UKRAINE’S GDP IN 2021 GREW BY 3%. WHY IS THIS NOT ENOUGH?
The growth of the Ukrainian economy in 2021, according to the State Statistics Service, was 3% – not 4.6%, as was set in the state budget at the beginning of the year. 3-4% economic growth per year is not enough for our country, said in an interview on Delo.ua Yuriy Pyvovarov, CEO of the Kyiv International Economic Forum, which is supported by the UFuture holding company. In order to at least get closer to the pace of development of neighboring countries, it is necessary to grow by 7-8% per year.
"We grow so slow because we are still a country with a commodity economy. And this will not allow us to make a breakthrough, to become a strong and successful country. It is good that Ukraine has a record harvest this year. Prices are rising, and our farmers are successfully selling all grain for export, instead of processing it in Ukraine and exporting the finished product. We sell grain, and later we will buy flour made from our grain. This is the way to nowhere," said Yuriy Pyvovarov.
It is important to change the specialization of our economy. So we can strengthen it significantly. Namely:
- create conditions for industrial development;
- produce value-added products and export them.
The rules are not the same
To play in the global market of finished products, especially high-tech, it is important, first of all, to realize that the rules there are different.
It is not companies who compete in the world market, but states and their systems. Boeing does not compete with Airbus, but European and American economic systems compete. Countries create special conditions and stimuli for exports: preferential interest rates, partial compensation for investment, financing the promotion of goods for export.
"Understanding trends, the ability to work with international corporations is one of the most important tasks that our team solves by organizing such forums as the Kyiv International Economic Forum, the Forum of Innovative Industries, and the U Tomorrow Summit. The latter is a new international summit on innovation business, technology, venture capital, and startups. This is important because sharing experiences and knowledge with foreign speakers, investors and corporations help our business integrate into the global economy on an equal footing," added the KIEF CEO.
Investments
If we look at neighboring Poland, Slovakia or Turkey, we will see that there the state compensates from the budget up to 50% of investments, supports job creation and infrastructure, compensates interest rates on loans, provides tax benefits, import duties etc.
And we are losing. Large corporations, choosing where to locate their new productions and create jobs, often, unfortunately, do not choose Ukraine.
What is done
Among the successful steps of the authorities aimed at revealing the economic potential of Ukraine, Yuriy Pivovarov mentioned:
- bills that provide stimuli for the residents of industrial parks: investment, tax and customs benefits;
- law on localization: it provides preferences in public procurement for Ukrainian producers.
Such mechanisms have long been in place in Europe and US. And now in our country. This is a move in the right direction for economic development. After all, it is important that products are made in Ukraine from Ukrainian raw materials by Ukrainian workers.
Read the full version of Yuriy Pyvovarov’s interview at the link.