A positive attitude is important for those doing business in Ukraine, not least because of the challenges and crises sometimes faced. Now is no exception. And the current information agenda is pushing investors to react and consider different scenarios for how to manage their business and operations going forward.
Is there a sense of panic? Definitely not. My observations are supported by the results of the European Business Association’s latest survey, which asked CEOs to share their views on the current security situation and possible actions they might take if the situation worsened.
Business people are still optimistic:
Almost half (45%) plan to stay in Ukraine and continue working even in the event of a military invasion. A minority (17%) are considering relocating to Western Ukraine. This can only be a good sign, since business confidence supports stability and certainty.
Forewarned is forearmed. Whilst we still cannot reject hypothetical scenarios that pose geopolitical threats on Ukraine’s eastern borders, it is better to be prepared. Two thirds (67%) of CEOs share this sentiment and believe Ukraine and the international community should stay alert.
In the worst-case scenario, 10% of surveyed companies would consider leaving the country and 7% may close their business operations altogether. When discussing “plan B” for such a scenario, 40% of EBA member companies report that they already have a contingency plan, while another 40% are planning to put one in place.
Contingency plans are mainly focused on three priorities: People, Assets and Business Continuation.
PEOPLE: Most companies put safety for the employees and families as the number one priority in case of an escalation. Specifically, relocation, evacuation, emergency communication and psychological support are important.
Some 58% of companies plan to retain their team even in the event of aggression, while 14% expect to continue to hire and develop new people. However, another 14% say they will lay off some employees or provide unpaid leave, while 4% are actively considering reducing salaries.
ASSETS: Companies plan to secure their property, documents, data, and financial assets. To ensure this, they may resort to physical protection of property and equipment, full-scale relocation to other regions, improved information security, withdrawal of funds and insurance.
BUSINESS CONTINUATION: Having dealt with two previous priorities, businesses will focus on ensuring basic functionality and operations, supply chain continuity, etc.
In the event of an emergency, most businesses will require stable telecommunication and banking infrastructure, internet services and ground-based logistics. Also important are clear and effective communications and information from country leaders, as well as the smooth and coordinated work of state agencies and services.
In 2021, businesses had predicted quite a successful year. Companies expected increased revenues, planned to hire and train people, and scheduled large-scale investment projects. There is still every chance of a successful 2022 should there be no further ratcheting up of geopolitical tensions.
Businesses would prefer politicians to find a diplomatic pathway to resolving current hurdles. The eyes of the whole world are now on Ukraine, making it important to keep a cool head and continue operations whilst staying alert.
Support from the international community and attention from Western media is especially helpful in highlighting Ukraine’s plight at the hands of its bullying neighbor.
As a country, Ukraine hopes that the on-going crisis will be resolved peacefully and that Plan B or even Plan C will not be needed. If diplomacy fails, business sentiment could turn from cautiously optimistic to radically pessimistic. And that will raise all sorts of new questions for the economy of Ukraine.
Anna Derevyanko is Executive Director of the European Business Association (EBA). Anna graduated from the Kyiv National Economic University with a degree in International Economics and Law.
Op-ed disclaimer: The Kyiv Post is not responsible or liable for any content in this article, which expresses the personal viewpoint of the author only.
