Investor’s Focus on the Ukrainian Market

On May 7th I attended an event sponsored by the U.S. – Ukraine Business Council here in Washington D.C. that featured an impressive gathering of legal professionals discussing the investment climate in Ukraine.  Each presenter offered a slightly different take on the current situation in Ukraine, but they all seemed to agree on several key issues:

1. International investors continue to flood Ukraine with capital despite the risks.  The continued high pace of investment is due to extremely high returns on investment.
2. Substantial reforms need to be implemented to improve the independence of the legal system and to the protect property rights of investors/owners.
3. Ukraine’s entry into the WTO should pressure the government to revisit some current legislation on investment.
4. The private sector and NGOs have provided the Ukrainian government with detailed analyses of reforms needed to improve the overall business climate.

I did notice a definite lack of consensus among the panelists on just how to enact these reforms and improve the business climate.  Providing Ukraine with detailed analysis and recommendations is great, but without government action everything remains “business as usual”.  I came away from the meeting feeling that if the private sector does not gather itself together soon and advocate for real change it will remain hopelessly divided in a semi-transparent and corrupt system.  Ukraine’s private sector is now sufficiently sophisticated to play on the world stage, but they first need to get their own house in order. 

CIPE’s partner in Ukraine, the Ukrainian Center for International Integration, has produced a series of short videos on the subjects of Ukrainian small and medium sized businesses and their place in the world market.  Ukrainian businesses and international investors need to unite to advocate on behalf of reform that will be beneficial for business.  Corrupt officials and semi-transparent legal structures do not provide jobs, income and infrastructure for the people of Ukraine; it is time for the private sector to make its case.