Zelensky’s FDI push faces opposition from Ukrainian agriculture sector

While Ukraine’s president Volodymyr Zelensky courts more foreign investment, he faces scrutiny over how a corrupt official is disrupting the country’s largest agro-industrial company.

An estimated 6,000 demonstrators rallied in downtown Kyiv on February 19, calling for the resignation of Artem Sytnyk, the head of National Anti-Corruption Bureau of Ukraine (NABU), who stands accused of leading an intimidation campaign against the employees of UkrLandFarming (ULF), one of the largest Ukrainian agricultural companies, Avangard, a Ukrainian agricultural group, landowners and their families.

The crowd, which mostly consisted of ULF employees, as well as other agricultural workers, their families and opposition MPs, claimed that the NABU director had acted to “disrupt their agricultural activities” by authorising the interrogation of 10,000 ULF employees, and as a result of his interference, the company’s operations have been affected while some employees were suspended.

In December, a court of appeal upheld a previous decision which found Mr Sytnyk guilty of corruption for having an expensive vacation paid for by Mykola Nadeyko, a Ukrainian businessman.

In a statement published on February 10, the ambassadors to Ukraine of the G7 group of countries called for the resignation of the NABU director in accordance with Ukrainian law.

“For as long as this harassment is permitted to continue, President Zelensky cannot seriously claim to be tackling corruption or working in our country’s best interests. It is time for the president to choose to side with those who are farming for our future, not those who stand in their way,” said Galina Kovtok, the COO of UkrLandFarming, calling on Mr Zelensky not to turn a “blind eye to corruption happening under his very nose.”

According to her, the company’s work has been destabilised by Mr Sytnyk’s actions as NABU officials regularly carry out searches and interrogations among ULF employees.

UkrLandFarming is one of Ukraine’s largest investors and also one of the country’s five leading agricultural exporters. Ukrainian news agency UNIAN has reported that Oleg Bakhmatyuk, the owner of UkrLandFarming, considered the raids on his company personal revenge related to the December court verdict, in which he was a key witness.

“It is so disgraceful that the person leading the charge against corruption has himself been found guilty of corruption,” Oleksiy Honcharenko, an MP from the European Solidarity Party of former Ukrainian president Petro Poroshenko said, pointing out that Mr Sytnik, who has not only been convicted on corruption charges, also stands accused of selling a family plot in the Russian-occupied Crimea and illegally receiving money for it from the peninsula’s “authorities.”

The demonstration comes as the Ukrainian president is increasingly pushing for more foreign investment, especially in the country’s huge agricultural sector, and is trying to position Ukraine on the world stage as a country that wants to tackle corruption.

His critics argue that Mr Zelensky is not doing enough to support and protect fellow Ukrainian farmers whose agricultural activities are being disrupted.

According to Transparency International’s Corruption Perceptions Index, Ukraine currently ranks 126th of 18o countries, the lowest in emerging Europe, while TRACE International recently found that Ukraine is the country most exposed to business bribery risk in the region, ranking 122nd of 200 countries globally.

“Why is President Zelensky going out of his way to attract new investments, when he has such strong domestic investments which he continues to neglect?”, Ukrainian MP Mykhaylo Tsymbalyuk asked the crowd in Kyiv.

The protest also follows an announcement from Ukrainian economy development minister Tymofiy Mylovanov about the government’s aim to attract 50 billion US dollars in FDI, create one million jobs and accelerate the country’ GDP growth by 40 per cent over the next five years, a highly ambitious target overshadowed by the domestic discontent demonstrated by UkrLandFarming and the demonstrators.

The Ukrainian government is now also in preparations for a major land reform that would allow for the sale of Ukrainian farmland to foreigners, which continues to be a highly debated issue among the country’s lawmakers.

Around 75 per cent of Ukrainian farmlands are in the hands of small landowners, who are not entitled to sell their property, only lease it, with the rest belonging to the Ukrainian state. Mr Zelensky, who expects land sales to contribute to the country’s economic growth, said that he would put the question to a referendum.

“The implementation of this reform should first of all bring benefits to small farmers, those people who live and work on the land who cultivate the land, and, of course, appropriate warnings must be provided so that the interests of small farmers are taken into account and were respected,” Matti Maasikas, the head of the EU delegation to Ukraine said earlier this month.

On-site reports from the February 19 rally pointed out that the protesters had voiced frustrations over Mr Zelensky continuing neglect of Ukraine’s own agricultural companies and failure to protect them from corrupt officials.