In early October a large delegation of Dutch entrepreneurs is coming to Kyiv. They are expected to hold talks with their Ukrainian counterparts and visit enterprises in various sectors of the economy. To some extent, this visit will be a continuation of meetings held by a Ukrainian business delegation in the Netherlands during President Viktor Yushchenko’s visit to that country. The Day interviewed Mr. Ron KELLER, Ambassador of the Netherlands to Ukraine, whose contribution to the development of trade relations between our two countries was recently marked by a special medal as a result of a poll of entrepreneurs.
“Ukrainians remember that your country was (and perhaps still is) the biggest sponsor of technical assistance to our country, and they know that the Netherlands has been providing useful and disinterested consultative assistance to Ukrainian agriculture. Does your country intend to continue this cooperation with Ukraine?”
“Definitely. This will be cooperation on the level of tax and customs services as well as in agriculture, public utilities, nature conservation, and environmental protection. I recently attended the celebrations of the 230th anniversary of Dnipropetrovsk. They very much appreciate the advice of our consultants, who helped them set up a household waste treatment system.”
“Are you satisfied with the level of trade relations and trade turnover between our two countries?”
“One can never be fully satisfied. Still, I can say that we have some very positive trends in trade. Trade between our countries tops one billion euros and continues to grow. Trade turnover climbed by 20 percent in 2005 in comparison to 2004. Although the latest information hasn’t arrived, I can say for sure that this parameter is growing this year, too. I’d like to note that it is not only about increased Dutch exports to Ukraine. Ukrainian exports to the Netherlands are also on the rise. To a large extent our economies are mutually complementary. Dutch exports to Ukraine mostly include food and chemical products, computers, equipment, and transport, while Ukraine exports metals, equipment, and food.”
“We are talking about developing economic ties, but is it possible to develop them further if there are obstacles, namely, visa requirements? Negotiations with the European Union on this matter are underway, but in all probability they will end up with very few concessions for Ukrainian citizens.”
“In reality, there are no major barriers that would prevent Ukrainian citizens from traveling to the Netherlands. If you look at the number of people who arrived in the Netherlands from Ukraine this year, it is 20 percent higher than last year and 100 percent higher than 10 years ago. Most individuals who want to visit the Netherlands are businessmen, although there are many tourists, too. Out of the estimated 25,000 Ukrainians who can apply for a Dutch visa, just one to three percent will be denied, only because they have no grounds for obtaining one. In other words, they might be people who have problems with their documents or who actually do not want to go to the Netherlands but France or other countries.”
“But citizens of the Netherlands arrive in Ukraine without any visas.”
“Yes, the Ukrainian government has made this kind of decision. But, as you know, to cross a border in the European Union, one must meet certain conditions. The EU policy is not just the policy of the Netherlands, and it is aimed at stemming illegal migration. The Ukrainian authorities are taking equally determined actions in this direction. But I’d like to stress again that there are no obstacles at all for individuals who travel to the Netherlands on business, as tourists, or if they want to visit their friends or relatives. This is in our interests, too, because the Netherlands would like to invite Ukrainian investors — we also need your products.”
“What are the conditions in which your entrepreneurs and private investors are working in Ukraine? How do they differ from the conditions your businesses are used to at home?”
“Naturally, there are some particularities, although there are very many common things. Both countries have a market economy, a lot of consumers, a highly skilled labor force, a stock exchange, a stable macroeconomic situation, and a stable currency. All this is conducive to working both in Ukraine and the Netherlands. What also attracts us is the mentality of Ukrainians, who are very openhearted people. Yet there are some differences. One can speak, for example, about a language barrier, although it can be easily avoided if one works with a Ukrainian partner. Therefore, every Dutch company that is working successfully in your market has a reliable Ukrainian partner, who is the key to success.
“But there also some things in the business environment that are not conducive to business. It is very difficult to start a business. A lot of licenses are required, far more than in the Netherlands. More often than not, licenses are introduced for the sole purpose of raising revenue for the state. There also are differences in the way the tax law is applied to different facilities in different regions. Even if a contract has been signed in compliance with all the rules, you are never sure that, in the event of a dispute, the court will hand down a proper ruling.
“Customs control also takes too much time, and its results can be rather unexpected. Sometimes you have to pay officials to make them do their job. Current standards in Ukraine are not always in line with Europe’s. Often problems arise over the right to own land and buildings. The financial sector is not sufficiently developed either. These difficulties can, of course, be overcome, which will have a positive effect both on Dutch and Ukrainian businessmen.”
“In which sectors of the Ukrainian economy are the interests and private investments of the Netherlands concentrated? What other sectors can be classified as attractive for your investors?” “Our investments have been coming into the banking and financial sectors, agriculture (very little), as well as logistics, transport, and shipbuilding. There is a large shipyard in Mykolaiv to which our investments have given a new lease on life. The waste treatment system that I saw in Dnipropetrovsk has lived up to expectations. Extremely promising is investment in energy production, computer hardware, and software manufacturing. This is the sector in which Dutch business is taking the greatest interest, and we hope that investments in these facilities will be increasing.
“We have already mentioned the Shell gas and oil company, which intends to invest not only money but also state- of-the-art technology in the extraction of hydrocarbons in Ukraine. We also hope that investments will start coming to food industry and electronics sectors. Naturally, this will depend on enthusiasm and on the actions of companies that can do this. Their actions will (or will not) be stimulated by the existing business environment in Ukraine. This depends on your government.
“We can also intensify our cooperation in the field of tourism. Ukraine has a lot of opportunities here. If you increase the number and quality of hotels and infrastructure, and carry out an active promotion campaign, this sector will burgeon. There is also a potential for investments in the financial services sector. It is about establishing new bank subsidiaries that can offer a whole range of services, including insurance, to clients — both natural and artificial persons. The Netherlands has great experience in this.
“In the last 20 years the Dutch economy has been transformed from one oriented to the farming industry into one oriented to the service industry. We should also remember the importance and potential of Ukrainian exports to and investments in the Netherlands. We are convinced that once Ukraine joins the WTO and signs a free trade agreement with the EU, we will have many more Ukrainian products. The debates now underway in Ukraine either exaggerate or simply pay more attention to the risks of WTO membership, often forgetting about the advantages. Frankly speaking, as an ordinary consumer, I would be more than glad to buy some very tasty Ukrainian foods at the supermarket, if they are reasonably priced, than buy expensive and absolutely tasteless produce grown in Dutch greenhouses.”
“Ukraine is vigorously debating our accession to NATO and the European Union. Our people mostly have a positive attitude to the EU, but they have a dim view of NATO. What can you say about NATO, of which the Netherlands is a member?”
“Past threats no longer exist, but there are new threats — from local conflicts to global terrorism. And these conflicts are now more integrated than ever before: it is now difficult to say who is good and who is bad. It is important to understand the degree of the danger to which, say, the Internet or the international system of payments may be exposed in the nearest future. Some Ukrainians think that your country is insured against this, but someday it might also face these dangers. So it would be better if Ukraine joined forces with other countries to combat these threats. Ukraine, just like the Netherlands, Belgium or France, cannot cope with them on its own. We have joint energy, computer, and economic systems, so we must protect them together.”
