Ukraine’s intention to expand cooperation with the Eurasian Economic Community voiced by President Kuchma has met with varying responses inside the country, although the head of state stresses (in a May 28 interview with the Italian Unita) that Ukraine’s CIS effort is mostly aimed at forming stable markets for its domestic goods. The Ukrainian Foreign Ministry also focuses on the economic aspects of Eurasian EC membership; the economic community is regarded as an organization meant to uphold economic cooperation, so Ukraine will shape its stand there accordingly, foreign ministry’s press service chief Serhiy Borodenko said at a May 28 briefing. As for the possibility of expanding Ukrainian-Eurasian EC cooperation, he emphasized, “Considering Ukraine’s economic interests in the post- Soviet space, the Ukrainian government is carefully studying the conditions and mechanisms of Eurasian EC performance, allowing for all potentialities, results, and consequences of this process, so as to fully serve the Ukrainian national interests.” The diplomat’s somewhat ambiguous statement is augmented by what certain businessmen had to tell The Day. Simultaneously, the respondents’ almost unanimous preference for Eastern markets can be explained by practical hardships confronted in the developed markets – or by being unprepared for the competition. Also, one ought to bear in mind Russia’s and Ukraine’s determination to join the WTO. After that, some experts believe, the Eurasian EC economic impact will be significantly less.
Oleksandr KRYVOKIN, head of marketing, Bears Co.:
Our markets are in the CIS, of course, because we have a long way to go to reach European standards of quality. I’d be happy to say that we see our markets at least in Eastern Europe, but that’s not true. It becomes obvious after visiting Poland, the Czech Republic, Slovakia, and other countries. There are no Ukrainian goods on sale. It’s bad but it’s a fact. Russia buys our goods. I’m not saying it’s the way it should be, but that’s the way it is.
Serhiy LYTVYNOV, director general, Minolta Ukraine:
I am connected with imports, not exports, but I think that our prospective market is in Russia, and that we’ll have to work for it for decades on end. That’s a sober opinion, because I consider myself a Ukrainian patriot and am disgusted by some media, even more so by Ukrainian and Russian politicians trying to subordinate our national interests to Russia. The domestic market should be the most promising for Ukraine. The rest of the world views it with an eager anticipation, yet we’re looking for something somewhere. Well, we have no alternative as long as our domestic market stays weak. As for the CIS market, it’s the planet’s last market still to be filled. Actually, it is the future of the world economy. By way of comparison, I saw 17 five-star and 34 four-star hotels in Prague which has a smaller population than Kyiv. And that far from exhausts the list. We have only one European standard hotel in Kyiv. Who is going to let us into Europe with what we have?
Herman SHLOMAN, director, Ukrayina Investment Company:
Ukraine will have a hard time in Europe. All the markets have long been occupied by tough operators and no one is expecting a strong newcomer. Even if Ukraine joins the EU, it will have to travel the road to maturity, and that takes a strong economy with stable indices. This, in turn, requires a powerful domestic market. We don’t have it. Once again, no one is out there waiting to make us welcome, least of all in Europe. Even Russia has learned to count its money. Considering our good political relations of late, it could be a good market for us. Likewise, we mustn’t forget about the east and southeast vectors in our foreign policy. I mean Eurasian EC. It’s only natural for us to seek access to the civilized European market, but we must change a lot of things at home first. Indeed, one can juggle statistics and show just how much better off we’ll be in Europe, but there is our mentality that can’t be changed or shrugged off. And so we have the kind of economy we deserve.
Leo PARTSKHALADZE, president, 21st Century Group of Companies:
The Ukrainian foreign trade structure is evidence of close economic ties with Eurasian EC countries. The substantial ratio of metallurgical products, agribusiness, heavy machine-building, petrochemical and mineral output, also the great trade and economic potential of Ukraine and Russia speak in favor of expanding Ukrainian cooperation with the economic community, and even membership.
Yevhen KONYK, deputy head of the securities department, Financial Consulting Group:
Cooperation with Eurasian EC has both positive and negative aspects. On the positive side, we get a bigger access to the Russian and other markets, particularly in terms of light industry currently showing a somewhat higher output. In the end we’ll have an edge on our rivals. Yet we can’t forget that Russia will also have additional opportunities to access our markets. Besides, there is an active Russian lobby in Ukraine, heavy financing, strategic enterprises privatized, and oil and gas where Russia is the monopolist. But there is also the light industry and there is hope for Ukraine. If we can get enough loans and qualified management, we can count on success.
Yuri ZASTAVNY, chief financial officer, Synhenta Co.:
Now that Ukraine is still separated from the European Union by customs duties, status, and most importantly, by its level of economic development, its markets, regrettably, we are doomed to remain in the post-Soviet space for the next two or even five years, due to historical reasons. At present, our goods, because of their quality, cannot compete with European products, although they cost less and this could increase their competitiveness. In other words, Ukraine could have access to Western markets even now, but there are too many political obstacles in the way. First of all is European protectionism concerning their own businesses and industries. Still, I believe that Ukrainian foreign policy should be aimed at Western Europe, while the Eurasian EC direction ought to be considered only tactically, for the next two or five years, for strategically it has no future.
