I am often asked the same question, both by international publications and investors – “in which markets is it best to invest in Ukraine?”.
Before answering, it should first be noted that the international industrial markets are far more competitive than many other fields and to secure a niche in this arena can often require significant initial capital outlay, especially in Ukraine. In Kyiv and beyond, by and large, the development of a competitive business in the industrial sector would require the construction from scratch, or at very least major renovation, of production facilities. Furthermore, I would argue that the Ukrainian industrial sector doesn’t enjoy the natural advantages that can be found elsewhere – for example in the agro-industrial space. Here, prospects for the overseas investor are generally more feasible and show a simpler and clearer path to attractive returns. Given the realities Ukraine faces today, well targeted forays into the agrarian market have the potential to offer both high social and economic impacts to the country as well as major rewards to those with the vision to pull the trigger on such investments.
The global population increase continues with no sign of slowing down and so in turn the demand for quality products grows annually as well. In fact, I have recently addressed the greater implications of this trend in one of my recent articles with the EUreporter. For one, this cycle continuously stimulates demand for agricultural products in the global market. Innovation has staved off the worst doomsday scenarios of mass starvation at the end of the 20th century but has not dampened demand for both the raw products that Ukraine’s fertile soils yield so beautifully, nor the finished products that come from these crops that fill supermarket shelves and increasingly find homes in things such as furnishings, building materials and even biofuels. Furthermore, prospective buyers are willing to pay more for higher quality, natural, and environmentally friendly goods. Therefore, the dynamics of the agro-industrial complex are relatively risk-free, as there is an unceasing demand for the final product. This makes the agricultural sector lucrative for those whose goal is to secure stable income, or, in this case, a stable, ever-growing investment. It is for this reason that I believe investments in agricultural processing, the development of biogas and bioethanol, and the cultivation of niche crops can be especially rewarding.
In its most recent agricultural initiative, Ukraine launched the “Program for Accelerating Private Investment in Agriculture” in 2019, concluding in an agreement between the International Bank for Reconstruction and Development and the Ministry of Finance of Ukraine to raise $200M. The program’s intended purpose was to remove restrictions restricting private sector participation, with a particular focus on small and medium-sized enterprises. However, this program is unfortunately limited in its scope, exclusively concerning the nation’s system of free legal aid.
I have always been a firm supporter of investments in Ukrainian agriculture and a strong believer in the core values of democracy and capitalism. Hence, I have always promoted and aided Ukraine’s integration of international business to the best of my ability, and nowhere more so than in the agricultural and related spaces. More importantly, I believe that such foreign investments and the influx of global business have the potential to elevate the Ukrainian economy, providing much-needed boosts to the nation’s employment, GDP and state budget. This is all possible if we embrace the promise of agro-investments.
Back when I was the CEO of the Ukrainian Union of Industrialists and Entrepreneurs, I utilized my position and the public relations resources at my disposal to aid a number of foreign businesses and investors entering Ukraine. Needless to say, the pleas of major American corporations, such as Cargill (represented by its vice president Ivan Miroshnichenko) and other examples, always received my attention and assistance. In short, I have contributed in every possible way to help all major international business enter the Ukrainian market in the decade spanning from 2004 to 2014. Even back then, I realized that both the country of Ukraine, and the business my union was representing, would benefit enormously from international partnership and investment. My opinion is, and always has been, that enticing foreign investment is our best hope of alleviating the unemployment and migration crises currently ravaging the country. My personal transition from business to politics hasn’t altered this one bit.
Integrating major corporations, such as John Deere, Syngenta, NCH Capital, NCH Agroprosperis, Monsanto Company, and Cargill into the Ukrainian market, can play an essential role in revitalizing the national economy, all while providing these companies substantial returns on their outlays.
As a member of the Agriculture Committee of the Ukrainian Parliament, I worked with the former vice president of Cargill (Ivan Miroshnichenko) in developing several important agricultural trade projects. These experiences have honed my intuition for how major agricultural corporations can support the country in difficult times. Last year, for instance, Cargill Financial Services International generously provided Ukraine a state loan of €250M in its time of need. This is just one example of such international partnership and aid in the face of a global crisis.
It is important to note that our focus should not be exclusively fixed on the giants that currently dominate the global agro-economy. The participation of private investors and smaller businesses is just as crucial to the overall success of the country’s finances. I can confidently attest to this fact, as, along with large international corporations, I have also helped many independent foreign investors enter our market. One of my more recent endeavors was my cooperation with the Saudi Arabian Fas Energy Group, as well as China’s Power Group, in developing an immense solar energy plant in Ukraine. Furthermore, I am currently assisting international funds in implementing projects in waste management, waste recycling, bioethanol plants, wind farms and solar energy facilities here in Ukraine.
For me, it is not simply a matter of national prosperity, but also something I hold dear as an avid environmentalist. I know that if we can convert agricultural waste into green energy, we can significantly improve the state of the planet’s environment and ecosystems. For interested readers, I address this issue in more detail in my recent blog article that you can read here.
In conclusion, I would like to emphasize that Ukraine’s future lies with the West, which means that, moving forward, we will have to accept and embrace the changes that must come if the country is to achieve its potential. Chiefly, we must begin to forge an internal consensus and strive to resolve political disputes with other nations – major businesses crave certainly and are averse to geopolitical risk, so strong and stable international relations based around strong alliances with our democratic neighbors are a must to create the optimal environment to attract overseas capital.
A healthy business landscape also requires strong values of integrity and transparency that must be upheld, free from the noxious influences of oligarchy, corruption, and shady agreements. My dream has always been to build a political and financial bridge between Ukraine and the West, and I have faith in the bright future of this promising partnership. I would be honored to help strengthen these relations, especially in the key area of developing Ukraine’s agricultural potential.
