Waiting for a miracle...

The international conference on support for Ukraine has ended with virtually nothing to show for it, as Europeans have made no specific promises on substantial financial support and implementation of major joint projects, while the discussion was centered on this country maintaining the tempo of its economic reforms. On the one hand, it was to be expected, because the conference was postponed several times, allegedly precisely because of the lack of progress in reforming. Furthermore, the word “donors” disappeared from its title in advance, as it would suggest funding allocations.

The Ukrainian president and Cabinet members tried to convince more than 500 delegates from 50 countries that they could and should invest in Ukraine. Officially, EU officials and other guests of the conference agreed with this, but they privately admitted that this was the nation’s last chance to preserve the confidence of investors, because it was very close to evaporating altogether. From what we heard there, three points should be emphasized, which were clearly seen between the lines in the context of the meeting.

First and foremost of them is the question: where are the promised reforms? In his speech, President Petro Poroshenko strongly assured Europeans that the Euromaidan and the snap parliamentary election had set Ukraine firmly on the path of reforms. The first and most important of them, he said, was the formation of an independent Cabinet of reformers. Meanwhile, the foreign-born ministers are the key to the economic transformation’s success, according to the guarantor of the constitution. Decentralization, deoligarchization, debureaucratization, and creating the Anti-Corruption Bureau were all elements of the reform plan, Poroshenko continued. “You can do business in Ukraine... Believe in Ukraine, please!” he said as he concluded his speech. However, the president left the meeting early to avoid getting questioned by the business community, leaving the prime minister and all the Cabinet to write down these questions.

THE COUNTRY’S LEADERSHIP STRONGLY ASSURED EUROPEANS THAT THE EUROMAIDAN HAD SET UKRAINE FIRMLY ON THE PATH OF REFORMS. THEY INCLUDE THE FORMATION OF AN INDEPENDENT CABINET OF REFORMERS, AS WELL AS DECENTRALIZATION, DEOLIGARCHIZATION, AND CREATION OF THE ANTI-CORRUPTION BUREAU

As subsequent speeches seemed to show, the presidential reasoning left Europeans distinctly dissatisfied. “We have supported and will support Ukraine,” European Commission President Jean-Claude Juncker said to sum up his response to Poroshenko. He stressed that the year-old treaty establishing a free trade area with the EU, as well as funding for Ukraine’s reforms, with about 6 billion euros already disbursed out of the promised 11 billion, were evidence of that support. “We have just agreed to disburse another 1.8 billion,” he explained. The EU is ready to take further steps as well, “but we need economic and political reforms to happen here,” the European official said to emphasize the main condition for further cooperation. He noted that the government was making progress, for example on the adoption of laws on gas market reforms, but it was not enough. “We, like the entire Ukrainian society, look forward to the reform of the constitution, the judiciary and the prosecution service, because no reforms in other areas will be possible without securing the rule of law,” EU Commissioner for European Neighborhood Policy and Enlargement Negotiations Johannes Hahn added.

“THE CONSTITUTIONAL REFORM, COMBATING CORRUPTION, DEOLIGARCHIZATION, PURGING THE ENERGY SECTOR, AND DECENTRALIZATION ARE WHAT INVESTORS EXPECT,” U.S. AMBASSADOR TO UKRAINE GEOFFREY PYATT (PICTURED LEFT) TOLD THE DAY

The second point is whether the government will really engage in reprivatization and monopoly-busting. “We are now reviewing the list of state-owned enterprises which should be subjected to a massive privatization program... The purpose of this process is very simple, and it has nothing to do with any alleged preparations to reconsider the previous privatization’s results, which we will not do. Despite the public appeal of such measures, we are not doing that. However, we do need to break the monopoly of a small group of businessmen,” Poroshenko said trying to clarify the talk of reprivatization. However, the Ukrainian side was far more ambiguous when responding to inquiries about the work of the Antimonopoly Committee of Ukraine (AMCU). Despite repeated attempts by journalists and guests of the forum to clarify the timeframe for the new AMCU head’s appointment and the list of applicants for the job, Prime Minister Arsenii Yatseniuk replied only vaguely that it was necessary to wait for the decision of the coalition and stated his hope that the issue would be resolved at the next session of the parliament. “We have been waiting for the answer to this question for over a year already, but it is still absent. This is alarming,” director of an international financial investment corporation said in a confidential conversation with The Day. According to him, this pause was working to Ukraine’s detriment.

The third point deals with the culture of working with investors, which is still largely the same as it was. The whole impression made by the grand, truly European scale of the event, held in a spacious hall with English-language supporting materials, strict time limits on speakers and so on, was partly destroyed by minute, but very revealing details. Not all of the distinguished guests managed to get a seat during the first session, and many were initially at a loss what to do: go away or stay there and listen to the president while standing up. The latter category included director of the Energy Community Secretariat Janez Kopac at first, even though the organizers found a seat for him eventually. The head of the World Bank and US Ambassador to Ukraine Geoffrey R. Pyatt both got lucky enough to sit in the third row. “On the other hand, the whole Cabinet occupied the front row, even though they ought to sit behind the investors,” a diplomat told The Day after the first panel meeting.

AN INTERNATIONAL CONFERENCE INVOLVING FOREIGN INVESTORS SAW MEMBERS OF THE UKRAINIAN CABINET OF MINISTERS… TAKING THE FRONT SEATS

Nevertheless, the overall sentiment remains positive.

“This was Ukraine’s opportunity to save its face in the eyes of investors. As you can see, the interest is still there. What we need now is concrete steps,” director of the Eastern Committee of German Economy Rainer Lindner told The Day. He explained that German companies would decide whether to stay in Ukraine or leave the country at the year’s end. What can serve as a reason to stay? “We have heard several such reasons, but the main issue facing European investors is corruption. Important anti-corruption laws have been passed, but whether they will work remains the question. We have not seen any progress yet,” he said.

The constitutional reform, combating corruption, deoligarchization, purging the energy sector, and decentralization are what investors expect, US Ambassador to Ukraine Pyatt told us. For its part, the US will assist Ukraine in getting positive results in this field as soon as possible. In particular, he said that the US would host an investment conference for Ukrainian businesspeople in July.

Well, the government still has time to keep investors interested and demonstrate progress in reforming the major sectors of the economy. “Exams” will arrive soon, as two business conferences are slated to be held in Germany and the US in midsummer.