Ukrainian President Volodymyr Zelensky generally gave a good pep talk at the World Economic Forum in Davos, Switzerland on Jan. 22 about why the nation is an attractive destination for investors.
But Zelensky’s speechwriters must have thought it would be clever to include the strange concept of an “investment nanny” to look after big investors of $100 million or more yearly. Zelensky said that such investors would get special status — a separate contract with the state to ensure that they face no problems. “A manager speaking five languages and available 24/7 will answer any question. You will be in direct touch with the manager and have no problem whatsoever,” Zelensky told the elite forum.
While it made for a good soundbite, this is the wrong approach to attracting sorely needed investment. Ukraine shouldn’t create special privileges for a select class of investors — it already has, they are called oligarchs. That ruling class, plus others with insider access, rarely has any problems. Besides, a “nanny” won’t do anything about Ukraine’s woeful state of law enforcement.
What’s needed is the rule of law and fair rules that apply to all investors, big and small. If Zelensky wants to attract investors to investment-starved Ukraine, he can start by giving the green light to the prosecution for bank fraud of billionaire oligarch Ihor Kolomoisky. The evidence that the former owner of PrivatBank looted nearly $6 billion before bankruptcy it is clear. The political will, and perhaps the capability to prosecute, is lacking. After the public and other oligarchs see there are no longer any untouchables in Ukraine, society will respond accordingly.
Zelensky can further dismantle the Security Service of Ukraine, the Soviet KGB successor of 40,000 or more agents who believe they can interfere in all aspects of political and economic life in the nation. Further, Zelensky can create a true Anti-Monopoly Committee in Ukraine that dismantles oligarch privileges in various sectors, including electricity, fertilizers, natural gas distribution, and media.
There’s a long list of unfinished business and, finally, Ukraine has the macroeconomic stability and political unity to tackle these problems. But cosmetic solutions and clever soundbites won’t help.
