Today’s guest of our regular column “Ukraine through the Eyes of Foreigners” is Dominique MENU, the head of the Representative Office in Ukraine of BNP Paribas, one of the main banks in Europe and France. Like all foreign experts, politicians, and ambassadors accredited in Ukraine, he was asked to answer the following two questions:
1. What impressed you most about Ukraine?
2. Can you list three reasons to love Ukraine?
1. What was my first impression of Ukraine? When I came to Kyiv with a group in 1984, after seeing Moscow and Leningrad, I was impressed first of all by the beauty of the chestnut trees growing along Khreshchatyk, the green character of the city, and of course the Dnipro River’s enchanting scenery that you can see from the Arch.
Comparing today’s Ukraine to the way it looked when it gained its independence, I can say that much has changed, but fortunately the visage of Ukrainians has remained the same. Of course, it was difficult for them to proceed along the path to developing their market economy. I remember that in 1991 there was only one “foreign” restaurant called the “Apollo” in the Passage on Khreshchatyk. The city looked nice but it was somber and poorly lit. Returning to the past, I can divide Ukraine’s recent history into three periods:
1990-1995: The fall into the abyss at 15 percent GDP every year. In Soviet times, the central Moscow government had strict control over Ukraine, and its economy was tightly linked to heavy industry (A Class), like metallurgy or the military industry (the Military-Industrial Complex). For the Ukrainian economy this meant that it was indissolubly linked and heavily dependent on the economy of the whole USSR. This is one of the explanations behind the drop in the GDP.
1996-2001: This was a period of stabilization; the National Bank of Ukraine stopped extending credits to the government; the hryvnia was introduced, which helped stabilize the economy; on the other hand, foreign capital was expensive and privatization was insignificant. This ended after the crisis in Russia, when Russian capital left the country, as well as Western currencies, the foreign debt was restructured, the hryvnia was rapidly devalued, and the state had to start privatization.
2002-2007: Metal prices increased, and for the first time since 1914 Ukraine managed to export grain; a positive balance of foreign trade was achieved when imports were outstripped by exports.
In 2004 the European Union reached the borders of Ukraine, which attracted the world’s attention with Eurovision and the Orange Revolution, while Russia began to be regarded as a country reverting to aggression and resisting foreign investments.
Within a few months Ukraine will be the first country of the former USSR (except the Baltic countries) to have 50 percent of its bank system held by foreign banks. This means that the country should continue to implement international regulations. Since the country lacks oil and gas, and coal mining is too expensive, Ukraine needs foreign investments for its development.
But I believe that Ukraine will continue (the question is the pace) to improve its legislation and regulations in order to attract investments. Two things are urgently required for this.
The 1993 Law on Currency Regulation needs to be immediately reconsidered in order to achieve more flexibility and limit the risks of currency operations. Many absurd Soviet regulations should be abolished and fully substituted by contemporary Western norms with regard to many aspects of life. These changes will take 10, 15, or 20 years, but many countries have gone through this.
Look at the vast number of Ukrainian companies enjoying the benefits of foreign stock exchanges for selling their stocks, which are obliged to publicize information about themselves; this is good, because real business is growing increasingly more transparent in the modern world.
2. Three reasons to love Ukraine? First, each country has its own advantages. In Ukraine these are: 1) rich nature with a multitude of flora, fruit orchards around every house in the countryside; forests, lakes, and fields nearly everywhere please the eye, and people decorate their homes with love and keep them clean and tidy; 2) The kindness of the Ukrainian people, their sincere hospitality, their interest in foreigners and eagerness to learn and discuss without prejudices; 3) Most people, not just Frenchmen, will of course add here the beauty of Ukrainian women. As a male, I am no judge of men.
