Ukraine’s Resilience Level: Economic, Political, and Security Developments

On 19 May 2021, the Ukrainian Think Tanks Liaison Office in Brussels in cooperation with the Martens Centre and with the support of the International Renaissance Foundation organised a public online webinar “Ukraine’s Resilience Level: Economic, Political, and Security Developments”.

Participants have discussed the latest political and economic developments in Ukraine as well as the pace of reforms and further assistance from the international community.

Olena Carbou, Co-Founder and Executive Director, Ukrainian Think Tanks Liaison Office in Brussels, opened the event and outlined the context of the discussion. The topic of Ukraine’s resilience has been chosen following long-lasting and recent events in and around the country, including political developments, socio-economic consequences of the COVID-19 pandemic, and the recent Russian military escalation against Ukraine.

Carbou: “We are glad to continue our cooperation to bring Ukraine at the spotlight of the attention of the EU audience.”

Veronika Movchan, Academic Director, Institute for Economic Research and Policy Consulting, noted that the resilience of Ukraine’s economy increased during the previous year. The Ukrainian real GDP dropped by only 4%. This is a result of reforms and diversification of energy supplies and foreign trade. On the one hand, Ukraine’s banking system, energy sphere, and foreign trade remained resilient to the shocks. The diversification of trade flows and growth in IT services exports allowed balancing in shock and contributed to the economy’s resilience. On the other hand, it is essential to prevent backtracking of reforms and achievements of the previous years. According to Ms Movchan, diversification, competition, flexibility, and readiness to innovate are important to ensure resilience and sustainability of changes.

Movchan: “Ukrainian economy resilience increased.”

Yuriy Yakymenko, President, Razumkov Centre, focused on political and security areas. He has noted that the situation around Ukraine is changing, and there are many factors that influence Ukraine’s resilience. The most important factors, which increase the resilience, are: strengthening Ukraine’s statehood, European and Euro-Atlantic integration, continuation of reforms, creating better living conditions and standards for citizens. According to Mr Yakymenko, holding the course on the EU and NATO integration by key political institutions is a favourable factor for resilience. The majority of Ukrainians also supports EU integration (62%) and joining NATO (54%). However, the authorities lack a strategic vision of further development of the state and society, incompletion of reforms, and internal problems are key factors of vulnerability in the political sphere.  It is noteworthy that the situation in the security sphere is better, especially in military security and defence capacities. Furthermore, more than 50% of citizens are ready to defend their country from an aggressor and security and defence institutions have a high level of public confidence.

Yakymenko: “In general, the situation is somewhere in between sufficient and vulnerable.”

Michael Gahler, MEP, EPP, Member of AFET Committee, noted that the framework of the EU possibilities to contribute to further strengthening of Ukraine’s resilience and development is the Association Agreement and DCFTA. He stressed that the quality of the best intentions might be lacking without a strategic vision. In contrast, the resilience will be strengthened by consistency and accountability of reforms. According to Mr Gahler, Ukraine still has too many people who would like to interfere in the ongoing legislation and reform processes, that’s why it is important to avoid the “privatisation” of public interests. Nevertheless, the decentralisation reform is successful, as people on the ground have the competence and necessary funds and can show that they are working well.

Gahler: “The country needs steadiness and accountability of reforms.”