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Confidence in the victory of Ukraine and the willingness of Western investors to invest in the country's recovery. For its part, Ukrainian business should do its "homework" by proposing interesting and relevant projects. Davos-2023 through the eyes of Boris Shestopalov, co-owner and CEO of HD-group.
In Davos during the World Economic Forum, you can feel the beating of political and economic pulse of the world. I went there to get answers to the two most important questions: "Are our Western partners tired of the war in Ukraine?" and "how justified are the expectations of Ukrainian businesses regarding the implementation of the country's post-war reconstruction plans?". The answers I received are unambiguous and clear, and I came back with a homework.
I'll start with the positive. Despite the publication in some foreign media, the collective West is not tired of the war in Ukraine - I clearly felt this while talking to stakeholders of world politics and economics in Davos. Seeing the fortitude of the entire country and the successes of the Ukrainian army on the battlefield, no one doubts Ukraine's victory.
I do not think that in the West we are expected to win a quick victory. Rather, they are expecting for a radical change in the situation, a shift in the combat zone, or the liberation of another significant part of the country's territory. And this will only increase the help that we have been receiving. Therefore, the question "how soon will victory come?" most likely has a mathematical answer, no matter how pragmatic it sounds.
The speed of accumulating military resources and, above all, heavy armored vehicles — this is what will determine our victory. We see that this movement is taking on more and more distinct outlines. So Scholz, previously so reticent, finally gave the go-ahead to supply us with the long-awaited Leopards.
At the same time, I, like other ukrainian businessmen who visited the WEF, was interested in the prospects for the fastest possible peaceful recovery of the country with the help of Western investments.
Many of us would be disingenuous to say that we didn’t dream of bringing drafts of future contracts from Davos. Unfortunately, that was not the case. However, our expectations were not rejected - we were assured that huge investments are planned for Ukraine, but in order for them to launch, there is a number of conditions that must be met.
Firstly, the above-mentioned radical change point in the war. Until it happens, we should not expect the arrival of large private investments (it is on them that Ukrainian business can count). Investment companies and funds that dare to enter Ukraine without real military risk insurance instruments are very limited.
But as soon as a series of military successes begins, businesses would be overwhelmed with the number of signed preliminary agreements. There is also a possibility of missing out on opportunities, because development zones and sectors in Ukrainian economy are not limitless. This in itself will strengthen military support, and on the other hand, it will inspire our foreign partners and, first of all, financial institutions.
By this time, Ukrainian businesses need to do a lot of work on project preparation — this is the second condition that will determine the volume and speed of investments. The West is ready to invest money in post-war Ukraine - they expect not just specific projects from us, but projects that take into account current trends in the world economy. This was mentioned in the conversations between Western investors with Ukrainian businessmen: "Do your homework." And we all returned to Ukraine to do our homework.
And, of course, I can't help but mention the problems voiced at a number of discussion panels — corruption, the judicial system, investment protection.
Without a radical change in these matters, we should hardly expect a flow of investors into the country. And this is a serious task for the Ukrainian authorities.
Virtual flags of "green" energy, decarbonization and digital technologies, including blockchain and AI, flew alongside Ukrainian flags in Davos. All political and, above all, economic processes related to the future recovery of the country, must take into account these trends.
This fully applies to the HD-group holding. All our future export-oriented projects, will be based on the maximum use of "green" energy and innovative digital technologies.
Another subsection of our homework is to go through the first stage of future investment projects on our own. The implementation of any of them — especially infrastructural, industrial, and other high capital-intensive projects — takes time.
The design and preparatory stage itself, takes 6–10 months. This is what we have to do now, taking the first mandatory step towards Western investors. Furthermore, as pre-project and examination works make up 1–2% of the cost of the entire project.
As a result, it would be possible to start implementation stage immediately after the victory. We have no other option. Everything that is happening now in the Ukrainian economy (forced emigration of the population, a drop in demand and solvency) does not allow us to rely on long-term fluctuations.
This tragic war gives Ukraine a chance to finally break the umbilical cord that connects us with the Soviet past. And not only in the historical and political sense, but also in the context of the economy. Ukrainian new economic doctrine should be as far away as possible from our neighbors, who have become our enemies.
It is necessary to restore or, more precisely, rebuild our economy not only taking into account the maximum proximity to the markets and raw materials, but also relying on the current global trends of decarbonization and digitalization.
Only in this case, Ukraine will be able to become a real "green" energy hub of Europe and offer it and the rest of the world demanded and competitive products.
** The material was prepared in partnership with KIEF.**
