Economic reservation during the war will support the army and business: Oleksiy Omelianenko on the new legislative initiative

Economic reservation is a special status for workers and businesses that perform important tasks for the country's economy during wartime. This status allows such workers to be exempt from military service so they can continue to work in their jobs and keep important industries running. Instead, employers will pay contributions to the state budget for each employee who was "booked" under the relevant mechanism.

Reservation of employees of enterprises of strategically important industries in Ukraine during the war has several important aspects and potential advantages for the state and society. This is stated by businessman Oleksiy Omelyanenko.

According to him, one of the key points of business reservation is the retention of employees who are indispensable for the functioning of critical sectors of the economy, such as energy, health care, transport, production of strategic goods and public utilities. The existing number of officially reserved people (which is already more than 900,000 people, according to the Ministry of Defense) is obviously not enough for the functioning of the economy.

"According to the estimates of the state leadership, for the successful conduct of hostilities during a full-scale war with Russia, it is necessary to mobilize another 450-500 thousand people to the Defense Forces of Ukraine. According to the estimates of the Commander-in-Chief of the Armed Forces of Ukraine Sirskyi, this figure may be lower. If we give the possibility of economic reservation to at least 10 percent of the total number of conscripts (which, according to the Ministry of Defense, as of July 2024 – 4,690,496 conscripts who have updated their military registration data), which is obviously not even close meets Ukraine's needs for workers even today, not to mention the colossal increase in the need for personnel to restore the country, but even this will provide tens of billions of hryvnias of additional revenues to the budget, which in 2024 will lack up to 20 billion dollars even in the case of receiving full international financing. Economic booking of business can become one of the sources of additional revenues to the budget and partial repayment of this deficit", - explains businessman Oleksiy Omelyanenko.

The businessman emphasizes that keeping key specialists in critical industries helps to avoid economic collapse. The uninterrupted operation of enterprises contributes to the preservation of jobs, the reduction of unemployment and the maintenance of economic activity.

"Many enterprises, especially in heavy industry and engineering, work for the defense industry and produce the necessary military equipment and materials," Omelianenko notes.

Economic reservation of such enterprises ensures that they will be able to continue their activities, will continue to pay taxes and thus fill the budget and support the military efforts of the state.

The businessman emphasizes that preserving jobs and economic activity contributes to social stability. People who have stable jobs and incomes are less prone to social unrest and protests, which is important for maintaining internal security in times of war. If there was a mechanism of economic reservation, there would be fewer episodes when representatives of the TCC forcefully and coercively detain men of draft age, and conscripts working in strategically important industries would not be afraid to go out, cross the borders of cities and regions.

For many businesses, the loss of skilled workers through mobilization can mean significant losses in productivity and product quality. Booking helps to avoid such losses and preserve not only the competitiveness of business, but also will contribute to the development of Ukraine in international markets, which is important in the context of our country's accession to the EU.

Deputies and the government of Ukraine are currently considering several options and proposals regarding the economic reservation of workers from mobilization.

"The state must create and necessarily implement a mechanism for economic reservation of business, because this will make it possible to fill the budget, which is experiencing a deficit due to military operations. After all, war is not only the front line. If business representatives have the opportunity to work, support the economy and the army, why not give them such an opportunity in the form of an economic reservation mechanism," Oleksiy Omelyanenko notes.

According to him, private enterprises are also interested in economic armor, which provide a significant contribution to the country's economy through the payment of taxes, the creation of jobs and the production of goods and services. If they are mobilized, it can negatively affect economic stability, especially in times of war. And in the case of the introduction of the mechanism of economic reservation of business, entrepreneurs will have the opportunity to pay tens of thousands of hryvnias for their employees or for themselves every year (currently there are three projects of the model of economic reservation: from the amount of the monthly income of the employee, the amount of the military levy for each booked and a mixed system ), which will be a significant contribution to the war-weary economy of Ukraine. According to preliminary estimates, this amount of additional revenues to the budget may reach 40 (or even more) billion hryvnias, which will be a significant economic support for the state.

The Economic Reservation Act is an important tool for ensuring the stability and functioning of the state during wartime. It allows you to support the economy, provide critical industries and contribute to the overall defense capability of the country.

Currently, Ukraine needs additional funds, because the budget deficit in 2024 is 20.7% of GDP. International aid remains an important source of its coverage, and the implementation of the economic reservation mechanism for business could become an additional source of repayment of this deficit. It is not only about the direct figure of additional income due to contributions for reserved people, but also about the preservation of labor productivity due to the presence of qualified workers, which additionally creates GDP.

"According to influential publications, about 650,000 men of draft age could leave Ukraine since the beginning of the full-scale war.

Most of them crossed the border illegally. Currently, Ukraine has various illegal mechanisms to avoid mobilization. Some of the so-called evaders are ready to pay transporters and flee the country through mountains or rivers, risking their health and lives. If such "operations" are successful, the refugees live and work in other countries and fill their budgets, and could replenish the state treasury of Ukraine. Others bribe doctors to get a so-called white card. There are also those who pay from 5 to 10 thousand dollars for the opportunity to get a job at a strategic enterprise that has the option of booking employees. And in general, the market of illegal reservations is estimated at 700 million to 2 billion US dollars per year. Under the condition of the existence of economic reservation, a huge number of people could, being officially employed at enterprises to which such an option will be available, bring benefits and revenues to the budget both through the payment of contributions by businesses and by spending on the territory of Ukraine the funds that they are forced to give for illegal reservation services," adds Oleksiy Omelyanenko.

In addition, the introduction of economic reservation can become an additional incentive for conscripts to develop professionally in order to get a job in companies that will use the option of economic reservation in the future. The state should provide business with a mechanism for economic protection of business, because not only the development of the economy and financial stability depend on it, but also the opportunity to raise the salaries of the military, which can additionally encourage Ukrainians to voluntarily join the ranks of the Defense Forces.