IT OUTSOURCING PLAYBOOK

Political situation

Late 2013 – Early 2014. At the end of November 2013 mass protests provoked by the refusal of the Ukrainian government to sign an association agreement with the European Union began in Ukraine. The peak of the confrontation came within the period February 18 – 21, 2014. On February 21, the President of Ukraine, Viktor Yanukovych, signed the opposition agreement on resolving the crisis. The same day he left Kyiv.

Spring 2014. On February 23, 20000th mass meeting in support of Russia was held in Sevastopol. After that, 97% of people in Crimea voted in a referendum for joining Russia.

Ukraine occupied territories

By April, armed opponents of the new government in Kyiv occupied administrative buildings, including the offices of the police and security services in Donetsk, Luhansk and several smaller towns, and took control of a significant part of the Donbass region.

On April 15, the government announced the “anti-terrorist operation” to have started. At this stage, the situation quickly escalated into an armed conflict between government forces and Russian separatist armed groups.

Fights for Donetsk airport began on May 26, 2014. This is one of the most heroic war stories. Ukrainian armed confrontation between security forces and terrorist armed groups to establish control over the airport Donetsk International Airport, being of strategic significance. The defense had been lasting 242 days. The old and the new airport terminal were destroyed.

By April, armed opponents of the new government in Kyiv occupied administrative buildings, including the offices of the police and security services in Donetsk, Luhansk and several smaller towns, and took control of a significant part of the Donbass region.

On April 15, the government announced the “anti-terrorist operation” to have started. At this stage, the situation quickly escalated into an armed conflict between government forces and Russian separatist armed groups.

Fights for Donetsk airport began on May 26, 2014. This is one of the most heroic war stories. Ukrainian armed confrontation between security forces and terrorist armed groups to establish control over the airport Donetsk International Airport, being of strategic significance. The defense had been lasting 242 days. The old and the new airport terminal were destroyed.

Summer 2014. On May 25 Petro Poroshenko is elected the President of Ukraine. In July 2014 Amnesty International published a report, which documented the abduction and torture committed by the armed groups of Russian separatists in Ukraine. Actually, AI was the first international human rights organization that has provided evidence of involvement in the conflict and recognized the international conflict.

Ukrainian forces were steadily reducing the occupied territories until Russia increased its military intervention in Ukraine. On July 17 Russian soldiers shot down Malaysia Airlines Flight MH17 in the eastern Ukraine, with the loss of 298 lives. Another bloody episode of Ukrainian conflict is fighting for Ilovaysk.

Autumn 2014. On September 5, Ukraine, Russia and the Organization for Security and Cooperation in Europe signed a peace agreement in Minsk, Belarus. After the de facto government Donetsk and Luhansk held “elections” on November 2, Kyiv withdrew its offer of limited autonomy for the region.

Winter 2014. Active hostilities resumed in mid-January after the bus attack in Volnovakha. On February 12, in Minsk, the “the Norman Four” negotiations agreed to a new peace agreement. Participants appointed a contact group comprising of representatives of the OSCE, Ukraine, Russia and leaders of the self-proclaimed “Donetsk People’s Republic” and “FSC”.

IT outsourcing industry impact

Political situations IT industry

As for positive trends:

Political situations pozitiv

Current state and risks. Today, there are no active steps in the conflict zone, the breather has been observed since the beginning of March 2015. Russia is becoming weaker due to the sanctions and decreasing oil prices. Because of the very close attention paid from all of the world institutions and leaders to the conflict, the chances for resuming the active steps are very low.

Moreover, it is very unlikely that Ukraine will return the occupied territories easily, so probably it is going to be another frozen conflict with the armed troops from both sides at the current front-line.

By this time, the country’s life has stabilized. People and companies have been getting accustomed to living in the state of constant threats from Russia.

There is also 100% probability that the aggressor – Russia – will continue its impact through media, business, and political tricks to prevent Ukraine from quick resuming.

As to possible risks, the military conflict is one of the most threatening issues to invest in Ukraine’s economy (see the table below):

Political situations advantage

Advantages and opportunities of the association with the EU

Political situations association

IT outsourcing industry trends. The fourth quarter of 2014 revealed the picture with the stabilized situation and growth with small and mid-level clients, while big ones continued shrinking.

In the first quarter of 2015 the industry has started to grow again.

Today, even big companies are returning, as people learned how to work alongside the conflict, yet being in progress, as far as the situation in the country has stabilized. This provides the IT sector in Ukraine with opportunity to renew its development.