28 Feb 2023 09:47

Head of Rada's economy committee calls for dialogue with IMF to support Ukrainian manufacturers

MOSCOW. Feb 28 (Interfax) - Ukrainian manufacturers need support amid shrinking demand and a lack of capital, and this problem should be discussed in a dialogue with the International Monetary Fund while developing a short-term economic policy, head of the Ukrainian parliament's Economic Development Committee Dmitry Natalukha said.

"We are constantly balancing between these two problems, which are probably key ones for the existing business environment. When the question arises as to what the alternatives are, perhaps there's no alternative. The only choice is to sit down together with the IMF and talk candidly," Natalukha said in an interview with Ukrainian media.

He said he doubted that the IMF, which is insisting on lifting the benefits granted earlier to the business community and objecting to granting new preferences to Ukrainian manufacturers, clearly understands how comprehensive and complex the problem is.

"I understand and realize the IMF's role, especially now: in these conditions, they're doing a lot to help Ukraine survive financially. But it seems to me that they should look into the context, which is not what I observe thus far," he said.

"Do they [the IMF] really believe that the existing businesses, which, despite the yearlong crisis, keep working and manufacturing vital things for the Ukrainian economy, will continue to work without preferences of industrial parks, without benefiting from the 5-7-9 program, and so on?" Natalukha said.

Some benefits and preferences help Ukrainian businesses to reinvest using their operational funds now, he said.

Natalukha regretted seeing that some officials from relevant Ukrainian ministries also fail to understand the context of the situation, as they similarly "make decisions that are correct conceptually and ideologically, but which ultimately damage national manufacturers."

"The priorities should be different: we must prioritize helping the national manufacturers over thinking how to launch imports or make something together with our partners," Natalukha said.

As an example of such ill-conceived policy, Natalukha mentioned imports of generators and other power equipment on privileged terms and a LED bulb project. "That is, this is a good idea and a good case, but its implementation is as always: care about anyone but Ukrainian manufacturers," he said.

References to the fact that Ukrainian manufacturers lack production capacity means that they lack available capital to boost this capacity, and they cannot raise it from abroad these days, he said.

David Arakhamia, leader of the pro-presidential Servant of the People parliamentary faction, earlier questioned the feasibility of making the abolition of the 2% simplified taxation system, which was introduced to support businesses during the crisis, a precondition for negotiating IMF financing.