YES Conference Highlights Ukraine’s Potential and Challenges
Last week, the Yalta European Strategy (YES) Conference took place in Kyiv, bringing together Ukrainian and foreign political and business leaders, including President Volodymyr Zelensky. The theme of this year’s conference was “The Future is Being Decided in Ukraine”, reflecting the country’s pivotal role in the region and the world.
The conference was held in the basement of Kyiv’s Intercontinental Hotel, creating a war-time bunker vibe. The center wall was covered with TV screens playing reels of drone footage of the battlefield overlaid with the words “YES War Room”. Side panel screens had Twitter posts of war updates from Ukrainian media.
The message Ukraine’s officials wanted to convey was that Ukraine’s economy is surviving, the country is open for business, and the government is fighting corruption despite the difficulties brought on by war.
Deputy Economic Development and Trade Minister Yuliia Svyrydenko said that despite a loss of 29.6% in GDP last year, the Economy Ministry expects the country’s GDP growth in 2023 to be close to 4%. Ukraine’s central bank is less optimistic, predicting that growth to look more like 2.9%. The World Bank is even less upbeat, however, estimating GDP growth of 0.5% in 2023.
Prime Minister Denys Shmyhal was similarly confident Ukraine is on the right track. “This year, Ukraine’s economy has kept going, and reconstruction has started,” he said. Shmyhal cited estimates that put the destruction caused by Russia’s war at around $400 billion, saying that while this is a tragedy for Ukraine, it is also an opportunity to “build back better”.
According to Shmyhal, Ukraine has received over $30 billion from international partners over 8.5 months this year. When pushed by the moderator, BBC host Stephen Sackur, on whether Ukraine is too dependent on outside financial assistance, Shmyhal responded by saying that the country is using “100% of taxes collected by the state to fund the military”. That revenue has already amount to Hr 1.8 trillion ($48 billion), which is higher than in peace time, Shmyhal said.
U.S. Support Crucial for Ukraine’s Stability and Reform
One of the main topics of discussion at the YES Conference was the level and nature of U.S. support for Ukraine, especially in light of the upcoming presidential elections in America. President Zelensky expressed his hope that whoever wins the White House will continue to stand by Ukraine and help it defend its sovereignty and territorial integrity.
Zelensky also thanked the U.S. for providing military aid and diplomatic pressure on Russia, as well as for facilitating peace talks with the Kremlin. He said that he expects a meeting with Russian President Vladimir Putin in the near future, but stressed that he will not compromise on Ukraine’s national interests or European aspirations.
However, some analysts and experts warned that Ukraine should not rely too much on U.S. assistance, and should instead focus on strengthening its own institutions and capabilities. They argued that Ukraine needs to implement more reforms to improve its governance, rule of law, anti-corruption efforts, and business environment.
They also pointed out that U.S. support is not unconditional, and that it comes with expectations and obligations for Ukraine to adhere to democratic values and human rights standards. They cited the recent arrest of Ukrainian business tycoon Ihor Kolomoysky as an example of U.S. pressure on Ukraine to crack down on oligarchs and their influence on politics and media.
Kolomoysky was arrested with the right to post bail in the amount of half a billion hryvnias after being suspected of fraud at a court hearing in Kyiv on Sept. 2, 2023. He is accused of embezzling billions of dollars from PrivatBank, which he co-owned until it was nationalized in 2016. The U.S. has imposed sanctions on Kolomoysky and his associates for their involvement in corruption and undermining democracy in Ukraine.
Business Opportunities and Challenges in Ukraine
Despite the war and the pandemic, Ukraine still offers many opportunities for business and investment, especially in sectors such as IT, agriculture, energy, infrastructure, and tourism. Several speakers at the YES Conference highlighted the potential and achievements of Ukrainian entrepreneurs and innovators, who have created successful startups and products that compete globally.
For instance, Oleksandr Bornyakov, Deputy Minister for Digital Transformation of Ukraine, presented some of the initiatives and projects that his ministry has launched to digitalize public services and promote e-governance in Ukraine. He said that his goal is to make Ukraine one of the most advanced digital nations in the world by 2024.
Another example is Max Polyakov, founder and CEO of Firefly Aerospace, a U.S.-based company that develops rockets and satellites for commercial space missions. Polyakov said that he is proud of his Ukrainian roots and that he employs many Ukrainian engineers and scientists in his company. He also announced that he plans to build a spaceport in Ukraine, which would be the first of its kind in Europe.
However, doing business in Ukraine also comes with many challenges and risks, such as bureaucracy, corruption, legal uncertainty, security threats, and geopolitical instability. Several speakers at the YES Conference urged the Ukrainian government to address these issues and create a more favorable and predictable business climate for both domestic and foreign investors.
They also called for more cooperation and dialogue between the public and private sectors, as well as between Ukraine and its international partners, to foster trust and confidence in the country’s economic potential and prospects.
