President's Office considers options for creating free economic zone in govt controlled, temporarily uncontrolled areas of Donbas – advisor
The Office of the President is considering options for creating a free economic zone (FEZ) in the controlled territories of Donbas, as well as in those that are temporarily not controlled by the Ukrainian government, but will have to reintegrate again, advisor to the President of Ukraine Volodymyr Zelensky on economic issues Oleh Ustenko has said.
"This idea has been discussed for a long time in the Office of the President. By the way, it was discussed both for the "continental" territory of Donbas, which is controlled by the Ukrainian government, and for the part that is now not under our control, but will have to reintegrate into Ukraine again. Based on this task, possible solutions were being constantly worked out," he told Interfax-Ukraine.
Ustenko said that the controlled part of Donbas also needs additional development, which would require additional funding from the budget. At the same time, the possibilities of the national budget are limited due to the global economic crisis and pandemic, the presidential adviser added. According to preliminary estimates, the reintegration of Donbas may require about $10 billion.
"For us, this is exactly the same deficit as in the current year. It is not possible to double the deficit. We need to look for some ways. Part of the public spending will have to be reoriented to the territory when peace comes. And peace is not an economic category. But if you should spend money on the territory where there is no public finance, the role of the private sector is important. And the industries there are destroyed, infrastructure is destroyed, and even investor confidence is destroyed. It is necessary to somehow bring investors to that territory, give some incentives so that to invest in it was more than interesting," Ustenko said.
The FEZ was considered as one of the incentives by the Office of the President.
Explaining the reason for raising this issue for the national poll, Ustenko pointed to the political situation in the country: "All economic issues in Ukraine, especially now, at the peak of the political cycle, are being raised on the banners of different political forces and are used as slogans. But a consolidated opinion is needed. If we decide on a FEZ, everyone should understand that yes, they need a preferential treatment there. These territories need to be restored, and we don't have enough funds."
At the same time, the expert does not rule out the risks that such a decision may entail, but the current risks in the form of smuggling are also high.
"Small business in Donbas will be on an absolute starvation diet. There are no savings, no infrastructure, but there is a desire to resume. It needs these conditions, first of all," the president's adviser said.
"Although in the future, the FEZ is the whole of Ukraine. There should be such a phased movement," Ustenko said.