Tag Archives: ukraine

Removing Barriers to Investment in Ukraine

panelists from Identifying and Removing Barriers to Investment in Ukraine

By Eric Hontz and Kathryn Walson

Three years after Ukraine’s Revolution of Dignity, a centralized, oligarchic power structure has once again taken hold. This has made it challenging to keep the business environment in Ukraine friendly to western investment, as the new power structure allows for increased influence from oligarchs and leads to increased corruption. Further, ongoing hostility with Russia and corruption act as a serious deterrent for western investors, which bring with them demands for higher standards in compliance, governance, and accountability from government institutions.

Because public funding alone cannot solve the country’s infrastructure problems, foreign investment into Ukrainian infrastructure is essential to the country’s ability to increase exports and gross domestic product. Despite this paradox in expectations and reality, an increase in investment in Ukraine has already begun, as Ukraine has consciously turned its efforts towards recruiting western businesses. CIPE and the U.S.-Ukraine Business Council co-hosted a panel discussion in June to discuss the investment climate in Ukraine, featuring Volodymr Omelyan, Minister of Infrastructure in Ukraine; former Ambassador John E. Herbst, current Director of the Dinu Patriciu Eurasia Center at the Atlantic Council; and Matt London, Deputy Managing Director at Amsted Rail Russia-CIS at Amsted Rail Inc.

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Francis Fukuyama: Ukraine Should Rebuild the State Management System and Eliminate Corruption

By Anastasia Baklan

Francis Fukuyama recently visited Kyiv and Lviv on behalf of a joint initiative between Stanford’s Center for Democracy Development and Rule of Law, the Ukrainian Catholic University’s School of Public Management and CIPE, to kick start the Leadership Academy for Development (LAD) to Ukraine. On February 2, 2017, as an addendum to the lessons, more than 250 representatives of the business community, officials from the state authorities and the Verkhovna Rada, and civil society institutions took part in a public forum on building democracy that delivers.

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Improving Corporate Governance in Ukraine’s State-Owned Enterprises

On May 1, 2016, the law, On Introduction of Amendments to Certain Legislative Acts of Ukraine Regarding Protection of Investors’ Rights (No. 289-VIII), came into effect. It introduced a number of new aspects to Ukrainian corporate law including the right to shareholder derivative actions, direct payment of dividends to shareholders, and –perhaps the most relevant to reducing corruption and privatizing state owned enterprises– the establishment of independent directors.

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Democracy that Delivers Podcast #50: Marc Schleifer on Democratic Trends in Europe, Eurasia, and South Asia

Podcast guest Marc Schleifer

CIPE Regional Director for Europe, Eurasia, and South Asia Marc Schleifer works on democracy projects in vastly different parts of the globe. On today’s episode of the Democracy that Delivers podcast he discusses the trends that are affecting the health and development of democracy in his areas of focus, including the attitudes and outlooks of the citizens in each region.

Schleifer describes his early interest in social issues and how his fascination with Russia led to eight years living in the country working in law and international development (and his brief stint as a rock musician). His recollections from this time, including the exciting and chaotic mood in pre-Putin Russia, contrast sharply with his assessment of Russia both today and in the near future. He also talks about the rise in populist sentiment in many parts of the world and challenges us to avoid knee-jerk reactions and look at the political and economic developments behind it.

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Private Sector in Ukraine Makes Strides Toward Curbing Corruption

ukraine-conference

When one thinks about Ukraine in the context of corruption, the picture typically does not look rosy. The headlines about corrupt oligarchs and continued graft easily come to mind – including recent revelations about the riches disclosed by top officials in their asset declarations. This wealth stands in stark contrast with the financial condition of most ordinary Ukrainians, causing public outcry. Not surprisingly, Ukraine was ranked 130th out of 167 in the latest Transparency International’s Corruption Perceptions Index.

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Ukraine’s Future Tied to Strengthening Public Governance

Francis Fukuyama giving a lecture about case study methodology at the Leadership Academy for Development in Ukraine

Francis Fukuyama giving a lecture about case study methodology at the Leadership Academy for Development in Ukraine.

Ukraine is a resource rich country, an entrepreneurial country, a country filled with talented individuals who work hard for their families, but why do so many Ukrainian people live in poverty? The answer, perhaps, is public governance, or more precisely, a lack thereof.

To be clear, allow us first to define the words “public governance,” as we understand them. Simply put, public governance is the relationship of power among the government, civil society, and the market. Given the strong skepticism concerning democracy in nations near Ukraine, without improvement in the standard of living of Ukrainians, the Ukrainian people may soon lose their excitement about their own bustling and fledgling democracy. In short, Ukraine’s democracy must begin to deliver tangible benefits to its citizens.

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Donbas Entrepreneurs Reopening and Expanding Businesses in Ukraine

donbas-2

By Anastasiya Baklan

The war in Ukraine has been especially difficult for small businesses in the conflict-affected regions, despite a ceasefire agreed to in February 2015. According to the data of the State Statistics Service of Ukraine, communities in Luhansk, Donetsk, Kharkiv, Dnipropetrovsk and Zaporizhia suffer from a severe economic crisis, which is especially stressful for small and medium business owners.

Analysis of business owners’ attitudes in the Donbas region shows that the stressful situation provokes a fear of investing in illiquid assets such as real estate and land. So entrepreneurs in the region are revising their business models, leasing assets where possible and limiting immobile capital investment.

With the goal of assisting SMEs affected most by the economic downturn, as well as those businesses displaced by the conflict, CIPE recently supported at-risk entrepreneurs in six towns (Berdyansk, Pershotravensk, Slavyansk, Lozova, Svatovo and Kreminna) through a business training and mentoring program for 119 people. The USAID-funded project was based on strategies that promote specific business sectors in each of the target communities, which business owners are now beginning to operationalize.

Given the dire economic situation in Donbas, CIPE was pleasantly surprised to encounter several social impact business models. For example, Oleksandr Gadenko from the village of Osypenko near Berdiansk, has a business concept that will extend the public water supply to the villagers who suffer from a complete lack of water.

The business would bring fresh running water to residents of 800 housing units, which currently have no access to water at all. The novel business financing model, involving a mixture of state investment, private funding, and donor support, will allow villagers to access running water while earning a modest rate of return for the business owner.

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