Expansion of export of the Ukrainian commodities, services, capitals and labor force became the immediate objective for the whole foreign trade policy of Ukraine. However, removal of barriers on the way to the target requires for the will of not only expo
THE LONG WAY FROM SLOGANS TO DEALS
Expansion of export of the Ukrainian commodities, services, capitals and labor force became the immediate objective for the whole foreign trade policy of Ukraine. However, removal of barriers on the way to the target requires for the will of not only exporters but also of the Government.
There was a discussion devoted to this issue at the first 2001′ meeting of the Council of Exporters under the Cabinet of Ministers of Ukraine chaired by the First Vice Prime Minister of Ukraine Yuriy Yekhanurov on February 26.
RESULTS OF THE YEAR
In 2000, foreign trade turnover of Ukraine accounted for USD 33.4 bln., which is 18.5% up from 1999. Las year, export of commodities from Ukraine increased by 18.8% to USD 18.6 bln. and import turnover reached USD 15.3 bln. (a 18.2% increase). For the first time in the last ten years, trade balance reached plus USD 2.74 bln. Trade balance switched to the positive mark in August and retained up to the end of the year.
All the main constituents of Ukrainian export saw an increase in turnover: machinery – as high as 1.5 times, mineral fertilizers – as high as 1.4 times, aluminum and aluminum products – as high as 1.3 times, and ferrous metals – as high as 1.3 times.
Export of Ukrainian commodities to CIS countries increased by 38%, including export to the RF expanded by 21.9%. Growth of Ukrainian exports to other countries reached 21.0%.
OBJECTIVES
The Government does realize that last-year success would be impossible unless global conjuncture was not that favorable for us. Market forecasts for the present year are not that promising. This means, that it would be necessary to make a lot of efforts and retain present foothold.
At the beginning of 2001, Ukraine faced the task to restructure export. According to the Chairman of the Council of Exporters under the Cabinet of Ministers of Ukraine, the First Vice Prime Minister Yury Yekhanurov, at the meeting of the Council, yet, raw materials are the weighty constituent of the Ukrainian export, "which does not suit us". It is high time to expand portion of high-tech products.
To expand export in the present year, the Government plans to pay attention to those regions worldwide, which, according to Mr. Yekhanurov, "make zone of legal Ukraine’s interests", that is, the countries involved in various economic relations with Ukraine back during Soviet-era times. In particular, we face the task to "launch markets of African countries we are well interested in". The First Vice Prime Minister appealed exporters to bring back the situation on the markets of these countries.
The Cabinet also plans to expand export of Ukrainian military products.
STRATEGY
To expand export of Ukrainian commodities, services, and capitals, the Government planned a number of measures.
Foremost, the Ministry of Economy completed development of the State Program for Stimulating Export of Products, which aims to coordinate all the export expansion incentives in the country. In the nearest future, the Council of Exporters will consider the program draft.
The Cabinet of Ministers worked out the draft decree of the President of Ukraine on altering status of Trade and economic missions of Ukraine abroad. According to the Deputy Minister of Economy Andrey Goncharuk, during administrative reform, the Ministry of Economy managed to secure traditional subordination of missions (it was supposed to subordinate these to the Ministry of Foreign Affairs). From now on, activity of missions will be concentrated at increase in Ukrainian export.
Decree draft foresees to forward representatives of Ukrainian exporting enterprises for work at vacant positions in trade and economic missions. According to Mr. Yekhanurov, this will allow Ukrainian exporters "to work with foreign partners and expand exports at the site".
According to the Ministry of Economy, Trade and economic missions of Ukraine operate in 33 countries worldwide. In the present year, it is planned to open another 7 missions, in particular, in Libya, Lebanon, Yugoslavia, and Cuba.
In respond to claims of exporters on insufficiency of own funds for export expansion (a lot of enterprises even lack funds to open representations abroad or take part in the international exhibitions), the Cabinet of Ministers made a decision to create the Fund for Development of Foreign Trade. Its main objective will lie in support of Ukrainian exporting enterprises.
The initiative to create the Fund is currently being considered by numerous interested ministries. Besides, the Ministry of Finance offered to create the Fund under Ukreximbank, which has the necessary potential and experience of foreign trade activities.
The concept of the Ministry of Finance foresees current management for the Fund by Ukreximbank, and strategic management – by the Supervisory Council of the Fund represented by the authorized officials of the National Bank, Cabinet of Ministers and exporting enterprises.
Potential sources of funds comprise funds of the State Budget, voluntary contributions of exporters, tranches of international financial organizations, and investment capital.
As well, it is planned to introduce measures and improve information and consulting support of exporters, which does lag behind the world level, especially, from the viewpoint of quality and operativeness. Meantime, Andrey Goncharuk believes, it is one of the factors to enhance competitiveness of Ukrainian export in the terms, when the world markets are over-flooded with high-quality products.
With this aim, in particular, the Ministry of Economy developed the Register of Associations, Unions of Ukrainian enterprises, which has to ensure systematization of information on the Ukrainian producers and support in access of Ukrainian export to the external markets.
In the end of the first quarter, Ukrainian National Research and Information Center for Monitoring International Commodity Markets DERZHZOVNISHINFORM plans to issue the Catalogue "Importers and Exporters of Ukraine" in Russian and in English, both printed and electronic (CD).
Taking into account status of the RF as of one of the major trade and economic partners of Ukraine, the Ministry of Economy and DERZHZOVNISHINFORM Center were assigned to develop conjointly with the RF the project of creation open Internet database for export potential of both countries.
As well, revision of all the Internet-sites of state structures will be conducted, as far as these, according to A.Goncharuk, "need profound development". At last, web-site of the Council of Exporters will be created.
METALLURGISTS BLAME THE GOVERNMENT …
At the meeting of the Council of Exporters appeals of the Government to expand export faced negative comments of management of metallurgical works as to insufficient support of export activity addressed to the Cabinet of Ministers.
Foremost, metallurgists, with a 40% share in the total Ukrainian export, criticized recent decisions on increase in prices for numerous resources and services, which lowers export potential of the enterprises.
According to the general director with Ilyich Iron and Steel Works of Mariupol Igor Baranovskiy, metallurgical enterprises cannot expand export also for the reason the State does not reimburse VAT paid. In 2000, he stressed, the State Budget is to reimburse UAH 326 mln. to Ilyich ISW. In case the Cabinet approves the Regulation on restructuring of this debt, "we will run out of current assets and the plant will have to stop operation".
Besides, according to management of the plant, development of export is impeded with increase in prices for electric power, its transmission, and prices for coke. Besides, metallurgists believe that they have to pay for failures of other entrepreneurs. For instance, the Deputy Chairman of the Board of Directors of JSC Zaporozhstal Alexander Rabtsun reminded of precedent, when Zaporozhjeoblenergo applied to the National Commission on regulation of electric energetics for a 40% increase in tariff for transmission of electric power through the nets to compensate losses suffered in trade with bills.
…THE GOVERNMENT APPEALS EXPORTERS TO UNITE
Respond of the First Vice Prime Minister Yury Yekhanurov on behalf of the Government to claims of exporters was mainly the proposition to exporters to unite and intensively lobby own interests.
In respond to "encouraging requests" to the Government "to turn face to metallurgists", the Chairman of the Council of Exporters literally flooded speakers with non-answerable questions: Who will defend interest of metallurgists except for themselves? Why exporters have no questions to the Ukrainian diplomats, despite for all the "signs" of the Government on economization of external policy? Maybe, exporters have no incentive to launch new markets? Why "economy" does not demand support from the "policy"?
According to Mr. Yekhanurov, passive attitude of exporters in future does not except the opportunity to fail their interests as a result of settlement of such arguable issues as, for example, increase in tariffs for electric power to back and complete construction of nuclear units at Khmelnitskiy and Rovno nuclear plants and increase in railroad tariffs with aim of obtaining funds to construct the second terminal in Kiev …
The third meeting of the Council of Exporters witnessed seriousness of the assignment of the Government to expand export at the expense of exporters’ cartelization.