Monument to the Ukrainian Businessman

Kyiv Regional Center of the Academy of Legal Sciences hosted a week-long (starting February 5) workshop seminar titled The Defining Right of Civil Law Relationships meant for Ukrainian lawyers working for government structures, judges, and law firms. The seminar was held within the framework of the project Center of Commercial Structures undertaken by Deloitte Touche Tohmatsu and financed by USAID. Participants in the seminar on contract law heard a number of lectures dealing with commercial negotiations, conclusion and performance of contracts, their legal support, settlement of disputes, amending, terminating, and invalidating procedures.

This author managed to interview one of the lecturers, Dmytro Dubohrayev who is a US defense lawyer in Washington, DC with an office in Moscow. He said that his lectures are based on a purely pragmatic approach to business, which is anything but paradoxical. Business must essentially provide mutually advantageous conditions, otherwise the contracting parties would be simply unable to do business together; instead, each would be looking for a way to sever all such relationships. Pressuring and exploiting partners heavily is an approach best described as a double-edged sword more damaging to the seemingly stronger of the partners trying to use the other. And it is often better to deal with Western companies in Ukraine, with their flexible policy, rather than with business entities originating in former Soviet republics that often come up with draconian conditions. Business ethics do not allow the destruction of mutual interest, and this is nothing but healthy egoism. The same applies to economic expediency. Contract law is regarded as a measure of risk allocation among partners. The task of such seminars is forming the intellectual and educated basis on which to do business in Ukraine.

Until recent developments Ukraine showed no dictatorial trends, meaning that compared with its eastern neighbor, it had a degree of prestige in doing business with the West. It would be a mistake to assume that Ukraine has been lagging behind American or European culture. On the contrary, it often proves superior, especially in terms of intellectual potential. The problems faced by Ukrainian businessmen cannot be compared with Western civil law relationships. The exertions it takes to sail through the reefs of Ukrainian business would seem unthinkable to many foreign companies, and it is the same with production. Preserving and further developing it on objective terms, according to Mr. Dubohrayev, rates not just a medal, but a monument. The biggest and so far insoluble problem in Ukraine is the continuing outflow of qualified, educated, highly skilled, and experienced manpower. All these people now work for the benefit of other economies. Under the circumstances any legalization of capital (that is, money originating from the shadow economy) can only serve to strengthen the Ukrainian state in the world arena. Stopping the exodus of manpower is a way to enrich the people that deserve to live in affluence. After all, an affluent state can be made only by affluent people, because the poor can only build a poor country.

It is hard to assess Ukraine’s prospects in terms of foreign investment. In this sense historical experience is especially important (for example, the United States that built its powerful business machine using someone else’s money). For this reason the stagnating Ukrainian economy and the actual absence of any [effective business] relationships allows one to regard its economic marshland as a construction site. It is much easier to build one’s own model of such relationships on an empty lot than tear down or renovate an existing structure. Simultaneously, the objective absence of investment in the Ukrainian economy is explained by an intrinsically unfavorable business climate, which makes it easier to carry out a promising project in Poland, Romania, or other Eastern European countries. All this means that we have to start by learning the rules of the game and getting our bearings. That is why such programs are worked out. At this historical stage there is simply no need to conquer one region or another; it is enough to set up a McDonald’s network.

So far Ukraine remains an iceberg drifting in the world ocean, propelled by undercurrents following a course no one sets or controls.

The US lawyer’s interest in an educational program for Ukraine — likely to be regarded as quixotic by the narrow-minded — is actually a manifestation of personal freedom, self-perfection, sharing one’s experience, and putting one’s knowledge into practice. Participation in the formation of norms of civil law relationships in a country inhabited by some 50 million is an attractive prospect for an interested businessman. Partnership is the driving force of business and is by no means charity. Doing business in Ukraine shows whether business can be done here at all and whether one can make it pay.