Donbas development plan calls for USD 20 bln in investment

Ukraine’s cabinet approved at its weekly meeting on
Dec. 23 its economic development concept for the Ukrainian-controlled
territories of the Donetsk and Luhansk regions, which it projects will require
USD 20 bln in investment. “It’s impossible to solve these tasks at the expense
of the state budget, donors, or the latest loans. So the single solution – only
investors are capable of,” said Oleksiy Reznikov, minister for reintegration of
temporary occupied territories. The concept’s report identifies financing sources
as the state and local budgets, international partners, the banking sector and
attracted capital, including from Russia, as reported by the epravda.com.ua
news site.

The concept is based on stimulating investment in the
designated territories and clusters of priority, as well as introducing tax
stimuli that will direct a portion of enterprise profit towards reinvestment,
Reznikov said. It also involves creating tens of thousands of jobs, promoting
standards of international commercial arbitrage, providing insurance for
military-political risks and developing infrastructure. It will be submitted to
parliament for approval in the spring, the news report said.

Zenon Zawada: Such economic development concepts will remain a fantasy for as long
as the situation with the war in Donbas remains as it currently is, which is
low-level fighting accounting for a handful of injuries and casualties per
week. Only a few global mega-corporations would be capable of handling the
risks and expenses involved. Nonetheless, the Donbas development concept is a
worthwhile goal that generates some positive PR for the Zelensky
administration.