Petro Poroshenko, Ukraine’s “Chocolate King” turned politician, wins Ukraine presidency with 57.3 %, according to exit polls. Ukraine’s new president inherits the country that faces serious challenges.
Updated May 25th, 3:42 pm
Ukrainian business and entrepreneurship – essential parts of any future economic and political success in the country – have been affected by the ongoing crisis on all fronts. Business knows it’s important for this presidential vote to succeed, even though not everyone is happy with the list of candidates. The positive sign is that Ukrainian business has a sober outlook and seems willing to adopt as it enters this new reality. Really, what choice does it have?
Big businesses tied to Russia have been suffering since last summer, when the neighboring country declared economic war, punishing Ukraine for attempting to develop close ties with the West (billionaire Victor Pinchuk’s steel pipes and Poroshenko’s chocolate were among the first victims).
Petro Poroshenko and his wife vote in Kyiv
Since the protests started in November, business activities have slowed and companies admit they’ve put new development, expansion and investment on hold. In the first three months of this year, consumer confidence fell sharply – from 63 to 56, according to a recent report by Nielsen firm. In the eyes of many Ukrainian businessmen, the presidential elections seem to be the first step to stabilizing the situation.
Today, the “founding fathers” of Ukrainian oligarchy, without doubt, are competing for political and business influence in the country. However, at times they’ve also taken steps help Ukraine stay intact.
Ukraine’s most influential rich – Rinat Akhmetov, Ihor Kholomoysky, Victor Pinchuk, Kostyantin Zhivago, Dmytro Firtash – publically support national sovereignty. A year ago, some of them had doubts that they could remain successful without dealing mainly with Russia. Today they take a more optimistic view of independence.
The current situation, far from ideal, has forced them to explore new markets and business opportunities. At the same time, the oligarchs haven’t given up on the idea that Ukraine can continue its partnership with Russia. Poroshenko, an experienced businessman and politician, seems equally equipped to deal with both the West and Russia. Forbes wrote a detailed break down
on how nine Ukrainian businessmen-billionaires have behaved during Ukraine’s recent political fray.
Mid-size business in Ukraine, usually reluctant to get involved with politics, has taken a practical view. The Maidan revolution affected all industries and companies. “Business doesn’t grow when the protests sentiment in the society is high,” says Andrey Kirik, the owner and the president of local energy business and several car dealerships in Kharkov. He hasn’t laid off any of his 250 employees and has managed to open two new dealerships in 2014, which was planned before the turmoil. “Electing a legitimate president is only the first step,” he says. “The country needs to calm down. We should have dialogue with Russia. Anyhow, we are neighbors.” His business interests, however, are not tied to Russia in any way. His partners are in Europe and Japan.
The common opinion is that an aggressive neighbor can’t make a business partner. After Russia’s hostile annexation of Crimea, the threat of war seemed very real and businessmen in Eastern Ukraine were afraid that their region would be next, killing their businesses.
The idea of bipolar world emerging doesn’t get massaged in Ukrainian media as much as it does in the United State. Reinventing the Iron Curtain doesn’t seem attractive to Ukrainian businessmen. In Russia, the officials, when commenting on sanctions imposed by the West, brush off threats of isolation and speak of developing new markets within Russia.
“I wouldn’t want to be on that other side of the Iron Curtain,” Kirik says. He favors western business models and thinks that his native Kharkov – located very close to the Russian border – wouldn’t be able to become part of Russia. “Kharkov’s mentality is closer to Europe than to Russia.” Businesses will work with whoever is elected, as long as rule of law prevails. Be they oligarchs or midsize businessmen, Ukrainians seem to crave stability, independent courts and a functional department of taxation.
Smaller entrepreneurs and businesses have very pragmatic views: “I’m against joining Russia,” says Miroslava Marchenko, the owner of a travel services and online portal for tourism professionals. “It would mean changing the entire system. From the point of view of taxation, administrative fees, retirement contributions that would set us twenty years back.” Marchenko has about five employees, and stayed afloat this season even though she says that her quarterly revenue in 2014 dropped twice compared to the same period a year ago. She says that voting in this election is her personal responsibility.
“My candidate is Poroshenko,” says Oleg Siganevich, who owns a small printing business. “There is hope that he, as a businessman, will support entrepreneurship.” At the same time, Siganevich says that in the East many small enterprises would seriously suffer without access to Russian markets. He is not really afraid that Russian aggression would continue. “Putin doesn’t need Ukraine,” he says.
“Ukraine will have to go through painful reforms to survive, otherwise the country will be lost,” said Georgian reformer and businessman Kakha Bendukidze at a press briefing in Kyiv. A real fight against corruption, similar to what Georgia went through during Mikheil Saakashvili’s term, is fundamental.
Ukrainian businesses and entrepreneurs indicate that they want to save their country’s independence and they are open to adapting to the new leadership, which includes anti-corruption campaign and reforms. Having come close to the country’s collapse in recent months, the country’s business community is serious. They expect the rules to be followed and the laws to be strictly enforced. If government and the newly elected president fail them, Ukraine may not be able to survive their mistakes.
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