After COVID-19 shock: how to boost Ukraine’s economic recovery

After COVID-19 shock: how to boost Ukraine’s economic recovery

14 Sep 2020

Русская версия

The onset of the COVID-19 pandemic in March 2020 had a drastic impact on the industrial sector of Ukraine. Measures taken to slow the spread of COVID-19 hit the country’s small and medium-sized enterprises (SMEs), and the Ukrainian Chamber of Commerce and Industry reports that approximately 700,000 small businesses in the service sector have closed - leading to the loss of between 3.5 to 4 million jobs. This is a particularly concerning figure given that Ukraine's SME sector includes a high proportion of women-led micro-enterprises and female employees.

In response, the United Nations Industrial Development Organization (UNIDO) joined forces with Ukraine’s Ministry for Development of Economy, Trade and Agriculture (hereafter referred to as the Ministry of Economy) in a new initiative to bolster the nation’s economic recovery. The focal point of these efforts was the innovative Industry4Ukraine platform - a virtual collaborative space for more than 35 industry associations, clusters and other stakeholders that share a vision of national industrial development.

Drawing on Industry4Ukraine's existing network, UNIDO and the Ministry of Economy launched a series of online, expert-led discussions aimed at improving industrial analytics, as well as providing national authorities with informed recommendations for COVID-19 recovery policies. Between May and July 2020, these sessions gathered over 300 participants, including representatives from Ukraine’s Ministry of Economy and regional state administrations, Office of the President, Chamber of Commerce and Industry, and Export Promotion Office, in addition to leaders of local tech and industrial companies. The sessions addressed a range of key topics, such as the role of regional business clusters in driving inclusive and sustainable industrial development, the integration of local SMEs into global value chains, and export support tools for medium and high-tech industrial sectors.

“Ukrainian business is quickly adapting to new realities. In the absence of the opportunity to physically participate in exhibitions and trade missions , there is a growing trend to use online tools to find partners and relevant B2B platforms," explained Tetyana Miskova, acting Director of the Export Promotion Office (EPO), a state institution established to support and promote the export of goods and services of Ukrainian producers.

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Taras Kachka, Deputy Minister of Economy said: "We use differentiated approaches to support different sectors. For clusters that are integrated into European chains, logistical support, the absence of problems at customs, the solution of labour problems, and financial predictability are very important,” adding, “The Ministry is trying to provide targeted support to all industrial groups. Regular feedback from industry groups is a key factor in our mutual success.”

As a result of the Industry4Ukraine platform’s recommendation on reviving cluster development in Ukraine, a working group has been set up which will present the first version of a national cluster policy to the Ministry of Economy by the end of September 2020. In addition, stemming from the webinar discussions, a white paper on industrial policy and its tools, based on research by UNIDO and other international organizations, is currently under preparation.

UNIDO also took part in the discussions, and Lyudmila Musina, UNIDO National Coordinator in Ukraine, explained, “Promoting advanced digital production in Ukraine is the key to increasing its industrial competitiveness. This requires radically new approaches to industrial policy and the platform's task is to facilitate their adoption by the government and by business”,

Volodymyr Vlasyuk, Director of the Ukrpromzovnishekspertyza State Enterprise, presented the platform’s vision of the critical areas of the Ukraine's new industrial development until 2030, "For Ukraine, the most effective way to gain control over the beneficial value chains is to build modern processing plants on its own territory," he said.  

Building on the outcomes of the online discussions, Industry4Ukraine published their own review of the proposed COVID-19 crisis strategies, sharing their findings with business partners and government bodies. These findings, combined with UNIDO’s newly developed approach,          Prepare and Contain, Respond and Adapt, Recover and Transform, provide the basis for a strategy to address the negative COVID-19 economic impacts.

The platform’s recommendations will be also presented during the Third Ukrainian Industrial Week (UIW-2020) in November, organized by the Industry4Ukraine platform, in partnership with UNIDO and the Directorate for Industrial Policy of the Ministry of Economy. These recommendations will serve as the platform’s input into the new government’s initiative to develop the draft National Economic Strategy up to 2030.

For detailed information about the manufacturing sector in Ukraine, please click here.

For more information, contact

Solomiya Omelyan, UNIDO Programme Officer

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