“Ukraine after the war will not become the “investment Mecca of Europe” if you just sit and wait”

– Now this question sounds affirmative. But I would say that Ukraine after the war can become one of the main investment projects in Europe, and our task is to make it so that we become one. If nothing is done, Ukraine will not become investment attractive for the West.

Let’s go into detail. Conventionally, there are three different sides to helping or investing. First, there are donors, donor aid – from national governments or supranational organizations, such as the World Bank, the European Commission or the European Bank for Reconstruction and Development or the American Agency for International Development. An Interdepartmental Donor Coordination Platform was created to coordinate their actions. According to the report prepared together with the government of Ukraine “Second rapid assessment of damage and needs for the recovery of Ukraine”, our country needs 14.1 billion dollars for “urgent” needs. This money will be used to restore Ukrainian infrastructure, and a certain part will be allocated now.

The third type is private investment, that is, money for prosperity – for the creation of new enterprises and jobs. Everyone imagines it this way: Boeing or Airbus will want to build a factory for the production of aircraft or components in Ukraine, or a large car manufacturer will want to build a factory. This is the attraction of private investment, which is what we all hope for.

By the way, everyone knows the Marshall Plan (a program of economic assistance to European states after the Second World War, – ed.) provided for a one-to-one ratio of donor aid to private investment – ​​that is, for every dollar provided by donors, there must be one dollar from private investors.

Are there reasons to believe that Ukraine will become the “investment Mecca” of Europe? I would like to hope that it will be so, but there is little hope here. Investors have clear requirements and a clear understanding of why they are investing their money.

– Private money will not arrive en masse before the end of the war, although there are already isolated cases. The key to private investment will be the provision of military and political insurance.

During the war, and even in the post-war economy, wartime elements remain: an asset can be destroyed, or be expropriated or confiscated for political expediency. Therefore, the investor wants guarantees, to have insurance against this. Private insurance companies do not provide this, as it is very expensive. Usually, such insurances are provided by supranational or governmental organizations – a certain fund is created, with the funds of which existing risks are re-insured.

– Yes, this is a good example. At that time, the Lloyd’s insurance syndicate refused to reinsure the risks of other insurance companies regarding planes flying to Ukraine. And the Ukrainian government created a fund worth UAH 17 billion to guarantee flight safety.

Currently, such a fund should be created at the level of an international financial organization, for example, the International Investment Guarantee Agency. As far as I know, right now international financial organizations and the governments of some partner countries are talking about the creation of a guarantee fund for investments in Ukraine. The issue has not yet been resolved, but is already being discussed.

– The credit rating of Ukraine is insufficient, it is not the so-called triple-A (AAA) according to the category of rating agencies. So it should be guarantees provided by an organization that has a higher credit rating.

– The answer is both simple and complex at the same time. Ukraine needs to focus on the list of requirements provided by the European Union as part of the EU accession process. The list is quite long, but we have to do them. All Western investors look at Ukraine through the prism of EU requirements, because they are understandable.

We can analyze the key requirements as an example.

First, it is the adaptation of Ukrainian legislation to the norms of the European Union. Now the government is conducting an “inventory” – discovers where we have disagreements so we can start working on them.

Secondly, ensuring the principle of Rule of law (principle of the rule of law – ed.). That is, the judicial system must be independent, the rules of the game – understandable and the same for everyone, and legal norms – have “supreme power”. This is also being worked on. After all, these are not new requirements, but if they are still talking about it, then the issue has not yet been resolved.

Thirdly, it is an anti-corruption policy. Ukraine is still considered a highly corrupt country and the EU has made a clear demand – fight corruption. This is one of the two key problems preventing European companies from entering the Ukrainian market. Companies cannot operate in such conditions because, for example, in certain countries the CEO is criminally liable for corruption in which his company is involved in any other country.

Fourthly, it is de-oligarchization. We have already adopted certain normative acts, but the EU insists on further steps. They believe that there cannot be economic concentration in one hand, because any economic or political concentration in the long run leads to an undemocratic regime – or to a violation of the rule of law, or to corruption. These are political and economic issues.

– So. There is such an understanding, because these requirements were brought to the first persons by the representatives of the European Union. Certain things, in my opinion, are already being done. But our Western partners insist on faster and more confident steps.