The COVID-19 pandemic has changed the world drastically. On the one hand, the immediate targets of reducing the sky-rocketing rates of infection, increasing the capacity of intensive care and vaccination programmes require the urgent attention of all nations. On the other hand, state leaders must also review their supply policies, in particular global delivery chains to keep essential goods and services flowing, writes Vadym Ivchenko.
Worldwide Food Insecurity
People have been always in need of food and basic resources to survive even before the spread of this pandemic. Last April, the United Nations projected that the number of people facing severe food insecurity worldwide could double to 265 million due to the impact of COVID-19. We are now faced with the herculean task of rescuing as many of them as humanly possible from starvation.
Agriculture’s silver lining
If there is a silver lining in this unfolding crisis, it is that agriculture has proved to be more resilient to the impact of COVID-19 than manufacturing industry. While it is true that there have still been significant slowdowns, particularly in situations where outbreaks were discovered, the agriculture sector has never been forced to fully shut down. Irrespective of a global pandemic, people still need to eat, leaving the market demand for agricultural products virtually unchanged. The main factor brought into focus by the pandemic has been the issue of food safety.
Ukraine Can Help
My firm stance is that Ukraine has every chance to play a central role in the forthcoming effort of obtaining global food security in the face of the COVID-19 pandemic. My country has often been referred to as the breadbasket of Central Europe, and with global food insecurity set to increase dramatically, coupled with Ukraine's large agricultural yields, it can soon become a breadbasket for the whole world. In a nutshell, Ukraine is an agricultural goldmine. Already Ukrainian farmers feed the world, supplying food products to 205 countries. The country is home to around 25% of the world's black earth soil, renowned for its high level of fertility. Although it does not yet have the same level of crop yields as countries with modern agricultural production, Ukraine already has the potential to feed more than 600 million people. To put this into perspective, Ukraine only needs one-fifteenth of its current production to feed its domestic population, leaving the rest available for export.
Ukraine ranks as the world’s largest exporter of sunflower oil, second in nuts, third in honey, barley, and rapeseed, fourth in corn, fifth in wheat, seventh in soy, eighth in chicken, tenth in chicken eggs, and eleventh in flour. Agricultural products are the primary basis of Ukraine's foreign trade. Agricultural products and foodstuffs represent about 40% of the nation’s overall exports value, a valuable share of foreign currency revenues for the country.
Global partnerships have an important part to play
One thing that’s clear is that leading companies around the world are starting to take notice. Large multinationals, such as John Deere, Syngenta, NCH Capital, NCH Agroprosperis, Monsanto Company, and Cargill have all started actively working and developing their production in Ukraine.
As a member of the Agriculture Committee of the Verkhovna Rada (Ukrainian Parliament) I have worked with Cargill on the development of important agricultural projects. I and have personal vision and experience of how major agricultural corporations can support the country in difficult times. Last year, for example, Cargill Financial Services International provided Ukraine a state loan of € 250 million.
Ukraine is already making strides in increasing its trade potential. The volume of trade between Ukraine and the EU has increased significantly over the last five years. Likewise, between Ukraine and the US, the figure has exceeded $5 billion per year, with poultry, sunflower oil, flour, alcohol, fruits, and vegetables being just some of the exported goods. Ukraine is capable of providing a much wider range of products, but is held back by trade barriers, which hopefully will be scaled back shortly. The key factor for us is to become serious as a society in tackling global food insecurity.
The need for progressive technology
To update the country’s agricultural infrastructure and increase crop yields, about 15% of companies have begun actively implementing agricultural innovations by purchasing the solutions of both foreign and domestic technology startup companies. Many also develop their own in-house solutions, and according to the AgTech Ukraine Association, the number of agricultural startups in Ukraine has risen to more than 80.
All of these advancements come just in time to tackle the largest threat currently facing humanity, greater even than the COVID-19 pandemic, potentially irreversible climate change. By 2050, in just 30 short years, the world's population is projected to grow so much that it will require 70% more food to sustain it. This population explosion is aggravated by environmental changes to agriculture, as the amount of agricultural land is annually decreasing. Soil contamination with heavy metals, radioactive waste, and pesticides threaten biodiversity, reduce food quality, and have negative impacts on human health.
According to the UN, the world exhausted its yearly limit on the consumption of renewable natural resources in August 2020, meaning that the supply of natural resources for the next 4-5 months will come at the expense of future years and, beyond that, of subsequent generations. However, through agriculture, we may still be able to provide an effective solution. In situations where there is no available pathway in switching to renewable energy, the production and consumption of biofuels can serve as a life-saving stop-gap.
To achieve this solution, especially considering that the production of bioethanol in the country is actively slowing down (progress is more noticeable with biogas), Ukraine needs to reform its current system of economic incentives and start to prioritise the development of biofuels. If only around 20% of the country’s corn can be repurposed for domestic processing, rather than export, Ukraine will be able to actively improve its environmental conditions.
Unfortunately, for all of their bluster, the state’s current agricultural development programs are declarative, but lack the necessary specifics, making the creation of a large scale bioethanol market difficult.
Ukraine as the “world’s breadbasket"
Citing the famous 19th-century Ukrainian scientist, Serhiy Podolynsky, “Of the many types of human activity, agriculture is of the highest priority, the most productive and useful work, which dozens of times increases the product made by nature”. I do agree with Serhiy’s ideas which are very relevant to our times; agriculture is indeed essential in providing humanity with food, medicine, renewable energy, clothing, and other much-needed resources.
Ukraine has long been a regional breadbasket, but must seize its chance now and make strides in becoming a breadbasket for the whole world. While the country has already made significant contributions to overcoming world hunger, by incorporating global technologies into production and integrating itself into international supply chains, Ukraine can become a reliable agricultural trading partner to any country in need.
The Author, Vadym Ivchenko, is a Member of the Verkhovna Rada of Ukraine (Ukrainian Parliament), elected in 2014.
Ukraine prosecutor says there are no plans to revisit Burisma probes
Ukraine’s top prosecutor said on Friday (18 February) investigations into Ukrainian energy company Burisma Holdings Ltd, a matter closely tied to a scandal that led to former US President Donald Trump’s first impeachment, have been closed with no plans to reopen them, write Karin Strohecker and Matthias Williams.
Ukrainian prosecutors in recent years had looked into the actions of Burisma, a company on whose board US President Joe Biden’s son Hunter had served from 2014 to 2019, and its founder Mykola Zlochevsky.
“Everything that prosecutors could do, they have done,” Prosecutor General Iryna Venediktova said in an interview with Reuters by video link from Kyiv. “This is why I don’t see any possibilities (or) necessity to come back to these cases.”
Venediktova also said US authorities had made no requests of her office since Biden took office last month.
The US House of Representatives impeached Trump in December 2019 on charges of abuse of power and obstruction of Congress over his request in a July 2019 phone call to Ukraine’s president, Volodymyr Zelenskiy, for an investigation into Biden and his son Hunter. The US Senate voted in February 2020 to keep Trump in office.
Trump made unsubstantiated corruption allegations against both Bidens. U.S. Democrats accused Trump, a Republican, of soliciting foreign interference in an American election by trying to get a vulnerable ally to smear a domestic political rival, using American aid as leverage. Biden defeated Trump in the November US election.
As vice president under President Barack Obama, Biden oversaw US policy toward Ukraine and sought the removal of the country’s top prosecutor at the time, who the United States and Western European countries had viewed as corrupt or ineffective. Trump and his allies made unsubstantiated claims that Biden did so because the prosecutor had been looking into Burisma while his son served on the board.
Zlochevsky, a former Ukraine ecology minister, is now living abroad.
One Burisma probe had related to suspected tax violations. Burisma said in 2017 investigations into the company and Zlochevsky had been closed after it paid an additional 180 million hryvnias ($6.46m) in taxes.
Venediktova, in her post for just under a year, said she wants to take a different approach in her job than predecessors she described as being “too political”.
Asked about Ukraine’s fight against corruption, Venediktova dismissed concerns that the independence of the national anti-corruption bureau, known as NABU, had been undermined after the government drafted new legislation on its status that the bureau said would harm its ability to fight high-level graft.
“NABU is now an independent body and will be an independent body in future,” Venediktova said.
Corruption has been a longstanding issue for Ukraine, and any threat to the independence of NABU, set up with the backing of Western donors, could further derail the flow of foreign aid at a time when its economy has been hammered by lockdowns related to the COVID-19 pandemic.
The International Monetary Fund has told Ukraine it needs to adopt more reforms to unlock further funds from its $5 billion IMF programme.
Venediktova also said she is hopeful that legal cases surrounding PrivatBank would come to a conclusion before the end of the year. The central bank declared PrivatBank insolvent in 2016 and said its poor lending practices blew a $5.5bn hole in its finances before it was taken into state hands. The lender’s former owners dispute this and have fought to reverse the nationalisation.
($1 = 27.8492 hryvnias)
National Bank of Ukraine: Uncertain times call for unconventional approaches
The economic fallout from the coronavirus pandemic presented several challenges when Kyrylo Shevchenko (pictured) took over as governor of the National Bank of Ukraine (NBU) in July of last year. But, in an interview with this website, he says that NBU has since responded to these challenges by deploying a wide range of “orthodox and unconventional” approaches to calm the financial market and the economy.
By adopting this flexible approach, he says its actions mirror those of central banks in other comparable markets as well as the world’s leading economies.
“Our dynamic approach,” he told EU Reporter, “has allowed us to factor in the long-term future of the economy whilst serving its short-term and immediate needs.”
He argues that in doing so, it was crucial that NBU created the conditions for household and corporate loans to become more affordable by easing our monetary policy.
“Indeed, we are currently leading among emerging markets in cutting our key policy rate, seeing a reduction from 11% to 6% in the space of 4 months – the lowest key policy rate in our financial history.”
Interest rates on most instruments fell gradually in response and banks responded positively by actively lowering interest rates on deposits from, and loans to, non-financial corporations, pushing them close to an all-time low.
Speaking from Kiev, he added: “We also simplified access to financing for banks by increasing the frequency of tenders, extending the term of NBU loans from 30 to 90 days and expanding the list of collateral that banks can provide to obtain loans from NBU.”
While orthodox measures were necessary, NBU, he says, also had to adopt “innovative and unconventional instruments to deal with this unprecedented crisis”.
For example, NBU provided long-term financing for banks over a period of 1 to 5 years with an interest rate that equals the key policy rate.
“Perhaps our most innovative instrument, however, was the introduction of interest rate swaps.”
These allowed banks to continue to pay low interest rates to NBU over a longer period of time. As a result, banks do not need to include interest rate risk into the rates they charge on loans to the real economy. Based on the results of 6 auctions to provide such support to the banks, the total volume of satisfied auction bids has amounted to approximately €293 million.
At the height of the pandemic, the Governor says the NBU was committed to ensuring that banks could focus on supporting the economy.
Shevchenko said: “We eased some regulatory and supervisory requirements by temporarily relaxing the requirement that banks create capital buffers and postponed the submission and publication of financial statements.
“These policies, when implemented together, allowed NBU to create conditions suitable for the future.”
Businesses, he points out, were able to receive funds at affordable rates not just for short-term needs, but for large-scale business projects that require long-term investment.
However, whilst NBU has had to adapt an unprecedented global situation, this does not mean that there isn’t room to reduce interest rates further,he concedes.
“In particular, monetary policy remains accommodative and its easing continues. Banks also possess excess liquidity, meaning it would be illogical for them to stimulate significant deposit inflows by keeping interest rates high.
“Simultaneously, it is important to bear in mind that market interest rates are affected not only by the key policy rate but also by other structural factors: high inflation, depreciation expectations – which continue to deteriorate – and the anticipated worsening of loan portfolio quality.”
Shevchenko said:”Uncertain times have called for unconventional approaches. Since July, NBU has taken the necessary steps to ensure Ukraine’s economy is in the best position for a post-pandemic future.”
Looking ahead, he said: “To maintain this success, it is essential that we continue to pursue a moderate fiscal policy, make progress in strengthening the protection of creditors’ rights, de-shadow the economy, reform our judiciary and law enforcement, and accelerate our cooperation with the IMF and other international partners.”
Europe should not be divided by colour of 'vaccination passports' and vaccine brand
During the pandemic, not only the lives of ordinary people but also the practices of business, government and international institutions have changed dramatically. The world is learning how to live in a new reality but what it is like and what is in store for us? EU Reporter spoke about this with Ukraine lawyer and academic Kostiantyn Kryvopust, a member of the International Association of Lawyers (UIA, France). Kryvopust has extensive experience working in Ukraine and the former Soviet Union, is an advocate of European integration and closely follows trends in international law, writes Martin Banks.
What do you think of the coronavirus problem and when do you think the pandemic will end or at least subside, including in Ukraine?
Kryvopust: Globally, there has been an important shift in perceptions of the pandemic - the existence of the coronavirus and its dangers are no longer denied, even by the most exotic of political regimes. Now, in addition to vaccine competition, effective management solutions and quarantine practices are being developed, which will then be harmonised and formalised into new regulations.
European countries are now forced to find a new balance between democracy and security, the interests of state and citizen, transparency and control. This is something from which public philosophers, politicians and lawmakers have tried for years to escape, but it will no longer be possible to ignore the issue. The epidemic will end when all threats are understood, new norms are formulated and everyone starts to adhere to them.
In your opinion, why do quarantine measures in various countries increasingly face civil protests?
If we analyze the reasons for discontent, it is clear that people are angered by the illogic and unfairness of the decisions, rather than by the quarantine policy itself. Vaccination privileges, discrimination against certain groups, economic insecurity for businesses and employees, non-transparent spending of public funds, fears of abuse of the state of emergency, distortion of public information, strengthening of the police functions of the state, and restrictions on organized protest activity are all issues that need to be resolved as soon as possible.
We do not want the once single European social space to become segmented in terms of the brand of vaccine used, health insurance policy or colour of the vaccination passport.
Don't you think that the legal enforcement of policy is lagging far behind the practical actions of the authorities? If so, why does this happen?
For an emergency, this is normal. But the temporary should not become permanent. It is alarming that this is the second lockdown since spring 2020, but so far there has been no serious attempt to comprehend all this systematically and to formulate it into new norms of constitutional, civil, economic and criminal law.
In addition, there are many purely national inconsistencies. Ukraine has a Chief Public Health Officer but no subordinate service and no hierarchy. This is because shortly before the pandemic, the service in question was abolished due to complaints of corruption. There are dozens of times more infected, but the current January lockdown is noticeably milder than the previous one. Public transport is working, there are no restrictions on movement etc. There is a desire on the part of the government to help businesses and people, but this is still political charity rather than a clear mechanism.
Is it possible that quarantine restrictions will develop into some new form of political control?
I do not see any systematic attempts to build something of this kind, but there are individual, very controversial initiatives. For example: there is a decision in one country to set up a separate prison for quarantine violators and covid-nihilists and draft laws that give the government broad powers to interfere in the private lives of citizens.There are plans by individual local authorities to use temperature scanners in public places and restrict the movement of suspicious persons; ideas to introduce so-called "covid-passports" are seriously discussed. One can find information about forcing people to get vaccinated in some undemocratic countries.
The main method of work of the health control authorities is to carry out sanitary and epidemiological investigations, in which the mode of spread of the infection, its possible sources and carriers are clarified. It is not difficult to predict what such technology-based activities can lead to if they are not clearly regulated and placed under public scrutiny.
In your opinion, as a lawyer, what new legal provisions might emerge as a result of the current epidemic?
Perhaps, these are regulations concerning the right of citizens to access means of personal protection and vaccination. Perhaps additional guarantees of universal access to the Internet, since the Internet is becoming a basic technology for learning, leisure, work and services.
I think that in the very near future lawyers and politicians will have to find answers to questions about the legitimacy of remote screening technologies, the use of data from mobile phone operators and user information from social networks for sanitary and epidemiological investigations, corporate responsibilities during pandemics, measures against COVID-19 deniers and so on. Everything like these should be formalized to avoid legal arbitrariness.The European legal tradition would be consistent with an approach in which legal regulations would be new rights, not just obligations.
How do you think the economy will recover after the pandemic?
Two general scenarios are possible here. The first one is a return to the framework of the old model after mass vaccination and compliance with new precautions. The second one is a transition to a new quality, where the main characteristics will be: remote working, automation, limited social interaction, short production chains, and the winding down of many traditional business sectors.
I think the most realistic scenario would be an intermediate scenario, but that does not take away the responsibility to solve the contradictions that arise. Europe will have to work out new regulations not only for cryptocurrencies, but also for labour protection and taxation of self-employment, outsourcing regulation, public information, electoral procedures and much more. Medical reform is a separate issue and dramatic changes await medicine regardless of what the global scenarios are.
During the pandemic, the cultural sector, the travel and hospitality industry, logistics and transport, sport and recreation suffered large losses. In order to rebuild and adapt these activities to the new conditions, not only additional incentives will be needed, but also financial support.
How are the policies of global financial institutions changing and how do you assess such changes?
In response to the pandemic, international financial institutions have been forced to hastily change the rules of the game, simplifying many mechanisms and adapting them to the situation. To date, many traditional donor governments and international organisations have taken a range of proactive measures to support developing and most needy states. In particular, the IMCF has announced more than $100 billion in emergency loans and stands ready to raise an additional $1 trillion. During the crisis, the IMCF received emergency requests from more than 100 countries. Also, the World Bank group plans to provide $150 billion in financial assistance to nations in need over the next 15 months. The fact that the world's financial donors have not curtailed their funding programmes, but have instead maintained and decided to increase aid is an encouraging fact.
The G20 members have made major concessions and frozen debt repayments for 76 International Development Association (IDA) recipient countries. Financial analysts estimate that such a measure would help developing countries defer payments totalling $16.5 billion.
The EU, for its part, has approved an $878.5 billion package of measures to help the European countries most affected by the infection. We would like to see these funds go not only to the EU leading countries, but also to countries that are in the process of European integration, including Ukraine.
The post-war reconstruction of Europe has created a unique moral climate and a sense of unity among European countries. It would be good if the response to the current epidemic was also such a stimulus for political and civic unity and a stronger feeling of security and safety.
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