15th Kyiv Post CEO Breakfast takes Ukraine on road to prosperity (PHOTOS) - Jul. 10, 2018

The Kyiv Post and its partners, S & P investment risk management agency and DHL Express Ukraine, picked a decidedly broad topic for the newspaper’s 15th CEO Breakfast: “Ukraine’s Road to Prosperity.”

Much like Ukraine’s long and winding road to that destination, the conversation took many twists and turns, covering familiar ground, such as the need to reduce the size of the gray economy and to stamp out tax evasion and corruption in customs — which bleeds the nation of billions of dollars annually — as well as other spheres of the nation’s public sector and private economy.

On the bright side, businesspeople said that Ukraine is already a good place to invest and has an even brighter future. Entrepreneurs can influence the situation for the better and shouldn’t sit on the sidelines forever, missing opportunities in the hopes that a more ideal business climate will come.

Yet the slow pace of improvements was also a concern. Some detected little desire among the governing elite to make dramatic changes for the betterment of the whole nation.

In the short term, all eyes are on Ukraine’s government and the Verkhovna Rada in anticipation to see whether, before adjourning for summer break on July 13, lawmakers will meet the International Monetary Fund’s three key conditions for restarting lending that has been frozen at $8.4 billion since April 2017 (out of a possible $17.5 billion until next March). Those conditions: adoption of a law that creates a High Anti-Corruption Court that hears all existing corruption cases, hiking household gas prices to market levels and reduction of the deficit of the $40 billion state budget to 2.5 percent of the gross domestic product, down from the current 4 percent.

There was a debate about whether Ukraine needs more IMF loans, with expected remittances from abroad expected to reach $9 billion this year, more than 8 percent of the official GDP. But others said that resumed IMF lending is critical to showing investors that the nation is on a genuine path of reform to building rule of law and a transparent, competitive economy.

The need for higher property taxes, an end to the abuse of the lower-taxed private entrepreneur designation and curbs on transfer pricing abuse was part of the discussion.

The banking sector, which racked up $20 billion in losses mainly through fraud and insider lending in this decade alone, is seeing better days — with increased liquidity and the prospect of better rights for creditors, who are contending with some of the highest rates of non-performing loans in the world. Some borrowers, including members of parliament, simply refused to repay debts until the sector went bust in 2014 and the National Bank of Ukraine curbed insider lending practices. The central bank closed half of the nation’s banks (which number about 90 today) and nationalized the largest one, PrivatBank, to give the public sector control over most banking assets in the nation.

Participants of the 15th Kyiv Post CEO Breakfast on July 10 at the InterContinental Kyiv included:

Oksana Markarova, acting minister of finance

Oksana Syroyid, member of parliament

Ole T. Horpestad, ambassador of Norway

France Malige, European Bank of Reconstruction and Development managing director for Eastern Europe and the Caucasus

Ivan Svitek, CEO, Alfa Bank

Renato Ruszczyk, general manager, Lactalis Ukraine

Kamran Iskandarov, general director, Coca-Cola Ukraine

Artem Sachuk, CEO, Zhytomyr Regional Development Agency

Iaroslav Gregirchak, deputy business ombudsman

Yuriy Kryvosheya, managing partner and president, Toronto-Kyiv

Igor Smelyansky, CEO, Ukrposhta