English language posts Украина Реформы

The UBN 2019-02-06


The main economic task of a second presidential term would be “overcoming poverty,” President Poroshenko told the American Chamber of Commerce Tuesday evening. To get there, Ukraine needs foreign investment and decent paying jobs. “If you want to prevent people from going abroad, Ukraine should never again be the country of cheap labor,” he said. Ukraine should process more of its farm production, “become the country of the biggest number of startups,” and should increase tourism seven fold, to 10% of GDP.

Populist presidential candidate Yulia Tymoshenko hewed a centrist line with the European Business Association Monday evening, saying that Ukraine cannot afford to stop cooperating with the IMF, Bloomberg reports. Calling Ukraine’s debt burden ‘heavy,’ she said she would negotiate better terms from the IMF. She promised to “find a common language with investors before parliamentary elections and lift this burden a little.” Tymoshenko and Poroshenko are roughly even in polls leading up to the March 31 election. Volodymyr Zelenski, a well-known comedian, and entrepreneur, is currently in first place.

Retail trade in Ukraine increased 6.1% in real terms last year, slightly below the 6.5% increase for 2017. The biggest jumps were in Ukrainian-controlled Luhansk – up 27% — and Donetsk – up 14%. Fueled partly by remittances from Ukrainians working abroad, retail was one of the three pillars of growth last year’s 3.4% growth – led by agriculture – up 8.2%; and construction – up 6.3%. Concorde Capital’s Evgeniya Akhtyrko writes: “We expect real retail to increase 6-7% yoy in 2019. It will be driven by real disposable income growth.”

E-commerce grew by 31% in Ukraine last year, the second fastest rate in Europe, following only Romania’s 37%, according to the Better Regulation Delivery Office, or BRDO, a regulatory advisory body funded by the EU. While growing faster than the world average of 24%, Ukraine has plenty of room to grow, Alexander Kubrakov, BRDO IT director, tells reporters. In 2017, online accounted for 3.2% of retail sales in Ukraine, compared to 8.8% in the EU, 10.2% in the US, 17.8% in Britain. To further promote online sales, the BRDO recommends the government allows online stores to email sales receipts, instead of requiring they issue printed paper receipts.

Nova Poshta increased package deliveries last year by 20%, hitting 174 million. Points of sale grew by almost quarter, to nearly 3,000 across Ukraine. Deliveries from the United States double and deliveries from Europe tripled, bring international shipments to 2.7 million, or 1.5% of the total. About 21% of Nova Poshta’s deliveries come from internet shopping. Nova Poshta has signed a deal to provide warehouse and delivery service in Ukraine for IKEA. This summer, the Swedish furniture retailer plans to open its first store in a showroom ‘city format.’

Ukrposhta, the state company, plans to increase deliveries by 27%, to 28 million packages this year, Director Ihor Smilianskyi tells reporters. He says: “Today Ukrposhta delivers more parcels in a day than in all of 2016.” Last year, Ukrposhta entered into an alliance with Rozetka, Ukraine’s largest online store. After launching a mobile app, Ukrposhta delivered 6 million packages ordered online last year. To further democratize e-commerce, Ukrposhta plans to complete the computerization this spring of all post offices in towns with populations over 2,000. With the biggest commercial reach in the nation, Ukrposhta has 11,000 post offices.

To cope with booming air cargo, Boryspil starts work in May on a new cargo terminal designed to more than triple handling capacity to 100,000 tons, Pavel Ryabikin, general director, tells reporters. Ideally, the terminal, will be partially open in time for this year’s Christmas rush. During the recent Christmas period, the airport was so overwhelmed with packages that it closed for air cargo for two weeks. Given air cargo growth rates, Minister Omelyan predicts this expansion will only be sufficient through 2022.

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