Free economic zone. Why does Donbass need it?

President Volodymyr Zelenskyy wants to consult voters during local elections if they support the creation of a free economic zone in Donbas.

A free economic zone has been created in the Donbass since 2014, and it still does not work. President Volodymyr Zelenskyy decided to update this issue again, taking it to a poll across Ukraine on October 25.

Correspondent.net discovered what a free economic zone could provide for Donbass.

What is this free zone?

The Office of the President explained that the initiative on a free economic zone (EPZ) mainly refers to territories controlled by Kiev, but it is possible that it will be extended to uncontrolled territories.

“The most loyal special approach to taxation, fundamentally comfortable conditions of state supervision of business activities can significantly help the Ukrainian Donbass. First free, then liberated,” the OP said.

According to the Office of the President, the purpose of the FEZ should be to “unite the Donbass”, restore its infrastructure and quickly reintegrate with the rest of Ukraine.

However, the president and his team have not yet explained what exactly the authorities will do if the majority of the citizens surveyed answer yes.

In principle, a free economic zone is a part of the territory of a country where a different customs or tax regime is in force.

These can be free production zones or scientific and technical, for example, to stimulate the production of goods and services for export. They can be ports, tourist or recreational areas, cross-border trade zones and free banking zones (offshore). Or like in Crimea, where a free zone operates and no national taxes and fees are paid.

Reaction of the population

According to a survey conducted by the Foundation for Democratic Initiatives together with the Center for Political Sociology from August 22 to 31, 2020, most citizens do not have a clear opinion about the Free Economic Zone for Donbass and are not well aware of the content of the decision itself:

29% of Ukrainians approve the introduction of a free economic zone in Donbas, 20% have a negative attitude towards this initiative, 51% have not heard anything about it (33%) or do not have a clear opinion (18% ).

Problematic question

Political analyst Volodymyr Fesenko points out that the issue of creating a free economic zone in Donbas is problematic.

“There is something to discuss. There may be arguments for and against. This is the Donbass issue, which many feared. But it is not in conflict, it is not annoying. Simply debatable. But it won’t be easy for people to answer it either. In the context of this issue, it is obvious that we are talking about a compromise, a peaceful way to resolve the conflict in Donbass, which can add votes in favor. Well, the very theme of a free economic zone in Donbass requires concreteness and content. The office of the President of Ukraine has already given its own interpretation of this issue. But parliamentarians will solve this problem by law. And we must, of course, remember that to implement this idea it is necessary to end hostilities in the conflict zone ”, says the expert.