Editor’s Note: The following is an English-language translation of Horizon Capital CEO Lenna Koszarny’s advice for President-elect Volodymyr Zelenskiy, published in Ukrainian by liga.ua, a news website that solicited opinions from business and opinion leaders. Separately, the Kyiv Post’s recurring feature, Ukrainian Voices From Abroad, solicited advice from Ukrainians and those with Ukrainian ancestry who are living abroad. Those responses can be found online.
Dear President-elect Volodymyr Zelenskiy,
It is an honor for me to share my perspective with the newly-elected President of Ukraine, the country of my ancestors and my home for over 25 years, since 1993. My perspective comes from a deep knowledge of what matters to foreign investors both as chair of the board of directors of the American Chamber of Commerce in Ukraine, uniting over 600 leading companies in the country, as well as founding artner and CEO of Horizon Capital — whose funds managed have invested around $700 million in Ukraine and the near region and have attracted capital for Ukrainian companies from blue-chip investors with over $350 billion in capital.
At the same time, my views are also defined by the over 140 companies that we have worked with over the past 25 years that employ over 46,000 people and are led by truly visionary Ukrainian founders. We believe these companies are a source of pride for Ukraine — successful, progressive companies that are transforming the sectors in which they operate in Ukraine and in many cases, are true global champions abroad. These business-champions include Rozetka-EVO, Genesis, Ajax, Intellias, Jooble, Dobrobut, Yarych, Datagroup, Biopharma, Kerameya and many more.
My perspective also comes from my birth country, Canada, the #1 country in the world for quality of life where Ukrainians are an integral part of the DNA that have made Canada what it is today. Few in Ukraine know that Ukrainians are a founding people of Canada, contributing to Canada for over 125 years of the 150 years that the country has existed.
This clearly shows that Ukrainians have what it takes to build a successful country and if we remove the blocks and unleash the talents, creativity, hard work and determination of Ukrainians, we will all celebrate in their success in the years to come.
Many smart people have already written their advice to Ukraine’s president-elect based on LIGA’s request so I will try not to repeat and focus on being practical and pragmatic.
The people of Ukraine elected you in a landslide with over 73% of the vote. The expectations are enormous. You do not have the luxury of time, people are impatient and expect near-term results. Just as we go into a new deal and new partnership with an agreed-upon 100 day plan, I would highly recommend that you do the same. This means maximizing the quick wins that are within your sphere of control, while also producing near-term results that require coordination with the legislative and executive branches of government. The issues that Ukraine faces are very complex and worthy of much more thought than one article may provide, thus I have made three main recommendations in each category using STOP-START-CONTINUE.
STOP what is hurting Ukraine
- Continued operation of any “pocket courts” and no impunity for judges delivering decisions that are clearly against the interests of the state and transparent business. Real and effective judicial reform should be the highest priority. Rule of law, a fair court system, justice and transparency are a must have for Ukraine to unlock significant investment, whether foreign or domestic.
- Harassment of transparent business by any government agency. Business creates jobs not government, and entrepreneurs will take their businesses to countries that are welcoming to them. Life is too short and capital is easy to divert elsewhere if roadblocks keep arising.
Any attempts to “change the rules” for the IT industry. This is an industry powered by the new generation of Ukraine that grew from $110 million in 2003 to over $4.5 billion today. - Governments globally spend billions to support innovation in their countries. Ukraine spends almost nothing yet is naturally abundant in IT talent. These young Ukrainians are our future in a rapidly evolving technologically-advanced world. Do not mess with a winning formula by introducing higher taxation, more bureaucracy — they are mobile and can take their creativity with them in as fast as it takes to buy a plane ticket.
A woman checks her ballot with a magnifying glass at a polling station in Kyiv as she is about to vote in the presidential election on March 31, 2019. (Volodymyr Petrov)
START game-changing improvements
- A fully-operational anti-corruption court prior to the parliamentary elections. High-ranking government officials should serve their country not their personal or business interests and there should be serious consequences for those who engage in corruption that will serve as a major deterrent for others.
- Electoral reform. It is high time to open party lists and allow Ukrainians to scrutinize who they are electing to the highest legislative body in their country rather than the bios of only five people and other important changes.
- Pilot project on land reform. Take baby steps. Start small. Do a pilot project with sales of state-owned land. The headlines will say “Ukraine finally has lifted a moratorium on land sales that has been in place for over 18 years!”. It takes courage to start this process but the long-term benefits to Ukraine and its economy are enormous.
CONTINUE successful achievements
- Cooperating with the International Monetary Fund and Ukraine’s bilateral partners. This is a “must-have” for continued macroeconomic stability, for capital markets to remain open for Ukraine and for increased foreign direct investment inflows.
- Maintaining an independent National Bank of Ukraine free of political influence. Central Banking Journal awarded the NBU for the first time in its history the prestigious international Transparency Award. Investors will react very negatively and very swiftly to any attempts to politically influence the country’s central bank.
- Build on the existing institutions and business/civic-society backed initiatives that have produced excellent results. UkraineInvest, National Investment Council, the Business Ombudsman, Export Promotion Office, brand UkraineNOW, National Reform Council with the participation of top business associations, cooperation on foreign policy with the Ukrainian World Congress and top diaspora organizations. These are institutions and initiatives that are producing results, are trusted by business, investors and/or civic society and should be built upon not discarded.
Mr. president-elect, Ukraine was a $180 billion nominal GDP economy prior to 2008, dropping to $117 billion after the 2008 financial crisis and freefalling by 50% to $91 billion in 2015 after the economic crisis precipitated by the annexation of Crimea and occupation of the Donbas region. Through blood, sweat and tears, the economy has risen to over $130 billion nominal GDP by year-end 2018 and still has a long way to go before bringing the economic prosperity to Ukraine that its citizens dream of. Ukraine is on the right path largely thanks to:
- its brave, determined and hard-working citizens;
- the support of the IMF and Ukraine’s bilateral partners in replenishing the country’s reserves to over $20 billion;
- the hard currency generated by fast-growing export champions leveraging access to the European Union and other markets given the game-changing Association Agreement with the EU;
- the remittances sent by Ukrainian workers and diaspora that have driven domestic consumption within Ukraine and much more.
Ukraine must not step back.
Ukraine must continue the course that has been set of Euro-Atlantic integration and advance its reform process at an even more rapid pace to achieve the economic prosperity that Ukrainians dream of.
I sincerely wish you strength during the challenging times ahead that will surely come, the wisdom to surround yourself with a team of professionals whose motivation is first and foremost to serve their nation and the vision and principled decision-making necessary to lead Ukraine into a brighter future.
Slava Ukraini!
