Ukrainian businesses fear new mobilisation law could paralyse economy

By Thomson Reuters Feb 19, 2024 | 6:28 AM

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.


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.

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.”

(Reporting by Olena Harmash; Editing by Tom Balmforth and Hugh Lawson)