181010 brovchenkoGreeting words of Yurii Brovchenko, Deputy Minister of Economic Development and Trade of Ukraine, Head of the Interinstitutional Commission on Defense Industry for brand new edition of “UKRAINIAN TECHNOLOGY: UKRAINIAN PRIVATE-SECTOR DEFENSE INDUSTRIES” DIRECTORY 2018-2019.


Now we are on the third year of implementing the defense industry reform initiated by the President of Ukraine. Assessing its effectiveness, we should focus on the basic principles - consistency and performance. The analysis of these components makes it possible to declare that we chose the right direction for the Ukrainian defense industry.


What was the defense industry of Ukraine like when the military actions on the East began? It consisted of the number of enterprises, which had production capacities residually focused on the production of weapons and military equipment for export. In addition, the level of dependence of the Ukrainian defense industry on the aggressor country exceeded 75%. It was almost the main obstacle to industry’s further development.


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The world practice and Ukraine’s previous experience proves the effectiveness of the systematic approach to reforms. External threats and internal factors did not allow to apply the top-down principle, that is to start with the development of plans and criteria for ten or fifteen years. Let’s think of an enterprise that faced an 80% fixed assets depreciation in 2014. It was tasked to increase production output by three times. Of course, it will not be able to fulfill the task since a system of resource support and control is not working.


That is why we came up with the reanimation plan . It was implemented with State Target Programs. The main goal of the Defense Industry Development Program and the restoration of the munition industry program was to stabilize the operations and create the preconditions for more substantial changes.


An assessment of the Ukrainian defense industry capabilities, both its state share and the private one, made it possible to clearly identify the strategic benchmarks for the long term. In the Defense Industry Development Strategy 2028, we already could see what changes are envisaged for each segment of defense production. The Strategy also accounts for national context and peculiarities of the international market.


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Consistency brings efficiency and thus the system works. Today we see linear solutions, coordinated at all levels; a well-established system of internal co-operation, and practical achievements. We celebrate the twenty-seventh anniversary of Independence of Ukraine with a capable army equipped with modern technologies; high indicators of implementation of development plans and procurement for defense purposes. Most importantly, the national defense industry went from a part of several countries conglomerate to the separate, integrated system.


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Not only the state worked on this result but also private sector enterprises. Years of reform have revealed many private enterprises that are ready to implement innovative solutions, free from restrictions and aimed at producing competitive products.


Many are aware of how the share of private enterprises in defense production grew and their ratio to state-owned enterprises as the only producers of some defense productions. The success of the import substitution program is also due to the participation of private companies all over Ukraine. The main achievements of defense production in recent years are the cooperation of the prominent SOEs with growing private businesses.


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Private companies demonstrated its self-organization abilities with the formation of professional industrial associations. Today these organizations are equal partners in the system of the national defense industry on par with the state authorities and SOEs.


Last year during the XIV International Specialized Exhibition "Arms and Security - 2017" a regular edition of the Directory "Ukrainian Private-Sector Defense Industries" was presented. It stimulated the development of a mutually beneficial partnership not only in Ukraine but also in other countries. Numerous producers and suppliers of components for weapons took part in Ukrainian Armed Forces’ public tenders, enhanced export potential of our country and got an opportunity to come forward on Ukrainian and international markets.


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I'm absolutely sure this year's edition will continue this way. The number of enterprises on the list has increased. That proves   the interest of private enterprises in defense production, the opportunities for their innovation development and the market need for new players.


I would like to add that the Ministry of Economic Development and Trade in accordance with the Defense Industry Development Strategy will continue to support the participation of the private sector in the implementation of defense projects, will stimulate the attraction of foreign investments and improve the system of public-private partnership within the framework of regulatory initiatives.





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