The vast majority of emerging Europe countries started their transition process into market economies at the beginning of the 1990s. Ukraine became an independent state in August 1991, yet the country’s social and economic development still lags behind its Central European peers. Emerging Europe asked some leading economists how to speed up growth and catch up with the country’s Central European neighbours. Continue reading The Dilemmas of Ukraine’s Economic Policy
In 1990, GDP per capita in Poland and Ukraine was roughly the same and amounted to some $1,600. By the end of 2016, Polish GDP grew to $12,700. In 2013, GDP per capita in Ukraine equalled $4,200 but the recent recession has caused it to fall again, to some $2,000.
Leszek Balcerowicz is a former Polish deputy prime minister, and he is known for implementing the Polish economic transformation programme in the 1990s: this was a shock therapy that is commonly referred to as the Balcerowicz Plan. He is a former governor of the National Bank of Poland, and currently, he is Ukrainian President, Petro Poroshenko’s, representative in the cabinet of ministers. He spoke to Andrew Wrobel about Poland’s transformation in the 1990s and the current government’s economic growth plans, as well as his ideas for the economic development of Ukraine. Continue reading Leszek Balcerowicz: Ukraine Can Learn from Poland’s Economic History
With the fast-developing IT sector and most IT firms occupying refurbished Soviet-era office buildings, demand for modern office space is sky-rocketing, says Volodymyr Zhenchak, CEO and the owner of Galereja Centre Ltd, which has developed the Forum Lviv shopping centre, and vice-chairman of the board of the shopping centre. He spoke to Eva Keller about Innovation District IT Park, which his company is developing and looking for partners for.
Continue reading The Innovation District IT Park Will Help Lviv Become CEE’s IT Hub
Since the beginning of the military conflict in eastern Ukraine, quite a few foreign companies have left the country. Other firms decided to stay and grow the business, however, seeing Ukraine as a great location for their manufacturing facilities. Continue reading Longstanding Early Investors Say Ukraine Offers Foreign Manufacturers Great Prospects
The land law will help to improve the land market but its influence on the agricultural industry in general is still hard to estimate, says Andriy Dovbenko, Managing Partner at N&D Law Firm. He spoke to Jerry Cameron about the new regulation that the Ukrainian government is working on, as well as the legal framework for making an investment in the country. Continue reading Start Making Connections for the Opportunities Ukraine is Currently Offering
O.Torvald is the fourteenth Ukrainian act to appear in the Eurovision song contest. The country joined the family in 2003 and won the competition a year later with Ruslana’s Wild Dances. In 2007, Verka Serduchka came second with Dancing Lasha Tumbai. In 2008, the performer’s success was repeated by Ani Lorak, who sang Shady lady. In 2013, Zlata Ognevich took third place. Finally, in 2016, Jamala’s 1944 brought the Eurovision song contest to Kyiv again. Continue reading The Eurovision Song Contest Is a Perfect Showcase for Ukraine’s Talent and Warmth
Saying that Ukraine is an attractive but difficult market is nothing new. Situated in the heart of Europe, it is close, big and well-educated. It is cheap and abundant in resources, both natural and human. It is industrial, agricultural and hi-tech. However, at the same time it is unstable; it is corrupt; it has contradicting laws, unjust courts and a war inside the country. It has a big and aggressive neighbour and weak state institutes. It also has a mentality that was being developed for 70 years on the other side of the Iron Curtain. Continue reading See the New Ukraine and Benefit From the Best by Partnering or Investing in IT
In recent years Ukraine has shown it has much to offer the IT sourcing sector, from a highly skilled workforce of young professionals to a busy community of foreign investors and the support of the Ukrainian government. Continue reading Ukraine Continues to Make Waves as an IT Outsourcing Destination
Ukraine’s favourable geographical location; it’s extremely fertile black soil; decent infrastructure and relatively cheap labour force make the country’s agribusiness sector highly competitive. A lot has been achieved in the country over the past 25 years to enable Ukraine to live up to its status as the “breadbasket of Europe” and to help, at least partly, address the global challenge of sustainable food supply and food security. Continue reading Ukrainian Agribusiness — a Jewel in a Crown
Ukraine hasn’t bought Russian gas since November 2015. In January 2017, Gazprom charged Naftogaz $5.3 billion for gas it had not purchased, under a take-or-pay clause covering the second through to the fourth quarter of 2016. The applicability of the take-or-pay principle is currently being reviewed by the Arbitration Institute of the Stockholm Chamber of Commerce within the context of the arbitration proceedings between Naftogaz and Gazprom that were initiated in 2014. Naftogaz doesn’t intend to pay the invoice until the final decision has been reached in the arbitration.
Yuriy Vitrenko, Group Chief Commercial Officer at Naftogaz, spoke to Andrew Wrobel, about the reforms of the Ukrainian gas market that have already been introduced and the challenges that the sector is facing now as a result of a slowdown in further reforms. Continue reading Naftogaz: A Good Start Has Slowed But Optimism Remains High
Set up 1,535 years ago, Kyiv is one of the oldest cities in Central and Eastern Europe. Not only is it Ukraine’s capital, and the country’s largest city, but it also enjoys a special administrative status and is considered a region. Continue reading Kyiv’s Mayor Is Used to Fighting to Attract Attention and Interest
The Russian military operation began, in Crimea, on the 20th of February, 2014. A month later, after the questionable referendum on self-determination, Vladimir Putin announced the annexation of Crimea. Demonstrations by pro-Russian and anti-government groups took place in the Donetsk (in the photo) and Luhansk oblasts (collectively the Donbas) began at the beginning of March. Shelling of the airport and the toughest military operations began on 26 May. Continue reading Military Operations in Ukraine Have Had Some Surprisingly Positive Side Effects for Modern Businesses
I have been in Ukraine since October 2014; I arrived soon after the Revolution of Dignity began. Continue reading Ukraine and Canada: A History of Settlement and a Future for Investment
Ukraine is already one of the top IT outsourcing destinations in Europe, and a prolific source of start-ups which are attracting more and more attention from global investors. However, the market remains undercapitalised compared to other European countries. The blossoming Ukrainian technology sector has triggered the advent of new companies that are developing their products based on great ideas and high performance in their technological implementation. What is needed now is a bridge between Ukrainian and global investment as well as start-up ecosystems that will match investors and Ukrainian entrepreneurs. Continue reading Ukrainian Start-up Projects Recognised in the International Market but Still More Investors Needed
Within the last three years the Ukrainian government has introduced more reforms than all the governments of the previous 15 years, says Satu Kahkonen, country director for Belarus, Moldova, and Ukraine at the World Bank. She spoke to Andrew Wrobel about the business climate in Ukraine and the impact of the conflict in the east of the country. Continue reading There Is a Move Towards Change in Ukraine
Ukraine’s privatisation potential is based on more than 350 objects dedicated for sale in 2017, including the most interesting “blue chips” including: the second biggest producer of ammonia and carbamide in Ukraine (PJSC “Odessa Port Plant”), a power generating company that produces eight per cent of the electricity and 18 per cent of the heat in Ukraine (PJSC “Centrenergo”), one of the biggest domestic producers of mineral phosphorus fertilisers (PJSC “Sumykhimprom”) and a monopolistic producer and retailer of pure alcohol in Ukraine (State Enterprise “Ukrspyrt”). Continue reading Ukraine’s Government Declares Ambitious Privatisation Targets
The Ukrainian market for venture investment and business innovation has been actively and systematically developing since 2005. That is earlier than in most European countries. Despite the fact that it has seen significant growth, however, it still has not formed a self-sufficient ecosystem. Why? Of course, the main reason is the economy. Continue reading Ukrainian Venture Investment Market Is Immature and Needs Growth
Sirin Software started in March 2014, and has grown quickly. The company now employs 30 IT specialists. In 2016, it merged with another firm in order to expand its service portfolio.
Alexander Nikitenko, CEO of Sirin Software, spoke to Jerry Cameron about how the company was started, the firm’s presence in the US as well as its future expansion plans. Continue reading Sirin Software — A Ukrainian Firm Conquering Global Markets
The public property damage in corruption cases that have been investigated by the National Anti-Corruption Bureau of Ukraine (NABU) only amount to UAH 83 billion (around $3.7 billion), says Artem Sytnyk, the director of the NABU. He also spoke to Jerry Cameron about the origins of corruption, its size and the challenges the NAPU is facing in fighting it. Continue reading Governmental Support is Vital to Fight Corruption
The Ukrainian banking sector is going through tremendous changes. The National Bank’s efforts to clean up the industry, the recent nationalisation of PrivatBank and the merger of Ukrsotsbank and Alfa-Bank are only a few examples.
Tamara Savoshchenko, Chairwoman of the Management Board at Ukrsotsbank, and Roman Shpek, an advisor to the President of Alfa-Bank Ukraine and Head of the Independent Association of Ukrainian Banks, spoke to Andrew Wrobel about the bank’s merger and its impact on the market as well as the prospects for the banking sector in Ukraine. Continue reading The Ukrainian Banking Sector Looks Set to Regenerate New Growth
Ukraine, similar to Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, and Serbia, is a contracting party of the Energy Community, whose goal is to extend the EU internal energy market beyond the European Union, by attracting investment, creating an integrated energy market, securing supply and enhancing competition.
Janez Kopač, director at the Energy Community Secretariat, and Karolina Cegir, a gas expert in the organisation, spoke to Andrew Wrobel, about how Ukraine’s energy sector is integrating with the EU’s. Continue reading Ukraine Is Energy Independent in Some Sectors and Awaiting Change in Others
The story of Ukraine’s 2013-2014 anti-government protests, which started because the then-president Victor Yanukovych declined to sign an Association Agreement with the European Union, is definitely still remembered in Brussels. However, as time passes, the memories of these dramatic events are being increasingly replaced by criticism of Ukraine’s current inability to deliver effective reforms. Where then, does Ukraine stand, today, in its relationship with Europe, how well the country is doing and what does it need? Continue reading Between the East and West, Geographically and Politically
Geopolitical Futures (GPF) forecasts that the frozen conflict in Ukraine will be formalised in some way in 2017. The increased fighting in Ukraine, since 29 January, poses a potential challenge to this forecast and therefore warrants a closer look. At the end of January 2017, Ukrainian president, Petro Poroshenko, cut short his visit to Germany amid news of heavy fighting in eastern Ukraine, near the town of Avdiivka. Continue reading The Stalled Conflict in Ukraine Will be Formalised
The fight against corruption is one of the key reforms in Ukraine during the past three years since the Revolution of Dignity. However, despite all the steps that have been taken, the results are still far from what citizens, business and the international community would expect. Continue reading Anti-corruption Efforts Are the Starting Point for Further Reforms
The protection and enforcement of intellectual property rights (IPR) in Ukraine has received significant attention over the last few years, particularly within the context of Ukraine’s inclusion in the Priority Watch List of the United States Trade Representative’s (USTR) “Special 301” Report, as one of the countries where particular problems exist regarding the protection or enforcement of IPR or market access for persons relying on IPR. Ukraine has been listed on the Priority Watch List every year since 2012. Continue reading Protecting Intellectual Property to Encourage Business Confidence
In 2016, the total stock of office space in Kyiv amounted to 1,783 square metres. The new supply was insignificant, a mere 38,000 square metres and was the market’s lowest increase since 2008. 2016 was characterised by an increase in the number of lease transactions in Grade A and B business centres. Continue reading Office Space Remains Available in Kyiv
The Deep and Comprehensive Free Trade Area (DCFTA) negotiations between the European Union and Ukraine began in 2018, after the country joined the World Trade Organisation (WTO). Despite having started on the wave of the Orange Revolution of 2003-2004, they were continued, or even accelerated, by President Viktor Yanukovych, who was elected in 2010 and is known for his pro-Russian. Continue reading Finalising the DCFTA is Expected to Bring Multiple Benefits to Ukraine
The National Renewable Energy Action Plan (NREAP) till 2020 establishes the general goals for the development of the renewable energy sources’ (RES) sector in Ukraine. According to Ukraine’s commitments as an Energy Treaty member, the RES share in the gross final energy consumption should reach 11 per cent by 2020. Continue reading A Very Good Prospect for Future Biogas Development
Although in Ukraine SMEs make up 99.9 per cent of all registered enterprises in the country, there are limited possibilities for their growth and competitiveness.
Dr Gennadiy Chyzhykov, president of the Ukrainian Chamber of Commerce and Industry (UCCI), spoke to Jerry Cameron about the role Ukrainian SMEs play in the economy and the challenges they have been facing since the Maidan. Continue reading SMEs Should Play an Important Role in the Economy and Export Development
Since gaining its dependence Ukraine’s economic and political priorities have been to attract foreign investors. Ukraine is a country with a population of 45 million. The country’s leadership’s main arguments to attract foreign investors have been its abundant and cheap labour force as well as a large market and fast growth of consumption. But is that supply of labour sustainable? Continue reading Ukraine’s Reputation for Cheap Labour May Not Ring True in the Long-term
The Concept for Development of Ukraine’s Gas Production Industry by 2020, which was approved by the government in September 2016, predicts that natural gas production should increase to 27 billion cubic metres within four years, compared to the current 20 billion cubic metres. Are these plans feasible? Continue reading Ukraine’s Gas Industry Risks Stagnation Without Investment
In the current geostrategic environment, it is impossible to divorce political development from economic development. The prospects for the global economy and, by implication, for individual economies are intricately driven by significantly changing and unpredictable geopolitical trends. Continue reading European Volatility Makes Economic Development Slower for Ukraine
Ukraine is known as Europe’s breadbasket and has close to a third of all the arable land area in the whole EU: some 34 million hectares. 70 per cent of that land is highly fertile black soil with a depth of up to six metres deep.
Elena Voloshina, country representative of the International Finance Corporation in Ukraine, spoke to Andrew Wrobel about the challenges and opportunities in the agricultural and energy sectors, where the IFC is strongly engaged in in Ukraine. Continue reading Europe’s Breadbasket Offers Opportunities for Investment and Diversification
At the end of December 2016, the film ‘Viking’ was released in cinemas across Russia. It set an absolute record among the country’s filmgoers, gathering $1 billion in the box office within its first nine days. It is also said to be the most expensive Russian film ever made. The film was expected to depict historical truth, at least this is what the producers claimed, but it seems it failed to do so. Continue reading ‘Viking’ is Yet Another Way to Annoy Ukraine
Ukraine’s export IT segment showed an increase of 15 per cent in 2016, and continued to occupy the third place, by volume of total country exports, after agriculture and metallurgy. While we are speaking about the rates of growth, there are very solid grounds to expect that this positive tendency will be maintained and will grow to an optimistic 20 per cent in 2017. Continue reading The Human Factor is Boosting Ukraine’s Promising IT Export Sector
In December 2016, the European Council reconfirmed its commitment to international law and the territorial integrity of Ukraine, as well as the conclusion of the EU-Ukraine Association Agreement, including the establishment of a deep and comprehensive free trade area. Continue reading A Roadmap for Reform in Ukraine and a Promise of EU Support
Entirely by chance, in 2006, I ended up controlling a small bank in Lviv, Ukraine, and I have been doing it ever since. Continue reading Past Troubles Belie the Opportunities for Investment
Until now, the European Bank for Reconstruction and Development (EBRD) has invested over € 21 billion in more than 1,000 projects across six countries of Eastern Europe and the Caucasus (EEC), contributing to the countries’ economic growth as well as policy dialogue.
Francis Malige, Managing Director for Eastern Europe and the Caucasus for the European Bank for Reconstruction and Development (EBRD), spoke to Andrew Wrobel about the prospects for growth in Armenia, Azerbaijan, Belarus, Ukraine, Georgia and Moldova, which make up the Bank’s EEC region, as well as the business climate and investment opportunities in its largest economy — Ukraine. Continue reading Changes Are Needed in Ukraine’s Economy and Business to Catch up with CEE Growth
Recent statements by the European Union (EU) and the International Monetary Fund (IMF) give the impression that Ukraine is making significant steps toward stabilisation and normalisation. There has been much praise for the administration of Petro Poroshenko, especially for the nationalisation of the heavily indebted PrivatBank, and recognition that reforms such as this will be sufficient to unlock the next $1.7 billion tranche of IMF assistance from its $17.5 billion rescue-fund. Continue reading Steps to Stability Marred by a Failure to Attract FDI
I first arrived in the Western Ukrainian city of Lviv at the beginning of 2003. Lviv is about 75 km away from the border with Poland and some 600 from Kyiv, Ukraine’s capital. With its low labour and energy costs, Ukraine offered, and still offers, enormous opportunities for foreign businesses to grow and I went for it. However, there are two sides to every coin; corruption and the share of dealings in the black market were very high. Everyone talked about it but not much was being done to combat it. Continue reading Denmark in Ukraine: Fostering a Better Business Climate for Both Sides
As so often in the past quarter century, Ukraine is again in the news internationally, with questions being asked about how President Trump’s apparently friendly attitude towards Putin might affect the issues of Crimean annexation and the Russian intervention in the Donbas. Such a threat to the sovereignty of a nation that declared independence from the USSR only 25 years ago, gives cause for good analyses of how Ukraine has developed. Continue reading The Political Economy of Independent Ukraine: Late Starts, False Starts, and Last Chance?
Those who follow the ups and downs of Ukraine’s economy cannot help but ask one obvious question — what is the “cause” behind all this “effect”? While the obvious disconnect between the economic data and market performance is sometimes baffling, we need to listen closely to the sources that matter more, such as the International Monetary Fund (IMF), the US Department of State, etc. and less to those that matter less — the Ukrainian Ministries of Economy, Finance, and the Central Bank, etc.). Continue reading Ukraine’s Economy in 2017 — When Dreams of Growth Meet Geopolitical Reality
Investors’ feelings concerning the outlook for Ukraine’s economy improved slightly in late 2016, although the economy remains fragile as the pace of reforms is still too slow. Continue reading Business Moving Forward with Cautious Optimism — Can Investors Win the Confidence Game?
The turning of the calendar to a new year is a natural point to reappraise the legacy of the year just passed; searching for clues as to what will come and what must be avoided in the future. Such an exercise is particularly useful in the case of Ukraine, which has a large milestone coming up. February 2017 marks three years since (now) former President Yanukovych fled to Russia with large quantities of Ukraine’s treasury, a signature event which also sparked three years of tangible economic reform and political change. Continue reading Falling into Old Ways in 2017? Ukraine’s Struggle for Functioning Economic Institutions
Poland’s role in relation to the Ukrainian context is often discussed in the political sphere and there are important reasons for that. Not only was Poland the first country to recognise Ukraine’s independence in 1991, but since then it has also repeatedly and continuously supported Kyiv in its pursuit of European and Euro-Atlantic integration and after 2014, it provided help when military conflict broke out in the eastern part of the country. Yet, there is another chapter in Polish-Ukrainian bilateral relations; one that is linked to economic collaboration and its impact on Ukraine. Continue reading Poland’s Business Experience Makes it a Good Neighbour to Ukraine
In January 2014, €1 cost about 11 Hryvnias (UAH) and $1, almost eight. At the end of December 2016, these foreign currencies were bought at close to 28 and 27 Hryvnias, respectively. However, depreciation is not the only challenge the National Bank of Ukraine has had to face.
Dmytro Sologub, Deputy Governor of the National Bank of Ukraine (NBU), spoke to Andrew Wrobel about the recent nationalisation of PrivatBank, the country’s largest bank, about the reforms of the banking system and development prospects for the financial sector, as well as the future of FDI in Ukraine. Continue reading Changes Are Making Ukrainian Banking More Aligned with International Standards
For a long time, energy sector reforms have been viewed as one of the most important challenges facing Ukraine. Their most visible manifestation so far has been in the steep hikes in energy tariffs for households, to ‘market’ levels, above all for natural gas and central heating.
Continue reading Energy Tariff Reform in Ukraine: Estimated Effects and Policy Options
After two years of contraction—seven per cent in 2014 and 12 per cent in 2015 — the Ukrainian economy returned to growth in 2016 and is expected to increase by more than two per cent in 2017. However, that is not the case for Donetsk and Luhansk, which are still engaged in the military conflict and where the manufacturing sector has contracted by 32 and 42 per cent respectively.
Dr Mohammad Zahoor, a Ukraine-based, British businessman of Pakistani origin and the founder and owner of the ISTIL Group and publisher of the Kyiv Post, spoke to Andrew Wrobel about how his business has been affected by the Russian-Ukrainian conflict, the investment opportunities the country offers and the recent reforms following Maidan as well as Ukraine’s integration with the West. Continue reading Maidan Three Years On—What Has Changed for Ukraine?
After an expectedly modest increase of 1.1 per cent in 2016, the Ukrainian economy is expected to grow by 2.4 per cent in 2017 and by 3.0 per cent in 2018, according to a survey of 30 local and international economic analysts made by FocusEconomics. The National Bank of Ukraine is more optimistic and sees the economy expanding by 2.5 per cent in 2017 and by 3.5 per cent in 2018. Continue reading FocusEconomics: Predicting an Increase for the Ukrainian Economy
When Ukraine makes the headlines, it is generally because of the war, which started in 2014, in the eastern part. This has hugely influenced the political and economic situation of the country, including the ease of doing business. However, it’s unjustified to think that, given the circumstances, investing in the whole country makes no sense. Continue reading Western Ukraine Could Be an Entry Point into the Country
Since it obtained full sovereignty from the Soviet Union, in 1991, Ukraine has remained suspended somewhere between the East and the West, being pulled closer to one or the other by various administrations. Now, paradoxically, an important stimulus for defining the future identity of this country of over 40 million has come, with the Russian occupation of the eastern part of Ukraine in 2014.
Ivanna Klympush-Tsintsadze, Ukrainian Deputy Prime Minister for European and Euro-Atlantic Integration, spoke to Nikodem Chinowski about the prospects for integration with NATO and the European Union and about the development of the Ukrainian economy, a few days ahead of the 25th anniversary of the country’s independence. Continue reading Ukraine Is Offering Europe Unique Combat and Technological Experience
Lviv is the important cultural, economic and scientific centre of western Ukraine. Its architectural charm and cultural heritage have earned the city the nickname, Pearl of Ukraine. It is also a modern city that is looking towards a bright future thanks to the development of the IT sector.
Andriy Sadovyi, Mayor of Lviv, spoke to Andrew Wrobel about his city’s key sectors, his future vision for the city and the amazing ambiance that makes Lviv a must-see on the European tourist map. Continue reading Lviv Is the Pearl and the Soul of Ukraine
This has been a rough year for the countries of Central and Eastern Europe in terms of governance, with neighbours Poland and Ukraine seeing the biggest challenges. Continue reading History as Destiny? Institutional Erosion in Ukraine and Poland
Ukrainian President Petro Poroshenko felt quite content, during his visit to Copenhagen in early April 2017, when he heard leading Danish companies that already work, or plan to invest, in Ukraine say that they had already noticed practical results of the reforms. “This is a very good advertisement for potential investors to come and work with us,” he said at a joint press conference with Danish Prime Minister Lars Løkke Rasmussen.