Page 6 - UKRRptSept22

Reconstruction plans are being formed and International Financial Institutions (IFIs) like the EBRD have already started work, lending money to key infrastructure entities and beginning the task of building residential accommodation to house returning refugees. In a recent poll only 7% of respondents said they did not intend to go home when peace comes.
The government has presented a 10-year plan for a three-fold economic jump following the war at the end of August, but says it needs something on the order of $700bn to fund it plus compensate Ukraine for all the damage Russia has done.
The plan envisages the transition from a transitional economy of $4,000 per capita GDP per year to a developing economy with $12,000 per capita GDP per year. In practice, this will mean the creation of a Ukrainian economic miracle – 7% GDP annual growth over a long period of time, the Ministry of Economy said in a statement. One of the key steps that will ensure reform implementation will be economic liberalisation and creating a free regulatory environment.
But there are many hurdles to overcome first – ending the fighting being preeminent amongst them.
Even with the debt holidays, Ukraine must pay $10bn in debt by the end of the year. In the third and fourth quarter of 2022, the government, the National Bank, and Ukrainian enterprises must pay $10.1bn, of which $7.8bn is the principal and $2.2bn is interest. That is in addition to trying to fund a $50bn-$80bn deficit (circa 60% of GDP) that is expected this year. The government has been trying to avoid a debt restructuring deal, but it is looking increasingly inevitable.
As a result of the worsening economy, one of the ironies is the growing number of Ukrainians travelling to Russian-controlled territory in search of work. Every day, up to 200 cars cross the front lines in the Zaporozhye region. At the same time some refugees have returned to Ukraine as they have been unable to find work in the EU. In order to stem the flow of workers east, a draft law has been submitted to the Verkhovna Rada providing for up to 15 years in prison for Ukrainian citizens who accept Russian citizenship.
According to an official of Russia’s National Defence Control Centre, a total of 2.8mn people have moved to Russia from Donetsk and Lugansk and from other Ukrainian or former Ukrainian territories since the beginning of Russia’s military operation. Millions more are in year-long queues for work permits and citizenship applications in neighbouring Poland or further west in Europe.
6 UKRAINE Country Report September 2022 www.intellinews.com