Gennadiy Chyzhykov, President of the Ukrainian Chamber of Commerce and Industry, a well-known and experienced a well-known and experienced specialist in foreign economic, shared his views with LDaily readers on the emergency situation in global and Ukrainian business caused by the massive coronavirus spread. Mr. Chyzhykov notes one important peculiarity that during this difficult time, the Ukrainian business community began to actively consolidate and launch joint projects more and more often. This helps solve economic issues. He also says that the state support of small and medium-sized businesses, as well as the development and implementation of a non-standard program to overcome the crisis, is no exaggeration crucial at the moment.
LDaily: How has the coronavirus affected business in Ukraine? Which industries have been affected the most?
G. Chyzhykov: The quarantine led to significant losses. The global estimate showed that a total of 600 000 entrepreneurs have been affected by the crisis. Trade and services have been hit the most. Here is an example: hair and beauty salons in Ukraine have been losing a total of more than 1 billion UAH each month. Just think about it! It would seem these were just hair salons, only one industry… Meanwhile, it is operated by 60-70 000 people across the whole country. Due to quarantine measures, the revenue of cafes and restaurants has decreased five times, while the cost of daily real estate rent in the country has tripled, as well as the number of taxi orders… However, we should also take into account the shadow economy. 20% of Ukrainian entrepreneurs said that they would need six months to resume their work after quarantine, whereas 17% asked for two years. Another 7% of entrepreneurs said that it would take them more than two years to resume their business activity and get the same income as before the quarantine.
LDaily: What has the business learned after the introduction of restrictive quarantine measures?
G. Chyzhykov: Entrepreneurs realized that it would be hard to work without trust in each other. Ukrainian business is moving towards the point when we begin to trust each other more and launch joint projects. This is what will help survive both small and medium-sized businesses. Certain habits that are currently developing, for example, in e-commerce will remain. Our polls show that this is indeed the case − this is really one of the ways to get out of the crisis. From the perspective of small businesses, there will be a significant emphasis on online forms of trade as the relevant habits of most citizens have strengthened during the quarantine period. I have no doubt that only joint experience multiplied by teamwork can result in something worthy. We studied such experience, and the important thing we noticed is that small businesses in countries like Germany or Italy got through the same things after World War II.
LDaily: Should Ukraine expect that some of the global companies will leave the Chinese market and look in our direction? Are there any companies or countries that have already expressed their desire to enter the Ukrainian market?
G. Chyzhykov: At present, the business is at the point of selecting a model that the future state of the country’s economy can depend on. There is an objective reality: a decline in sales in most markets traditional for our exports of goods. However, promising areas are also appearing. For instance, significant interest in Ukrainian products is reviving in the countries of Central Asia such as Tajikistan, Kyrgyzstan, Uzbekistan, Kazakhstan.
During online negotiations of recent months, foreign entrepreneurs have become increasingly interested in the possibility of placing orders in Ukraine. We hope that our country will soon receive another opportunity to get the right to export industrial products to EU countries without additional certification. To do this, we are working to prepare an agreement on the so-called industrial visa-free travel. At the beginning of 2020, the CCI of Ukraine began preparing enterprises to implement the requirements of European certification. Even before the quarantine, a series of seminars on the implementation of European technical regulations were conducted. They will proceed with this later. As for the agreement itself, our experts continue working on it together with our European colleagues. A parallel process is the revision of quotas and duties on agricultural supplies under the Association Agreement between Ukraine and the EU.
LDaily: Does the state help business? In your opinion, what else does the business need from the state to survive the crisis?
G. Chyzhykov: The entire business is already tired of waiting to exit quarantine. The current situation requires implementing a non-standard program of overcoming the crisis. So, the government is doing its best. Quarantine measures are devastating for the economy, especially for small and medium-sized businesses that are not financially strong enough. Such entrepreneurs should be supported in the first place. Lack of working capital is a real challenge for small and medium-sized businesses after quarantine. All other issues can be resolved quite easily.
In my opinion, at the time of quarantine, it is necessary to implement measures to stimulate the resumption of business activity. We need to analyze what kind of business, what kind of relationships the population really needs, and think of how to stimulate those things. It is significant to support small exporters. These are about 12 000 businesses.
The business expects us to help in foreign markets.
The CCI of Ukraine is always ready to lend a helping hand. Businesses can turn to export support centers at the chambers of commerce and industry. It is an effective tool to support sales abroad, especially for small exporters. We have sales representatives in 55 countries, communication with the CCI in almost all countries, access to resources for supporting exports to the EU. Anyone interested can contact the CCI and we will definitely help! In the last month alone, the Chamber held nearly two dozen different video events remotely attracting more than a thousand participants. These were forums, conferences, including international ones in which Ukrainian and foreign officials and businesses participated.
In these circumstances, we work together with the Ministry of Foreign Affairs of Ukraine. We are pleased that the Chamber’s position is supported.
We are not the United States, not China, not the EU countries where they have powerful levers of business assistance. It all depends on the level of the country’s economy. Most countries, including ours, are not only searching for the ways to pass these tests but also think about what to do next. This is already a matter of economic crisis. It is a significant challenge for every economy.
You can pass this test and become stronger. Nevertheless, the lesson is learned only by those who are able to learn.