[000:00:00;00] the light of the marten for the light of the whole world i pray that it will be bright enough to lead you through this darkness we must invest everything in the ukrainian people all my heart is with the ukrainians hello i am here in ukraine it is impossible to believe how terrible the situation is in ukraine i want to say that i am close to by the ukrainian people next to the ukrainians i give my heart in ukraine we must help as much as possible i am very proud of the ukrainian people this war will be finished it must be won 50 i am

absolutely sure that they will win there is good news for us coming from russia, there is not enough money there only in january for the first month of this year, the budget deficit of the aggressor state is big well, almost two-thirds of the planned budget deficit it would seem that what are the sanctions here, in the end we can hope that the financial mess will eventually make it impossible for the kremlin to finance the war against our country, but when exactly this will happen and does the ukrainian economy have enough capacity so that we can wait, this is the column , the emphasis is on oleksiy fadeev, and today we are focusing on the economy, but

today we will talk about the economy with guests in the studio today this is ms. roksolana podlaza, the head of the verkhovna rada committee on budget issues good evening and mr. hlib vyshlinskyi, the executive director of the center for economic strategy greetings greetings so gentlemen, what is the state of the ukrainian economy at the moment and will we be able to overrun and wait until sanctions are added to our enemy. well, of course, during the war, the economy cannot be completely healthy, and the estimate that is for the 22nd year of the war is actually a full 10 months. last year, the economy fell by 30%. according to your data, there are even 35 units in this e-e , the official preliminary data of the state statistics is a little more than 30%. it is actually better than expected and taking into account in particular

those energy strikes that occurred in october, november and december, it is even better than could be expected and here there are some relatively better news behind this figure than it may show at first glance on the one hand 30 looks very a lot of other things, because we understand that a large part of the ukrainian territory is occupied or hostilities are taking place on it, we understand that in bahmuti, for example, you will not produce anything, hostilities are already underway, but it is mined, but the avatar country is also mined, which is also a problem, that is, if you actually look at the territory that is relatively safe for doing business, in fact, we have a minus of approximately 15% somewhere , it is possible to calculate

the share of gdp before a full-scale invasion by territory in different ways, that is, in fact, in another territory , we have a drop there, conditionally, by another 15%. that is, it is actually comparable to the extent to which the ukrainian economy fell during world war ii of the financial crisis of 2008-2009, and again it is uneven across the territory of ukraine. of course, in the southern regions , closer to the front line, the decline is greater, and vice versa in the western regions, and in some places there is even no decline, and in general there a lot of business has moved. so this is the general economic situation , but what smooths it out for us is the fact that we have uh because of actual russian aggression. this is the help of international partners, it is more than 30 billion

dollars abroad for the 22nd year, and we understand that on the one hand this is money that seems to go to financing of the budget deficit, i.e. to finance the hole, but this is real money that then enters the ukrainian economy , which is non-emission, which does not hit er , compares prices immediately and which actually helps to maintain the functioning of the ukrainian economy in this difficult time. thank you, ms. roksolano. please tell me budget just mentioned the fruit mentioned and ah well, how is our budget uh this year's budget is in general what is this budget what is this budget definitely defense both in 2023 and in 2022 more victory this is a budget victory of course we we hope that victory awaits us in 2023 and we will begin the recovery

of the economy and the reconstruction of ukraine, but what we are laying, we are laying a fairly conservative scenario for the budget, and half of the state budget expenditures today are directed to defense. by the way, i wanted to show you for our viewers, this is a very simple graph. how did the structure of state budget expenditures change in two months, two months of 2022 versus two months of 2023? this red e-e sector is the red part this is what our expenses were for two months at the beginning of the 22nd year, in fact, before the full-scale invasion. on this graph , we can see the growth of this. this is the red part . now we actually

have a defense budget. can i ask you? i can't see it very well on the graph yet, but i can see two more large sectors, one blue, the other purple, dark, and this is social protection because, as far as i can tell, it is it decreased a little as a share decreased, but the state continues to fulfill its obligations to citizens . that is, all pensions will be paid, this is all assistance, even in some sense nominally social assistance has become more because a large proportion of internally displaced persons who receive defense appeared, the blue sector is general the so-called state-wide functions include debt service and debt repayment , as well as inter-budgetary transport, i.e. what we pay from the state budget to local budgets is so big share of military spending, which means that our economy has already shifted

to the military, to the military rails, as they talked about it in the cabinet of ministers for a long time, well, without a doubt, it immediately almost came to the military rails, even until february 24. i remember our last meetings in the verkhovna rada. we allocated funds for defense, we increased defense spending because we understood that the situation was getting tense and we needed to prepare for defense there, in fact , what was very possible was in the tomography a-a that roksolana was shown, this is this blue part of the national functions, where are the and the actual debt service is actually part of this raspberry - a small part of the blue and there are these officials. very often in our country, when there are discussions, they say , well, what's the problem, you take it, it's just boiling during the war so that business can live simply because we we can reduce all the officials and everything will settle down immediately. in fact

, what was shown to roksolana is so very obvious that you do not solve the problem by reducing the number of officials, that is, of course, any system needs optimization, but we have to understand that during the war, people and businesses have to pay taxes because we don't want our country to be, you know, a mercenary country of world democracies where we defend not only our country with other people's money, but what is your russia accusing us of we have to understand russia and e in the same way, well, that is, this is an old trap for the phrase that if you don't finance your army, then you will later pay for other people's armies . in fact, no matter how old it is, it is correct. well, that is, you can't

spend so much on defense such a large share to be covered exclusively by international aid. the country itself must work to ensure that, in particular, in the event of a prolonged war, it has its own system when the economy works and taxes are collected , and then they go to protect the country from e-e from the aggressor. in addition, it must be said that our international partners are categorically against that that we finance with international aid, and our defense spending , that is, it helps, it is targeted. as i understand it, not all of it is targeted, some of it is simply help to the state budget, and we ourselves decide whether to direct it there or to pensions or for the salaries of doctors, for example, but what is very clearly tracked is every center, every euro cent that enters the state budget is marked and cannot be used , for example, for the salaries of the military or for the modernization of military equipment within ukraine, so we understand that we need

to work on increasing our own government resources and own revenues if we talk about own revenues, mr. shmygal, who reported on the work of the government , in particular, announced a 10% increase in revenues from taxes uh i understand correctly by 10% 10 lost this quote tax revenue increased by 10%. said denys shmyhal and because of what does this work in our country that pays 10% more taxes, it works in our country and because it is about nobody more a-and we have in the middle in fact in the spring last year, in fact , the people's deputies were objectively afraid of that

that in ukraine during armed aggression , firstly, it will be difficult to fully pay taxes , and secondly, there will be a shortage of goods and a number of tax benefits have been introduced, that is this single tax of 2% was introduced, it was extended to all a-a enterprises that wanted to pay this tax, and therefore well, that is, it turned out to be such a decision. i would say for wartime, and that is not enough, and now , that is, an initiative has already been introduced to actually cancel it from july 1 if i'm not mistaken, this regime, because uh, this is uh, this is actually, that is, it was introduced by the government, and the verkhovna rada has not considered this issue yet. but i think that it is inevitable because

what you say is from plants income by 10%, and at the same time, our consumer inflation for the past year was 26.6 26.6, this indicates that the economy was also falling, and in fact, unfortunately , there are a lot of those who could pay taxes in full, but the state said that it is possible to pay less. well, why should we pay more, that is i will not pay more if it is possible to pay less, this is a normal truth that children understand - the truth. please tell me what was done in order to at least somehow save ruslana's e. this is probably a question for you, we know about relocation programs business, we know about the state's efforts to save how successful it is. as far as we manage. and are there any parameters that you can voice that demonstrate that yes, we filmed so many businesses there and i am a specialist in business relocation, it is rather the ministry

of economy worked but there are certain parameters really we tried despite the difficult situation, despite the fact that we do not have enough of our own resources, we tried to support the business, that is, there is, for example , a grant program for small and medium-sized businesses engaged in processing processing industry there, about a billion hryvnias were allocated from the state budget to support such a business, as a result of these funds, they created 3,000 jobs , more than 3,000 . it cost the state about 200,000 hryvnias for one job, but you need to understand that, of course, against the background of the losses suffered by the economy, this is very not enough, because our industrial sector suffered huge physical destruction and losses, heavy industry , first of all, in part, the metallurgical industry, that is, at first, we had several

enterprises there. metallurgical industries were physically destroyed and then, of course, the ilyich mmk, and then after when the energy terror began, those metallurgical enterprises that remained in the dnipro and in kryvyi rih stopped because the operators of the energy system did not give them electricity, even at night because we had a huge power deficit in system, and they produce products, and currently they have not yet restored their capacity, which was even, for example, as of march 22 of the year ago, we say how much we lost in net well, approximately, at least in money maybe it was a percentage of the national bank's percentage, and if i'm not mistaken, then in my opinion it was one percent, 1% of gdp per month, well, that is, the national bank made an assessment of the actual losses. it's actually

quite easy to calculate when you know how unsatisfied the economy's demand for electricity is. because here there is not only the production of electricity, which is not produced and is not er, it does not invest its share of gdp there. and there is what roksolana is talking about , that it further along the entire chain leads to the fact that there is no electricity, it is not produced products do not work. people, we can compare very roughly. this is of course not an absolutely accurate comparison, but if you look at the skills of the middle class in the third quarter of 2022 , compared to the third quarter of 2021, it fell by 30%, and in the fourth quarter, which fell basic energy terror by 35%. and here we see this difference, this is an additional drop of 5%. it was most likely related to the shortage of electricity in the system in

most of ukraine, which has suffered from such energy terror at the moment the energy supply is gradually being restored, how much do you, as economists, how quickly under the conditions of the restoration of the energy supply and under the conditions of the absence of new energy facilities on our side from russia? well, like a perfectly spherical horse in a vacuum, under such conditions , how quickly will it be possible to catch up with the 5% there. how long does it take? i think that business actually uses the opportunities that appear quite quickly, and so do consumers. consumer behavior changes quite quickly and becomes more optimistic. we saw it even during this terror. how much business tried to immediately buy these generators, buy a couple of cans to work for any possibilities a-a, in fact , the business began to think in the same way in advance, someone bought

generators, and someone already started in solar panels , installed storage systems a-a electricity began to think about other sources of renewable energy energy industry is a very good example here, a large production of chicken, myronivsk bread product, which was put out of the system long before the war, which biomethane, in fact , an open cycle, such a wonderful green economy but it helped them a lot at that moment because in fact they became independent of electricity supply because they produced everything for themselves, so i think that first of all, the economy will prepare for the next axis no, not only the government, but every specific business i i think that such a strong blow as we saw in october, november, what roksolana was talking about will not happen again, everyone will prepare much more, and

the second thing is that uh, i think that, in principle , this spring can give such a good push why because at the same time that is, we see that the situation with the satisfaction of the demand for electricity is developing better than everyone expected, the energy companies managed to raise it faster, in fact, in the winter, and we already have it today , and there has been more than a month without a power outage. second, this is what actually spring, in itself, is a more optimistic period for consumption, and it is actually very important not only from the point of view of consumption of those who are now in ukraine, but already in the first week, there is again a positive balance on the return of people to ukraine, and every

a person who returns is automatically additional additional production in the economy from the point of view that these people who return and start working from the point of view that they start to consume it starts all these cycles in the economy i hope that if on the one hand colleagues in the parliament in the government a will show such a predictable high-quality economic policy that will promote business on the other hand, and the military will also bring good news, and our enemies will not come up with anything new, how did they manage to do it in the fall, in fact, with such a very a controversial war result, but with - in principle, a noticeable blow to the ukrainian economy, the second quarter, the third quarter, we should be relatively optimistic at the moment - the most important question is that the sowing went as well as possible, in particular , the question that would be asked how to actually

support business because roksolana spoke about grant mechanisms. it seems to me that the mechanisms of subsidized lending are extremely important, in particular for agricultural producers, it worked very well last spring. i think that there are initiatives and for this law i have praised the changes to the state budget, which provide for an increase in the authorized capital of the agricultural loan guarantee fund specifically for small farmers who cultivate up to 500 hectares of land, they will be able to get a loan at a preferential interest rate, but we are now referring to farmers who are experiencing or on free territories or on undisputed perhaps de-occupied but cleared, we have about a million hectares mined more than any loans and grants to

agriculture will help demining their fields because a lot of farmers now say that there is no agricultural crop that can be sown in the field that would pay off demining, therefore for this farmer , the state must take this task upon itself. and it is doing it, and we have international partners who will help us with demining. ah and here hleb rightly says that the ukrainian economy is most helped by the military and ah rescuers and specialists of the state emergency service because ah the better our air defense and air defense work the better the faster we vacate the territories that are currently occupied, the faster the economy will recover and this will have an effect that cannot be compared with any point programs to support small businesses or large businesses there, but the forecast of the national bank is just very positive because it says

that in the 23rd year the economy will stop falling, it will stabilize at the expense of what is happening or not worth it, they cannot, on the 25th we are waiting for growth , we still have to live, agree, we will all live, but at the expense of what we are waiting for growth at the expense of treatment by our western partners from above due to the flow of money into the country , just a lot of money. i am an economist, of course. this year, on the one hand, we saw such a great role of the state and there were good examples, even with the state enterprises of ukrzaliznytsia , ukrposhta worked very well during the war , but on the other hand, a lot was done

at the level of private business, and that is what we are there starting with ukrposhta's competitors , ending with private banks, mobile operators, retail chains , all of which worked the same way, not because the president was there or from the president's office. that it is necessary to work somehow to use the country the situation with a normal desire to earn and i think that we did we actually will happen this year even in the conditions of the continuation of hostilities, everyone will to try to find an opportunity, where to make money, where to create jobs, where to restore jobs, and this will actually be the source of this, he wants a small but growth for this year, and then there is the question of victory, there is a question of recovery and recovery as quickly as possible because, for example, the issue of demining is a lot of work for the state, in fact, because i

found out just a few days ago that this issue is very regulated in our country. that, for example , foreign companies cannot engage in demining, although there are already companies that are ready to work on this market and actually participate in the ukrainian recovery, and i think that there will be a lot of work for people's deputies and government officials, because it seems to me that deregulation should be one of the main state policies, even now, and actually after the war, so that we have such a temporary moratorium on inspections during martial law, we have to approach it very openly. for example, this time of war has shown that businesses themselves work safely without these inspections in

the relevant issues and areas, yes , let's just nail it and it won't be simply unnecessary, what's called in russian , sorry, but yes, if it works without that without that control so why not one more i think it is necessary to talk about the fact that non-agrarians will feel better in the 23rd year because in the 22nd year we had a 40% worse harvest than in the 21st because in fact many oblasts could not be sown from kyiv region kharkiv region, kherson region, they were occupied when there was simka, the fact is that in 2022, for ukraine, ukrainians and for our business and for everyone who works for the economy of ukraine, it was a shock for absolutely everyone. we are starting the 23rd year in a state of war, but we already know

what uh. as far as i understand, money just doesn't like shock stages . they like uh, if it's a stable condition, even if it's even slightly visible. daily traffic on nine o'clock, as if it was considered unfashionable there after covid, who goes to work in the office and even at nine o'clock, but for me this is actually a sign of such normality that the restoration of normality, in particular, in the work of a power outage, will have a very big effect because what if the enterprise there trades in the service sector, they adapted , they bought a generator there . for example, a metallurgical enterprise cannot buy a generator, its products are unprofitable from a generator, that is, this metal. well, this product becomes gold if you you produce the electricity produced by the generator, that's why when we have enough power to

revive the industry, this will have a huge effect. so far, we don't have enough power . the disconnection continues for ukrainians for household consumption, gentlemen, you have already mentioned the restoration, you have spoken several times and i would like to ask, but a lot of people are talking about when, when , many of our partners, even individual countries, start thinking about the restoration they tell me there, we will take such an area, and we will take such an area, and we will take such an area, and so on , the mykolaiv region, denmark seems to be going to restore , how will this restoration policy be built in general , how will they come here? mykolaiv oblast, how can i go elsewhere? chernihiv oblast, for example, you can’t in any way. is there any kind of order planned, or is there already some, well, at least some kind of vision for it ? we have a fund for liquidation of the consequences of armed

aggression as part of a special fund of the state budget a, in which we credit the funds from the confiscated russian assets of both russian oligarchs and the assets of russia as a state, and we will probably credit funds from confiscation abroad, at least such a mechanism is being discussed, ukrainians are familiar with the word confiscation, this and all of this is the proper and only source of funding for this of the fund at the moment because we are talking about a lot of values ​​by international partners about uh, um, so that they confiscate the frozen assets of the russian state abroad in the first the turn of the russian central bank with different assessments in the eu, about 300 billion dollars of the assets of the russian central bank may be frozen and we need to develop

a mechanism to confiscate them and direct them to the restoration of ukraine, because otherwise we are telling european politicians that otherwise your taxpayers will pay for it, which money so that you or you are arrested. how do you in russia transfer them to us? they are already frozen . you can actively use them. the question is how to take them away, because now unfortunately for some reason, there is an opinion in the world that the assets of the state enjoy a certain immunity from confiscation even if the state commits terrible war crimes, as russia does . the fact that in this case there should be an exception for ukraine, what is the discussion, why do you need to prove our