Increasing GDP and New Jobs: Parliament Passed a Draft Law on Localization

by Olha Povaliaieva
Thursday, December 16, 2021
Increasing GDP and New Jobs: Parliament Passed a Draft Law on Localization

Starting next year, imported goods purchased at public or municipal expense must contain a Ukrainian component

A foreign supplier can ensure the availability of a local component by locating production in Ukraine, purchasing Ukrainian components, or ordering production operations in Ukraine.

The head of the Committee on economic development, Dmytro Natalukha added that the date of adoption of the bill on localization could be the day of economic independence of Ukraine.

"For 30 years, we should have been ashamed to put the national producer and Ukrainian workers in the first place. For 30 years, we have been convinced that industry was the day before yesterday, and our state destiny is agricultural and raw material exports. Today everything will change," he Natalukha.

In 2022, the localization rate will be at least 10% and will increase by another 5% every year. In 2028–2031, the degree of localization will reach 40%.

The law on localization will apply to 5 groups of mechanical engineering: urban passenger transport, railway transport, municipal vehicles, energy engineering, aerospace products (aircraft, satellites).

Deputy chairman of the Verkhovna Rada Committee on economic development Dmytro Kysylevsky emphasizes that the law on localization will bring Ukraine 4.2% of additional GDP growth in 3-5 years, save 200,000 jobs and create more than 62,000 new ones.

"62.5 thousand Ukrainians will receive an offer of a job with a decent salary at an industrial enterprise in their country and will not be forced to go abroad to earn money. The plant will pay taxes to the budget of the Ukrainian city. Ukraine will receive not only trolleybuses but also benefits for its economy and citizens," added the chairman of the Committee. 

We will add that localization is a common practice for machine builders worldwide. In particular, in the EU, USA, South Korea, Japan, Turkey, and China.

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