While most surveys of business leaders show that corruption and lack of rule of law are the reasons why investors shy away from Ukraine, others have a simpler explanation: It’s the fault of the critical independent media or overly self-critical Ukrainians.
At least that was the message some speakers delivered to the 50th anniversary celebration of the Ukrainian World Congress, a Toronto-based non-profit organization that says it represents the interests of 20 million ethnic Ukrainians with networks in 53 nations.
Daniel Bilak, the Canadian lawyer who is the director of UkraineInvest, the government-sponsored agency set up last year to attract investment, equated Russian propaganda with Ukrainian independent news media in the sense that both are bad for attracting investment in Ukraine.
“Russia invests billions of dollars into” portraying Ukraine in a negative light, Bilak said. “Unfortunately, Ukrainian press also often write how everything is bad, how they don’t like this or that.”
He cited the Kyiv Post as an example. He called it “a good media outlet” but said “their editorial policy is: ‘until everything is perfect, everything is bad.’ Don’t let the perfect be the enemy of the good.”
(Editor’s Note: The Kyiv Post has no such editorial policy as described by Bilak.)
“We understand that there’s corruption in Ukraine, and we also understand that there are ways to fight it. We fight corruption by shining light onto dark corners,” he said, citing the ProZorro online transparent system for government purchases, e-declarations that require public officials to list their income and assets, and electronic value-added tax refunds, recently instituted to eliminate widespread corruption.
Dmytro Shymkiv, deputy head of the Presidential Administration said Ukrainians are often more critical than foreigners.
“We lack positive stories about Ukraine,” Shymkiv said. ” Very often it’s foreigners who speak well about us, but we ourselves only criticize,”
The economic forum was held in Kyiv on Aug. 25 and gathered 140 delegates from 23 countries as well as high-level officials of the Ukrainian government and foreign diplomats. The panelists were a mix of Ukrainian officials and diaspora members who have been living and working in Ukraine since its early days of independence.
On Aug. 26, President Petro Poroshenko spoke to the group during an event at Mystetskiy Arsenal in Kyiv. Other notable guests included Security Service of Ukraine head Vasyl Hrytsak, Prosecutor General Yuriy Lutsenko and ex-Prime Minister Arseniy Yatsenyuk.
Some of the discussion at the economic conference was highly idealistic and slightly disconnected from reality, with accolades for a government and politicians who are unpopular, surveys say, with most Ukrainians.
Ukrainian World Congress president Eugene Czolij put the emphasis on the positive in his remarks. He said Ukraine’s victory in winning visa-free travel to the European Union and the ratification of a political and economic association agreement with the EU. He also talked about Ukraine’s efforts to fight corruption, strengthen border control, combat organized crime and promote judicial reforms.
However, many of these anti-corruption efforts are unfinished or being stifled by powerful special interests, with President Petro Poroshenko obstructing the creation of an independent anti-corruption court and clinging to a discredited Prosecutor General, Viktor Shokin, before relenting to Western pressure to fire him last year.
Czolij also cited Ukraine’s progress in restoring economic growth after losing half of its gross domestic product through recession and steep devaluation of the hryvnia, the national currency.
“It is prominent that, de facto being at war, Ukraine received financial support from the International Monetary Fund and other partners as well as implemented important structural reforms for macroeconomic stability,” he said.
If the number of ethnic Ukrainians living abroad is, indeed, 20 million, that is nearly half the number of people living inside Ukraine.
And therein lies opportunities and problems.
One of the reasons why so many Ukrainians left their homeland, especially since independence in 1991, is the lack of economic opportunity at home. An estimated 1 million Ukrainians are working in Poland, another 2 million in Russia and at least 3 million — and probably many more — elsewhere. The other segment of the diaspora consists of those who emigrated in other eras, such as after World War II, or their descendants.
Uniting the Ukrainians who live abroad into helping, working or investing in the homeland would provide Ukraine with a huge boost.
Already, the Ukrainian diaspora worldwide is providing the nation with strong political and financial support — in the form of multibillion-dollar remittances and humanitarian assistance.
The potential is significant.
In 2016, the U.S. Agency for International Development conducted a study of the three-million strong Ukrainian diaspora in the United States and Canada. It showed that almost one third of them are employed in business, management and finance-related occupations. The majority earn relatively high incomes: 56 percent indicated annual income of $100,000 or more, while 10 percent reported earning $250,000 or more a year. The Ukrainian-American Credit Union, for instance, has nearly 100,000 family memberships and comprises an asset base of over $2.8 billion.
Marie L. Yovanovitch, the United States ambassador to Ukraine, underscored that the diaspora can help Ukraine to unlock its vast economic potential. Yovanovitch said that Ukraine must enhance its competitiveness by accelerating the growth of startups and smaller businesses and by stimulating competition on domestic market.
Economic development and more foreign investment are increasingly being viewed inside and outside the government as matters of national security, especially in the face of Russia’s three-year-old war against Ukraine.
Ukraine is pinning its hopes on two key free-trade agreements: One with Canada, which came into effect on Aug. 1, and the other with the EU, which formally comes into force on Sept. 1. Ukraine considers these as two key trade and investment partners, along with others, in reorienting the economy away from centuries of entanglement with Russia.
The Ukrainian World Congress forum, however, was more of a celebratory event than one devoted to talking about how to fix Ukraine’s problems. Rather than using its collective influence to publicly push politicians to stop stalling on reforms, participants preferred to glorify the successes of the government.
There is good reason for that, Czolij said. “In the wake of Russian disinformation campaign that represents Ukraine as a failed state, it is becoming increasingly important to show the progress the country has made,” he said.
Lenna Koszarny, the Ukrainian World Congress vice president and Horizon Capital CEO, said that Ukraine’s image abroad must be as a “winner” because nobody wants to work with losers.
Into this atmosphere, Hanna Hopko, a member of the Ukrainian parliament, tried to inject the sobering reality. She asked the audience to stay optimistic, but not to cherish illusions that everything has already been done.
