Norway, a rich Scandinavian country with an inclusive economy, seems to have little in common with poor, corrupt Ukraine. But the two nations share rich and ancient historical ties.
“Scandinavian Vikings played a major role in developing the early Kyivan Rus state almost 1,200 years ago, and Kyiv became the center of this state, strategically placed on the trade route between Scandinavia and Asia. So we have common roots,” said Asbjørn Tandberg, a Norwegian-Ukrainian Chamber of Commerce member and director of Tandberg Value Creation consulting company, based in the Norwegian capital Oslo.
The Viking Rurik dynasty ruled Kyivan Rus in the 860s, seizing control of the area from local Slavic tribes. One of the most famous princes of the medieval epoch, Oleg, was a Viking, and other Vikings served in the military of the Kyivan Rus.
The old ties are still celebrated today: Ukrainian and Norwegian historians met in December in Oslo for the first “Ukraine-Norway: Connected by History” conference.
Today Norway, with only 5.3 million people, is one of modern Ukraine’s biggest supporters, both politically and financially. Norway has financed at least 30 development projects, supporting startups and young business leaders. It has helped soldiers settle back into civilian life. Since the EuroMaidan Revolution that ousted President Viktor Yanukovych on Feb. 22, 2014, Norway has given Ukraine more than $100 million in assistance.
In addition, Norway has supported sanctions against Russia to punish the Kremlin for its war against Ukraine, even though this has triggered counter-sanctions from Moscow that banned Norwegian fish exports to Russia.
However, when it comes to business, Norwegians are still cautious about taking the plunge into Ukraine’s economy.
The State Statistic Service of Ukraine reported that, as of October 2017, Norway’s foreign direct investment in Ukraine was only $7.2 million out of the $39 billion that Ukraine has received since independence.
Ukraine’s exports to Norway in 2017, while on the rise, were worth just $17 million out total exports of $40 billion, while imports were $192 million out of a total of $45 billion.
Increasing trend
However, Kjartan Pedersen, managing director of the 98-member Norwegian-Ukrainian Chamber of Commerce, told the Kyiv Post on Feb. 14 that a very positive trend in bilateral trade can be seen in Norwegian statistics.
“From 2015 to 2017 we experienced a 79 percent increase in mutual trade, according to Norwegian statistics– a 31 percent increase from 2016 to 2017,” Pedersen said.
The countries buy each other’s fish: In 2017 Ukraine imported fish worth $125 million and exported fish worth $7.4 million to Norway. The countries also trade other food and agricultural products, lumber and ferrous metals.
“Last year we witnessed a close to 40 percent increase in Ukrainian exports to Norway, where textiles, light manufacturing and agricultural products are some of the important sectors of growth,” Pedersen said.
IT is by far the most important in Ukraine’s economy for Norway when it comes to employment. At least 5,000 Ukrainian IT specialists work with Norwegian clients, Pedersen said.
Cautious players
Amund Myklebust, the former managing director of the NUCC, told the Kyiv Post that Norwegian companies often miss business opportunities in Ukraine because of misconceptions about the country and its poor image abroad. But there are real issues too.
Tandberg said that “different companies and sectors will give you different answers. But most Norwegian companies are concerned about corruption, environmental issues and quality monitoring and controls.”
He sympathizes with Ukraine’s unenviable position — caught between Russia and the European Union. And he wants to help.
“I would like to contribute to enhancing Ukrainian business relations and opportunities with Norway in a way that contributes to a winwin situation for both parties, not only to the benefit of my country and the West,” Tandberg said.
Tandberg has visited Ukraine three times since 2016 in search of business connections.
“My primary field of interest is agricultural and the food industry. But I also have contacts within other sectors such as infrastructure, IT and travel,” Tandberg said. “I would like more Norwegians to experience your beautiful country and its professionals, who are highly educated, ambitious, energetic, enthusiastic, and willing to learn.”
And it seems more Norwegian businesspeople are indeed showing an interest in Ukraine.
Pedersen has seen his organization grow: the NUCC now has 42 Norwegian members out of 98 total.
“We have seen increasing interest and membership applications in the last few years, with IT firms leading the growth,” Pedersen said.
“There is also increased interest from Norwegian energy companies, since Ukraine’s strategy of increasing its energy independence is creating opportunities for Norwegian companies to get more involved in Ukraine, in both the petroleum and renewables sectors.”
But Pedersen said that the main factor stopping new Norwegian entrepreneurs from entering Ukraine is still corruption. It is also a major concern among businesses already operating in Ukraine.
“Although corruption is still a challenge, our experience is that development is going in the right direction. Several important measures have been taken and institutions created to tackle corruption,” Pedersen said.
Among the most important improvements for Norwegian business, Pedersen named tenders conducted via the ProZorro online public procurement system, wwhich are held in a transparent manner, and with information in English.
A well-functioning judiciary, predictable legislation, limited bureaucracy and political stability are all things Norwegian companies would like to see in Ukraine, Pedersen said.
A professor lectures former soldiers in an auditorium of the Chernivtsi National University’s economics faculty on Sept. 14 (Courtesy of the International Foundation of Social Adaptation)
Norway-Ukraine project
Norway, a member of NATO but not the European Union, says it will never recognize Russia’s annexation of Crimea and supports the 2015 Minsk peace agreements, which call on Russia to leave the eastern Donbas, where for nearly four years it has been waging a bloody war that has killed more than 10,000 people.
Norway provided more than 60,000 field rations for the Ukrainian army in 2015, one of the toughest years of fighting. It has also financed retraining and aid for former soldiers in the UkraineNorway Project, a joint initiative of Norway’s Nord University and Ukraine’s International Foundation for Social Adaptation.
Vladimir Rubtsov, president of the International Foundation for Social Adaptation, said that more than 16 Ukrainian universities and one Norwegian one are now engaged in retraining soldiers for new professions. Participants can study free, for three to four months, subjects ranging from IT, business security, accounting, tourism, management, and entrepreneurship.
Since 2003, more than 9,000 soldiers and their relatives have taken part in the retraining project; 30 percent of those retrained were women.
Rubtsov said the program also helps participants find new jobs or even start a business.
“We have also a network of nongovernmental organizations who continue cooperation with our participants for a year after, helping them to settle back into civilian life, find a job, study the legislation, and much more,” Rubtsov said.
The program, already 15 years old, will continue until 2019 with $4 million in funding.
Norwegians seem to have a strong sense of duty in helping less successful countries: it is one of the few nations in the world to spend more than 1 percent of its gross national product on international aid.
“They believe that the one who is on the top of a pyramid should help those who are at the bottom,” Rubtsov said. “Because if they fall, you’ll fall too.”
Vladimir Rubtsov, president of the International Foundation for Social Adaptation, speaks with the Kyiv Post in his office in Kyiv on Feb. 12. (Kostyantyn Chernichkin)
