Viacheslav Chaus, Head of Chernihiv Regional Military Administration

 

Over the past two years UTEX Ukraine LLC, operating in Chernihiv region, has been holding an over 25% share in the Ukrainian market among fiber optic cable manufacturers. On February 24, 2022 new equipment was delivered to the enterprise and advanced payment for one more line for increasing production capacity was made. In 3 days the enemy missile destroyed everything.

In June-August 2022, the company purchased the equipment and materials, and production was restarted at a new location. The enterprise was relocated within the region. Chernihiv Regional Military Administration helped in searching for premises that would be suitable in terms of technical characteristics.

The territory of the Chernihiv brewery was also hit by enemy missiles. However, AB InBev Company started brewing Chernigivske beer in Belgium. Profits go to Ukraine humanitarian efforts. Now the plant in Chernihiv is also resuming its work.

LLC “Sivertex” having partially crashed equipment, the roof punched through, broken windows, practically in ruins, continued to sew on orders for foreign partners.

As well company “Veres” despite logistical difficulties and destructions managed to export its furniture.

All these examples (the list is far from complete) are the answer to the question “why the economy of Chernihiv region did not finally fall into the abyss during the war.”

The secret is in the great desire of people to restore everything. At each of these enterprises, teams got to work as quickly as possible. And often they haven't been doing only their jobs, which they did before the full-scale invasion, but they also have been doing other jobs. In general, over the past year, the amount of taxes paid by businesses decreased by 20%, and exports and imports decreased by a third.

Enterprises that did restart their work after the end of active hostilities in the region were able to restore production volumes by 20-70%. The foreign-invested enterprise “Plast-Box Ukraine” and several more completely local companies still cannot restart their work.

The enemy probably counted on such economic losses. But the business, although wounded, is getting back on its feet. In some cases, there is even progress: 3,791 business entities were registered during January-September 2022; the volume of exports of fats and oils increased by 2.8 times; the volume of exports of products of the chemical and related industries increased by 2.4 times.

In general, only one big enterprise – “Pozhmashina” - was partially relocated from the region. The rest enterprises have relocated within Chernihiv region. This is another proof that the future belongs to industrial parks: places where it is easy to arrange a working area for any production. There is much work to be done on this issue in the region, since such special industrial areas must be well prepared. As a rule, they have high-quality engineering and transport infrastructure and a set of necessary services, and also take advantage of simplified regulatory procedures. The package of investment incentives for production and scientific research enterprises is also important in this matter. In the border areas that have suffered losses, all this should have an even wider range of offers. Therefore, all branches of government and at all levels have a lot to work on.

The Regional Military Administration along with people's deputies from Chernihiv region has been working on a draft law on the so-called “special economic zone”. The main points of the initiative are: zero taxation; the possibility of receiving compensation for employment creation; a simplified system for obtaining technical conditions. However, it has not yet been possible to obtain a special legal regime for economic and investment activities in Chernihiv region. But the need has not disappeared. So we will continue to work.

The war also revealed another interesting aspect of the work of the agro-industrial complex in the region, which is also important for the near future. At a time when a significant number of communities were cut off from the regional center, or had complicated logistics (it is still difficult), small mills and bakeries began to revive. They successfully maintained food security, although they worked only on the enthusiasm of people and using very old equipment. This cannot go on. Therefore, the issue of revival of such places, in particular in the context of the small and medium-sized enterprises development, is also on the agenda. How can we do it? By developing and implementing local and state programs, by looking for investors.

Thanks to the state support during the full-scale invasion, many enterprises and farms survived in Chernihiv region: more than UAH 40 million was directed to the development of processing enterprises (nine applicants); almost UAH 10 million - to one winner of a grant proposal for the development of horticulture and berry cultivation; 81 applicants received support for job creation, more than a hundred jobs were created, etc.

Of course, it is very hard for the state now. Most of the money goes to the war, and that is right. However, to get funds for high-quality defense, it is necessary to stimulate the economy properly, in particular in the border regions. An important tool on this issue is military risk insurance. Only with a guarantee of security, in particular capital security, local businesses can be kept and motivated to invest. This and other tasks are herculean for everyone!