After a year and a half of the full-scale war, the threat to the Ukrainian economy has not disappeared; it has simply transformed. In the first weeks of the war, we battled with circumstances, but now we face the risks of responsibility. As the government and businesses, we continue to maintain constant communication and coordinate our actions, just as we did in the early days of the war. However, now that we contemplate our own risks and responsibilities, we sometimes hinder each other. Such hyper-caution is detrimental to the economy.
The most striking example is the issue of the currency settlements term. The National Bank is currently moving very slowly towards adopting a roadmap for currency liberalization. I am overwhelmed with requests for extending the deadline for foreign currency earnings. The entire business community is upset with me and the Security Service of Ukraine (SBU) constantly scrutinizes me to ensure that there is no currency leak. Meanwhile, the National Bank is offended that I am interfering with their policy.
While the economy has managed to withstand the challenges, today it seems that we did everything right at the beginning of the full-scale war. However, upon a closer look, it becomes clear that we made many mistakes in the first weeks of the full-scale invasion: we made decisions that completely abolished any regulation, then reinstated regulation, and so on. But back then, we were not afraid to make mistakes, whereas now we are fearful. And this fear puts additional restrictions on all of us.
Today, we no longer need the adrenaline rush of the first days of the war. We need to calm down and understand that the challenges that lie before us now require meticulous and detailed coordination between businesses and the government. The challenge is not the speed of decision-making but establishing effective cooperation, including ensuring stable functioning of government institutions.
We cannot attract talented young individuals to work in the Ministry [of Economic Development] because last month we paid our key specialists only 12,000 hryvnias (about $308). This is nonsense. The foundation of an institution cannot function properly if it receives such meager salaries. At the same time, our institutions went through even more difficult times, such as the 1990s, the 2008 crisis, and the hardships of 2014. Today what we need most is calm and collaborative work for the future.
The already mentioned currency liberalization (NBU Resolution No. 18 of 2022) requires a swift and high-quality decision. If we don’t make a decision regarding the normal circulation of capital for new investments before the London conference, the conference in London will remain mere advertising, and in reality, it will be impossible to invest in Ukraine because there is no capital outflow. We need to adopt a roadmap for currency liberalization by June 22nd (the event took place on May 19th – ed.). For this purpose, the Ministry of Economy, the Ministry of Finance, and the National Bank of Ukraine should cooperate calmly, steadily, and harmoniously.
The author’s column is prepared based on the materials from the international conference “Forward and Upward: Reforming Ukraine during the War,” held on May 19 in Kyiv. The conference was organized by the think tank Vox Ukraine with the support of The National Endowment for Democracy (NED).
The author doesn`t work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations