Diane Fran­cis: If Chicago can de­feat cor­rup­tion, so can Ukrainian cap­i­tal

An op­er­a­tor as­sem­bles wires at Japanese au­to­mo­tive parts fac­tory Fu­jikura in Lviv, 540 kilo­me­ters west of Kyiv on Feb. 6. The com­pany pro­duces ca­bles for German and Czech car man­u­fac­tur­ers like Volk­swa­gen, Audi, Skoda and oth­ers. (Volodymyr Petrov)

Kyiv Post Legal Quarterly - - Contents -

I’m fully con­fi­dent that Ukraine will take its place as one of Europe’s most im­por­tant coun­tries be­cause of its splendid re­source en­dow­ment, tal­ented peo­ple, ac­cess to Europe, and fi­nan­cial sup­port from the west. To me, it’s not a mat­ter of if, but when. I first vis­ited Ukraine as a jour­nal­ist af­ter its in­de­pen­dence in 1991 and have watched it slowly get out from un­der the Soviet boot. To help, a group of us founded the Cana­di­anUkraine Cham­ber of Com­merce in 1993 to

build garchs tire-kick­ing on Union Western the world-beat­ing turn­around. and and Ukraine far their and from some politi­cians; is busi­nesses Rus­sia’s a cau­tiously case in and war. by point, tak­ing nav­i­gat­ing that The close for­eign re­gion the to plunge, around the in­vestors around Euro­pean the bet­ting Lviv oli- are is an. info /2158299- for­eign-in­vestors-shift- fo­cus-to-western-be­com­ing an auto parts clus­ter https://ec on omics.uniuk raine-ft. ht ml em­ploy­ing 40,000 that Ukraini­ans. has at­tracted Tourism 20 ma­jor also booms. auto com­pa­nies Of course, in­vest­ing in Ukraine now and in fu­ture is not for the faint of heart, but Amer­i­can ven­ture cap­i­tal­ist Ja­son Mi­tura has suc­ceeded and of­fered some im­por­tant ad­vice in an in­ter­view. “The big­gest bar­rier to in­vestors was po­lit­i­cal risk,” he said. “The ge­og­ra­phy is un­fa­mil­iar. One Bri­tish ven­ture cap­i­tal­ist said Kyiv is too far away for us to in­vest in — Bri­tain is only three hours away by plane — but then there was a guy in LA who said 'let’s get on a plane and have a look at this.’” He said ev­ery in­vestor who came to see op­er­a­tions and the cul­ture and coun­try wrote checks. The other im­por­tant fac­tor in his suc­cess, and that of oth­ers, is to op­er­ate through a western en­tity and us­ing western-base con­trac­tual agree­ments, in­tel­lec­tual prop­erty laws, fi­nan­cial ef­forts, or ac­qui­si­tion pro­cesses. “You can­not run a gray mar­ket com­pany where you make cash and pay peo­ple in cash be­cause when you need in­sti­tu­tional cap­i­tal they won’t look at you. You must run the com­pany prop­erly with au­ditable prac­tices or they will walk away,” he ad­vised. “The macro story of sta­bil­ity/in­sta­bil­ity in Ukraine can’t be con­trolled, but needs to be front loaded and ex­plained to in­vestors,” said Mi­tura. “It’s the first thing any­one asks when they hear about Ukraine. Is­rael has man­aged this and I think Ukraine can, too. The his­tory of ups and downs can’t be changed, but there’s a his­tory of sta­bil­ity and ex­cel­lence too.” Clearly, Ukraine — the most re­source-rich and big­gest coun­try in Europe — de­serves a look if only be­cause it is on the cusp of a break­through into a na­tion that treats its cit­i­zens and in­vestors with re­spect. But like in­vest­ing any­where, en­trepreneurs must ad­here to sev­eral rules: Choose sec­tors that have po­ten­tial but are im­mune from med­dling; choose part­ners care­fully; then watch for pos­i­tive sig­nals from the IMF, Euro­pean Union, and World Bank that mon­i­tor the coun­try’s re­form agenda closely and tie their fi­nan­cial aid to de­liv­er­ables. And con­sider as I have, that if Chicago can do it, so can Ukraine. Diane Fran­cis, a Cana­dian-amer­i­can au­thor and jour­nal­ist, is a non-res­i­dent se­nior fel­low at the At­lantic Coun­cil.

DIANE FRAN­CIS

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