Creating Conditions and Finding Resources: Prerequisites for the Development of Ukraine’s Economy — Summary of the Dialogue “The Future of Ukraine’s Economy”

Ukraine is not only experiencing a difficult period in its history; we are also facing challenges already confronting the European Union and the Western world as a whole. These include a slowdown in technological progress (compared to other regions), a demographic crisis, insufficient security funding, the need to reduce dependence on carbon energy sources, and external energy suppliers.

Currently, Ukraine faces a non-trivial task: finding and implementing an economic model that will ensure a radical acceleration of economic growth amid these challenges. It is important to ensure that the framework of this model can serve as a reference for EU partners and that our country takes a critical, organic place in the EU’s economic ecosystem during a full-scale war.

On October 11, the Aspen Institute Kyiv held a dialogue on “The Future of Ukraine’s Economy” as part of the “Made in Ukraine” Business Forum. The Dialogue involved government officials, politicians, business representatives, media, independent economists, and analysts.

The Director of Program Development at the Aspen Institute Kyiv, Denis Poltavets, expressed gratitude to the Ministry of Economy for initiating the Discussion and to the UN Development Program for organizing the Business Forum.

“What should the vision of the future be, and how can we balance what is realistic given the current economic conditions and what is desirable? There are many development scenarios, and determining which one will best ensure a strong, capable economy that meets the needs of the Ukrainian people under today’s circumstances is a key topic for Discussion.”

Yegor Grygorenko, moderator at the Aspen Institute Kyiv, Partner, Head of Consulting and Risk Advisory practices at Deloitte Ukraine, and member of the Kyiv School of Economics Supervisory Board, opened by referring to a report by Mario Draghi, former President of the European Central Bank, on the future and competitiveness of Europe.

“The challenges Draghi mentioned as significant for Europe in the coming years are already critical for Ukraine today. Therefore, it is appropriate to discuss not only Ukraine’s economy in 10-15 years but also Europe’s. In some areas, Ukraine might set the pace for development. I believe a renewed Europe in 15 years is impossible without Ukraine.”

Here are some thoughts from the discussion:

• Ukraine can help address the challenges Draghi identified for Europe: if our country demonstrates its capabilities, we will be perceived as an equal partner.  
• One goal of Ukraine’s economic strategy should be transforming the country from a raw materials supplier to a goods producer. This strategy must incorporate innovation to be effective.  
• Ukraine’s victory and development must be part of the success of its partner countries.  
• It is essential to strive to keep entrepreneurs in Ukraine and enable the state to enhance its productivity by creating economic incentives, implementing favorable taxes, and preparing a skilled workforce.  
• The country lacks leaders, and those present must focus on specific priorities outlined in the economic strategy.  
• For large businesses to continue investing in the country’s economy, predictable tax and regulatory policies and strategies, access to capital, and fair rules for all players must exist.  
• Ukraine should focus on its successful examples of market development, such as retail, agriculture, IT outsourcing, and drone manufacturing. These markets share the common feature that the state intervened minimally in their regulation during the development phase. Once the market matures, regulation and coordination should be revisited.  
• Predictable state policy is a prerequisite for a developed economy. The effective functioning of the state apparatus is crucial to ensuring Ukraine remains competitive and attractive for investment during wartime.  
• Ukraine is fighting not only against Russia but also against the military-industrial complexes of the “axis of evil” countries: China, North Korea, Iran, Belarus, and others. Therefore, it is essential to understand that the army alone cannot win the war. Consolidating the entire society is required, with some fighting on the front lines and others supporting them.

Summary:

• Ukraine must build an economy prepared for war over time, as the threat may remain for the next 10-20 years.
• Integration into the global community is the only way to a booming economy. Ukraine has the opportunity to become a global player by exporting value-added products and attracting innovation, capital, and the attention of partners.
• The future of Ukraine’s economy depends on the leadership and responsibility of each citizen in their respective field.

Yegor Grygorenko, moderator of Aspen Institute Kyiv, member of the KSE Board, partner at Deloitte, head of the Consulting Department in Deloitte Ukraine, and Denis Poltavets, Director of Program Development at the Aspen Institute Kyiv, moderated the Dialogue.

Olena Fomina, Policy Program Director at the Aspen Institute Kyiv, coordinated the event.

We thank Tetiana Berezhna, Deputy Minister of Economy of Ukraine, for the initiative and the United Nations Development Programme (UNDP) for organizing the Business Forum.

The “Made in Ukraine” Business Forum was organized by the UNDP in Ukraine in cooperation with the Ministry of Economy of Ukraine, the Ukrainian Chamber of Commerce and Industry, and the Kyiv-Mohyla Business School as part of the project “Transformational Recovery for Human Security in Ukraine,” with financial support from the Government of Japan.