The majority of Ukrainian enterprises are going to be shut down after signing the association agreement with EU
During the seminar on clarification of the advantages of partnership with EU held in Simferopol the invited experts from Great Britain have disclosed that after the free trade agreement comes into effect many Ukrainian enterprises will go through a wave of slippages, while the majority of them will be shut down.Initially during the seminar, which was supported by The Crimean Chamber of Commerce and Industry, the representatives of the British embassy, company СТА Economic&Export Analysts Ltd, and the director of the department on European integration at the Cabinet of Ministers of Ukraine tried to prove to the invited manufacturers and entrepreneurs the benefits of Ukraine joining the free-trade zone with EU. In particular, director of CTA Mark Hellyer forecasted 12 percent growth in the standard of living of an average Ukrainian, 6 percent growth of the general export, and 7 percent growth of manufacturing after signing the agreement.
However, after the floor was given to the Crimean entrepreneurs the invited "experts" found themselves in quite an uncomfortable position because they were unable to reply a single posed question.
According to Nikolay Vasiliev, the general manager of Pnevmatika Corporation, which is one of the most high-tech enterprises of the Crimea, preparation for signing the agreement has already influenced the manufacturing at his enterprise negatively.
"We were told a nice story here, that there will be only benefits, 5-10-20 percent growth, but what kind of analytics can make a 10 year forecast? We have serious doubts that these kinds of forecasts are correct. This particularly relates to machine-building industry. The representative of the Fiolent plant (the leading Crimean manufacturer of precision electronics – editor's note) is here; we exchange the opinions and we see that we are losing the Russian market. And this is a reality: we cannot balance the plan for the next year. Ukrainian expert negotiators perhaps see more, but this is the second round table attended by me, which does not bring a single reply. We are now transferring our people to a 3-day working week. The politics does its job and the Russian market is slowly closing. Belorussia is closing, Kazakhstan is closing. To the best of my knowledge 70 percent of the export of the Ukrainian machine-building enterprises go to the Customs Union countries. Neither Pnevmatika nor Fiolent exports anything to the EU. And that's not because we are not doing a good job or the goods do not correspond to the European standards. The European market is balanced. Everybody is in his place there and the market is full. No one will let strangers in there. Who did that analysis for our enterprises? It was not possible for us to change the manufacturing technologies and the equipment to be able to compete fairly with the European manufacturers."
The representatives of the agrarian enterprises share this opinion. According to the representative of The Crimean Chamber of Commerce and Industry and the director of agrarian cooperative Yuriy Komov Ukrainian agrarians will not survive even 3 months of economic blockade from the EU countries, which is mainly due to absence of the storage for the goods of agrarian sector and secondly because most of Ukrainian exporters are small producers, for which the opportunity to sell their crops is the issue of survival here and now. Besides that the cyclicity of the production does not allow to pause for changing the line of business and preparation for new reality: one can temporarily remove the plant from the operation, but stopping an agrarian enterprise means its liquidation.
Under a shower of questions the representatives the department on European integration started with admitting that the growth percentages were forecasted for 10 years at best. Having tried to hide behind the list of memorandums, regulations and resolutions, which apparently none of the entrepreneurs has ever seen, the "Euro-integrators", particularly the representatives of the Cabinet of Ministers, have finally enounced that in the conditions of market competition most of Ukrainian enterprises will be either liquidated or their manufacturing will be massively reduced.
This was not, however, a surprise for the members of The Crimean Chamber of Commerce and Industry. Having failed to obtain a reply to their question about the concrete benefits, which signing of the agreement will bring to their enterprises, the Crimean manufacturers said that they could not see any other way but to prepare themselves for a new survival loop, similar to the one they experienced in the 1990-s.
"The Euro-experts gave me the only right answer to my question today, 'Those who will not survive will die'." We don't see the European market in Pneumatics and Fiolent. Our goal is to find new product for Ukraine, perhaps, for the European market. Now high-tech manufacturing will be in Europe only. All we will be left with is general chemistry, maybe metallurgy. We have already started to reduce the working week, but that is not the most dreadful. All of our former and current European partners in Bulgaria, Romania, Hungary, and Slovenia tell us, 'Where are you going? We have no idea how to get out of here!' All the manufacturers in those countries are utterly dissatisfied with becoming part of Euro zone. Bulgaria used to manufacture canned food, which we remember perfectly, but now the plants are idle: the UE considers it more profitable to produce fruits and vegetables in Spain and Greece. Yes, the costs are lower there due to cheaper energy; however, we are still accountable to the people, who were left without the means of subsistence, without job, without food." said Nikolay Vasiliev.