Ukraine under quarantine. How the economy of Ukraine will survive the coronavirus

Ukraine under quarantine. How the economy of Ukraine will survive the coronavirus

24.04.2020 News

The largest European countries are going to exit quarantine. On Monday, Germany, the Czech Republic, France, Poland, Norway and Denmark are lifting some of the quarantine restrictions imposed to combat the coronavirus epidemic.

So, in Germany, it was allowed to open commercial space less than 800 square meters in size. Car dealers and bookstores were allowed to open as well. In Germany, as of April 22, there are 148 453 cases of coronavirus infection. There are 5086 fatal cases.

In the Czech Republic, markets were allowed to resume work; citizens were allowed to conduct seminars in the open air and visit other countries (in case of a business trip or visiting relatives) with required 14-day quarantine upon returning to the country. In the Czech Republic, as of April 22, 7 041 cases of coronavirus infection are registered. There are 204 fatal cases.

In France, it is allowed to visit nursing homes. Physical contact is still prohibited. An elderly person can be visited by only two relatives at a time. In France, as of April 22, 117 324 cases of coronavirus infection are registered. There are 20 796 fatal cases.

Kindergartens resumed work in Norway. High schools, universities, hairdressers, massage and beauty salons are scheduled to be opened in a week. In Norway, as of April 22, there are 7 241 cases of coronavirus infection. There are 182 fatal cases.

Walks in parks and forests were allowed in Poland. As of April 22, 10 034 cases of coronavirus infection are registered in Poland. There are 404 fatal cases.

In Denmark, kindergartens and elementary schools are beginning to reopen. Hairdressing, massage salons and dental clinics resumed operations. In Denmark, as of April 22, there are 7 912 cases of coronavirus infection. There are 370 fatal cases.

At the same time, large-scale rallies against quarantine are taking place in the United States. People are demanding to soften the self-isolation regime which affects the operation of most businesses. Restrictions against the spread of coronavirus infection operate in 42 states out of 50. President Donald Trump also supported the rally. In the United States, as of April 22, 826 240 cases of coronavirus infection are registered. There are 45 373 fatal cases.

Meanwhile, in Sweden, the government has not introduced strict quarantine measures against the coronavirus pandemic. There are still a number of restrictions, for example, any activities involving more than 50 people are prohibited, most cinemas and museums are closed, and major sports events are cancelled. At the same time, elementary schools work, children’s and teen sports events are held, outdoor sports clubs, cafes and restaurants are open but with a limited number of visitors — there should be at least one and a half meters between the tables. However, there are no strict bans in Sweden as in other countries where the exit to the street is allowed only on vital matters and only with special permission, as well as penalties for violation of the self-isolation regime. In Sweden, as of April 22, 16 004 cases of coronavirus infection are registered. The number of fatal cases is 1 937.

What is happening in Ukraine at this time

On March 12, quarantine has been introduced in Ukraine, and it has already been going on for more than a month and is not yet planned to end. Thus, on April 22, the Ukrainian government announced that it was decided to keep quarantine measures until May 11. The Cabinet of Ministers has announced there will be some relaxation of the measures, but there is no clear understanding of this yet.

Meanwhile, Ukrainians are losing their jobs and are left without livelihood. According to the Rating Group, nearly 30% of Ukrainians work remotely and just as many are on leave without pay. 4% of respondents lost their jobs due to quarantine.

Representatives of the development market for shopping and entertainment centers in Ukraine approached to the authorities with a joint letter requesting a dialogue to consolidate actions in order to prevent the spread of coronavirus and take measures aimed at reviving business after quarantine.

In the letter, developers ask to allow the sale of textile bandages in shopping and leisure centers, provide the availability of using public transport for employees of authorized groups of tenants, reduce the amount of VAT and defer payment of income tax for three months after quarantine, exempt from land fees, property tax and income tax.

In Ukraine, business is not on equal terms. For instance, large electronics stores continue to work (they should operate as communication salons, but in fact visitors can choose any product from the range), construction stores (only the sale of household goods is allowed, but in fact visitors can choose any goods from the range). Of course, there is nothing wrong with having a job. However, there are other businesses that are not allowed to operate during quarantine: furniture and light stores, markets, shopping centers, etc. Large networks were allowed to work in Ukraine, but small businesses were forgotten. Thousands of small business owners as well as their employees were left without work.

While severe restrictions are applied here, European countries have already begun to lift some bans. Thus, Europe is considering setting up specific border crossing procedures for the citizens who are important to the proper functioning of the economy.

Human rights defenders have repeatedly stated that the measures introduced by the Cabinet of Ministers of Ukraine Decree No.111 of March 11, 2020 “On prevention of the spread of COVID-19 acute respiratory disease in Ukraine caused by the SARS-CoV-2 coronavirus” and the timeframes such measures have been taken for are improper.

Fundamental breaches include the following.

  1. The procedure for introducing quarantine was violated.

Thus, according to Article 1 of the “On the Protection of the Population against Infectious Diseases” Law, quarantine includes administrative and health measures used to prevent the spread of especially dangerous infectious diseases.

Especially dangerous infectious diseases are those (including quarantine ones: plague, cholera, yellow fever) characterized by severe and (or) persistent health disorders affecting a significant number of patients, high mortality rates, and the rapid spread of these diseases among the population.

According to the last definition, the following diseases are considered quarantine — plague, cholera, yellow fever.

To obtain an “especially dangerous disease” status, according to the current legislation, the following criteria are required:

  • high mortality rate;
  • a significant number of patients;
  • rapid spread of the disease among the population.
  1. The issue of introducing quarantine is brought before the Cabinet of Ministers of Ukraine by the central executive body which ensures the formation of state policy in the field of healthcare, at the request of the chief state sanitary doctor of Ukraine.

Despite this, the quarantine decision was made “taking into account the decision of the State Commission on Technological and Environmental Safety and Emergency Situations as of March 10, 2020”, that is, a body that is not provided for by law at all.

  1. In disregard for Article 29 of the “On the Protection of the Population from Infectious Diseases” Law of Ukraine, the appealed resolution does not indicate the circumstances led to the introduction of quarantine. Therefore, the resolution cannot be considered justified because there are no circumstances (or simply they are not described in the text) that should result in the quarantine introduction.

And here is the most important thing. It is the Ministry of Health of Ukraine (data from the official website) that states the epidemic threshold is not exceeded if less than 518,68 people per 100 000 of the population are ill in Ukraine.

If we assume that 37 million people live in Ukraine (according to the latest census), the number of patients for declaring the epidemic and quarantine should be at least 191 911 people. As of April 22, 6 592 cases of coronavirus infection are reported in Ukraine. The number of fatal cases is 174.

As for the limitation of civil rights.

From April 6, 2020, to April 24, 2020, citizens of Ukraine face with:

  1. Limitation of freedom of movement:

The restriction of the right of freedom of movement was introduced not by law but by a by-law. However, in accordance with the Constitution of Ukraine, restriction of the right of movement of citizens can be introduced solely on the basis of law.

  1. Ban on peaceful assembly.

The limit regarding the realization of this right may be applied exclusively by the court in accordance with the law and only in the interests of national security and public order. So, Article 39 of the Constitution was violated.

  1. Prohibition of activity of business entities, which provides for the reception of visitors, including public catering establishments (restaurants, cafes, etc.), shopping and entertainment centers, other recreational facilities, fitness centers, cultural institutions, retail and consumer services.

Thus, the state not only imposed a restriction violating the procedure defined by the current legislation but mainly discriminated the activity of individual business entities.

Moreover, the right to engage in entrepreneurial activity was crudely violated.

According to the “On the Protection of the Population against Infectious Diseases” Law, it is possible to change the conditions of activity and work schedule of enterprises. However, the right to a complete ban on activities is not provided. On the other hand, enterprises can be involved in the fight against the epidemic.

Virologists’ opinion

Meanwhile, virologists say that too severe quarantine measures are ineffective.

German virologist Hendrik Streeck conducted a large-scale disease analysis in Heinsberg, one of the Covid-19 spots. A quarter of a million people live in this area. 1,400 of them have been infected with the SARS-CoV2 coronavirus.

Dr. Streeck and his team conducted a survey of infected and contact persons to find out the source of infection. Then scientists took samples from door handles and toilets in public places, as well as from phones of infected people. No signs of a live virus were found. Dr. Streeck states that the virus lives in droplets and is sensitive to drying. ‘To transmit an infection, it is necessary for someone to cough in their hand, touch the door handle, after that another person should immediately touch it and raise their hand to their face,’ said the professor.

Dr. Streeck emphasizes that current measures to combat Covid-19 can cause serious problems: unemployment, poverty and illnesses — long stay indoors can wreak havoc on your immune system.

Conclusion

Sweden proved that it is possible to fight the coronovirus quite effectively without stopping the economy. They did not stop public transport; employers were only advised to transfer their employees to a remote mode. The government only recommended that people should avoid traveling by public transport during rush hour and that shops should take measures to limit the number of visitors and maintain a safe distance between them. However, these recommendations are optional and advisory rather than mandatory.

Ukraine can follow the Swedish scenario and start rebuilding its economy until it is too late. Economists say that if we continue quarantine, there will be nothing left to save.

The Verkhovna Rada promised Ukrainian entrepreneurs tax breaks, fine and penalty freezing, a moratorium on checks. The plans include credit breaks for business and payment of UAH 1,000 to pensioners. However, are these measures sufficient? Let’s see the example of other countries. Thus, France will provide economic assistance to businesses and employees in the amount of 45 billion euros. Germany is mobilizing at least € 500 billion in loan guarantees and is committed to providing unrestricted liquidity to companies affected by the pandemic. The Austrian government has announced a € 4.4 billion economic aid package to guarantee companies’ activity and jobs. The allocated funds are aimed at stabilizing health care, stimulating the labor market, maintaining public order and reducing the loss of income due to the coronavirus epidemic. In Italy, which was affected by the coronavirus the most, the government approved a decree providing for the allocation of 25 billion euros to cover coronavirus losses and special measures to save the economy. Spain will allocate 200 billion euros to support the economy and prevent bankruptcy. The Polish government has announced a large package of assistance to the economy and entrepreneurs. Its estimated amount is about $ 52 billion. In the United States, the Presidential Administration of Donald Trump has instructed the Small Business Administration to provide loans to businesses affected by the coronavirus. US President urged Congress to increase funding for extra $ 50 billion.

Therefore, based on the above-mentioned information, Ukraine does not have means and capacity to support its business sufficiently as other countries. In one month of quarantine, we lose about UAH 120 billion of GDP and about UAH 250 billion in the value of goods and services. On average, we lose 30-40% of the monthly GDP, so if we recalculate at annual rates, the losses make up 2% in one month. That is, for two months of quarantine, the annual decrease equals 4%. We have gone down, and it is clear that GDP will decrease in 2020.

Taking into account all the above, Ukraine should follow the European countries’ lead and abolish severe restrictions related to the coronavirus if it wishes to save its economy.

Please read: To be succesful the business has to spend time learning business environment

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