Following reports of business professionals being detained in Ukraine and threatening to tarnish the country’s image among potential foreign investors, President Volodymyr Zelensky’s team has been forced to placate local entrepreneurs protesting against alleged lawlessness by some state officials in the business sector.

After the arrest on Jan. 18 of the Ukrainian businessman Ihor Mazepa, founder of the Concorde Capital investment company, local entrepreneurs raised their voices against the pressure of law enforcement agencies on their businesses.

Investigators claim that Mazepa organized the illegal appropriation of land in the Vyshhorod district of the Kyiv region to build the prestigious Goodlife Park residential development. The facilities of the Kyiv Hydroelectric Power Station are located in the area, making the land crucial for the nation’s infrastructure.

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Mazepa refuted the allegations and said the investigation should focus on the official who agreed to the land allocation and not him.

The prominent businessman told the media that his detention may be due to his active participation in the Manifest 42 public movement.

The movement was created in summer 2023 by 42 representatives of enterprises and investors to protect business from what they saw as the arbitrariness of law enforcement officials.

Accusations against law enforcement agencies

On Dec.15, 2023, Manifest 42 appealed to Zelensky to submit to parliament bills to provide protection against pressure on entrepreneurs in wartime, which the group considers has had a detrimental effect on Ukraine’s investment climate.

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According to the ministry, the program aims to create a “10:1 technological advantage” over Russia by fostering experience exchange and providing feedback and mentorship to domestic tech talent.

One of the signatories, Oleh Horokhovsky, co-founder of the online banking platform Monobank, expressed his concern regarding the current state of affairs around doing business in Ukraine.

Oleh Horokovsky Wikidata

 

“Such methods are causing the demise of business,” Horokhovsky said. “Businesses cannot and should not work in fear; otherwise, they won’t survive. Unfortunately, under such conditions, the matters of business climate and future investments are out of the question.”

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Andriy Fedoriv, founder of the FEDORIV Group, pondered the question of who would be the next victim of Ukraine’s law enforcement agencies.

“I’m uncertain what the state plans to do now to attract investment and stimulate entrepreneurship. Just a reminder – we have about four to five times fewer entrepreneurs than we should have had according to the global statistics,” he wrote on his Facebook page.

The Union of Ukrainian Entrepreneurs also issued an open statement expressing concern about the alleged illegal actions of law enforcement agencies. It argued that these were inappropriate given Ukraine considers itself to operate according to the rule of law.

Call to action

On Jan. 22, Manifest 42 announced a more radical response if their concerns continued to be ignored, involving the shutdown of enterprises.

On the same day, First Deputy Prime Minister and Minister of Economic Development Yuliia Svyrydenko, Minister of Digital Transformation Mykhailo Fedorov, and Speaker of Parliament Ruslan Stefanchuk, had a face-to-face meeting with roughly 20 entrepreneurs to discuss such regulatory actions.

Photo: Oleh Tatarov, Wikipedia

The meeting was not the first of its kind. In 2023, Rostyslav Shurma, deputy head of the president’s office, held similar meetings with his colleague Oleg Tatarov. Ukrainian businesses consider Tatarov the “boss” of law enforcement agencies and the one giving instructions on whom to intimidate.

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Forbes reports that while speaking with Svyrydenko, entrepreneurs repeatedly mentioned Tatarov.

“So, Svyrydenko, Fedorov, and Stefanchuk ended up listening to the furious businessmen for two hours,” Kyiv Post’s source said.

After the meeting, Svyrydenko reported that “the economic bloc of the government and business are on the same page” and that she was “ready to fight for every entrepreneur.”

Establishment of a new business support council

To de-escalate the situation, on Jan. 26, President Zelensky announced the establishment of the Business Support Council for Economic Security and Economic Stability, including some key business representatives:

“These are some household names and some renowned CEOs of Ukrainian companies. Businesses that work for millions of people. Technology, finances, services, and other industries. They have different backgrounds and represent different views but have the same goal – to strengthen our economy and our society.”

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In addition, Zelensky promised that the government would work on changes to regulations from the Bureau of Economic Security and others to decrease any potential pressure on legal business in Ukraine.

The Council comprises:

  • Artem Borodatyuk – co-founder of Netpeak Group;
  • Oleg Horohovsky – co-founder of Monobank;
  • Kostyantyn Yefymenko – president of Biopharma;
  • Taras Kytsmey – member of the board of the IT Ukraine Association, co-owner of SoftServe;
  • Vyacheslav Klymov – president of the Union of Ukrainian Entrepreneurs, member of the supervisory board of Nova Poshta;
  • Oleksandr Konotopskyi – member of the board of directors of the Union of Ukrainian Entrepreneurs, co-owner of Ajax Systems;
  • Dmytro Oliynyk – head of the Council of the Federation of Employers of Ukraine

As Horokhovsky told Kyiv Post, business representatives expect the government to take actions that will change the business climate in the country, and that the creation of the advisory board is the first step on this path.

“We want to help the authorities understand the existing problems that directly hinder the work of entrepreneurs,” said Horokhovsky.

Photo: Yulia Svyrydenko - Wikipedia

According to Svyrydenko, the Business Support Council will be “an opportunity for operational communication between the state and business, and a joint solution to urgent problems [with] coordination and interaction.”

Cooperative agenda

On Feb. 1, representatives of the Council met with the Head of the President’s Office Andriy Yermak. They talked about the main challenges to the work of entrepreneurs in Ukraine – in particular, about the law enforcement agencies and their attitude towards people creating jobs and paying taxes.

"Now it looks like their only goal is psychological and physical pressure," Horokhovsky said.

He added that the President’s Office is planning future meetings with law enforcement agencies.

A discussion on the need to encourage the growth of enterprises in the military-industrial sector and allow them to operate freely appears to be on the agenda.

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“We aim to conduct joint consultations to remove existing and prevent any new obstacles that may arise [in the path] of small, medium, and large businesses,” Horokhovsky said.

“As of now, such impediments can emerge from the gaps in the legislative framework, manipulation by law enforcement agencies, or changes in legislation. Our task is to prevent this.”

Horokhovsky’s colleague Oliynyk spoke positively about the meeting with Yermak: “I’m shocked. Almost all the groundwork has received positive feedback, no idea why.

I want to believe that we actually have a chance to change this country for the better,” Oliynyk wrote on Facebook.

Horokhovsky also believes that one should use every opportunity to stimulate change.

“As someone who is used to acting, I am determined,” said Horokhovsky. “I want to do everything I can to strengthen business in this country, thereby strengthening society. But of course, the future will tell.”

Furthermore, he believes that a better attitude toward Ukrainian businesses should be a top priority, especially given the government’s focus on supporting and encouraging domestic investors.

Horokhovsky and other business leaders say that a positive relationship between the government and entrepreneurs would create a favorable environment that may attract foreign investors in the future – something Ukraine is very interested in.

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Comments ( 1)

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John
This comment contains spoilers. Click here if you want to read.

Ukraine needs a portal for direct commerce with foreign consumers....just as United24 has become for securing donations from abroad.

For the last 2 years in particular the free world justifiably has a soft spot for purchasing Ukrainian sourced products...not just its culturally representative items, but the day to day basics and new innovations they are okay with exporting. I'm imagining an Amazon like portal for Ukraine.

Would the polish truckers / farmers also object to their country becoming the 'war zone free' export warehouse for that endeavour? It would generate new wealth for both nations without impacting Poland's domestic pricing. However, if these entities object to even this benign gesture, then it would be worth investigating why their union leadership remains so intent on intentionally disrupting Ukraine's war ravaged economy.

Perhaps a MRGA connection in the Polish trucker / farmer union leadership will be revealed, that should quickly be stomped out, for doing the bidding of putin as he works to destabilize all democratic allies?

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