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Ukraine seeks to rebuild economy with defiant small businesses

by Andrea Shalal

LVIV, Ukraine (Reuters) – On the first day Russia invaded Ukraine, Victoriaia Maslova abandoned her herbal cosmetics factory in the Ukrainian town of Bucha, She fled to Poland with her mother and three younger brothers when rockets began hitting a nearby airport.

A month later, they returned to Ukraine, determined to continue producing Maslova’s plant-based cosmetic brand Vesna.

“We love Ukraine. We want to go back to our country and work here,” Maslova said, 10, founded the family seven years ago with her mother Inna Skarzhynska 44. company.

To reverse the economic shock of Europe’s largest war since World War II, the Ukrainian government is pinning its hopes on the entrepreneurial determination of people like Maslova, the return of millions of refugees and a massive international On financial aid.

Wait until after Russia’s chaotic withdrawal. In April, Maslova’s mother returned to the factory from the town of Bucha, near Kyiv, notorious for occupying the streets of civilian corpses. The workshop was ransacked and in disarray, but she salvaged some equipment and loaded it onto a truck. They set up a new operation in relatively calm Lviv, some 250 km (280 miles) west near the Polish border.

Five months later, Vesna products are sold in more countries than ever before, including Poland and Lithuania, and Maslova recently won a deal in the U.S. to manufacture goods for her own brand, she said. All the while, the company has been donating skin and hair care products labeled “You Are Our Hero” to women and men serving on the front lines.

The war operation, dubbed “special forces” by Moscow, is now approaching its eighth month. Despite Ukraine’s recent victories on the battlefield, experts believe it may drag on For a long time, millions of Ukrainians were displaced internally and nearly 8 million were displaced abroad.

Therefore, in the Ukrainian army for recapture since February While fighting over territory occupied by Russia since the invasion, the Kiev government is racing to stabilize the economy and provide for those fleeing the east and south. of people looking for jobs in their homes, jobs and businesses.

The economy is expected to shrink by more than a third this year, but as businesses reopen, Economy Minister Yulia Svyrydenko believes that in

, albeit from a low base. Within ten years, she dreams of more than doubling pre-war levels to 500 with the help of foreign investment and EU accession ) billion.

“We always say we have two fronts: one military and one economic,” Sveridenko in the basement of Ukraine’s grand Soviet-era cabinet building Corridors and windows are stuffed with sandbags, he said in an interview with Reuters. “The economy is as important as the military. “

SMEs like Maslova are at the heart of the government’s work.

After the war on economic activity started, all over the country froze, but now In Kiev, Lviv and other unoccupied cities, and even in Zaporozhye near the besieged nuclear power plant, restaurants, retail stores and even nightclubs have apparently reopened.

The Ministry of Economy has Helping 700 businesses relocate from the front line, of which 480 have resumed operations, Svyrydenko said. These companies are benefiting from the return of some 3 million refugees , helping needs while money flows back into the economy from new exports including three Black Sea ports.

Helping displaced companies make fresh starts, Lviv-based Ukrainian Investment and The Trade Facilitation Center provides businesses with rent-free office and manufacturing space, a valuable lifeline.

The task facing the country, and entrepreneurs like Maslova, given the World Bank And with the EU’s most recent estimate of total war losses approaching 250 $1 billion and Russia’s continued strikes on civilian infrastructure, it’s daunting.

Ukraine is also facing mounting budget problems, although Western government creditors agreed to freeze debt payments this month and private creditors in August. It is seeking foreign aid but also needs private capital to rebuild.

Given what the German Marshall Fund called Ukraine’s “history of corruption” in a report, any investment requires security guarantees and strong accountability

from Top economic experts from Ukraine, the World Bank, the International Monetary Fund and other donors will address some of these issues at a recovery conference hosted by Germany in Berlin in October. 15.

IMF approves $1.3 billion in additional emergency financing for Ukraine on Friday, boosts support from other donors, looks to the future A bigger, more comprehensive plan.

“Brave businesses, brave people”

Iryna Tytarchuk, head of Lviv Investment Center, helps displaced business owners gain access to Resources, including government microfinance and up to $25,50 loans, as well as USAID funding specifically for women-owned companies that helped Maslova get back on her feet.

“These are brave businesses and brave people who have not left everything to go abroad, but decided to start again and again,” she said. Tytarchuk recalled that after the annexation of Crimea, many companies were leaving In the Russian market, the 2014 revenue rebounded.

“Now, more markets are opening up for them,” she said, noting that some businesses in the UK have contacted her specifically looking for “Made in Ukraine” products.

Close to the front, Mykolaiv, 800 km (500 miles) to the southeast of Lviv, subject to Regular artillery fire. Here, Julia Konovalova is waiting for her moment, eager to restart her once-thriving healthy food delivery business, Fresh U & detox, when the fighting stops.

When more than half of Mykolaiv’s population fled, Konovalova stayed. She donated her supplies to the military at the start of the war and has been coordinating food aid for the World Central Kitchen Relief in recent months.

“My gear is still there. Now I wait until the war is over, and then I’ll start over,” said the former hotel manager. “We just need to survive.”

Near the Russian border, fierce fighting has depleted three-quarters of the 2 million inhabitants of Ukraine’s second-largest city, Kharkiv, despite recent Progress has retaken nearby territories.

The rocket damaged Evgeniy Safonov’s bar in Kharkiv, but he is already looking for a new location in a safer city and hopes to eventually return to Kharkiv.

“Even now, our investors are interested,” he said. “Call me brave or stupid, I know. But the scope of our plans is only a matter of days. You never know what tomorrow will bring.”

Looking for investment

Svyrydenko acknowledged that Ukraine faces enormous challenges, but said she and other officials are seeking investment wherever possible, citing estimates that per $1 billion investment would increase national output by 5 percent.

Her department is working on 68 The new “Ukraine” was launched on the New York Stock Exchange last month Advantages” investment portal from the US, Germany, UK and Poland, which was priced at billion investment opportunities, but said it was too early to provide details.

The private finance arm of the World Bank, the International Finance Corporation and the European Bank for Reconstruction and Development also said last month that they would invest 25 million-dollar vate equity fund invests in technology and export-oriented businesses in Ukraine and neighboring Moldova. Its goal is to raise up to 280 in the next 25 million dollars months.

Andy Hunder, head of the Ukrainian American Chamber of Commerce, said the Ukrainian economy was showing “amazing resilience” and that internet and banking services were more peaceful in wartime Kyiv than in parts of Europe.

The latest survey released this week by the organization shows that 77 its 600 % of member companies believe the war will end at 2023, and all but 2% plan to continue doing business here.

Yulia Zavalniuk, his cottage in Cape Verde Flower Farm approx km west of Kyiv, severely damaged by Russian troops four days into the war, initially considered moving to Slovakia but decided to temporarily relocate to Lviv while selling the factory to continue paying wages and paying Basic business costs.

“It’s time for us — small entrepreneurs,” she told Reuters. “We must produce, sell and pay taxes with the greatest creativity, service and quality in mind,” she said.



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