March 18th: NUCC statement concerning the ongoing war in Ukraine
- Ukraine is still in control of the capital, the biggest cities and most of its territory, after entering the third week of warfare by the Russian Federation.
- The Ukrainian State is functioning and operating to the best of its abilities, given the situation.
- Banking systems and financial systems are functioning, even if general infrastructure is damaged. Ukraine is still online.
- The ongoing war has severely impacted the business climate, but several companies continue to operate to the best of their ability.
- NUCC is currently assisting Norwegian authorities in questions regarding Ukrainian refugees and work integration.
- The Chamber has expanded its focus to deliver direct aid to trusted partners operating in Ukraine, through own fundraising initiative.
- Outlook on the Ukrainian economy by Ivan Vertsyuk, Editor at NV.
Entering the third week of constant attacks and hostilities by Russia, Ukraine still holds most of her ground. None of the major cities has yet to fall, but the situation in Ukraine is critical. Consensus so far seems to be that Moscow underestimated Ukrainian willingness to fight for their homeland, whilst overestimating own capabilities. This raises the question of what comes next for Ukraine and the following fear of further brutal escalations. President Zelenskyj has seemingly given up on a NATO membership and pursues diplomatic talks for a solution with Russia.
Against the backdrop of the unfolding humanitarian crisis, with hospitals, schools, infrastructure and governmental buildings being destroyed and the death of many civilians, The Ukrainian State continues their efforts to operate and maintain control. Major parts of Ukraine are still mostly online, and even if partially clogged, mobile networks are still functioning. The banking system also operates relatively normal, enabling people to receive money from abroad and send money within Ukraine. Sending money out of the country has been restricted. People can purchase the few goods that are still available in form of medicine and food, with their credit cards. However, the most heavily hit parts of Ukraine, are currently without water, electricity, and general infrastructure.
Given the difficult circumstances, many Ukrainian companies are still active. Several IT-companies have relocated to western Ukraine and manufacturers together with producers of commodities that are not directly affected by the ongoing fighting, are still doing what they can to keep their incoming revenue to stay in business. The Chamber wish to emphasize the importance of continuing business relations with these companies, as they in turn will help Ukraine in the general war context by adding value to the Ukrainian economy, – in this acute situation and for a post-war Ukraine.
The UN estimates per 17/3 that more than 3 million refugees are flowing into Europe. Mostly women and children, due to the martial law that keeps men from crossing the borders. There are ongoing discussions by the Norwegian government to create a fast-track system to employ Ukrainians and integrate them as quick as possible. NUCC is communicating closely with the government on this topic and have given their recommendations on how to implement it. As a part of this strategy, The Chamber is currently developing a work portal that aims to give Ukrainians easy access to jobs offered in Norway.
Given the circumstances, NUCC has currently shifted its workforce and focus into not only assisting in business relations between Norway and Ukraine, but also using established connections, inhouse experience and capabilities to get financial aid from our members and other private companies and individuals to trusted partners in Ukraine. To enable this, The Chamber has established its own fundraising initiative which aims to provide quick, targeted and effective aid in the categories of humanitarian aid, mental health and employment. Read more about our initiative here.
Some outlooks on the economy by Ivan Verstyuk, Editor at New Voice Ukraine
- On investing
Given the scope of the West’s monetary support ($13.6 bln from the U.S. alone), Ukraine won’t be having a sovereign default. But corporate defaults are likely.
- On economy
Ukrainian parliament passed the law on war economy: 7137-д. Zelensky will sign it. Businesses and private entrepreneurs will be paying a flat 2% tax on revenue if it doesn’t exceed UAH 10 bln. VAT is down to 7% from 20%. And a number of fiscal subsidies, but they will be effectively applied, I think, only to Ukrainian companies.
- On the future of Ukrainian economy
Ukraine, after the end of the war, will launch a major reconstruction program paid with Western money.
The country will have huge demand for construction, infrastructure companies: housing property, manufacturing property, energy infrastructure.
NUCC will continue its efforts to aid Ukraine and continues to condemn Russia ́s violation of Ukraine ́s sovereignty and general human rights. The Chamber also wants to express our gratitude to all our members and partners who supports the vision of a free, democratic, and prosperous Ukraine.
Statement from the Norwegian-Ukrainian Chamber of Commerce,on March 18 ,2022.