Digest June 2020
Anti-crisis Measures, Infrastructure Development and Cooperation with International Partners.
Anti-crisis Measures and Entrepreneurship Stimulation
The Government continues to implement anti-crisis measures aimed at overcoming the COVID-19 pandemic consequences. In particular, on June 16, the Verkhovna Rada passed Bill 3377 that introduces state aid for culture, creative industries and tourism. State support for cinema is expanding — from now on, Ukrainian State Film Agency will be able to cover up to 100% of the movie production expense. Rent amount for the cultural facilities that aren’t being used due to quarantine, is reduced. The Ukrainian Cultural Foundation will receive sufficient funding to provide grants not only for individual projects, but also, for institutional support. In addition, the law on advertising is being amended to ensure further opportunities for radio broadcasting.
One of the government’s priorities is stimulating entrepreneurship education. Therefore, the Ministry of Digital Transformation in partnership with the International Finance Corporation has launched the National Online School for Entrepreneurs via the Diia.business platform. The goal is to help Ukrainians start, run and grow their own businesses and teach them how to use respective financial services. Education will be organized in the training course series format. The first one, 10 Steps to Starting Your Own Business, is designed for startups and already available on the platform. Its realization has been made possible by the support of the United States Agency for International Development (USAID) under the Competitive Economy Program (CEP). The next one, Financial Literacy for Entrepreneurs, will begin shortly. Each month, the National Online School will run a new course completely free of charge. Besides the online lectures, additional training will be provided on the basis of the Diia.business entrepreneurship support centers.
Cooperation with International Partners
Cooperation with the IMF and European Institutions in Overcoming the COVID-19 Consequences
Ukraine continues to work with international partners to overcome consequences of the COVID-19 pandemic and implement structural reforms. On June 9, IMF approved an 18-month Stand-by Arrangement (SBA) with Ukraine with total access of about $5 billion. Ukraine has already received the first tranche of $2.1 billion that was forwarded to the state budget. The funds will help Ukraine provide adequate support to business and general population during the COVID-19 pandemic and cope with the debt burden. The IMF program has also opened up opportunities for financial support from other international partners. In particular, the European Commission has already allocated the second tranche of €500 million to Ukraine under the fourth macro-financial assistance program — a low-interest long-term loan provided by the European Union to partner countries. The funds will be also transferred to the state budget, reducing its deficit.
Ukraine is consistently implementing reforms towards acquiring full NATO membership. On June 4, the Verkhovna Rada passed Bill 2247 that harmonized the senior officer military ranks with the NATO standards. Also, the Alliance has recognized Ukraine as an Enhanced Opportunities Partner (EOP). The status is part of a NATO initiative intended to maintain and deepen cooperation between the allies and partners that have made significant contributions to NATO-led operations and missions. As an Enhanced Opportunities Partner, Ukraine will benefit from the enhanced access to interoperability programs and exercises, as well as more information sharing. Today, Ukraine is one of six NATO EOPs, including Australia, Finland, Georgia, Jordan and Sweden.
The implementation of the “Big Construction” project initiated by the President continues. The project envisions European-quality construction of 6,500 km of roads, 100 schools, 100 kindergartens, 25 emergency centers and 100 athletics centers across the country by the end of 2020. On June 18, the Verkhovna Rada passed Bill 3509 that expands the use of the COVID-19 Fund resources. Specifically, UAH 35 billion will be spent on road construction and repair, equipment purchase and medical facilities upgrade. The initiative will improve infrastructure and create 63,000 new jobs. Besides, on June 30, President Volodymyr Zelensky signed a law on financing road construction industry development, so that regional state administrations can attract additional loans for local road repairs as early as this year.
The Ukrainian economy badly needs efficient investment attraction effort. To that end, on June 19, the Verkhovna Rada passed Bill 2284 that introduces European practice of capital markets regulation and new financial instruments. The idea is to replace the existing outdated inefficient financial infrastructure rules, intermediaries and instruments with the new European-standard ones.