It was encouraging to hear a real change in sentiment at the two high-profile Ukraine-focused events in London last week, hosted at historic Lancaster House near Buckingham Palace. At Hudson Sandler, we were encouraged by these discussions which match our sense that there are the beginnings of renewed, albeit very selective, investment interest in the country.
Sadly Ukraine is often synonymous for international crises, conflict with Russia, European energy issues, and, lately, hacking scandals.
In addition, Ukraine continues to draw criticism for making little progress on domestic reforms and fighting corruption, which is deeply ingrained. The phrases “Ukraine is at a turning point” and “Ukraine is at the crossroads” have been used so many times since the country’s independence in 1991 that they now lack any credibility.
The UK-Ukraine intergovernmental Ukraine Reform conference and the related Chatham House event shared a common theme: Ukraine has made more progress since its Revolution of Dignity in 2014 than in the whole period up till then since it became independent 26 years ago.
“The runway was long, but Ukraine has finally taken off,” quipped the country’s finance minister, Oleksandr Danylyuk, speaking during the Chatham House event. The country turned the corner earlier this year when it left recession, posting a GDP growth of over 2% with a projected 2.5% growth in 2017 – admittedly, still far from the growth required to lift the nation from the poverty
The Financial Times’ Eastern Europe Editor Neil Buckley moderated the Chatham House discussion, which ranged from geopolitical risks to economic growth and domestic reforms.
The attendance of the UK’s Foreign Secretary Boris Johnson added weight to the Lancaster House’ audience, but it was the contribution of the young Ukrainian policy makers, business people and civic society representatives that really impressed.
Natalia Mykolska, a former lawyer and now Ukraine’s Deputy Minister of Economic Development and Trade, represented a young generation of Ukrainian leaders.
According to her, society has reached a new level of maturity with Ukrainians now being much better prepared to participate in the country’s governance and policymaking.
More Ukrainian businesses, especially, are now mature enough to work together with think tanks and the government to develop and push the economic agenda forward, Mykolska said.
Civic society has grown up significantly, she continued, although the development of educational programmes teaching civic organisations how to work together with the government would help to speed up the reforms.
“There is also a clear trend to favour ‘Ukrainian-made’: Ukrainians now prefer to listen to Ukrainian experts, not foreigners,” Mykolska said.
Speaking on one of the panels, Taras Kytsmey, a founding member of Soft Serve, one of the largest global IT companies, which also happens to be Ukrainian, reminded the audience that the Ukrainian IT outsourcing industry is the largest in Europe and the fourth globally. It is growing at 20% annually and expected to be worth USD 7bn by 2020.
Francis Malige, Managing Director for Eastern Europe and the Caucasus at the European Bank for Reconstruction and Development, has been based in Ukraine since 2014. He also sounded chirpy:
“We are now moaning about the [slow progress] of the land reform. Two years ago, there was nothing to moan about, as the land reform was not even in sights. The more successful we are, the harder it gets, and the resistance we now have to the reforms is a good thing: it means we are making a real progress.”
There is a strong community of young reformers in Ukraine, who may not be advertising their achievements enough, but they are making small steps every day, said Mykolska. “We should learn how to praise our own efforts better.”