The meeting between Viktor Yushchenko and foreign investors demonstrated that his appeals for investment into Ukraine's economy are sure to receive a positive response on the part of foreign investors if the planned "re-privatizations" of large domestic enterprises are transparent and free of underlying political implications

Not spoiled by the attention of the world community in the recent past, Ukraine now must grow accustomed to having a new status as a country. The road show that President Viktor Yushchenko headed in the first week after his inauguration was a catalyst to everything Ukrainian becoming vogue in foreign business circles. The optimism of potential investors in the Ukrainian economy is visible to the naked eye.

The fact was obvious from the recently held First International Investors Conference in Kyiv, which gathered so many visitors interested in checking out the potential of Ukrainian assets that there was "standing room only". Nevertheless, representatives of western companies, investment funds and well-known top managers of Ukrainian enterprises were eager to hear what the new president of Ukraine had to say, even standing. Judging by the enthusiastic reaction of foreign guests, who more sincerely applauded Yushchenko, it became crystal clear that he has enthralled the foreign business elite in his role as a truly "revolutionary leader". In his speech, the head of state reciprocated the emotions of the audience by talking about "seven steps" the government is planning to take in order to meet investors half way by creating a more favorable investment climate.

This was probably the first time after the recent World Economic Forum in Davos, Switzerland that the strategy of attracting foreign capital was presented so completely as a package deal, despite the fact that the president did not say anything that was new in principle"

The attendees of the forum appreciated Yushchenko's jocular appeal to them requesting that they include in their business plans a line item entitled "Profit from Economizing on Corruption" and displayed true interest towards the president's statements about the forthcoming revision of the results of privatization of 30 enterprises.

It is worth pointing out that foreign investors are assessing the prospects of the upcoming re-distribution of property one-sidedly. On the one hand, the dual process of re-nationalization and, in turn, re-privatization could become a "gold vein" for them, because repeat tenders will give major foreign companies the opportunity to acquire attractive assets into ownership. On the other hand, the process will show how the government treats the present owners in this process. In short, many are viewing re-privatization as Yushchenko's pilot project: if the process reminds one of the historic "de-kulakization", establishing a favorable investment climate could be dragged out for some time.

"It is important for the Ukrainian government not to go to extremes by turning the process of re-privatization into vengeance," stated Oleh Kiselyov, President of Renaissance Capital, which was the organizer of the conference. So, now that foreign investors got the signal from the Ukrainian president, the only thing left for him to do is meet their expectations and prove their fears wrong.

   06/02/2005     Kiev Weekly