The international investment summit and the concurrent Ukraine-Poland Economic Forum was a big event for the Donbas. The coal miners’ region has never hosted events on this scale before. The presidents of the two Euro-2012 host countries, Ukraine and Poland, came to the capital of the Donbas region, and the summit’s results promise some very important changes for Donetsk oblast.
The topics that were discussed at the forum can be roughly divided into two groups: ways to overcome the global economic crisis, which has also affected Ukraine and Poland, and discussions of the preparations for Euro-2012 with the aid of investment projects.
President Viktor Yushchenko of Ukraine initiated the debate on the problems associated with the economic crisis. He devoted almost his entire speech to this issue. The president believes that the crisis can be overcome by forming a domestic market and creating effective demand, especially in the crisis-stricken steel-making sector.
“I think the first thing that the government should do is to prevent the economy from slipping into a depression. We must take quick steps to form a more effective domestic demand. The foreign market is 57 percent closed to our key exporters, primarily our steel mills. And the price level has already fallen by more than 40 percent. This is an objective thing, and as professionals, we must decide how we can keep this sector working and prevent it from defaulting. This is a state problem,” President Yushchenko said.
In general, the Ukrainian leader believes that what can help Ukraine ride out the crisis is the national idea: we should all simply be aware of being Ukrainians and, accordingly, form our national priorities. This provision is actually the backbone of his anti-crisis draft law, the president said.
“There are many challenges that have affected everyone. We have an open economy and are deriving great benefits from this, but at the same time we are running high risks. So we should be responsible,” Ukraine’s head of state concluded.
Yushchenko’s speech received passionate support from businessmen, who agree that Ukraine must immediately address problems in the steel-making sector. As they see it, assistance to the domestic market and its development can help save it.
The president’s idea was supported by Rinat Akhmetov, a well-known businessman and parliamentarian, who considers mining and metallurgy the most important sector of the Ukrainian economy. “This sector accounts for 43 percent of our hard-currency earnings and 550,000 jobs. We sell 30 and 70 percent of our products on the domestic and foreign markets, respectively.
“What does this mean? This means that if everything is good there, things are wonderful for us. If things are bad there, then it’s very bad for us. The sector is suffering. This is a fact. The question is: what is to be done? There is only one answer: the domestic market must be developed. Today everybody is asking how we can help the steel producers. I am convinced that it is steel consumers, not steel producers, who need help. I am talking about construction and mechanical engineering,“ Akhmetov emphasized.
In his view, our country has good development prospects in this respect, as both Ukraine and Poland have to host Euro-2012, and we have to “doll up our country. We need a construction boom. Not only steel producers will benefit from this - everybody will. It is very important for the state to boost investments in high-profile infrastructure projects, such as airports, roads, bridges, and overpasses. It is important for our entire economy. What is even more important is to create a favorable investment climate. We need the same rules of the game for everyone. The rules should be simple, transparent, and easy for the investor to understand. Our main task is to make Ukraine Europe’s best country for business activity,” the multi-billionaire said.
The summit participants noted that a successful Euro-2012 needs more than just a construction boom. Ukraine and Poland are faced with a huge list of problems that should be tackled right now. But while the Poles are generally satisfied with the way our country is preparing for that event, the Ukrainian forum participants admitted that they felt awkward during the summit.
“Everything is going well for the Poles. They say: we have built so many roads, restored so many facilities, and we are planning to commission so many stadiums by next year. But we are reading from a scrap of paper that we have paved three kilometers of Donetsk roads this year and are finishing just one stadium. Yes, we do have Donbas-Arena. It will be a wonderful stadium, but it cannot host the whole Euro-2012. Too little is being done elsewhere, and I think the Polish guests can see this,” Artem Svietlov, a representative of a Donetsk construction firm, told The Day.
President Yushchenko knows about the Euro-2012 problems, but he usually reduces them to the question of financing. According to Yushchenko, Ukraine needs seven billion hryvnias’ worth of investments to host the European soccer championship in 2012. Three-fourths of this amount will be used to build a sports infrastructure and the rest to cater to the needs of visiting soccer fans. “This is a major test for both the government and the cities that will host the final matches. Cities are the basic hosts of this sporting event,” the head of state said.
Ukraine’s president singled out other Euro-2012-related problems, such as inadequate visa treatment and small-scale cross-border traffic. His Polish counterpart Lech Kaczynski also pointed to the same problems and promised that Poland will help Ukraine tackle them.
According to Kaczynski, the Polish state is interested in cooperating with Ukraine not only on the political but also on the economic level. The Poles are very interested in building the Odesa-Brody-Gdansk oil pipeline. They promise a high level of cooperation with Ukraine in this field and are contemplating further investments in a number of other Ukrainian industries.
The forum participants had an opportunity to examine a number of investment proposals at a special exhibition called Infrastructure and Real Estate: Euro-2012, which was held at the Expo-Donbas fair center. “Twenty-nine businesses and organizations are prepared to offer potential investors more than 30 projects. To be implemented, the projects need about 2.3 billion US,” said Donetsk Mayor Oleksandr Lukianchenko.
The Donetsk authorities offered investors suggestions about the most effective ways to implement these projects. For example, the Donetsk Oblast Council suggested that every investment project be approved on the central executive power level. “If somebody does not like free economic zones and priority-development areas (the law on which has never been repealed), then each investment project should be discussed separately and passed in such a way that privileges intended for free economic zones and priority-development areas will be kept intact. We will demand this by all means,” emphasized Anatolii Blyzniuk, the chairman of the Oblast Council.
The two heads of state listened to these proposals in passing, as they spent only five minutes looking at the exhibit, which occupied two floors of the fair center. Investors were disappointed to see the presidential cavalcade rushing by.
Nevertheless, they think that the findings of the economic summit will be made by none other than business people because they are going to conclude a number of contracts and agreements to implement a variety of projects. Document signing is in full swing in the Donbas and, if you consider that the summit lasted until Oct. 31, it may be estimated that Donetsk oblast struck a few dozen deals with European investors in connection with the most pressing problems.
