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Business Views on Ukraine's Path to Prosperity: A Roadmap for Reconstruction

Strategic reforms, war risk insurance (and not only of investments but equipment, people, etc.), permanent access to capital, human resources, infrastructure, etc. – these are the key factors that the private sector need to help to make a rebuilding process a success story. They were discussed during the Ukraine Recovery Business Day – the next day after Ukrainian Conference in London – to formulate a joint vision of the private sector for the recovery of Ukraine, moreover, understand the points of growth and challenges.

Rebuilding of Ukraine, which includes recovery, reconstruction and modernization is undeniably one of the most ambitious and costly endeavors since the Second World War. For its successful realization, Ukraine needs collaboration not only with governments of other countries, but also with the business sector. The private sector has the capacity to mobilize investments and innovative ideas/approaches on the scale necessary for Ukraine's restoration.

URBD served as a platform for dialogue and building a common vision for joining the Ukraine’s recovery by Ukrainian, British, and international businesses. The event has unlocked new possibilities for international enterprises, while providing substantial support to Ukraine's ongoing efforts. It will not only foster international partnerships, but also cultivate a fertile ground for the emergence of innovative ideas and initiatives, enhancing the robustness and adaptability of the business community”, – Kyrylo Kryvolap, CEO of the Centre for Economic Recovery (CER).

However, our mission during the UBRD was to discuss insights that business brought out from the main conference, sentiments of doing business during the war, insights of not just recovery but green recovery, etc.

“The week of discussions about Ukraine in London – about Ukrainian resilience, support, commitments, discussions about the situation in business and with the economy. International partners will continue to stay with Ukraine, will continue to support, many memorandums and agreements were signed in this regard during the #URC. That is great news. High hopes are placed on the business in terms of rebuilding and it is worth saying that Ukraine can give a lot of opportunities for the private sector to develop. However, challenges are also real. But companies are ready to overcome them. However, need to be involved in the discussion as even during our Recovery Day many speakers agreed that private sector voice was missing on the URC stage, hope, in Germany, it will change”, mentioned Anna Derevyanko, the European Business Association Executive Director.

In the first part of our discussionHence, the World Bank presented its survey. The general trends – yes, currently the level of uncertainty is very high, and companies are financially distressed, nevertheless, they continue to demonstrate enormous resilience and only 3% of businesses had to close their operation. It’s worth saying that large firms were more severely impacted than small companies (41% of large companies vs 15% of small). In general, the companies suffered from 3 factors – the impact of sales (-53%), employment (-26%) and assets. Obviously that business experience drops in export (75%) as well as in import (66%). And 2 especially affected industries become construction and manufacturing, still, companies continue working and stay committed to the country.

Obviously, uncertainty also influences investments. The importance to do reforms, access to money, information about opportunities and doing business in Ukraine, etc. became even more important for the country. Yes, there are financial institutions that continue to support business. For example, the EBRD has 5 areas of support - energy, infrastructure, food security, trade, and overall business resilience; among their instruments are direct landing, risk sharing with commercial banks, etc., however, they don’t perceive a dozen of projects to consider, hence, welcome interested businesses to come and to have a talk with the institution. The IFC has already pipeline projects for $2 bln, but still, think that more can be done, therefore, for example, think about how to implement PPP but business also need to understand that investing nowadays require risks, blended finance, partnerships.

James Watkins, Head of Policy and Public Impact at London Chamber of Commerce and Industry said,

“The Ukraine Recovery Business Day is a testament to the potential of businesses of all sizes in the United Kingdom to bring a difference to people’s lives not just in Ukraine but across the globe. The London Chamber recognises its responsibility to support Ukraine at this traumatic and pivotal time in creating an ecosystem of SMEs which can provide solutions to pertinent issues – from green energy to diversification of global value chains. UK and Ukraine business collaboration is a stepping stone towards creating a secure, safe and future-proof international investment market which doesn’t crumble in the face of geopolitical tensions.”

Igor Bartkiv, Ukraine Project Manager at London Chamber of Commerce and Industry said,

“The conference displayed grit, determination, and resilience of Ukrainian businesses even in the face of war and the need to support these ambitious businesses now more than ever before. Ukraine’s remarkable adaptability in adversity serves as a valuable lesson for the world, and its expertise can contribute significantly to other nations in fostering resilient and sustainable economic growth, as well as establishing a robust framework for war risk insurance.”

One of the ideas mentioned during the UBRD to bring investments was also that Ukraine needs an ecosystem of private equity. Still 5-10 years ago when businesses invested in Ukraine challenges were also in place (because of the lack of reforms) but companies managed to be successful – as Ukraine is a country of sophisticated infrastructure, fantastic people, therefore, adding reform and more innovation components nowadays will help the country to rock.

A very bright example was made during the panel on green recovery. First, on a regulatory framework that is crucial for the development. Hence, the UK has very well-developed wind energy not because of having the best wind but thanks to good regulations. Second, there is a lot of discussion on the importance of the private sector, however, according to the statistics, in emerging economies only 15% of investments go from the private sector, therefore, the public sector is needed and very important. Third, decarbonization, even more digitalization, building with smart and green technologies, development of green technologies (like sun, wind, hydro), nuclear industry will help to make the reconstruction of Ukraine greener. Moreover, implementation of EU regulations, otherwise, it could be hard for global companies to invest as they won’t be able to understand how to be in align with only Ukrainian regulations.

Special attention should also be given to the recognition of business regional specialization (for example, metallurgy and heavy industry in the southeast, etc) and SME mobilization. And potentially interested industries for bringing investments can be – agricultural processing, green energy and electricity, light industry, heavy industry (but adding a green component), etc. Moreover, the global trade system will change – it should be considered. Yes, russia exported to Europe for $7 bln without gas and oil, hence, it can be a good opportunity to substitute for Ukraine. One of the challenges is that FDIs are very sensitive to distance, therefore it’s important to use a geographical approach and develop infrastructure based on green technologies, smart building, etc. Besides, nowadays a lot of Ukrainians are abroad, hence, can be worth leveraging the diaspora to help to bring investments – as especially now they need meaningful work.

In the long run, the URC event helped the world to understand a bit more about Ukraine, reconstruction, and partners in this process. However, a lot of questions remain without answers yet - how much the reconstruction will cost, what exactly we will build after the war, who and how much will provide to Ukraine, thanks to what we’ll have economic development and such a huge GDP growth ($1 trln), etc. Nevertheless, the URC became a good next step after Lugano, hence, let’s hope we’ll have more clarity on these questions in the nearest future and at the next conference in Berlin we’ll see very practical steps on reconstruction and with partners will be able to implement them.

“We were proud to host a ground breaking event last Friday, bringing together 200 influential business leaders from Ukraine, the UK, and around the world. Focusing on the recovery and reconstruction efforts in Ukraine, the event emphasized the transformative role that business plays in addressing global challenges. We were deeply impressed by the courage, resilience, and innovation demonstrated by Ukrainian companies. Their unwavering determination to overcome obstacles and drive positive change in their communities is truly inspiring and aligns perfectly with the mission of the Wheeler Institute - to improve lives through business.

The event provided a platform for engaging discussions, fostering new partnerships, and promoting collaborations between business leaders in Ukraine, the UK, and internationally. We firmly believe that through innovative solutions and shared expertise, we can collectively drive sustainable growth and contribute for a better future for Ukraine and its people” - stated Tiago Ivo Martinho, Executive Director of the Wheeler Institute for Business and Development at London Business School.

Additional information

The Ukraine Recovery Business Day (URBD) was organized by the Centre for Economic Recovery (Ukraine), the European Business Association (Ukraine), The Wheeler Institute for Business and Development at London Business SchoolLondon Business School (LBS), and the London Chamber of Commerce and Industry (LCCI) on June 23 in London. More than 300 distinguished guests representing Ukrainian, British, and international businesses and associations joined the event.

We thank to all the speakers for participation and valuable insights!


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