Ukraine stands a chance to achieve much more than a pivotal westward shift away from Moscow’s grip by signing historic association and free trade agreements with the EU at a Vilnius-based summit in late November.
In setting course for EU convergence, it could rise up on
the global investment radar, portraying itself as following Poland’s economic
success, and in turn luring in much needed FDI. At least, that’s the theory.
The EU has set conditions before it will sign the landmark
agreement, saying Kyiv must undertake reforms that include improving its
democracy and freeing jailed opposition leader Yulia Tymoshenko. But even if it
does sign up, Ukraine faces massive domestic homework if free trade with the EU
is to provide big benefits, reversing a 53 per cent year-on-year plunge in FDI
to $1.3bn in the first half of 2013.
And local officials must improve the nation’s notoriously
horrible business climate.
That was the blunt message delivered by EU trade
commissioner Karel De Gucht on Wednesday during a visit to Kiev, where he held
talks with President Viktor Yanukovich and other officials.
“What I heard from
businesses… [is that] the business climate is worsening, becoming more
unpredictable,” he told journalists.
