The Marshall plan for Ukraine: who’s ready to invest, and when investment will come

Next week , the Cabinet must submit a technical plan for filling the so-called New European investment plan – a “Marshall Plan for Ukraine” by former Prime Minister of Lithuania Andrius Kubilius of. In the preparation of the document involved all the relevant ministries and, as it was succeeded to learn “Today”, it will include investments in infrastructure, regional projects and small and medium businesses. This technical plan will be finalized before the Eastern partnership summit, which will take place on 24 November in Brussels, where he is officially present. The major task for Ukrainian and Lithuanian politicians – to ensure that the EU leaders at the summit gave the European Commission and the European investment Bank mandate for the implementation of the New European plan for Ukraine. But, according to the MEPs, with the money in the EU is not so rosy. After Brexit annually to the EU budget will come to about 20 billion euros less. Plus, according to experts, investment at 5 billion euros per year, as envisaged by the New European plan, it’s not so much. According to some estimates, to 2025, to double the GDP, Ukraine needs $617 billion.

Small victories of Ukraine. Last week first Deputy Prime Minister Stepan Kubiv declared that by September 23, the government will prepare specific proposals for the content of the New European investment plan prepared by Lithuania, and the final project will be presented at the Eastern partnership summit. “In the future, this “Marshall Plan” for 10 years. We’re talking about at least 5 billion euros a year, and we’re talking about a very important aspect of the economic growth of 6-8%,” – said Kubiv.

The basis of our Lithuanian friends took the calculations of the ex-Finance Minister Natalka Jaresko and Swedish economist, senior researcher of the Atlantic Council Anders Aslund. In their opinion, the Ukrainian economy needs $4-5 billion annual injections to get out of debt and achieve economic growth.

In an interview with “Today,” Andrius Kubilius told that the first time his “Marshall Plan for Ukraine”, they presented in March in Brussels at a meeting of the Interparliamentary Assembly Ukraine-Poland-Lithuania. For six months, Lithuanian and Ukrainian parliamentarians had visited with him in Washington, Berlin, Brussels and London, and at the level of the government and Parliament of Lithuania have set up a joint working group to promote New investment plan. Has even appointed a head of this team – Ramunas Stanionis of the Lithuanian Ministry of foreign Affairs, which in their circles is called “Mr. Marshall”.

“We must ensure that EU heads of state summit took a decision and gave a mandate to the European Commission to develop an official document investment aid to Ukraine. There are three directions, which projects may be financed. First, infrastructure projects. Roads, etc. second, assistance for small and medium-sized businesses. It grants a variety of guarantees, cheaper loans. And third, municipal and regional projects – decentralization,” – said the “Today” Andrius Kubilius.

The head of the parliamentary Committee on foreign Affairs Hanna hopko told “Today” that we already have a small victory: in the preliminary text of the resolution of the Eastern partnership summit, which was elaborated by the foreign Affairs Committee of the European Parliament, there is mention of “Marshall Plan for Ukraine”. “Here is the draft resolution (shows journalist “Today,” Hanna hopko – Ed.) as discussed in the foreign Affairs Committee of the European Parliament. And it says: “the implementation of the New European investment plan for Ukraine and other member countries of the Eastern partnership programme…”. Here again it is written: “the European Commission together with the European investment Bank.” That is, that they have actually instruct the Commission to study the implementation mechanisms of the New European investment plan for Ukraine”, – told the “Today” Anna hopko.

But this, according to Polish MEP Michael Boni, a recommendation. To discuss investment plan to aid Ukraine need with those who really makes decisions, plans and budgets is the EU. “I have not seen any public information that such a plan was discussed with the countries-members of the EU and their governments. A couple of months ago I offered to go to the Committee on the budget, because they develop the annual financial budget of the EU. They decide where and how much money to allocate. Don’t know, I went there with Lithuanian and Ukrainian colleagues, because I of the budget Committee said nothing, did they develop such a plan for Ukraine”, – told the “Today” Michael Boni, who participated in the meeting of the Interparliamentary Assembly Ukraine-Poland-Lithuania in Brussels in March.

Who’s ready to invest, and how much is actually necessary? According to Kubiv, the money for the implementation of the investment plan for Ukraine in cooperation with Lithuania planning to attract from a pool of international partners and investors, among them the EU, USA, Canada, Japan, European investment Bank, the financial institutions of Lithuania and other organizations. “In February-March next year planned donor conference (presumably in Brussels – Ed.) who can participate in the implementation of this “Marshall plan,” – said Kubiv.

Ideally, you need to create a Ukrainian investment Fund that would be run by Ukraine in cooperation with foreign partners. But, for example, in Canada, neither sleep nor the spirit of the Napoleonic plans of Lithuania and Ukraine. In an interview with “Today,” Ambassador of Canada to Ukraine Roman Vashchuk said to him with some specific plans are not addressed. “Western countries have laid down different packages of support to Ukraine, perhaps they will be reformatted. It is important to change the rules of the game in Ukraine to Ukrainian huge resources that lie on the mattresses, internal and external offshore, could be involved. That, to me, would be the most successful plan for Ukraine”, – said the “Today” Roman Vashchuk.

And the EU, according to the MEP Michael Boni, the free money is not so much. Because of Brexit annually to the EU budget will receive 20 billion euros less. Moreover, according to the economists, 5 billion euros per year, referred to in the “Marshall Plan for Ukraine” (or 50 billion euros over 10 years) is a drop in the ocean. “According to the World Bank, the share of investment in fixed capital in Ukraine in 2015 – 13% of GDP (this is the last data that is). While the average for the world – 23%, ten points more,” said Serhiy Korablin, Director of the Institute of Economics and forecasting of NAS of Ukraine.

According to estimates of the Institute of social and economic research to double Ukraine’s GDP to about $600 billion over 10 years (or about $15 thousand per person). Thus, according to the head of the Board of the Institute Anatoly Maksyuta, Ukraine does not need new loans, because our economy is not able to return them, created a pyramid scheme: we take the money and return them at the expense of new loans.

*The data of the Institute of social and economic research, presented at the Ukrainian crisis media center during Smart Talk “plan for the Ukraine, not Marshall”

“In the end, this ends with default, debt restructuring or something. We need investments in fixed assets. How much do we want investment? According to our calculations, to double GDP, we need $600 billion over 10 years, $50-60 billion a year. It is quite large, which surprised all. But today the economy is generating somewhere in the $13-15 billion of capital investment. And we must understand that this is not a purely foreign investment. Today investments by foreign investors amount to 3% of the total capital investment. But here we are talking about the fact that the economy itself will generate,” said the head of the Board of the Institute of social and economic research Anatoly Maksyuta.

According to him, they also developed recommendations for the priority and investment attractive sectors of the Ukrainian economy. So, according to the Institute for real GDP growth at 6-7% annually, it is proposed to invest primarily in computer programming, manufacturing of electrical equipment, other vehicles and machines. In the second place manufacture of basic farmproduction, research and development, manufacture of computers and telekomunikacii.

*The data of the Institute of social and economic research, “the Policy of economic pragmatism”