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)
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.