Business Capital (Ukraine): Implosion and depressive silence. The death of flagships of national industry.

Business Capital ^ | December 28, 2019 | Denis Lavnikewitch

[NorseViking]

Economic giants, the flagships of the Ukrainian industry, one by one are falling apart. The result can be truly disastrous for the Ukrainian economy this year, the consequences of which will haunt us for a long time.

Industrial statistics shows the start of the disaster. New data of the state statistics for November indicate a decline in industrial output of 6.9%. Logical consequences in the short term are increasing unemployment and a new wave of emigration. Against the background of strengthening of the hryvnia and a complete misunderstanding of the situation by the government on what to do with it, we suppose: after another six months we can expect a serious crisis, which will hit a number of industrial cities (primarily Zaporozhye, Dnepr, Kharkiv) and, of course, will affect the situation in the country as a whole.

We decided to look, as is the case in several industrial centers of Ukraine, at enterprises, whose names are on everyone's lips.

Zaporizhia

Here, according to experts, under the threat of loss of income and job loss are about 35 thousand people — employees of local businesses. Together with families — about 100 thousand people losing the means of survival.

Motor Sich

Motor Sich company is one of the world's leaders in the production of aviation gas turbine engines for aircraft and helicopters, as well as industrial gas turbine installations. On the one hand, Motor Sich has become hostage of the economic war between China and USA, on another — a victim of neglect by the state and private short-sighted management.

This year was to plant a complete disaster. The net loss for January-September amounted to 532,7 million hryvnia, while the same period in 2018, the company ended with a net profit of 543,2 million.

[Rockingham]

Ukraine’s more fundamental problem was and is that corruption and the absence of rule of law scare away investment and lending. As a rule of thumb, former communist countries are hard put to create and run a capitalist society. A shambolic kleptocracy is the more common outcome.

[NorseViking]

Yes, corruption and rule of law are problems too.

[Jimmy Valentine]

Ukrainian problems center on pandemic corruption both government and in private industry. Arcelor Mittal is foreign owned and reasonably well run. They have come under fire from corrupt government appointees who want more bribes..

[NorseViking]

In fact Zelensky himself was outspoken attacking Arcelor. I have no idea how well founded the government claims of wrongdoing but it is the biggest foreign investor who dared investing $9 billion. Attacking it sends awful signal for others.

[Rashputin]

Vampire Capitalism will move along and save another country from the citizens of that country.

[NorseViking]

It is not a capitalism at all.