Even with significant support from Western countries and international organizations, Ukraine still needs private investments. However, attracting funds from businessmen is a more complex task than, for instance, organizing luxurious conferences. Transparent policies, effective reforms, innovative projects, and active promotion of Ukraine's advantages in the international market are needed. Successful investment attraction requires a wise strategy and determined steps to achieve success.
The world supports Ukraine and does not leave our country alone with the consequences of the war. Conferences, round tables, and official meetings are being held on all continents to discuss ways to support Ukraine and plans for its reconstruction.
At the end of June, London hosted a massive conference that brought together the most influential representatives from 61 countries around the world. Among the participants were not only heads of state and high-ranking officials, but also over 1000 prominent businessmen ready to discuss ways of cooperation and assistance to Ukraine in this challenging time.
The EU promised to allocate 50 billion euros over four years. The UK pledged 3 billion dollars for credit guarantees to businesses willing to invest in Ukraine. Assistance has also been pledged by the US, Canada, France, Germany, Switzerland, Latvia, and other countries. The World Bank and the European Investment Bank have announced their contributions. Overall, around 60 billion dollars in contributions for the benefit of Ukraine have been announced.
Previously, a similar event took place in Lugano, Switzerland, and more will follow. Do such events have an effect? Undoubtedly. Is this effect sufficient? Undoubtedly, no.
Russia has inflicted damages of 119 billion dollars on Ukraine's infrastructure, as reported by the Ministry of Economy of Ukraine in March this year. In total, post-war recovery will require no less than 411 billion dollars, according to a May report by the UN. And with each passing day, this estimate will only increase.
How many sumptuous conferences need to be held in European capitals to attract such funds? I fear that there won't be enough capitals. Moreover, our Government has grand ambitions. For the aforementioned conference in London, Ukrainian officials came with a reconstruction plan that drew criticism from experts and businessmen. I speak about this responsibly, as a shareholder of a company whose shares are traded on the main platform of the London Stock Exchange and are part of the FTSE index - the index of the largest companies in the UK. I regularly communicate with influential representatives of funds and private investors.
"It has no connection to reality," noted Alexander Kharchenko, Director of the Energy Research Center, for the media after reviewing the plans for energy recovery in Ukraine. And the Napoleon-esque plans of the Ministry of Economy of Ukraine to achieve a trillion dollar GDP by the end of 2030 became a widely used joke. Complete incompetence - an absolutely populist statement that might have an effect on the domestic audience but not on qualified investors. Ukraine already had a Prime Minister who rode a scooter around the Cabinet of Ministers and populistically promised a 40% GDP growth for Ukraine each year for the next 5 years, starting from 2019. And where is he, where is the scooter, and where is the growth? It's a pressing question for all Ukrainians.
What do foreign investors actually look at: beautiful government plans or the realities of Ukrainian entrepreneurs' lives? A rhetorical question. In the spring, Ukrainian law enforcement agencies conducted searches at entrepreneurs' premises nearly every week.
Searches at founders and partners of investment company Concorde Capital, at software developer ImproveIT Solutions, at technology company MacPaw, and many other stories. And I'm not even mentioning the clearly politically motivated pressure on companies, including public ones owned by myself or my family members. Even the business ombudsman, Roman Vashchuk, a former Canadian ambassador to Ukraine, had to speak out about the increasing pressure on businesses.
The conflict between law enforcement and Ukrainian businesses has reached a point where the President's Office has decided to hold weekly (!) roundtable discussions to "resolve problematic issues." Another example of trying to replace substance with form. Entrepreneurs haven't seen such "collaboration" between business and authorities since the presidency of Yanukovych.
Neither conferences nor roundtable discussions in the President's Office by themselves improve the Ukrainian business climate. The only path, though not an easy one, is honest courts, absence of corruption, efficient anti-monopoly bodies, and a tax system that's business-friendly. And then, both Ukrainian and foreign investors will have a good time in Ukraine.
Foreign funds and private investors primarily consider whether the local business environment in Ukraine is conducive to their operations and to the existing foreign investments. Only after that, they decide whether to enter the country or not. But when domestic businesses are being harassed by the Bureau of Economic Security, the State Bureau of Investigations, the Prosecutor's Office, the Security Service of Ukraine, and other law enforcement agencies, what is a foreigner supposed to think? Will they get another or better treatment?
In June 2023, the consulting company Advanter Group surveyed owners and CEOs of Ukrainian businesses. They surveyed over 700 companies. Among the main problems troubling businesses, the third place was occupied by "Unpredictable actions of the state that could worsen the business environment." Unfortunately, this is the most relevant title for the next conference on Ukraine's recovery.