Why Ukraine is called "toxic dead zone" for investments

Author :

Respondent : Mykola Martynenko

11:11, 6 October 2016

Why Ukraine is called "toxic dead zone" for investments

Author :

Respondent : Mykola Martynenko

Despite the statements of the authorities about the success of the reform, investors do not hurry to come to Ukraine. Moreover, they tend to go away from the Ukrainian market

11:11, 6 October 2016

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Mykola, how would you describe the business climate in Ukraine? Are the conditions comfortable for the investors?

Alas, this climate cannot be called favorable. When an investor faces with the realities of the ridiculous pressure on business, with the security forces, he have little interest to the promising statements on various business forums. He "votes with his feet" when subjected to "black" campaigns in the media and criminal cases fabricated on the basis of "anonymous letters" posted on the forums of the "yellow" websites. All the same "protection" of affiliates. Sometimes it seems that the power has not changed since in 2014! It is a "Stop" sign for the investor: do not poke your nose, there is something fishy here. And the officials can talk as much as they like about the new levels of transparency and fair rules of the game for everyone. In fact, comfort for the investor means protection of property, no raiding and unfair competition, and legal state as a whole. Therefore, Ukraine is losing positions in the index of competitiveness of the world countries; not it is in the 85th place. Among the CIS countries, this is one of the lowest results.

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You represent the ICI Suisse company. What markets it covers?

"ICI Suisse is a major player in the market of carbonaceous materials for steel plants. We supply carbonaceous material (coal, coke), ferro-alloys for the steel industry mainly at the international level. We work in more than 20 countries around the world. Only 15% of turnover comes from CIS countries. We have strong logistics specialists who program the best routes by land and by sea, by any means of transport, in any quantity. Since 2009, sales of the company are stably more than 250 thousand metric tons per year.

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What are the company's relationship with the Ukrainian market?

Since 2011, we looked closely to Ukraine. We have opened special information office of ICI Suisse, which collected information and studied the local market. The Company did not conduct business activities in Ukraine. Soon there was a plan, together with a pool of partners to invest $ 10 million to build a plant in Odesa region. It had to produce carbon material for the steel industry. The plant would have a guaranteed sale, as co-investors were the end users of its products. The project is fully developed, it would create up to 150 jobs with competitive salaries. But we had to stop implementing this project.

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Let me guess: you had to pay some bribe but you refused to?

The situation was even more clumsy and primitive. It all started with the “yellow press” publication on marginal sites, which are "drain holes" for the writers of "sleaze."

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But this “yellow press” publication hardly could make a lot of noise if it stayed in the wilds of the Internet.

Of course. But because of such "pseudo-journalists" the image of Ukraine get no benefits. After the online anonymous articles, law enforcers come. There ere even the criminal proceedings on the "facts," released anonymously on the Internet. Imagine, it was the cause. The request to initiate proceedings was filed by "concerned citizen" who read the negative reviews about the company on a certain site . the law enforcers somehow responded quickly to the request of the citizen.

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Do you know who might be behind all of this?

Obviously, the one who is trying to harm the image of the company. We do not rule out that the "black campaign" might be the order of the Russian competitor. We have reason to believe that behind all this dirty campaign in the media and "visits" of the security forces is a citizen of Ukraine, who has received a Russian passport in the occupied Crimea, and is now working on our competitors. That is a manifestation of a dirty competition or even some political war in our country, with which neither ICI Suisse nor I have no relationship.

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What will persuade you to resume your investment project in Odesa region?

We, our partners, as well as all investors want to feel that Ukraine as a legal state is able to protect the right of ownership: punish "dirty" competition, prevent the use of security forces to put pressure on the business, appreciate those who pay taxes and create jobs. Compare how much investment comes in neighboring Poland – $20 billion a year. And our country cannot attract a tenth of that amount. Ukraine will be "toxic" dead zone for investment, until the law does not work here. Unfortunately, this is the reality, but ICI Suisse company uses every opportunity to punish customers and executors of dirty campaign on the Internet. We have prepared all the evidence base and appealed to law enforcement agencies. We hope that Ukraine will prove that it is a legal state.

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