Foreign investors should adhere to a "build back better, made in Ukraine" policy that prioritizes Ukrainian firms when sourcing supplies, recruiting primary contractors and allocating donated resources for the reconstruction of Ukraine, the Brussels-based International Politics and Society (IPS) magazine said in its latest edition.
IPS, published by the government-funded German think tank Friedrich Ebert Foundation, also called for policies that encourage foreign companies to form joint ventures with Ukrainian companies and pursue localization.
"As many goods as possible should be procured from Ukrainian producers," the magazine wrote. "Local contracting and localisation will generate domestic demand, provide jobs and attract some returnees.
"It will generate higher and more sustainable growth because money will stay in the economy rather than leaving the country through foreign contractors or, worse, foreign contractors using foreign labour and imported building materials."
The article points out that Ukrainian companies in most sectors have lost market share to foreign competitors due to constraints of the war. Indeed, the market share of imported building materials in Ukraine has grown from 14% in 2021 to 23% in 2023.
"Ukrainian companies should be in the driver’s seat. Therefore, the revival of industry should be the primary task of the Ukrainian state, along the lines of ‘building back better, made in Ukraine’," IPS wrote. "If the state provides regular orders to local companies (in both the defence and the civilian sectors) and supports them with subsidy programmes, it will secure future domestic growth, create jobs and help the private sector to cope with the shocks of war."
The magazine also called for "as much funding as possible" for small and medium-sized enterprises and said Ukrainian companies are particularly competitive in the defence, food, garments and medical sectors as well as residential housing and infrastructure.
