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Monday, August 31

Corona Chaos on Roads Tomorrow as Parents Drive Kids to School...Aside From Banning Foreign Visitors, No Lockdown Expected Before Oct. 25 Elections...This Fall: Shakeup of Economic Ministries?..China and Ukraine Cuddle; Pompeo Pouts...
James Brooke
by James Brooke
UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief

Large traffic jams are expected in Kyiv and Ukraine’s big cities tomorrow as schools reopen for Ukraine’s 3.8 million primary and secondary school children. In the first six months of the coronavirus pandemic, 7,743 Ukrainian children were infected. Mass transit ridership is down and more parents than normal are expected to drive their children to school. Kabanchik, an online platform for ordering services, reports that its requests for driving teachers almost doubled this in June and July, to 786. Olga Soroka, head of marketing told Interfax-Ukraine, earlier this month: “They are learning to drive in advance.”

On Saturday, Ukraine registered a record 2,481 new Corona infections, a number that dipped to 2,096 on Sunday. Since March 17, more than 2,500 Ukrainians have died corona complications. Kyiv, the nation’s capital, continues to report the largest number of infections. On Saturday, Mayor Klitschko reported that infections in Kyiv over the previous 24 hours, totaled 265, including 19 children.

Although infection rates are double the level of April, when the country was under tight lockdown, life in most of Ukraine is largely normal. Last night, Kyiv’s first opera concert in six months, drew about 2,500 people to Sofia Square. About 1,500 sat on chairs spaced for distancing. The rest listened standing, some wearing masks, some not.

The Government will not consider imposing a second hard lockdown to combat coronavirus, Prime Minister Denys Shmygal told the European Business Association in a video conference on Friday. Instead, health officials will seek to localize outbreaks and stamp them out with local quarantines.

Adamant Capital writes: “Although Ukraine is currently displaying the highest amount of new cases on record, it seems unlikely that restrictions similar to those that have been introduced at the start of the pandemic are going to be reinstalled any time soon. Reasons for these are a few as lethality has significantly declined globally. Spain in so far reporting deaths per million at just 0.7, a far cry from 18.5 back at the beginning of April.  The 2Q20 real GDP figure (-11.4% YoY) has demonstrated quite clearly the cost of an even relatively light lockdown and suggests that repeating the same scenario may be politically unaffordable unless the health crisis becomes dire.”

Foreign business travelers flying to Ukraine should carry a letter clearly attesting to the business purposes of their visits, listing local contacts. Until the one-month ban is lifted September 28, entry is up to the discretion of border control officers at Ukraine’s airports and land entry points. Without warning, Ukraine’s government advanced the ban by one day to Friday morning, causing chaos at Kyiv Boryspil.

Separately, hundreds of Hasidic Jewish pilgrims ignored requests by Israel and Ukraine and flew to Ukraine for their annual Jewish New Year celebration, in mid-September. Israel has the world’s 7th highest rate for corona virus infection – 231/100,000 people. This is four times higher than Ukraine’s rate of 55/100,000 people.

Coronavirus money is being spent on building roads to avoid borrowing money for this year’s $3 billion road building program, David Arakhamia, head of the ruling Servant of the People faction in the Rada, tells Ukraina 24 TV. Noting that the government plans to repair or rebuild 4,200 km of roads this year, he implied roadbuilding is more popular than virus fighting. Elections for mayors and city councils will be held Oct. 25.

With economic ministries targeted, two to three Cabinet ministers may lose their jobs this fall, Arakhamia tells Ukraina 24. “By the fall there may definitely be some rotations in individual ministries — two or three ministries,” he predicts. “Our people are most of all dissatisfied with the economic bloc. We need people who, besides having a vision and programs, could quickly implement them.” Six months ago, President Zelenskiy fired two thirds of his cabinet.

China and Ukraine have agreed to increase bilateral trade and to identify joint projects in farming, infrastructure, energy, and energy conservation, reports the press service of Ukraine’s Ministry of Economic Development, Trade and Agriculture. Noting that China is now Ukraine’s top trading partner, China’s Deputy International Trade Representative Yu Jianhua and Ukraine’s Trade Representative Taras Kachka talked Thursday by video conference.

In coming weeks, the Kharkiv Metro is to sign a contract with China’s CRRC Tangshan for 40 new rail cars, a 13% percent increase in the fleet of Ukraine’s second largest subway system. With the new cars, the Metro will have eight one-piece ‘tube trains,’ without partitions between the five cars, reports the Center for Transportation Strategies.

US Secretary of State Michael Pompeo warned President Zelenskiy about “malign” Chinese investment in Ukraine, including Beijing’s efforts to acquire the Motor Sich aircraft engine maker. The warning came in a telephone call Wednesday with President Zelenskiy, State spokeswoman Morgan Ortagus said in a statement. For a year, the US has sought to block a Chinese takeover of the jet engine maker. After US investors failed to materialize, Kharkiv business man Alexander Yaroslavky filed an application in early August to buy the engine building company in partnership with Beijing Skyrizon.

Ukraine has frozen diplomatic contacts with Belarus and joined the EU in condemning the recent presidential election as not free or fair, Foreign Minister Dmytro Kuleba told reporters Friday, Reuters reports. “We put all contacts on pause until the situation in Belarus stabilizes,” Kuleba said. He noted that Ukraine had earlier recalled its ambassador to Belarus for negotiations. Belarus is Ukraine’s fourth largest trading partner.


The EBA has moved from its longtime office in Kyiv’s Podil neighborhood to the new Creative State of Arsenal coworking center on Moskovska 8, building 7, a five-minute walk from the Arsenalna Metro station on the Red Line. After 15 years in a building that grew to have workplaces for 70 employees, the EBA says it has moved to a smaller workspace that features hot desking and “modern infrastructure for meetings and negotiations.” Executive Director Anna Derevyanka notes: “Mobility and flexibility have become a new trend of today…We are changing to become even more flexible, fast, and modern in order to create maximum opportunities for all EBA member companies.”

After opening the 4,100 square meter Creative State of Arsenal in May, Ilya Kenigstein, founder of the coworking space network, says work is starting this fall on a second 3,100 square meter phase. The two recycled brick buildings will be connected by a bridge and will share parking, an event hall, and open area with art installations. Added to existing spaces in Gulliver and Senator business centers, Creative States will have 15,000 square meters in Kyiv.

Today, the Kyiv Post moves into a spacious new, 455-square meter space provided by publisher Adnan Kivan, owner of KADORR Group, the Odesa-based real estate development company. The Post trades its cramped space of the last eight years, on Pushkinska, for a glass-walled, open space in a largely residential building, at 68 Zhylianska, between Pankivska and Tarasivka. Post editor Brian Bonner writes: “While much of the Kyiv Post workforce is still working remotely, the era of the office is far from dead.” The new newsroom will have 48 work spaces and a video studio. The only downside will be the 20-minute walk to the nearest metro station.

From the Editor: Last week, the UBN signed a sponsorship contract with a multinational law firm. In light of future expansion this fall, we may take on a research assistant. If you are interested in Ukraine and business, please email me your resume:  With Best Regards, Jim Brooke

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Friday, August 28

Belarus Economic Drop Could Hit Ukraine...US Cybersecurity Expert En Route Ukraine Arrested as Spy for Russia...After 100 Days, Saakashvili Quits Reform Council to Go Home to Georgia...Ze Promises Peace by Christmas...Facing Tonight’s Ban on Foreign Travelers, UIA Cuts Flights...
James Brooke
by James Brooke
UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief

The standoff between Belarus’ long-running ruler and mass opposition may soon cripple the finances of Ukraine’s northern neighbor and fourth largest trading partner. In the last week, the Belarusian ruble weakened by 8.5%, falling to 2.67 to the dollar. Belarus’ foreign currency reserves are down to $4.3 billion –“sufficient to cover just 1.4 months of imports, while three months is considered the minimum,” economist Anders Aslund writes in a new Atlantic Council piece: “Belarus Crisis: Can Lukashenka Survive a Collapsing Currency?”

Strikes are affecting three of four key state companies — fertilizer makers Belaruskali and Grodno Azot and oil refineries Naftan and Mozyr. They account for two thirds of Belarus’ exports to the West. “A prolonged strike at any of these four state-owned companies would collapse Belarusian export revenues and the Belarusian ruble, bringing Lukashenko to his knees,” writes Aslund, a Swedish-American economist with three decades experience in the ex-USSR. “If the currency collapses, the real strife will start.”

Ukraine is Belarus’ second largest trading partner, after Russia, Dmitry Chervyakov, a consultant with Berlin Economics, tells the Kyiv Post. Last year, Belarus exported $4.1 billion in goods to Ukraine and imported $1.7 billion. Ukraine bought four million tons of diesel and bitumen from Belarus for $2.4 billion and fertilizers for $300 million, largely from Belaruskali, the potash producer. Many of Belarus’ imports from Ukraine are transshipped to Russia to skirt bilateral Russia-Ukraine trade bans.

Lithuania is preparing to route Ukraine-bound trucks through eastern Poland if traffic disruptions start in Belarus, Yaroslav Narkevich, Lithuania’s Minister of Transport and Communications, tells Russian Railways Partner site. “We intend to discuss with Poland the option of returning our carriers through Poland, bypassing Belarus,” he said.  “So far there is no need to redirect the flow of trucks, but we are ready for this.” On Aug. 5, four days before the disputed Belarus presidential election, Ukraine’s Cabinet of Ministers had approved for Rada debate a liberalization law that would abolish the need for international trucking permits for Belarus-Ukraine trade.

Ukraine has “tightened control” at Ukraine-Belarus border crossings in wake of Lukashenko’s charges that Ukraine is trying to destabilize his regime. “We have tightened control at the border with Belarus, since the situation in this country is quite turbulent,” Border Guard spokesman Andriy Demchenko told RBK-Ukraine.

Starting Tuesday, Ukrainians can only enter Belarus with a foreign passport, reminds Ukraine’s Border Guard Service. A similar rule went into effect six months ago for travel to Russia. The government is trying to phase out the domestic passport paper booklets, which are easy to counterfeit.

In an open letter signed by more than 2,500 Belarusian IT CEOs, investors and developers, democratic normalcy is essential for the future of the industry in Belarus. Otherwise, they warn: “In the near future, we will begin to observe a massive outflow of specialists abroad, the opening of offices in neighboring countries, a slowdown in the growth of the IT sector, a decrease in investment in Belarusian IT companies, and a decrease in tax revenues.”

Japanese-owned tech company Rakuten Viber has closed its office last week in Minsk. San Francisco-based Rakuten CEO Djamel Agaoua cited violence against employees in Minsk. Kharkiv and other Ukrainian IT centers are recruiting Belarusian developers to move to Ukraine.

The day before he was to fly to Ukraine, a former US Army Green Beret captain was arrested and accused Friday of spying for Russia for the last 15 years. Peter Rafael Dzibinski Debbins, aged 45, had repeated meeting with Russia’s G.RU., or military intelligence, according to the Alexandria, Virginia grand jury indictment posted by The New York Times. By 2010, the Washington Post reports, Debbins had left the Army and was working for a Ukrainian steel manufacturer in Minnesota. Then his Russian intelligence agents encouraged him to get back into government work.

Last spring, Debbins taught a webinar for Ukrainian-American Concordia University. He was billed as an instructor for Cyber Intelligence Initiative of Washington’s Institute for World Politics. The course was titled: “How to Approach Enterprise Cybersecurity!” In a congratulatory YouTube video, he urges graduates to have “a hacker’s mindset.”

Russia’s Gamaredon hacking group has prepared “a large coordinated attack on government agencies and critical infrastructure” by sending out email attachments infected with malware, Ukraine’s National Security and Defense Council warned last week. The goal may be to disrupt the Oct. 25 local elections. Phony emails were made to look like messages from Ukraine’s State Security Service. Council Secretary Oleksiy Danylov warns: “Cyberthreats from the Russian Federation are extremely dangerous for both Ukraine and European countries.”

So far this year, one million cases of cyber threats — website attacks, DDoS attacks, phishing and malicious software – have been recorded by the National Coordination Center for Cybersecurity, a unit of the Defense Council. To respond to threats and prevent attacks, the Center is stepping up cooperation with private sector companies. Last month, it signed cooperation agreements with three dozen private foreign and Ukrainian companies.

The Zelenskiy government is tripling the number of state companies protected from privatization – to 659. The Cabinet of Ministers approved the new list Wednesday. It will now go to the Rada. Last year, the Rada abolished a similar list of over 1,000 companied exempt from privatization.

Former Georgian President Mikheil Saakashvili, a major free market force in the Zelenskiy government, announced yesterday that he is returning home to Georgia, reports Georgia Online.  “I know that we can live much cooler, much better, and every Georgian can be rich, and we can do it together!” he says in a video. “I’m coming back!”

Appointed three months ago to serve as chairman of Ukraine’s National Reform Council, Saakashvili felt the push of anti-reformers in the Zelenskiy government and the lure of Oct. 31 parliamentary elections in Georgia. Responding to negative reactions, Saakashvili posted on Facebook: “Some of my Ukrainian friends mourn my ‘farewell’ to Ukraine. I want to tell them: heads up! We will fight both in Georgia and in Ukraine! We will win there and there!”

In Tbilisi, Thea Tsulukiani, Georgia’s Justice Minister since 2012, promised to prepare a jail cell for the former president. In 2018, Saakashvili was convicted in absentia in two trials on charges stemming from his decade in office, from 2004 to 2013. The sentences handed down by Tbilisi City Court total nine years. Saakashvili and his supporters say the trials were politically motivated.

President Zelenskiy believes the current one-month-old ceasefire in the Donbas can be extended into a lasting peace by the end of this year. “I want to believe that it will be this year,” he tells Eurovnews’ Sasha Vakulina in a lengthy video interview. “I really want to believe it, and I DO believe, I do.”

Zelenskiy also asks European leaders to spell out the steps for Ukraine to join the EU. “I asked many European leaders this question – what do you want Ukrainians to do, step by step, to become an EU member?” he said in the interview posted Tuesday. Calling on Ukraine to speed up adoption of EU norms, he said: “We just have to become the country that Europe really would want.”

Travel companies plan to protest today the ban on incoming foreign travelers. The 1-month ban goes into effect tonight at midnight. Chornobyl tour operators, organizers of medical tourism, the Business Travel Association and owners foreigner friendly night clubs, such as Skybar, Closer and River Port, plan to gather outside the Cabinet of Ministers. Using the hashtag #OpenUkraineNow to coordinate the protest, the Association of Incoming Tour Operators says that after temperature controls started two months ago at airports, there are no known cases of infected tourists entering Ukraine. The ban is on nationals from all countries, not just the 65 countries deemed ‘red’ by Ukraine’s Health Ministry.

Kyiv Boryspil, Ukraine’s busiest airport, is installing this week a $37,000 temperature screening system that allows border guards to identify passengers with fever systems as they walk past a stationary camera. “It enables instant, non-contact temperature measurement of passengers from a distance,” the State Border Service said of the EU-donated equipment.

Noting that foreigners currently account for 60% of UIA’s passengers, UIA said yesterday it is cancelling flights in September between Kyiv and Athens, Barcelona, Berlina, Chisinau, Delhi, Geneva and Madrid. It will reduce frequencies between Kyiv and Brussels, Dusseldorf, Dubai, Istanbul, Paris and Tel Aviv. UIA CEO Yevhen Dykhne says the government ban “will have a negative impact on the aviation industry of Ukraine, which in the absence of any other state support in the crisis caused by the global pandemic, is economically weakened and is in critical condition.”

From the Editor: Assuming the US grand jury indictment is true, the Kremlin once again is playing a diabolical game. With one hand, Russia launches cyberattacks against Ukraine. With the other, it sends a compromised American to infiltrate Ukraine’s cyber security world.  It all reminds me of the gee whiz stories in the US financial press a decade ago about Eugene Kaspersky. This graduate of a KGB-sponsored technical college, amazingly, had reinvented himself as the CEO of rare Russian multinational. But in 2015, Bloomberg reported “high-level [Kaspersky] managers have left or been fired, their jobs often filled by people with closer ties to Russia’s military or intelligence services.” US government agencies quietly banned the use of Kaspersky cyber security and anti-virus software. With Best Regards, Jim Brooke

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Wednesday, August 19 – Ferrexpo Poltava Mining marked half a billion tons of iron ore concentrate

Poltava Mines Enough Iron Ore to Build 100 Egyptian Pyramids...Cargill Loans €250 Million to Ukraine...Ad Agencies Expand...Kyiv’s Cautious Corona Curbs
James Brooke
by James Brooke
UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief

Ferrexpo Poltava Mining marked this month half a billion tons of iron ore concentrate produced since the mine opened 50 years ago. “The first ton of concentrate was produced in 1970, and after 50 years of operation, PGOK produced the 500-millionth one,” said Viktor Lotous, Board Chairman of Poltava GOK. Over the last 20 years, $3 billion has been invested in Poltava Mining, he said. With demand high in China,  the mine and processing plant shipped a record 1.1 million tons of iron ore pellets in March. For comparison, 500 million tons is 93 times the weight of Egypt’s largest pyramid, the Great Pyramid of Giza, according to The Heaviest Objects in the World.

Ukraine is to raise up to €250m in two loans from Cargill Financial Services, the Cabinet of Ministers reported Monday. The loans are to be: three years at 5.95% and five years at 6.85%. One year ago, the Finance Ministry conducted a similar operation, borrowing from Cargill at slightly lower rates:  €100 million for two years at 5.15% and €150 for five years at 6.25%.

Concorde Capital’s Alexander Paraschiy writes of the new loans: “The conditions under Cargill’s private loan look close to market rates, taking into account that Ukraine’s public six-year debt (EUR-denominated Eurobond maturing in June 2026) trades currently at 6.61% YTM. The loan will allow Ukraine to partially compensate the large foreign currency debt outlays of August-September, which amount to about $3 billion.”

The Finance Ministry raised the equivalent of $91 million in its weekly government bond auction yesterday – one quarter the $366 million raised one week earlier. Highlights were: 6-month hryvnia bonds placed at 7.82%; 2-year hryvnia bonds placed at 10.14%; and 8-month dollar bonds placed at 3.39%.

Due to the corona-recession, state budget revenues are $1.4 billion below plan for the first half of this year, Valery Patskan, chairman of the Accounting Chamber, writes on Facebook. About 37% of the drop is due to a fall in customs duties due a 20% drop in imports during the first half.

Watching “the sharp aggravation of the situation in the Republic of Belarus,” President Zelenskiy said after a security council meeting Monday night: “The events in this country could significantly affect Ukraine.” But hours earlier, as labor slowdowns spread through Belarus’ two oil refineries, the Cabinet of Ministers reintroduced special duties on imports from Russia of: liquefied gas (3%), diesel (4%), and most types of coal (65%).  The duties expire Dec. 31.

Pre-election populism at the Rada. President Zelenskiy vetoed a bill that would extend through the end of next year the moratorium on foreclosures for foreign currency mortgage loans. Why? The way the Rada sponsors worded the bill last month, it would have banned foreclosures under any loan agreement. As written, the bill would have brought “chaos into Ukraine’s entire financial system,” writes Concorde’s Paraschiy.

Banda, a leading Ukrainian ad agency, is opening an office in California, its first office outside of Kyiv. Yaroslav Serdyuk, the agency’s co-founder and strategy director, writes on Facebook from California: “We already have four ongoing projects in the U.S.: designing a brand identity for a promotional campaign of a Hollywood film, brand creation for two investment funds, and we are also preparing to launch a new campaign for a cannabis brand.”

France’s MSL public relations company is opening an office in Kyiv, strengthening parent company Publicis Groupe’s presence in Ukraine. The new office will be led by Olena Sukhanova, a 9-year veteran of Ukrainian marketing agency Tabasco.  Last year, MSLGROUP was the only European company in the top10 of the Holmes Report 250 Global Ranking of PR Firms.

The founders of Nova Poshta are investing in Fedoriv Agency’s Kooperativ co-working space at 23 Sichovykh Striltsiv, Kyiv. The investors, Viacheslav Klimov and Volodymyr Popereshniuk, plan to convert the ad agency’s existing space in Arena City into a working hub with places for 100 people.

With Ukraine reporting record levels of new Covid-19 infections – about 1,600 a day for the last week – Kyiv is mildly tightening restrictions this week. Everyone is to carry an ID on the street. Masks are to be worn in ‘indoor public spaces’ and on all public transport. Trams, trolleybuses, buses and minibuses carry only seated passengers. But the metro allows standees. Kyiv tightened restrictions after Covid-19 cases occupied 52% of reserved hospital beds. In the five months of the virus, 2,116 Ukrainians have died of the disease, including 155 in Kyiv.

Schools will open as scheduled Sept. 1, Health Minister Maksym Stepanov promises. Online learning will be mandatory only in the nation’s ‘Red Zones.’ Currently these are three towns and five districts – less than 1% of Ukraine’s 37 million people. In one ‘Red Zone’ city, Lviv region’s Sambir, the town council refused to tighten restrictions after local business owners protested outside the council building.

With local elections coming in two months, politicians have no appetite for a return to the severe lockdown of last spring. Concorde Capital’s Zenon Zawada writes: “The Zelenskiy administration has largely remained silent on the surge in infections. Moreover, no significant quarantine and lockdown restrictions have been introduced. Only in Kyiv and two regions are hospital bed occupancy rates exceeding 50%, indicating that the situation is relatively stable despite the surge.”

Orthodox Jewish pilgrims are asked to refrain from visiting Uman next month to celebrate Rosh Hashanah, “due to the threatening epidemiological situation,” according to a joint statement by Israel and Ukraine. In a normal year, 30,000-50,000 Orthodox make the pilgrimage. This year, it would be Sept. 18-20.  Interior Minister Arsen Avakov said that last month the government reached a similar agreement with Ukraine’s Orthodox churches to refrain from the traditional July 28 mass processions celebrating the Christianization of Kyivan Rus.

Returning to the air after coronavirus travel curbs, UIA had to “start practically from scratch,” to rebuild business, airline president Yevgeny Dykhne writes on Facebook. From mid-June to mid-August, Ukraine’s flag carrier carried 113,345 passengers on 1,238 flights. Last year, the airline carried 4 million passengers.

Marta Kolomayets, American director of the Fulbright Program in Ukraine for seven years, died Sunday at the age of 61 after a long illness. As the local head of Fulbright, she helped more than 300 Ukrainians pursue Masters and Doctorate degrees at US universities. The daughter of Ukrainian emigres, Kolomayets first visited the Ukrainian SSR in 1985, but was kicked out for filming interviews with Soviet dissidents. She returned in 1990s, opening the Kyiv bureau of the Ukrainian Weekly, the first foreign media bureau in modern Ukraine.

From the Editor – During the first half of this month, 74,000 Ukrainians vacationed in Antalya, the resort city on Turkey’s ‘Turquoise Coast.’ Ukrainians almost outnumbered Brits and Germans combined. This morning, I do my bit for Turkish tourism, flying with my family to Bodrum, on the Aegean. Thanks to help from the UBN research assistant in Kyiv, this email will not skip a beat during my one-week vacation. With Best Regards, Jim Brooke

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Tuesday, August 18 – the biggest impact of strikes spreading across Belarus

Belarus Strikes May Starve Ukraine’s Roadbuilders of Asphalt...Belarus Eurobonds: Worst Performers of Emerging Markets...Ukraine’s Garage Sale: Government to Auction Leases for 4,262 Empty Buildings...A Rebound Coming? Ukraine Buys Back GDP Warrants...
James Brooke
by James Brooke
UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief

For Ukraine, the biggest impact of strikes spreading across Belarus may be a shortage of asphalt for President Zelenskiy’s $3 billion drive to pave 4,000 km of highways this year. Ukraine imports half of its asphalt in heated, liquid form from Belarus. “Objectively, there is nothing to replace Belarusian volumes — and this is half of the market,” Serhiy Kuyun, director of the A-95 Consulting Group, writes on his Facebook page. “Russian supplies are closed, and Ukrainian traders are just mastering imports by sea.”

Ukraine also gets about one third of its diesel and gasoline from Belarus. But the strikes and slowdowns will only result in a ‘hiccup’ for Ukrainian prices, Kuyun predicts. “First, we have been living with a huge surplus of diesel fuel and gasoline for half a year. Traders sell it to zero at best, the market is so overwhelmed. Second, the Ukrainian market is open for supplies from all sides.”

Most of Ukraine’s imports of Belarus petroleum products come from the Belarus’ largest refinery, in Mazyr, on the Pripyat River, 250 km north of Kyiv. According to Argus Media, it appears that Mazyr workers will be on a 3-hour lunchtime strike this week. At Naftan refinery, near Belarus’ northern border with Lithuania, workers are on strike. The refinery which is owned by Belneftekhim, was already shut down for scheduled maintenance.

On the IT front, Ukrainian IT companies are “already accepting individual divisions of IT companies in Belarus as guests,” Olha Kunichak, manager of the European Business Association’s IT Committee tells Interfax-Ukraine. “Ukrainian IT companies are ready to cooperate and help our northern neighbors.” To restrict protesters, the Belarus government has been shutting off the Internet. Ukraine started this summer a fast track program to grant work permits to foreign IT specialists. According to Ukraine’s Ministry of Digital Transformation, Ukrainian universities only graduate 15-17,000 IT specialists annually, while the fast-growing sector needs 40,000 a year.

Belarus Eurobonds handed investors a loss of 5.1% this month, the worst performance in emerging markets, according to a Bloomberg Barclays index. Since the 2031 bonds were issued on June 25, the yield is up by one percentage point.

Ukraine is recalling its ambassador from Belarus to protest Lukashenko’s “repeated and groundless” statements against Ukraine, Ukraine Foreign Minister Dmytro Kuleba said yesterday. President Lukashenko’s return to of Russia mercenaries who had fought on the separatist side in the Donbas war, “derailed the trust between our nations and inflicted a heavy blow upon our bilateral relations,” Kuleba said.

Leases for 4,262 empty buildings totaling 2.5 million square meters – or 10 times New York’s Empire State Building – will go up for electronic auction this fall under streamlined rules approved last week by the Cabinet of Ministers, announces Leonid Antonenko of the privatization department of the State Property Fund. The full of list of leases to auctioned by ProZorro.Sales includes: 1,070 offices, 837 warehouses, 566 factories, 61 spaces at airports, and six sites for renewable energy plants at Chornobyl. While much of the vacant space is in the big five cities, there are thousands of square meters up for lease in Cherkasy, Kropyvnytskyi, Mykolaiv, Rivne and Zaporizhia.

Ukraine ranks first in a ranking of 39 Eastern European and developing countries for public procurement transparency. Following 64 indicators for the Transparency Rating, the authors placed Ukraine at the top with a score of 97% and Tajikistan at the bottom with a score of 38%. Poland got  74%, Hungary 67% and the Czech Republic 65%. Russia and Belarus were not studied by the group, the Soros-funded Institute for the Development of Freedom of Information. For the last four years, all government purchases of goods worth more than $7,300 have to go through the ProZorro on line tendering system.

Ukraine’s Finance Ministry has repurchased about 10% of outstanding GDP-linked securities, the Finance Ministry announced Friday on the Irish Stock Exchange. Known as GDP warrants, the securities have payouts triggered by two consecutive years of GDP growth. By spending up to $300 million to quietly buy back these securities, the government may be expecting a post-Coronavirus growth bounce next year. After Ukraine’s economy GDP fell 11.4% in Q2, the central bank predicts that economy will shrink by 6% this year, and rebound by 4% next year.

Concorde Capital’s Alexander Paraschiy calculates that the purchase was at 90% of par and writes: “This is also a good signal for the holders of GDP warrants, as it indicates MinFin is anticipating large payments under the warrants in the mid-term.”

Timothy Ash writes: “Now most official forecasts have a 4% plus growth for 2021.With the changes at the [central bank], the Zelenskiy administration is going for a pro-growth agenda, which might mean lower rates, cheaper currency, perhaps looser fiscal – note minimum wage hikes.

In a sign the Corona-recession has eased, Ukraine’s electricity consumption in July was only 0.7% below last year’s level, according to Ukrenergo, the nation’s state power transmission company.  Industrial consumption was down 3.2% yoy, but household consumption was up 4.7% and consumption by chemical industries was up 15%.

The central bank expects to receive the second tranche from the IMF by the end of this year, Kyrylo Shevchenko, the new governor of the National Bank of Ukraine, says in an interview with RBK-Ukraina. The IMF approved the 18-month, $5 billion program on June 9, and the first tranche — $2.1 billion — was disbursed three days later. Release of the remaining $2.9 billion depends on four reviews. However, Shevchenko’s predecessor, Yakiv Smoliy quit on July 1, citing pressure from President Zelenskiy. Since then, talk of a September review has faded.

Last week, the central bank bought $223 million, strengthening the hryvnia mildly to UAH 27.3/$1. So far this year, the National Bank of Ukraine has bought $1 billion more than it sold, latest data show. Demand for dollars this summer has been weak as vacationers are largely bottled up inside the country, unable to take advantage of visa-free access to the EU.

Last year, Ukrainians made 26 million trips out of the country, while foreigners made 15 million trips here, according to the State Statistics Service. Tourism accounts for only 1.5% of Ukraine’s GDP, well below Belarus – 6.4% — and Georgia – 26.3%. To generate more inbound tourism, Ukraine has dropped visa requirements for Chinese tourists and allowed Indians, South Africans and Filipinos to apply for visas on line. “Simple arithmetic shows the advantages of visa liberalization: the average check of one Chinese tourist in Ukraine is about $950,” says SkyUp, Ukraine’s discount airline. After coronavirus and visa barriers drop, SkyUp mulls launching flights to: China, India, Bahrain Saudi Arabia, Kuwait, Oman, UAE, Qatar, Egypt, Lebanon, and Tunisia.

Reminder: UIA is offering two direct Kyiv-New York-Kyiv flights – next Monday Aug. 24, and the following Monday, Aug. 31. No additional New York flights are scheduled. Tickets only are available through the UIA site:

From the Editor : In October 1991, I interviewed Stanislav Shushkevich, Belarus’ first president, who was then one month into the job. A smart man, Shushkevich has a doctorate in physics and was, oddly, chosen by authorities in Minsk to teach Russian to the American defector, Lee Harvey Oswald. Reporting for The New York Times, I asked Shushkevich a question of interest to my readers: “How many nuclear bombs do you have?” He responded: “I have no idea. Ask the Red Army.” Then, as in now, the biggest questions in Minsk are often answered 700 km to the east, in Moscow. This week, we may see whether Moscow props up Lukashenko for a few more years, or eases him into a sunny retirement at his hillside chalet above Sochi. With Best Regards Jim Brooke