While pitched battles for a sovereign and independent Ukraine rage on, governments worldwide are engaged with Ukraine to discuss its future. One very important voice is often missing: that of the private sector.
Many outside of Ukraine are only passively familiar with the country’s business environment. It is often assumed that the situation is largely unchanged since the Soviet era and the nation is overrun with oligarchs and corruption. Perceptions are further fueled by Russian disinformation. Over CIPE’s three decades on the ground in Ukraine, we have observed and supported the private sector’s efforts to act with integrity and demand greater accountability.
As thoughts turn to reconstruction, CIPE and its Ukrainian partners propose the creation of a mechanism driven by the private sector to collect and provide recommendations.
The true picture of pre-war Ukraine, from brains to grains, is one of a private sector that was poised for strong growth, with new levels of foreign direct investment and a stable macroeconomic outlook. Key sectors were evolving and innovating rapidly. Ten tech unicorns were based there, with more on the horizon. The agricultural sector was attracting hundreds of millions of dollars in investment annually and in the process of upgrading and modernizing systems. Networks of associations, chambers, and think tanks were pushing for reforms that would transform the country and make it a more inclusive economy and reliable trading partner. When the war started, the attention of these organizations turned to humanitarian aid and supply chain management, with close collaboration from government and civil society.
As thoughts turn to reconstruction, CIPE and its Ukrainian partners propose the creation of a mechanism driven by the private sector to collect and provide recommendations that will help the government and investors better prioritize reconstruction decisions and projects.
In addition to providing practical feedback and expertise, this independent private sector platform would offer an additional check on official proposals and directives around rebuilding. The platform would also help ensure transparency and accountability in procurement and spending, reassuring international investors that the private sector is adequately represented in all phases of planning and that work can really be executed. If done right, good ideas from even the smallest of start-ups could reach global investors.
CIPE-supported studies show that the Ukrainian people and the government trust its business community now more than ever before.
Such dialogues could help planners more effectively prioritize infrastructure projects, by flagging real life challenges, as well as practical solutions and opportunities where the private sector might take a leadership role with government support. For example, it is estimated that demining efforts to remove tons of Russian ordinance embedded in Ukrainian land will take ten years, and farmers will not be able to plant wheat and other crops in their fields until this is done.
Without a quick return to planting, Ukraine’s large agriculture sector, particularly in the hard hit east and south of the country, will continue to suffer. Demining work itself is costly, dangerous, and may require agility in financing, as well as a great deal of expertise and a healthy appetite for risk that may invite private sector innovation and solutions. Ukrainians are not waiting, with the Kyiv School of Economics already issuing a clear call to action for private sector innovation to address the issue.
CIPE-supported studies show that the Ukrainian people and the government trust its business community now more than ever before. The proposed hub could serve as a further connection point for business-to-business, as well as business-to-government, collaboration and cooperation. As we have seen, a dynamic and engaged private sector will improve the livelihoods of all Ukrainian citizens.