The Russian invasion of Ukraine led to the devastating destruction of many spheres of Ukrainian life, including local economic development. A considerable number of territorial communities have been occupied, leading to a large influx of internally displaced persons (IDPs), business closures, the destruction of housing and critical infrastructure, and more. About 90% of SMEs have been affected by the war, and more than 40% have ceased all or part of their activities. Others were forced to relocate and now continue operations in a safe area, some exporters have lost external markets, and either operate in the domestic market, or were forced to suspend production for indefinite period.
The Economic Recovery Initiative action implemented by the Center for Innovations Development (CID) with EU support in May-September 2022, united Ukrainian civil society representatives, professional and business organisations, local governments and Central executive bodies (CEBs) to develop effective and rapid mechanisms for Ukraine’s economic recovery. The action contributed to the implementation of a larger national initiative for economic recovery, entrepreneurship and export development in Ukraine launched by CID, the Entrepreneurship and Export Promotion Office and Diia.Business national project in May 2022.
A comprehensive study of the state and needs of local Ukrainian business conducted with the EU support became one of the largest studies of the actual state, needs, solutions and prospects for the recovery of the economy and entrepreneurship of Ukraine during the war, having involved almost 2,000 representatives in several waves: target individuals and organisations, public authorities, local self-government bodies and civil society. The study provided the stakeholders from the government, business and donor communities with up-to-date data on what was happening to communities and local businesses. Its findings revealed real challenges faced by Ukrainian SMEs, and lead to establishing a dialogue between public, professional and business organizations, local governments and CEBs. They were verified within mixed focus groups consisting of experts, local governments and businesses, who also identified ten ideas for quick economic recovery of Ukraine. Four ideas – tax reform, loan programme for SME, deregulation policy design and an online twinning tool for Ukrainian business – are currently under implementation.
Potential prospects for the Ukrainian economy identified within the action were used for the development of the National Plan for the Recovery of the Economy of Ukraine. The results of the study were also used for the development of the strategic plans on the economy recovery, IDPs’ integration, development of the mechanism of SME support and etc. by the Ministry of Digital Transformation, Ministry of Economy, Ministry of Finance, Ministry of Regional Development, Ministry of Reintegration, National Economic Headquarters, Agency of Regional Development, and local authorities.
Background information:
The project “Economic Recovery Initiative: Studying the Current Situation and Engaging the Stakeholders in Identifying Solutions” is one of the initiatives supported by the European Union through our ‘Eastern Partnership Civil Society Facility project within the #StandWithUkraine Call launched on the 8th of April 2022, in response to the war in Ukraine. Through this Call we directly supported 14 initiatives, covering a wide range of topics: support to pregnant women during the war, support to IDPs in specific regions, first aid and safety trainings for volunteers and citizens, educational programmes for children, as well as support to preparatory work for economic recovery. In addition, 13 smaller scale initiatives were supported through the EaP Civil Society Fellowship programme. Find more about the results of the Call here and read the stories about other supported initiatives here.
