Ukraine Seeks To Shrink Underground Economy, Takes On Illegal Gambling, Other Sectors

Women pass a Ukrainian National Lottery operator on Sept. 19 in Kyiv. The sign on the office reads: "Play here."

Ukraine is cracking down on illegal gambling and logging and fraudulent gas stations in a bid to reduce the size of the country’s shadow economy. Speaking at a meeting with the heads of the country’s 24 regions over the weekend, Prime Minister Oleksiy Honcharuk said the year 2020 “will be the year of the uncloaking of the Ukrainian economy.” He noted that in the last two weeks, police had shuttered 900 illicit gambling dens. He said about half of the gas stations police inspected -- 707 -- were not paying fuel taxes. A digital record of all cut timber is set to be placed in a centralized digital registry by February 1, Honcharuk said. The Economic Development and Trade Ministry estimates that 33 percent of Ukraine’s gross domestic product (GDP) is in the shadows. Some economists say the figure is higher and makes up about 40 percent of the economy. In monetary terms, Ukraine’s economic output last year equaled $155 billion, Kyiv-based investment bank Dragon Capital estimates.
Another illicit endeavor that should be strictly regulated is amber mining. This mostly tales place in Rivne oblast and results in the felling of trees and a severe degradation of the local ecology due to the large amounts of water necessary for amber mining. Odesa by far has the most illegal gambling establishments due to its corrupt (indicted) mayor, and its docks which welcome foreign navy sailors and tourist laden cruise ships. Gambling is currently illegal in Ukraine except for the national lottery games.

Related: Over 900 illegal gambling halls shut down as Ukraine prepares to legalize gambling