The Ministry of Health of Ukraine weekly reports a new incidence anti-record for the acute respiratory disease COVID-19. Despite the response provided by the government and competent authorities to fight the disease spread, Ukraine still remains among the top European countries by the daily gains. Last week, the Ukrainian Government extended the lockdown in the country until the year end and strengthened the restrictions for public gatherings and events in all zones. However, as forecasted by Kyiv School of Economics, starting from November, the country’s infection rates may reach as high as 10,000 new cases every day.
Even now, Ukrainians have rushed in droves to state-owned and private laboratories which cannot satisfy this high demand and handle the substantial increase in the patient inflow. The healthcare system fails to bear these increased loads – facilities do not have enough medical equipment or beds for all infected people they receive, and have to use hallways to accommodate new patients.
While this being the case, nearly half of the amount budgeted in the State COVID-19 Response Fund was spent by early October – that is UAH 30 billion. As much as UAH 13.6 billion of this amount was spent by the authorities on the “major construction”. Infrastructure development is definitely one of the country’s economic priorities, which however does not mean it may be financed through the budget allocations earmarked for the pandemic response. Substantial amounts were also withdrawn for unemployment allowances, subsistence support, salary supplements to the staff of the Ministry of Internal Affairs, Ministry of Health, etc. State spending from the COVID-19 Response Fund is also one of the most debating points in relations with the IMF.
Meanwhile, the economic slowdown continues in the country. According to the national survey conducted by the Center for International Private Enterprise (CIPE) in cooperation with the Union of Ukrainian Entrepreneurs, 60% of micro-owners have assessed their current business performance as decline and this share among small and medium enterprises makes up 55% and 42%, respectively. And from the beginning of the year to August, the percentage of stable businesses dropped by half. In this context, it is critical to avoid the second national lockdown, which would only exacerbate the existing economic downturns. Another point to mention, only the continued production of goods and services with added value in the country would help to halt the decline and resume the GDP growth.
Despite those crisis circumstances, businesses continue donating money to support the healthcare system, they repair and purchase lung ventilation equipment and protective gear for doctors. Only within the lockdown’s first three months, SUP members gave support worth nearly UAH 250 million for the coronavirus response!
Additionally, businesses provide testing for their staff, supply them with masks and sanitisers, implement home-based working schedules, which contributes, at least partially, to containing the coronavirus. However, taking into account the latest spread dynamics, even these measures seem to be no longer enough.
As a responsible business community, we call on the President and the Prime Minister of Ukraine to take action towards mitigating the infection risks and improving people’s access to personal protection. It is the duty of the state to protect human lives. For this purpose, SUP offers the following steps to be implemented by the state for the pandemic period:
- prevent another national lockdown with extreme restrictions, given that the fall in Ukrainian GDP only for the second quarter of this year reached 11.4%. A new lockdown might jeopardize the mere existence of micro- and small business in the country.
- introduce flexible working patterns with different work begin and end times for different staff categories and remote working patterns in central executive authorities, as well as state-owned and municipal companies, institutions, organisations, throughout the lockdown period, in order to restrict mass gatherings of people in public places, save public funds and effectively re-allocate them for the pandemic response needs.
- use all money budgeted in the COVID-19 Response Fund, as well as other funds allocated from the state budget for the pandemic response, only to improve the protection of healthcare workers, supply Ukrainian hospitals with lung ventilators and other equipment necessary for giving medical care to people infected with the coronavirus;
- instruct the Ministry of Finance of Ukraine to issue comprehensive tax guidelines explaining how expenses incurred to procure personal protective gear such as masks, sanitisers, etc., for staff and visitors must be reflected in financial statements (irrespective of a specific industry), and grant exemption from personal income tax for the protective gear provided to staff free of charge;
SUP calls upon the state authorities to strengthen the government’s awareness-raising efforts in the COVID-19 response, introduction of homeworking patterns, and use of personal protective gear. Flexible measures that are both efficient for reducing incidence rates and safe for proper functioning of the national economy, will help Ukraine sooner overcome this global challenge.
