The war unleashed by the Russian Federation against Ukraine has created a new reality, which effect on the economy is extremely difficult for us to assess now. However, the main determining factors are already clear.
However, the main determining factors are already clear. The key ones are the following:
- A colossal outflow of the able-bodied population. According to some estimates, it will reach 7-8 million people. These are mostly women, children and persons of retirement age. I don't think anyone has any illusions that all these people will return to Ukraine after the end of hostilities. It would be nice if half of them returned. An additional 1-2 million men of working age will permanently leave for family reunification after the ban on traveling abroad is lifted. The result is minus 3-4 million able-bodied citizens who have become forced emigrants. This is a minus to total consumption, which means a wave of bankruptcies of small and medium-sized businesses that served them, respectively, plus bankrupt ones to potential migration, since the capacity of the consumer market in Ukraine will decrease,
- Destruction of infrastructure. One can argue for a long time about estimates of the scale of the disaster, but they are definitely in the billions of dollars. The question is not only in the sources of funding, but in the timing of recovery, even with uninterrupted funding.
- Destruction of industrial and residential funds. A huge number of people was left without a roof over their heads or in emergency buildings that were not subject to operation. Again, the question is not so much in numbers, but also in how soon they will be provided with housing and, an important question, where exactly.
- A very small margin of safety for most households - according to Research & Branding Group  data of 2021 - the average family has enough savings to live approximately for 2.7 months. Together with the ban on the departure of those liable for military service, in 3 months we will have a mass of unemployed men, not needed by the army, without a livelihood and unable to leave the country. I would not count on the fact that during this period someone will provide them with at least temporary work, mainly in Western Ukraine.
- Massive bankruptcies (explicit or hidden) of business entities of all shapes and sizes due to a combination of reasons (destruction of production facilities, death of employees, etc.), and as a result - an additional wave of unemployment.
To the already existing problems, an openly corrupt deep state is added, which does not disdain active earnings even at a time when civilians of their country are dying in besieged cities under shelling. At this time, as practice has shown, customs officers do not tremble to cut 3-7% of the amount from citizens trying to take out of the country excessively acquired capital or skip trucks with delicacies under the guise of humanitarian aid. The actions of the tax authorities and other inspectors at this time are no better. So this is the bottom. This is the fifth column of orcs who have lost all their limits. Without destroying them as a class, no development is possible either in peacetime or in wartime. It just needs to be acknowledged. If in peacetime the economy could still pull on these parasites, now it is a matter of the survival of the state itself.
You need to understand that it is crucial to rebuild the economy on a war footing and adapt it to conditions when at any moment production capacities, logistics chains and the most valuable thing - human resources - can be destroyed by our crazy neighbor - this is a task for which our great theoreticians like Getmantsev are not ready absolutely. At the same time, appeals from them - we need to work - do not even cause surprise - but simply doubts about their adequacy to what is happening. Who will invest even a penny in the launch of production (trade, services) or relocation - when their shops, workshops, factories can be destroyed along with them and their employees in one second. Not only are the owners of businesses operating in such a difficult time risking everything, including their lives and the lives of their employees, but they are also forced to fight the corruption octopus, embracing all their activities.
Without the creation of simple mechanisms for the functioning of the economy, we are simply doomed. With such a system, no one will give us a penny for any restoration. Because they will be plundered in the most shameless way. We are obliged to organize the work of the tax, customs, and courts. This is the minimum that will give at least elementary guarantees for the functioning of a business that, understanding and accepting all the risks, will decide to continue working in Ukraine.
There are no illusions that it will not work to solve all this quickly and radically. As practice has shown - both tax and customs - these are such systems, getting into which a person either becomes a corrupt part of them or is immediately spit out.
Therefore: conclude international treaties and transfer the functions of the Ukrainian customs to the customs of neighboring states. We will not trade with the Russian Federation or the Republic of Belarus for a long time, and even if we do, let the Poles or Hungarians arrange cargo there. Not our customs officers, but they, mind you, were forced to declare the capital imported into their country. Although I think they were also offered even 2%. But for some reason ours were taken, but they were not. We cannot ensure the honesty of our own - we will buy this rare product from others. Duties and VAT on imports, of course, both went and will go to the budget of Ukraine, but smuggling and fraud with imports will be many times less, and the speed of registration will be higher. A little different, but a similar experience exists at the combined customs offices of Canada and the United States.
We need to forbid Tax service to provide all checks, literally all. That is - literally cancel all the certificates of employees of the tax service. All employees can be seen at their respective taxpayer service offices if you need them. If a person with an ID appears in front of you, call the police immediately. This is a scammer. No checks on the applications of citizens - no labor protection, no labor relations. Now a person who takes care of himself and does not ask for help from the state is a value. If he also provides work for others, it is worth its weight in gold.
The hardest part is the courts. Here, the only way that is seen - by analogy with customs - is to take this function out of the country in general. Fortunately, with the quarantine experience and the development of technology, court hearings in the form of videoconferencing are no longer a novelty, but an everyday experience. Introduce the course of Ukrainian legislation, for example, in British (American, Canadian) universities, change our legislation regarding the possibility of appointing foreign citizens to positions of judges and let them administer justice. Well, if our system is not capable of doing it efficiently, let another system do it for the money of Ukrainian taxpayers.
The number one task for economic policy today is to urgently provide employment for the able-bodied population that remains in Ukraine. It is unlikely that state-owned enterprises will be able to create so many jobs in a short time. Therefore, this task will fall on the shoulders of private business, which is already tired of work not because of, but in spite of. Therefore, the primary task is to create elementary conditions that give at least some chance to convince business that if the state cannot provide it with tomorrow or even today, then at least it takes steps to ensure that it does not interfere.