solutions. Meanwhile, we talked about the opportunities for business in Ukraine, particularly in the field of IT, green energy, agriculture, and the processing industry.

We sincerely thank the speakers, namely Rostyslav Shurma, Deputy Head of the Office of the President of Ukraine, Vahram Stepanyan, IMF Resident Representative for Ukraine, Sergii Marchenko, Minister of Finance of Ukraine, Andriy Pyshnyi, Governor of the National Bank of Ukraine, Sergiy Nikolaychuk, Deputy Governor of the National Bank of Ukraine, Oleksandr Bornyakov, Deputy Minister of Digital Transformation of Ukraine on IT industry development, Head of the Diia City project, Hanna Malyar, Deputy Minister of Defense of Ukraine, Oleksandr Kamyshin, Chairman of the Management, Ukrzaliznytsia, Inga Andreieva, General Manager Ukraine and Moldova, Mastercard, Natalia Bazilevska, Head of the Board, GRAWE Ukraine, Tomas Fiala, CEO, Dragon Capital.

International panel

"Ukraine′s position is to join the EU as soon as possible"

The European Union has demonstrated its solidarity with Ukraine on many levels – the total amount of assistance in 2022 is 19 billion euros. Granting Ukraine candidate status is a clear signal from the EU that Ukraine and Europe should move towards a common future. Thus, already in January, the EU can evaluate the first results of Ukraine in fulfilling the political criteria for accession.

Besides, the parties managed to reach a new level of interaction, as well as to develop a solid legislative framework for further synchronization in the field of energy, trade, etc. The liberalization of the EU market for Ukraine in 2022 is unprecedented, especially in terms of the elimination of tariffs, particularly for agricultural products. Thanks to this, Ukrainian exports grew by 16% during the war, and among the next promising steps towards integration are cooperation in a free-roaming zone and the introduction of the industrial visa-free regime (ACAA).

During the discussion, the European partners were reminded about the need to fight corruption, remove the oligarchic influence in the statehood, improve private property rights and achieve flexibility in the labor market.

In general, Ukraine has a good basis for the next round of negotiations with the EU in 2023. Therefore, we sincerely believe in a successful outcome!

We are grateful to the speakers, namely Olivér Várhelyi, European Commission, Commissioner on Neighbourhood and Enlargement, Olha Stefanishyna, Deputy Prime Minister for European and Euro-Atlantic Integration of Ukraine, H. E. Vsevolod Chentsov, Ambassador Extraordinary and Plenipotentiary of the Mission of Ukraine to the European Union and the European Atomic Energy Community, H. E. Matti Maasikas, Ambassador of the European Union in Ukraine, Head of the European Union Delegation to Ukraine, Farid Safarov, Deputy Minister of Energy of Ukraine for Digital Development, Digital Transformations and Digitization, Oliver Gierlichs, Managing Director & Chief Financial Officer, Bayer, Valeria Vahorovska, Co-founder and CEO, Fondy.

Critical infrastructure

"After the war, the infrastructure will be not just restored, but modernized"

A separate panel was devoted to the readiness of Ukraine’s critical infrastructure for the challenges of winter, during which we talked about how the energy, banking, postal, agricultural, and metallurgical sectors are coping now and what they will do in the next few months.

The constant attacks that have already damaged about 50% of the energy infrastructure make it extremely vulnerable to functioning during the cold season. The resilience of the grid for the coming months can be ensured through a combination of three factors: effective air and missile defense systems, external protection of the grid facilities, which, although not saving from a direct strike, can protect from debris, and rapid restoration, which requires materials, equipment, specialists and good coordination. After the war, the Ukrainian energy system will not only be restored but also modernized thanks to new approaches, solutions, and equipment.

The panelists suggested that the probability of a complete blackout in Ukraine is low, and even if it happens, the power supply will be restored in a few days. However, everyone is preparing for such a scenario, including banks. In the conditions of a prolonged power outage, most banks will be able to provide critical services, but it may affect the operation of branches, ATMs, and payment terminals.

The postal service is one of the first to appear in the de-occupied territories. Thus, Ukrposhta starts working 2-3 days after the liberation of the territories – with the help of mobile branches, the postal operator delivers pensions, financial assistance, and products. Thanks to European partners, the company continues to digitalize, and invest in communication devices, as well as sorting centers.

It is critically important for the metallurgical industry to resume exports by sea. The Ukrainian Government is already working on this, particularly the Ministry of Agrarian Policy, which confirmed that in communication with the UN they sent proposals to increase the number of functioning ports in Ukraine, as well as to expand the grain agreement to other types of products, including metallurgy.

We are grateful to the speakers, namely Taras Vysotsky, First Deputy Minister of Agrarian Policy and Food of Ukraine, Mauro Longobardo, CEO of ArcelorMittal Kryvyi Rih, Igor Smelyansky, Director General of Ukrposhta, Dmytro Sakharuk, Executive Director of DTEK, Oleksandr Pysaruk, Head of the Board, Raiffeisen Bank.

Social and volunteer projects during the war gained a remarkable scale. Thus, a renowned Ukrainian TV presenter Kateryna Osadcha told us about her initiative – «Search for the Missing “. Since the war started, the wave of inquiries to Kateryna about missing people has been growing daily, and their search has eventually transformed into a social project that helps to find people who disappeared as a result of the war. Today there is a project website, social media pages, and a chatbot where you can leave a request.

In general, the European Business Association sincerely thanks all participants of the event for their optimism, inspiration, and bravery! We would also like to express special gratitude to the main partner of our event – Mastercard, as well as our partner – Grawe. Thank you that in these difficult times we continue to stand together with Ukraine!

And, surely, the EBA will keep working and providing reliable support for our member companies!

Watch the AGMM broadcast in English:

 

Moreover, we have collected stories of how business, despite everything, continues to work and support the country. Unfortunately, we did not have enough time to show some of them due to the busy agenda, so we share the stories:

Olena Vdovychenko, Chief Executive Officer Metro Cash&Carry Ukraine

Bogdan Yarmolenko, Country Managing Partner at EY Ukraine

Yuriy Atanasov, CEO and Co-founder Centravis

Taras Yurynts, Managing Director, Guldmann-Ukraine

Peter Thomson, General Director, UA Sustainable Agri Trading

Speech videos from partners, business and government representatives:

Olivér Várhelyi, European Commission, Commissioner on Neighbourhood and Enlargement

 

Olha Stefanishyna, Deputy Prime Minister for European and Euro-Atlantic Integration of Ukraine

 

Video from our main partner Mastercard: