The 10th Kyiv Post CEO Breakfast brought together 17 business and government leaders to talk about “strategies for business continuity and resiliency planning.”
But it could have been headlined simply: Crisis management.
The event, sponsored by Mozayix International, an Arlington, Virginia-based firm that provides security and crisis management solutions to businesses and governments in several nations, took place at the Hilton Kyiv Hotel on March 16.
Ukraine brings its own set of opportunities and risks for those living and working here.
On the opportunity side, the nation has one of the cleanest governments it has ever had and has stamped out annual multibillion-dollar corruption in the energy and other sectors. The nation also has a highly educated workforce and offers low costs for doing business.
But there’s also plenty of wild-card risks: Russia’s war against Ukraine, which is three years old, is among them as well as ongoing corruption and distrust with government institutions assigned to uphold rule of law — namely judges, prosecutors and police.
And each business, depending on size and sector, assesses risks differently.
For some, the war is the major obstacle.
For others, it’s fear of illegal corporate raidership or corruption by tax police.
And for still more, the big hurdles are logistical or related to protecting supply chains or overcoming poor or unreliable infrastructure, from electricity to roads.
And perhaps for everyone nowadays, cybersecurity ranks high on the list of concerns.
The general tenor of the discussion conceded that international companies have better resources with which to make long-term plans and respond to unexpected events, while smaller firms are more often scrambling to find resources for coping with crises or responding to threats.
For example, some companies are large enough to hire full-time risk assessment managers, an unaffordable luxury for many smaller firms, and to make long-term plans.
Emergency contingency planning includes the ability to relocate a workplace and its people within days, if not hours, so as not to disrupt production or distribution and to keep the employees safe.
Unfortunately, in some ways, the longer that Russian President Vladimir Putin keeps Ukraine at war, the more he wins. Ukraine is now forced to spend 5 percent of its modest gross domestic product (less than $90 billion GDP expected in 2017) on defense spending, even though Ukrainians have many other needs for government spending.
Government is, however, fighting back – not only through Ukraine’s military, but also by taking Russia to court for human rights violations and business losses related to the war in the eastern Donbas and also the 2014 illegal annexation of the Crimean peninsula.
Government is also pushing forward with judicial changes to create an independent court system, pension changes — such as raising the retirement age — to reduce the $1.4 billion annual deficit and lobbying lawmakers for the possibility of land sales, with the idea of creating a market in this crucial area. Simplifying taxes and curbing abuses on tax enforcement, as well as revamping the civil service to make government service more attractive and effective, are also in the cards.
Vested special interests, however, are fighting to keep their special privileges. Fears were expressed, however, that if voters don’t see the benefit of paying more for their utilities and other reforms such as a higher retirement age, they will use the next elections to elect populists who campaign on fiscally irresponsible promises.
The banking sector is still stinging from enormous financial losses connected to the lack of rule of law, specifically the inability of financial institutions to collect on unpaid loans. Currently, the three largest banks are state-owned: UkrExIm Bank, OschadBank and now PrivatBank. The massive restructuring of the banking sector wiped out half of the nation’s 180 banks, many guilty of insider embezzlement schemes that will cost taxpayers $20 billion, according to banking experts. Credit remains very expensive and scarce, harming smaller businesses the most.
Participants emphasized the need for Ukraine to promote its strengths and to keep the trust of businesses already operating in Ukraine, particularly smaller enterprises, so they don’t lose faith and move to other countries.
The hope is that the war can be contained to a small portion of the Donbas — 2.5 percent of Ukraine’s land mass — while the rest of the country can develop more rapidly.
At this critical time in Ukraine’s history, strategic planning and continuous development were identified as more needed than ever.
One businessperson offered three pieces of advice for managing crises such as the ones that Ukraine experiences: act timely, don’t wait for orders from headquarters and protect the brand.
Participants at the 10th Kyiv Post CEO Breakfast included:
Jake Allen, managing partner, Mozayix International
Basil J. Papan, analytics division, Mozayix International
Oleksiy Filatov, deputy head of Presidential Administration
Oksana Markarova, first deputy finance minister
Hermine Poppeller, ambassador of Austria
Dmytry Kyselov, country manager, Procter & Gamble Ukraine
Andriy Golimbovsky, general manager, EKOL
Maciej Tomasz Zielinski, CEO, Siemens Ukraine.
Burak Ersoy, CEO, lifecell
Grzegorz Chmielarski, CEO, McDonald’s Ukraine
Ansgar Bornemann, market head, Nestle Ukraine
Vira Platonova, general director, MasterCard Europe
Mark Appelman, country manager, ING Bank
Pierre-Vladimir Joliot, general director, ALD Automotive
Alla Savchenko, president, BDO Ukraine
Oleg Bodnar, general manager, Cisco Systems
Sviatoslav Belei, country integrity officer, ABB
The Kyiv Post contingent included:
Luc Chenier, CEO
Brian Bonner, chief editor
Alyona Nevmerzhytska, commercial director
Anastasia Vlasova, photographer