A new path to reconstruction for Ukraine

This week, the Employers' Group held a debate on the war in Ukraine, one year on. Ukrainian business leaders took part in the discussion and called for support to tackle the many challenges they face every day.

In the last year, Ukraine GDP plunged by 30-35%. The total cost of direct losses is valued at almost $130 billion.  According to various estimates, between 2.5 and 5 million people lost their jobs and inflation sits at 26.6%.

"With many employees, clients and partners moving abroad, losing their companies in shelling and bombings, going to the frontline to fight, it is hard to maintain high levels of income, particularly for SMEs" said Kateryna Glazkova, executive director of the Union of Ukrainian Entrepreneurs. 

According to the latest survey, 8% of Ukrainian SMEs indicated that they were forced to stop working completely, 25.2% had a decrease in workload, 43.4% were partially working, and only 23.3% had an increase in workload or at least remained at the pre-war level.

Companies face a number of challenges:  The inability to regain clients they lost due to disruption of supply chains, delocalisation or other issues; the lack of financial resources; the general feeling of insecurity and the inability to export their goods and services are a matter of concern for most CEOs.

Nearly half of the member companies of the European Business Association are positive about their business development in 2023. These are the conclusions of the study "Business Forecast 2023" which was conducted by the EBA and Raiffeisen Bank with analytical support from Gradus Research. This year’s results demonstrate an expected deterioration in the sentiments and forecasts of top managers. For comparison, last year 83% of CEOs made positive forecasts.

To improve the situation President of the Ukrainian Chamber of Commerce, Gennadiy Chyzhykov, stressed the need for businesses to start exporting again. "It's a question of survival," he said.

According to one of the EU-funded survey of Ukrainian entrepreneurs, some 15% of companies that used to export, stopped doing so. Some reasons are the disruption of supply chains and loss of partners abroad.

Stimulating export activities is crucial in restoring the disrupted supply chains, gaining European partners, learning from European experience. For that to happen green corridors need to be continued and enhanced, said Anna Derevyanko, Executive Director of the European Business Association (EBA).

The association to the Single Market programme has paved the way for Ukrainian businesses to access the EU market and created potential new opportunities, but B2B matching must be improved so that they get the necessary assistance, consultation and contacts to become operational, Anna Derevyanko continued.  "It's not a sprint it's a marathon," she added.