Goodbye to Investors

Foreign investment as an indicator of Ukraine's integration into the world economic community is in glaring contrast with the official propaganda. Statistics present a lamentable picture, so much so that they are seldom mentioned officially, let alone compared with those of other Central and East European states. As of April 1, 1999, Ukraine had a mere $2.815 billion worth of such investment received during the years of independence. In terms of direct foreign investment per capita, a comparative analysis against last year's indices testifies that Ukraine's foreign direct investment is 42 times less than in Hungary, 27 times less than in Slovenia, and 19 times less than in Estonia. And not because the Ukrainian population is larger, not at all.

It is interesting to note the statements made by various high ranking bureaucrats prior to the committee meeting. Most were low-key. At best, they spoke of mind-boggling plans to reach $3.5 billion by the end of the year. At worst (as in the case of a Presidential Administration official), they attacked The Financial Times with its feature about the possibility of Ukrainian default. In addition, the theory of domestic demagoguery was enriched by a suggestion that the absence of foreign investment has a "seasonal character" (sic).

And the session was purely a matter of protocol. Apart from the President's discovery of a "cardinal turnaround in the people's psychology" and further declarations about "deepening market transformations," they mostly discussed individual foreign companies remaining in Ukraine. The President once again promised to issue edicts settling a number of problems encountered by foreign investors. This is about all the gathering accomplished.

In addition to the shaky legal basis and regime's instability, Western business circles are, of course, duly impressed by the scope of the presidential campaign. Foreign experts attending the session tried to recommend the President pay more attention to the economy. They even explained that this would have a positive effect on his campaign. Moreover, the current regime cannot even come close to meeting the criteria for holding elections of the developed countries, and the point is not only the President's monopolization of the media. Why do official information sources insist that he receive support during dubious actions starting at midnight on official television? How will this be regarded elsewhere? As a symbol of the chief executive's lofty intentions or evidence of the country's present economic status?

The current situation was vividly demonstrated by the underwhelming foreign attendance at the session. In fact, Western businesspeople attended not so much for the questionable pleasure of communicating with the President and Administration bureaucrats (considering that they will most likely have to go soon) as to take a closer look at the domestic situation, see who stands a real chance of winning, and their vision of Ukraine's prospects.

The council meeting, judging by the socioeconomic conditions, is sure to cause a definite reaction in the West. It could well be regarded as a goodbye party for the remaining investors (they say that during the banquet the President's promise to meet investors again in 2000 was not received warmly - Ed.). Or as bidding farewell to the President summing up his ill-famed course of "radical market reforms," which turned out not only devoid of any reform but served to frighten foreign investors away. Western business circles are fully aware that another term in office by the current President would mean a farewell party for the Ukrainian state.