Kyiv, 12 December. Foundation for Effective Governance in partnership with the Economist (Great Britain) held a conference “Inside Ukraine 2011: A success story in the making?” on 6 December in London. During the conference representatives of national and international businesses, politicians as well as independent observers presented Ukraine to western investors.

“Last year we talked about the plans, the steps to be taken by the government and the expectations of business, but today we have talked about the results. The discussion was constructive and unbiased as the participants discussed the positive changes and the obstacles on the way to a healthy and competitive Ukrainian economy. The most important is that the government is not afraid to discuss challenges and problems with business, and today we can boldly state with all confidence that we are making a story of success,” stated the Director of the Foundation Natalia Izosimova. She also added that the target audience of the discussion, which included western investors, experts, politicians, representatives of state authorities and international organizations, received very positive balanced information about Ukraine.

At the conference representatives of large national and international companies shared their experience of working in Ukraine: Natalie Jaresko, Founding Partner, Horizon Capital; Jorge Zukoski, President of the American Chamber of Commerce in Ukraine; Andre Küüsvek, Director, Ukraine, EBRD; Borys Krasnyansky, Managing partner, PricewaterhouseCoopers, Ukraine; Petro Poroshenko, founder of Ukrprominvest Holding, Head of Board of Directors of the National Bank of Ukraine; Evgeny Gavrilenkov, Managing Director, Troika Dialog; Maksim Timchenko, CEO of DTEK; Aleksandr Smirnov, CEO of Portinvest; Dejan Djordjevic, Managing Director, Hospitality Business, ESTA Holding Group; and Ivitsa Chachits, owner of Hotel Partner, regional manager, Marriott International, Inc.
Borys Kolesnikov, Vice Prime Minister of Ukraine and Minister of Infrastructure; Serhiy Tigipko, Vice Prime Minister and Social Policy Minister; and Natalia Korolevska, Chair of the Ukrainian Parliament Committee on Industrial and Regulatory Policy and Entrepreneurship reported about the government’s initiatives aimed at improving the investment environment in the country.

They discussed a number of important matters including:
• Ukraine - how we see it now
• Ukraine’s future on the world’s stage
• Tackling the challengers of reform
• Key sectors to watch: the potential, the problems and the people

During the discussion business representatives highlighted the positive changes Ukraine witnessed over the last year. According to Natalie Jaresko, Founding Partner at Horizon Capital, the country’s economy is slowly recovering from the recession of 2008-2009 when the country suffered a drastic drop in GDP. In addition, the government is implementing an administrative reform aimed at reducing the number of officials and simplifying administrative procedures for business. Also, Serhiy Tigipko, Vice Prime Minister and Social Policy Minister, stated that the government had managed to stabilize the banking system and reduce the budget deficit. Borys Krasnyansky, Managing partner at PricewaterhouseCoopers, underlined in his speech at the conference that Ukraine is the ranked first among post-Soviet countries on business profitability, but there is still a lot to be done: “We are more dependent on global and European markets. The growth of our company depends on business success and in my assessment of the reforms in this country I can say that Ukraine is a leader among post-Soviet countries on business profitability,” he stated.

Borys Kolesnikov, Vice Prime Minister of Ukraine and Minister of Infrastructure, stated in his speech that Ukraine plans to gain the positions it lost in 2007-2010 in the WEF’s Logistics Performance Index by 2013 and to enter the top 50 countries. “Logistics Performance Index takes into account such parameters as efficiency and quality of the customs clearance services, availability of trade-related infrastructure, ease of arranging competitively priced shipments, ability to track and trace consignment and frequency with which shipments reach the consignee within the scheduled time. And the government has committed to make progress in all these issues,” the Vice Prime Minister added.

The conference participants also discussed the problems hampering investment to Ukraine. Andrew Wilson, Senior Policy Fellow, European Council on Foreign Relations, mentioned that one of such problems is poor development of small and mid-sized businesses. Petro Poroshenko believes that today the main challenge of the Ukrainian economy is corruption. “We need to fight against corruption. The main problem for the Ukrainian government is absence of progress on the issue within the last ten years,” he stated and also mentioned the absence of a real judicial reform as one more challenge for the government.

Natalia Korolevska, an opposition member of parliament and the Chair of the Ukrainian Parliament Committee on Industrial and Regulatory Policy and Entrepreneurship, talked about corrupt bureaucracy inherited from Soviet times. “Success of the reform depends on the level of trust of people and business to the government. With political will and support we can go ahead, but today the majority of population treat the reforms of the government as unfair reforms,” stated the member of Ukrainian parliament.
Jorge Zukoski, President of the American Chamber of Commerce in Ukraine, noted during the conference that foreign investors in Ukraine are more interested in agricultural and energy sectors. “However, the Ukrainian agriculture does not meet the market requirements; it is unpredictable and unstable, which makes the situation even more complicated,” he noted.

Serhiy Tihipko in his turn described to potential investors how Ukrainian government will be improving the investment attractiveness of the country. In particular, the government plans to carry out judicial and customs reforms. Also, he made an assumption that the EU-Ukraine Association Agreement might be ratified on 19 December. “From a short-term perspective Ukraine’s joining the Customs Union of Russia, Belarus and Kazakhstan would bring more benefits to the country as this could allow us to reduce the gas price. However, Kyiv chose European Union, which will bring more prospects in the mid-term,” stated Mr Tihipko in his speech. He also explained that Association Agreement and the Customs Union present two different structures, which cannot coexist together in contrast to Free Trade Agreement with CIS and EU, which are based on WTO.