The Dec. 3 investment conference in Kyiv's Intercontinental Hotel came the day after parliament approved a new Cabinet of Ministers. Participants, many hailing from the U.S. and the European Union, investment scene, were in an upbeat mood and suggested the new government should continue changing the way the 45-million nation's economy is run – introducing a full-scale land market and reducing the households' energy consumption should just be the first step.
Many
hope that new
Cabinet that now contains
foreigners with experience in the investment business will be more successful than
the previous one in making Ukraine a better place to live than
Uganda and Comoros, two nations that suffer from corruption as much as
Ukraine, according to the Transparency
International.
The high
expectations come with a long list of accomplishments expected from the
new government.
Olexiy
Parkhomchuk of IFU, a Danish investment fund with a $55 million portfolio in
Ukraine, says the local market is worth investing in due to the high profit margins
that it provides. Controlling Danosha and Galychyna-Zahid agriculture
companies, IFU is experiencing problems with finding land for constructing the
new capacities, while constant audits from government agencies creates too much
paperwork. Dealing with Sanitary Service is a special headache.
Stefan
Verbunt, an expert on the land market with the EU mission, says Ukraine
should allow the buying and selling of land as now it’s banned under the 2001 moratorium. “We understand the risk of land-grabbing is high if moratorium is going to
be raised, but proper land market operations are needed,” he explains.
Erik
Versavel of Netherlands’ ING Bank in Ukraine praises the law on obliging companies to disclose their ultimate beneficiaries. “It’s very important
for a bank to understand who’s an ultimate beneficiary is,” he says.
As the country’s banking system going through a turbulence, with banks even as big as VAB
declared insolvent, Versavel says it’s unacceptable when a bank owner puts
money of his depositors into his pocket and then takes them away to an
offshore, Cyprus or other place.
Bate
Toms, owner of B.C. Toms & Co law firm, believes it’s crucial for the Ukrainian government at this point to ask the EU to back political risk
insurance to make it cheaper. As the cost for this type of insurance has nearly doubled amid the war in the Donbas, investors willing to come to Ukraine seek for cheaper opportunities to hedge their risks.
Alastair
McBain, head of Arawak Energy, a firm that is affiliated with Ukrainian private
oil and gas producer Geo Alliance, admits country’s economy won’t get out of
crisis without the reduction of gas consumption by the households.
In the
developed economies, it’s industry that consumes most of the gas, while in
Ukraine it’s households, which is why they have to pay more for the blue fuel –
and this will ultimately drop their consumption rate, he says.
Kyiv Post associate business editor Ivan Verstyuk can
be reached at [email protected].
