Anders Aslund (second left), Elena Voloshina and Jock Mendoza-Wilson during the “Ukraine in Washington 2012” conference.
WASHINGTON, D.C. – For a weekend, the American capital got a brief reminder about Ukraine with a forgettable leadership conference and gala awards dinner.
Organized by the U.S.-Ukraine Foundation, the two-day event called “Ukraine in Washington 2012” aimed to offer an alternative vision of Ukraine, one that contrasted with recent somber and anxious political discussions over the bilateral relationship.
The grand idea behind the Nov. 30- Dec. 1 gathering was not to discuss Ukraine’s problems, but rather to celebrate and promote the nation’s potential – the same potential that everyone has been talking about for 20 years, but which has never been realized.
Despite the ambitious name, however, the event lacked high-profile leaders on both sides.
The highest-ranking officials were two ambassadors – Ukraine’s Oleksandr Motsyk and America’s John Tefft. The head of Kyiv’s government, Oleksandr Popov, showed up.
But several ministers and Vladyslav Kaskiv, head of Ukraine’s investment agency, canceled their planned participation for the Nov. 30-Dec. 1 Leadership in a Global World conference.
Ukrainian Foreign Minister Kostyantyn Gryshchenko dropped by for a brief formal talk since he was in town anyway for bilateral meetings. His daughter, Oksana Gryshchenko, an adviser to Ukrainian Energy Minister Yuriy Boyko, unexpectedly appeared as a panelist on the energy topic.
As economist Anders Aslund put it, there were no issues on the table to discuss between the U.S. and Ukraine, therefore relations can be called “good.” In essence, U.S.-Ukraine relations indeed don’t have much substance at the moment.
So far Washington has frowned upon Ukraine’s requests to the International Monetary Fund for a fresh bailout loan. As for American businesses, according to investment consultants present at the conference (apart from energy majors Chevron and Shell), they are simply not coming to Ukraine at this time.
No wonder, despite the fact the program was focused on a presentation of innovative projects, such as, for example, an infrastructure project
for the information technology sector in a Kyiv suburb called Bionic Hill. There were practically no potential investors in the room. Very few representatives of international businesses attended at all.
Billionaire Rinat Akhmetov’s manager in charge of investor relations at System Capital Management, Jock Mendoza-Wilson, tried his best to advertise Ukraine: “Come now, while everything is still cheap, before it’s too late.”
Mendoza-Wilson said System Capital Management is interested in foreign businesses coming to work in Ukraine because Westerners share the Akhmetov company’s values and would create a more favorable environment and higher standards to work in Ukraine. Although some may think that big businesses owned by oligarchs are interested in keeping Ukraine’s market not fully open to outsiders, System Capital Management is definitely not one of those afraid of competition, he said.
The giant company is on the rise – it almost tripled its revenue in the last
year, making $3 billion, compared to $1.3 billion in 2010. Mendoza-Wilson claims that company’s business success is a natural process and Viktor Yanukovych’s presidency has nothing to with it.
Overall, despite the fact the event was supposed to coin a positive message, it was filled with negative pitches.
For instance, when Vera Rychakivska, deputy chairwoman of the National Bank of Ukraine finished praising all the innovative financial services offered to Ukrainian people, businessman Kim Kawasaki – who says he’s a victim of Rodovid bank fraud -- asked her to help him find those responsible for the alleged crime. Rychakivska also offered to help Ukrainian economy rid itself of U.S. dollar dependency by proposing a 15 percent tax on currency sales, an idea opposed by both economists and businesspeople in the room.
In another case, when representatives from the State Agency for Investment and National Projects were speaking, a D.C.-based film director Olya Onyshko, asked for a letter to be passed to the agency’s head Kaskiv as a protest against his “dishonesty” and without further clarification left the room. Many asked if she was one more investor who suffered in Ukraine, but she turned out to be Kaskiv’s collaborator from his civil society projects back in 2001 and referred to financial debacles among activists back then.
In her speech, Elena Voloshyna, the International Finance Corporation country representative, complained that only bad news about Ukraine gets sold and nobody buys stories of success. She asked if anyone wanted to hear good business examples in Ukraine, like the fact that Ukraine is the largest exporter of berries in Europe, although they are marketed not as Ukrainian, but Polish products.
But it looked like nobody wanted to hear Voloshyna’s good news stories.
Instead, behind the scenes, everyone was discussing a fresh scandal: why Kaskiv, the head of the state investment agency, recently signed a $1.1 billion liquefied natural gas deal with a mysterious man who was not a representative of Spanish partners Gas Natural. Some said that Russia was responsible for the setup. Others condemned Kaskiv’s unprofessionalism, saying he should have checked in advance whom he is dealing with. Overall, the whole thing remained a puzzle.
Despite all that controversy, it was obvious that there are talented people in Ukraine.
One of the stories is that of QuadSquad, a team of student programmers from Donetsk, who developed a product called “Enable Talk”— affordable gloves that translate sign language into speech. Their project won the Microsoft Imagine Cup this year, but nobody in Ukraine seems to be interested in their invention.
Other successful young entrepreneurs, an IT company SvitSoft, complained that they did not benefit from a newly adopted IT law that promised tax breaks for the industry. It does not affect firms, like SvitSoft, that provide diversified IT services, but only programmers. It is also questionable whether the law is beneficial even for programmers: most IT firms avoid paying taxes anyway using the private entrepreneur system.
At the gala Celebrating People of Ukraine awards banquet on the night of Dec. 1, attended by 200 Ukrainians and friends of Ukraine, the U.S.-Ukraine Foundation gave out awards to outstanding individuals.
Among those who got an award were people from different walks of life, like American astronaut Heidemarie Stefanyshyn–Piper, whose father was Ukrainian immigrant and who only saw Kyiv from space.
There is also a “Dancing with the Stars” celebrity – Brooklyn’s Maksim Chmerkovskiy, who was born in Odesa. Chmerkovskiy said the award made
him realize he belongs to the Ukrainian community and that he will make Ukrainians much more proud than by merely dancing.
“I am sexy and I know it is not the best soundtrack in front of ambassadors,” joked Chmerkovskiy.
One of the highlights of the conference was a passionate speech by Andy Card, former chief of staff to U.S. President George W. Bush, in which he attempted to find areas where Ukraine can be perceived as a word leader. Ukraine could have become a role model of democratic transition for the Arab Spring nations, but it did not succeed in that, Card concluded.
After exploring other possible areas of success, Card unexpectedly turned to the issue of corruption, telling Ukrainians that American investors are prohibited from participating in corruption schemes abroad by the Foreign Corrupt Practices Act. Unwittingly, Card seemed to have finally found the area where Ukraine appears to be a true leader - corruption. This year’s Transparency International report puts Ukraine in the same group with Syria, Congo, Eritrea and Papua New Guinea.
It is wonderful that in North America there are individuals who love Ukraine (or at least its image) with their whole heart and are willing to promote it to the world. It is also great that there are so many talented Ukrainians scattered around the globe whose achievements are worth celebrating.
The conference, however, revealed the fundamental problem of the moment.
Currently, it is indeed hard to advocate for Ukraine and spread a positive message about the country. This is not only because of frustration with Ukraine’s development among Western observers, but also because of the apathy and cynicism of those inside Ukraine.
Olena Tregub is a freelance journalist based in Washington, D.C.