No matter how long and energetically Ukrainian President Volodymyr Zelensky talks, and he held a marathon press conference that started at 10 a. m. on Oct. 10 and went late into the night, he needs to get the fundamentals right if he wants to attract $50 billion in promised foreign investment over the next five years.
His handpicked prime minister, Oleksiy Honcharuk, expects large-scale investments in Ukraine and outlined his agenda to a business audience on Oct. 4. But as Zelensky’s performance in front of journalists showed, Ukraine is still far from being an investment haven. If there was any doubt, Ukraine dropped to 85th place among nations in the World Economic Forum’s Global Competitiveness Report 2019, announced on Oct. 9. The scorecard is more of an indictment of Zelensky’s predecessor, ex-President Petro Poroshenko. But, as London-based Ukraine analyst Timothy Ash points out, Zelensky doesn’t seem to understand what is at stake if the state doesn’t recover for taxpayers as much as possible of the $5.5 billion allegedly stolen from PrivatBank by billionaire oligarch Ihor Kolomoisky. The bank’s former owner should face bank fraud charges. Instead, he is honored with meetings at the President’s Office.
“He needs to wake up quick,” Ash wrote of Zelensky. “His decision will set the course of his presidency. Either he is in the pockets of the oligarchs, or certain oligarchs, or he is truly representing the interests of the people. If he gets this wrong, PrivatBank, the largest bank in the country, might be declared insolvent, depositors will take flight and foreign portfolio investors will pull the $3.6 billion invested. With no International Monetary Fund backstop, how will Ukraine cover a weight of foreign debt falling due?”
If Zelensky makes the right decisions, the nation will achieve macroeconomic stabilization, a stable currency, rising foreign-exchange reserves, falling interest rates, and economic growth, Ash writes. We agree.
Promises of establishing rule of law ring hollow unless Kolomoisky is brought to justice. Already, Zelensky has made missteps by keeping Interior Minister Arsen Avakov and leaving alone Odesa Mayor Gennady Trukhanov, who are long overdue for their own justice.
In the end, the only way to attract new foreign investors is to take care of current ones, and that means ending the oligarchic privileges enjoyed by Kolomoisky, Dmytro Firtash, Rinat Akhmetov, Victor Pinchuk, Petro Poroshenko and others. Otherwise, Zelensky and Honcharuk can declare that they will attract trillions and trillions of dollars in foreign investments, but the goal will be no more credible — or attainable — than the ones they have set today for the government.
