Ukraine will become a haven for foreign business in the next five years — at least, that’s what President Volodymyr Zelensky thinks.
And the president wants Turkish business to help the country’s economy grow, he said during the Ukrainian-Turkish Business Forum in Istanbul on Aug. 8.
“My team and I have a full mandate to make changes,” Zelensky said during his appearance at the forum, part of his official state visit to Turkey.
“We already have a majority in parliament, soon we will form a professional government and we will appoint a decent prosecutor general,” he added.
Armed with promises to bring real changes to Ukraine, Zelensky offered a short vision of his economic plan and invited Turkish businesspeople to invest.
But experts say the situation is not as optimistic as he portrayed it.
Infrastructure
Zelensky announced that the economy will grow by 5-7 percent annually during his term and the government will allocate $20 billion to repair 24,000 kilometers of roads, increase the number of operating airports to 15 and develop and increase the capacity of five seaports.
This fall, parliament will adopt a new law on concessions to enable the state to cooperate with the private sector, he added.
However, Ukraine’s outgoing infrastructure minister, Volodymyr Omelyan, sharply criticized these statements, suggesting Zelensky misunderstands the infrastructure situation in the country.
“The president promised to ‘increase’ the number of operating airports to 15. But now we (already) have 16 of them,” Omelyan wrote on his Facebook page.
Moreover, according to the National Transport Strategy of Ukraine, the country should have 50 airports by 2030.
“So, we will reduce the number of them?” Omelyan asked.
Omelyan said he sees another, much more urgent problem: Ukraine doesn’t have enough aircraft to operate domestic flights. To solve this problem, the Ukrainian government can support the construction of regional aircraft — planes designed to transport up to 100 passengers on short flights — at Antonov, a state aircraft manufacturing company in Kyiv, Omelyan said.
On seaports, the minister was also surprised by Zelensky’s remarks.
Omelyan did not understand what it means ‘to develop five seaports’ and said that Ukraine currently has 13 seaports, 5 more in Russian-annexed Crimea, and another one in Vietnam.
“We develop five, and the rest what? We close? Forget? Sell? Lose?” Omelyan wrote.
In addition, the plan to spend $20 billion on infrastructure is not what Ukraine previously planned. According to the same Transport Strategy, the country expected to spend $30 billion in the same period.
“We want to spend $10 billion less on infrastructure than planned?” asked Omelyan.
As a final point, the minister said that, starting next year, Ukraine will be able to repair 10,000 kilometers of roads annually because the country now has a special Road Fund capable of financing it.
“Twenty-four thousand divided by five will be 4,800 kilometers of roads per year. That is, twice less than planned,” he wrote.
Ukrainian tourism
According to Zelensky, the government also has plans to legalize gambling in casinos and five-star hotels. This will help stimulate tourism in the regions on the Black Sea.
“Let’s develop the Black Sea tourism brand together in the world,” he said.
Again, experts were critical of Zelensky’s plans.
Gambling has officially been outlawed in Ukraine since 2009, but many businesses officially registered as lotteries are de facto running casinos.
Legal loopholes allowed them to start operating in 2012, when the Ukrainian parliament relaxed the gambling ban.
As a result, big casinos are unlikely to raise revenues for the state, as most gambling is located in the lotteries, political expert Valerii Klochok told Channel 24.
“That’s where all the money is,” he said.
Land reform
During his speech in Istanbul, the Ukrainian president reaffirmed that the government plans to lift the moratorium on farmland sales by the end of the year to create a land market of 40 million hectares.
“It will help to create a market of the best land in the world in terms of quality,” he said.
According to financial analyst Serhiy Fursa, if Ukraine were to have a real land market, prices could reach $5,000 per hectare in the next 3-5 years. Ukraine could even possibly reach land prices like in Poland: around $10,000 per hectare.
But on one condition: fair courts.
“The rule of law is still a problem,” said Fursa in an Aug. 8 interview with Novoe Vremya magazine.
