KYIV – Ukraine needs to speed up free market economic changes to attract desperately needed foreign investment, speaker after speaker said here Friday at the Yalta European Meeting.
“The timeline for reforms should not be held hostage to the political cycle,” warned
Suma Chakrabarti, president of the European Bank for Reconstruction and Development, or EBRD.
Noting that the EBRD has “invested more in Ukraine since independence than any other organization,” the Indian-born former British civil servant said: “Now is the time to rev up the reform engine.”
“Land reform could include huge amounts for further funding for agro business,” he said, referring to efforts to create a market for farm land in Ukraine. ‘We need faster privatizations. A series of successful privatizations would whet investor appetites.”
“Reform postponed is growth delayed,” he stressed, echoing fears among investors that the Petro Poroshenko government will sacrifice free market changes for populist measures that will help it to win elections, tentatively set for 2019. “Ukraine needs to much more to restore the rule of law, property rights.”
For his part, President Poroshenko promised the audience: “There will be massive privatizations in the next months.”
He cited foreign investor surveys and reactions to indicate that investor interest is up this fall.
“I hear the five Ukraine funds are full up,” he said. Referring to Ukraine’s plan to launch $1 billion worth of Eurobonds: “"Next week we are finishing the placement of our first sovereign bonds. I think everything will be fine."
Ukraine Builds Trade and Tourism Ties with EU
Ukraine’s President said that his nation’s trade and travel integration with the EU is moving fast.
“In the first eight months of this year, our trade with the EU is up by one third -- $25 billion,” he said. Referring to the visa free regime with the EU that started June 11, said: “In the first 90 days of more than one quarter of a million of Ukrainian citizens have taken advantage to travel freely to the Schengen zone.”
“Ukraine is joining the EU customs union, joining the energy union, join the free digital market,” he said of Ukraine’s new orientation to the west. “Our vocation is to become the eastern border of European civilization. We are going toward full-fledged membership of EU and full fledged membership in NATO.”
Oil, gas and electricity integration with the EU is Ukraine’s future, said Maros Sefcovic, vice-president of the European Commission in charge of the Energy Union.
“There is tremendous potential for Ukraine to become energy hub, an energy exporter,” said Sefcovic. “Ukraine has potential for gas transportation and trading with EU partners.”
That future may not become reality until the 2020s. Although Ukraine now exports electricity to the EU, Ukraine will probably be a net gas importer for another five years. And Russia is building bypass gas lines to deprive Ukraine of its present role transshipping Russian gas to Europe.
But the tenor of the European Strategy meeting was the Ukraine’s future is with Europe.
"Economically, 45 million new European citizens - a little more than 10% of the European population – it would be very good!” said Bernard-Henri Levy, the French writer.
Speaking to several hundred attendees at the conference organized by Victor Pinchuk, Levy cited a speech Wednesday by Jean-Claude Juncker where the president of the European Commission ruled out Turkey joining the EU in ‘the foreseeable future.’
“Bye bye Turkey, welcome Ukraine,” Levy said. Referring to Britain’s pro-Brexit vote, he added: “Helas,
bye bye Britain, welcome Ukraine.”
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