🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

Ukrainian businesses fear new mobilisation law could paralyse economy

Published 02/19/2024, 07:28 AM
Updated 02/19/2024, 07:30 AM
© Reuters. Volunteers who aspire to join the 3rd Separate Assault Brigade of the Ukrainian Armed Forces listen to an instructor during basic training, amid Russia's attack on Ukraine, at an undisclosed location in the Kyiv region, Ukraine January 9, 2024. REUTERS/Vi

By Olena Harmash

KYIV (Reuters) - Ukraine's leading business associations are calling for changes to be made to draft legislation that would overhaul the process for mobilising troops, saying the reforms could deal a blow to the already embattled economy.

Lawmakers are due to discuss the bill to tighten rules on mobilization in a second and final reading this month. Two years since Russia's full-scale invasion began, the issue is highly sensitive for the army, business community and wider public.

"Business asks the parliament not to paralyse the country's economy with the new mobilisation legislation," the European Business Association, which unites about 1,000 companies, said in a statement. "A balance is needed between the military front and the economy."

Businesses' concerns range from export sectors and those supplying the army wanting to avoid loss of staff to such issues as call-ups being made online and civilian vehicles being commandeered in a disorderly way.

The array of issues raised illustrates the tightrope the government must walk as it seeks to replenish battlefield manpower while protecting the fragile economy, which contracted by a third in 2022 before making a recovery last year.

Ukrainian authorities acted to tighten the rules on drafting civilians into the army late last year as the fighting in the war showed no sign of letting up and it was clear that a much smaller pool of volunteer fighters was available.

President Volodymyr Zelenskiy said in December he was considering a proposal to mobilize an additional half a million men into the army.

The government drew up legislation, but the initial draft prompted an outcry among analysts and lawmakers who said some of its proposals were unconstitutional.

The bill was amended and a new version that has won initial backing in parliament proposes cutting the draft age to 25 from 27, limiting draft deferrals and increasing fines and penalties for draft dodging.

COMPREHENSIVE REVISION URGED

The Ukrainian Business Council, which brings together more than 100 associations, said in a statement that some criticism had been heeded, but it urged the removal of other proposals that could hurt businesses already operating in "survival" mode.

It said it opposed things like allowing the military to seize privately owned vehicles for the war effort without proper oversight and the idea of call-up notices being sent to civilians online. Among other concerns, it said companies that supply the armed forces should also be able to prevent all staff from being enlisted.

The defence ministry did not reply to a request for comment.

David Arakhamia, head of the ruling faction in parliament, said work was underway to prepare the bill for the second reading, adding that the interests of the military command, businesses and citizens should be balanced.

"The task is not easy, there will be a lot of work," he said on the Telegram messaging app.

Business associations have asked for more clarity on how to ensure draft deferrals for critical staff, especially in highly skilled sectors.

Mariia Shevchuk, head of an IT Association, told Reuters that only about 1% of the 360,000 workforce in the industry, a key exporting sector, had deferrals from the draft. She said about 75% of the workforce were men.

© Reuters. Volunteers who aspire to join the 3rd Separate Assault Brigade of the Ukrainian Armed Forces listen to an instructor during basic training, amid Russia's attack on Ukraine, at an undisclosed location in the Kyiv region, Ukraine January 9, 2024. REUTERS/Viacheslav Ratynskyi/File Photo

In the new bill, the IT community was concerned about online call-ups that people might simply miss, short deadlines for updating personal information online, and plans to cancel draft deferrals for those studying for second degrees.

"We strongly urge the authorities for a dialogue with business so that we can be heard. We could grow, we could pay more taxes, we could provide for the army because there are issues with donor support in general."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.