Ukrainian Prime Minister Oleksiy Honcharuk has repeatedly promised that his government will create a business climate that attracts $50 billion in investment over the next five years – in a country that has seen slightly less than that amount in the last 28 years.
Honcharuk confirmed the investment promise and pledged to fight corruption, bureaucracy, and smuggling and work on a host of other programs in a meeting with members of three leading business associations on Oct. 4.
But it was Andy Hunder, president of the 600-member American Chamber of Commerce in Ukraine, who brought Honcharchuk from the stratosphere back down to earth – or, as he put it from “mission impossible” to “mission possible.” His members were represented at the meeting along with the European Business Association and Union of Ukrainian Entrepreneurs.
Hunder told Honcharuk that the government would need to establish rule of law and fair taxation and create a more favorable business climate to reverse the exodus of millions of Ukrainians seeking work abroad.
Hunder also shared Honcharuk’s intention to get back on track with loans from the International Monetary Fund, which has halted lending over concerns about the influence of Ihor Kolomoisky and the fate of the billionaire oligarch’s former PrivatBank.
“IMF is an assurance for foreign investors,” Hunder said. “If there is no cooperation with the IMF, then attracting $50 billion in investments is ‘mission impossible’.”
Hunder mentioned a number of cases where existing investors’ rights have been violated. “Business does not look for privileges,” he said. “Business looks for the law and justice.”
President of the Union of Ukrainian Entrepreneurs Vyacheslav Klymov, who also owns Nova Poshta, the postal and logistics giant, called for more transparency in the legislative drafting process as well as real dialogue, expressing regret that public councils of certain ministries have become ineffective instruments of communication with the authorities.
“Instead of fighting the shadow economy, a lot of legislative initiatives try to make the life of many small entrepreneurs harder,” Klymov said with reference to a proposed law under which businesses will have to register all their sales exceeding the threshold of 850 hryvnias ($34) on the state fiscal administration servers.
EBA exective director Anna Derevyanko supported the government’s action plan but called for greater transparency.
“If we could have the possibility to learn the agenda beforehand, and provide our feedback and suggestions about the topics discussed, that would be very nice, effective, and expedient,” Derevyanko said.
Derevyanko also highlighted the need to improve the nation’s infrastructure, including the revival of seaports and navigation on the Dnipro River, the nation’s major river connecting its north and south.
Derevyanko gave Honcharuk specific cases of the violation of rights of particular businesses and policy proposals developed by the EBA.
Honcharuk agreed with the need to improve infrastructure, as well as education, but disagreed with Klymov’s proposal for providing all sorts of businesses with low tax rates and simplified tax administration. “The private entrepreneur status is for small (businesses). … But if you are a big business with plants or supermarkets in the country, you will not be able to operate on the basis of a private entrepreneur.”
