Belgium’s cumulative investments in Ukraine almost doubled, to $102 million, in the first 10 months of 2014.
Although complete statistics aren’t available on the companies responsible for this growth, Belgium Ambassador to Ukraine Luc Jacobs said Belgian companies are finding creative solutions to the challenges of the Ukrainian market and are determined to stay despite war and recession.
While recapitalization of subsidiaries could be one reason for investment growth, some businesses are also expanding and planning further investments.
Cases in point are the TPF real estate company, which continues the development of the “Belgian Village” apartment complex in Lviv, and the Puratos bakery, which is planning to expand in Odesa Oblast
“Ukraine is being kept on the radar of Belgian companies, be it in terms of trade or investment,” Jacobs told the Kyiv Post during an interview at his residence in Kyiv. “Ukraine has potential as a market, as a production site, in terms of its qualified working force. You have companies that see that potential and do invest in the country.”
Belgians are also active in information technology, one of Ukraine’s strong sectors in terms of qualified engineers and economic potential. Meanwhile, they are also seizing the opportunities offered in energy efficiency and agriculture.
Farming, research, food processing and bioenergy are key areas of Belgian interest in the Ukrainian agriculture sector.
There are a number of medium-sized Belgian farms in Ukraine that are using innovative approaches to increase their productivity. They are also creating clusters around the farms, such as related food processing plants. Such approaches translate into more jobs for the region, the ambassador believes.
“We have a particular know-how in those areas that would be a good match for the Ukrainian expertise in the field,” Jacobs said. “The success of Ukrainian agriculture translates into exports also creates added business for the ports of northwestern Europe, of which Flemish ports are an important part.”
Ukraine’s reputation for an unstable and corrupt business environment is still among the major obstacles to attracting more investment, the Belgian ambassador said.
“We have seen the hope-giving developments in terms of legislation, the anti-corruption bureau,” Jacobs said, adding that the Belgian business community in Ukraine still feels hindered by the judicial system, in which much reform is needed.
“If businesses that are present here are happy, they will insight others to come,” he said.
The Ukrainian diaspora in Brussels is also contributing to improving the country’s image abroad, taking advantage of the vast international community in Belgium.
“It is a driving force behind the initiatives taken in terms of awareness campaigns, humanitarian aid collected and sent to Ukraine, but they are not unique. There are many Belgian NGOs involved,” Jacobs said.
The Belgian government contributed an additional 30,000 euros to the Organization for Security and Cooperation in Europe for assistance to Ukraine in 2014, and committed a further two million euros in humanitarian emergency aid for Ukraine on Jan. 30.
Belgium, one of the founding countries of the European Union, is an active participant in shaping EU policy and a strong advocate of a unified, European “single voice.” It is pushing for a diplomatic solution to Russia’s war against Ukraine.
During its chairmanship of Europe’s leading human rights organization, the Council of Europe, which began in November and ends in May, Belgium wants to fully exploit its soft power to contribute to a lasting political settlement in eastern Ukraine.
“The council’s rich experience could be used in order to find a more decent approach than just letting the guns talk and only listening to those who hold the trigger,” Jacobs said. “The council has its tools which are not weak in themselves: the European Court of Justice, elements of political pressure, a ‘naming and shaming’ approach that can be very effective.”
In a statement released on Feb. 27, in his capacity as chairman of the Committee of Ministers of the Council of Europe, Belgian Foreign Minister Didier Reynders called on “Russia to respect its commitments and to release, without delay, Nadia Savchenko, Oleg Sentsov and all other Ukrainian citizens that are illegally detained in Russia.”
However, the efforts have been so far unsuccessful.
While the channels for dialogue should be kept open for all the parties involved, the ambassador says, the EU’s political pressure and economic sanctions should be kept in place to ensure the implementation of the Minsk peace agreements, which the ambassador believes to be “the point of reference.”
At the same time, the failed historic “Belgian solution,” – externally imposed and internationally-guaranteed neutrality – for Ukraine is clearly out of tune with 21st century diplomacy, Jacobs believes.
In 1831, the “big powers” of the age decided that Belgium had to be a militarily neutral state, although without giving Belgium a say in the discussions. As a result, the country’s neutrality was brutally violated in both world wars.
“Countries should decide for themselves – and that is what the whole crisis in Ukraine is about,” the ambassador said. “Your eastern neighbor cannot dictate to you what to do. Neither can Belgium or the EU. You know what you want and it’s up to you to do that. You have international order and the international community behind you.”
The number of Ukrainian visa applications to the Belgium Embassy decreased by eight percent, to 8,756 in 2014. At the same time, the refusal rate rose from six to eight percent for all Ukrainian applications, considerably higher than Austria’s one percent or Finland’s 1.5 percent.
The ambassador believes that the hryvnia exchange rate plunge was one of the main reasons why Ukrainians cannot afford to travel elsewhere in Europe, particularly Belgium, now ranked the 11th most expensive European country by Eurostat.
Kyiv Post staff writer Olena Gordiienko can be reached at [email protected].
