Izawa Tadashi was appointed to represent Japan in Ukraine and Moldova in October 2008. He started his mission in Kyiv by attending the opening ceremony of Boryspil Airport development project, for which Japan loaned some $170 million. Here are excerpts from the Feb. 26 interview with the Kyiv Post:
About pitfalls of doing business in Ukraine:
“With regards to the business community, the major problem is rules and regulations, which are not enough transparent and clear. Even if they are clear, they are constantly changing. Decisions are quite often made subjectively and depend on a specific government official rather than represent entire governmental policy. Taxation is also quite often very inconsistent. Besides, Japan highly evaluated Ukraine joining the World Trade Organization. However, last year, Ukraine suddenly introduced a surcharge on the import duty of automobiles. The import of automobiles has already dropped significantly due to the crisis and Ukrainians did not start buying more domestically produced ones, either. Despite the enormous credit of trust that Ukraine received by joining the WTO, and trust means a lot, it took such a step. Japan and other countries thought that it’s a pity that Ukraine took the measure that does not exactly coincide with WTO principles in our eyes. The surcharge has expired; however, we fear it may be introduced again.”
Security as a concern
“It is difficult for the embassy to prevent physical security problems, although we can provide information to Japanese nationals on the criminal situation, dangerous places, etc. We mostly assist post facto, cooperating with police to increase the speed of investigation. As a result, Ukrainian police react more attentively with Japanese nationals who get involved in trouble. Part of the reason Japanese people face unpleasant situations in Ukraine is lack of Ukrainian/Russian language skills. Japanese people themselves are somewhat naive, as Japan is very safe place. When they travel abroad, they might not know the rules of how to protect themselves. However, in Ukraine at least, they don’t have to worry about terrorism.”
Environmental, energy-saving technologies
“At this moment, business activity of Japan in Ukraine is mostly associated with imports of automobiles, like Toyota, Honda, Mitsubishi, Subaru and technical devices, like Sony, Panasonic, etc. However, new accents are already put on cooperation in energy-saving and environmentally conscious technologies.
“As energy costs in Ukraine are growing, and it is not only connected with gas supplies from Russia, the development of energy-saving technologies is vital. Ukraine does have high-level technologies. However, their potential is not being used, as there is very little investment in modernization. Japan has a lot of experience in energy-saving technologies and is willing to assist and cooperate with the Ukrainian side in this sphere. According to an agreement Japan and Ukraine signed within the framework of the Kyoto Protocol, Japan bought 30 million tons of emission gas quotas from Ukraine through 2009-2010. The full sum for 2009 has been already paid.
“Ukraine must use the received money to implement environmental and energy-saving projects by 2012. The Ukrainian side, in consultation with the Japanese side, decides which projects to implement and where. The list is already made; however, as many of them require serious preparation, not a single one has been implemented. The projects, particularly large, do not exclusively depend on Japanese financing. They also require additional international financing. The crisis and the halting of International Monetary Fund financing are the major reasons for the delay of these co-projects.
Agricultural sector
“There is vital interest in food production in the world now. Ukraine has enormous potential in the agricultural field. Unfortunately, the potential is not realized. To make modernization happen and increase the competitiveness of the Ukrainian agricultural sector, foreign investment is necessary. That requires improvement of state policies.
“Japan has very high requirements regarding the quality of imported food. Japan imports a lot from China and still there are often disputes in terms of the safety of food products imported from this country. It’s hard for me to imagine that a large inflow of Ukrainian foods to Japan will happen rapidly. However, Japanese trade companies might consider exporting Ukrainian food products to other countries, not necessarily to Japan.
Investment climate, political dialogue
“Japanese investors have a specific nature: They enter the market with a long-term prospective. However, before entering, they study the country, its political stability, legislative base, transparency very long and very carefully. For Japanese companies it is important to know that the system does not change, that legal safety is ensured, that the permit and license system is executed fairly.
“I hope that Ukraine will introduce European standards, regardless of whether it joins the European Union or not. In other countries, political battles stopped during economic crisis. In Ukraine, due to the confrontation between the nation’s leaders, not enough measures have been taken to save the economy. Certainly, it affected decisions of potential investors and projects between our two nations. It’s very hard for other countries to imagine that a current year’s budget is yet not adopted as of early March.
“In terms of political dialogue, Japan and Ukraine are both in a politically transitional stage: Japan has a new prime minister [Yukio Hatoyama] and Ukraine has a new president. We expect intensification of dialogue by the end of 2010.
Japanese assistance focuses on Chornobyl
“Japan deeply sympathizes with Ukraine, which also suffered a nuclear tragedy in Chornobyl. A big part of Japanese aid to Ukraine is Chornobyl-related. It predominantly focuses on improving the quality of medical care in the hospitals in the damaged area, assisting schools, kindergartens.
With regards to education, Japan sponsors language studies, assists universities with equipment, musical instruments, etc. Personally, when I came to Ukraine, I was impressed with number of people fluent in Japanese and they’ve studied in Japan only for one year. I myself depend on them every day at the office. Unfortunately, there are very few Japanese students in Ukraine. Many of them are majoring in art studies, ballet, etc, as the level of art in Ukraine is very high. I hope with the development of ties, the number of areas of mutual interest will increase respectively.”
Level of understanding of Japan in Ukraine
“I was also impressed how interested Ukraine is in traditional Japanese culture, like tea ceremonies, ikebana, origami, etc. Little kids in Ukrainian schools learn Haiku and they probably know more poems than Japanese kids. The number of Japanese restaurants in Ukraine also impresses. You don’t expect to see an Italian chef in every Italian restaurant in Japan as well. It’s the same in Ukraine. However, with ties developing, chains of authentic Japanese restaurants may appear on the Ukrainian market.
How he spends time
“I go to the gym two-three times per week and I play tennis with my embassy colleagues. I am fascinated with the beauty of Kyiv and I like simply to enjoy the city. Besides, the level of art in Ukraine is very high. You can see amazing opera or ballet performances at much more reasonable prices than in Tokyo or New York.
About Doll’s Festival
Doll’s Festival is a Japanese annual event when families pray for the health and happiness of kids, particularly girls. During this March 3 holiday, parents decorate stands with dolls of the emperor and empress. As living space is very limited in urban areas, you will hardly see a pair of dolls in each house. However, in villages, it’s celebrated on a grand scale. There is also a saying that if you don’t take the dolls off the stand after the holiday, the girl in the family will get married late.”
Ukraine-Japan factbox:
Turnover: 2008 – $2.9 billion; 2009 – $630.7 million
Exports from Japan to Ukraine: 2008 – $2.7 billion; 2009 – $519.5 million
Exports from Ukraine to Japan: 2008 – $116 million; 2009 – 111.2 million
Major Japanese exports to Ukraine – vehicles, machines, equipment and electronics. New areas of cooperation: energy saving and environmentally-clean technologies.
Major Japanese imports from Ukraine – aluminum, ferrous and non-precious metals, chemicals and dairy products.
Japanese investment in Ukraine 1997-2008: $75 million
Number of registered Japanese nationals in Ukraine, 2009: 196 (50 – embassy and family; 60 businessmen; 26 researchers and students)
Number of registered Japanese companies: 28
Japanese aid to Ukraine since 1992: grants – $152.2 million; loans – $420 million.
Major joint projects:
Chornobyl-related projects consisting of humanitarian aid, scientific research and general assistance, including medical equipment and care in the affected area, as well as assistance for schools;
Loan worth $170 million in 2005 for the development of the Kyiv’s Boryspil Airport;
Within the framework of the Kyoto Protocol, Japan bought 30 million tons of emission gas quotas from Ukraine through 2009-2010. Ukraine must use the money to implement environmental and energy-saving projects; and
Nearly a $150 million loan to the Industrial Union of Donbass for purchasing energy-saving power generation equipment produced by Mitsubishi Heavy Industries, a Japanese company. Dolls Festival, also known as Girls Day, is an annual Japanese holiday on March 3 when families pray for the health and happiness of children, particularly girls, and decorate homes with dolls. (Courtesy)Japan-Ukrainebilateral trade:
Kyiv Post staff writer Nataliya Bugayova can be reached at [email protected].
Read also ‘World in Ukraine: Small Japanese community has big influence on nation”by Nataliya Bugayova.
