Why do the speeches of the Ukrainian government in London cause fear?

The Ukrainian side prepared dozens of slides for the London donor conference, and all of them are bad. Having failed in Lugano, our politicians should have drawn the appropriate conclusions, but...

If you are asking for money, especially a lot of money, then it simply becomes necessary to interest the investor, outline the benefits of cooperation and, yes, future joint profits, probable growth rates, depth of markets, niches – promising and unoccupied, competitive advantages and unconventional approaches. This is, unfortunately, an incomplete list of what was never announced to the guests during the Conference on the Restoration of Ukraine and during the speech in London. The economic bloc was represented by:

Rostyslav Shurma, in whose representation Ukraine is a victim of Industry 2.0.

Yulia Svyrydenko, in whose representation Ukraine is a magical world of unicorns and rainbows, in which GDP increases if you bite a mushroom from the right side.

And Oleksandr Kubrakov, in whose representation Ukraine is tons of asphalt, construction sites and bulldozers.

Everything looks so bad that Ukraine's Svyrydenko appears to be the most promising option. After all, in her view, it is at least not formulaic. It is only necessary to take into account that we will build Ukraine according to Shurma's idea, under the sensitive leadership of Executive Viceroy Kubrakov.

Gentlemen, the fact that you added the word "hub" to the agro-industrial complex, the word "green" to metallurgy, and the word "thermomodernization" to construction did not make your proposals innovative. Yekhanurov, Kinakh, and even Pustovoytenko could well present these ideas (just google it already).

Against the background of this sad, outdated mundanity, the proposal to transition to a cashless economy, which so outraged Maria Barabash, is simply a breakthrough thought. Despite the fact that the very idea of giving up cash dates back to 1995, it still has a wow effect even on people from the "National Reform Council". Think and… relax, because no other breakthrough ideas have been voiced in London.

The worst thing is that the ideas of a strategic and progressive vision of development were not formed and voiced.

The current government has a unique opportunity to build everything from scratch, and how does it use it? They have a blank sheet of paper in front of them, and they stubbornly draw there an elevator, an open-hearth furnace (OHF) and a cogeneration or combined heat and power plant (CHP)."No," says a potential investor, you need to think more broadly, the entire modern technological world is in front of you, new partnerships, new markets and a new subjectivity for you! And they draw three elevators, an open-hearth furnace (OHF) with a filter, and instead of a cogeneration or combined heat and power plant (CHP), a million wind turbines.

However, finally find at least some visionary! And if there is none, then at least it is important to hire a competent salesperson who will explain that the first slide in your presentation should be the benefits of investors, the second – challenges, and the third – solutions for these challenges...

Thus, it becomes clear that, in addition to many other important decisions and implementations, Ukraine also lacks the reform of government presentations. Our delegates are literally torturing people for their own money with an unstructured delusion that emphasizes all the flaws of the current government as much as possible. In particular, it is worth noting such disadvantages in the state structure as the professional and institutional weakness of the government, superficiality in assessments and planning, the enormous influence of big business on the state, and, accordingly, corruption and scheming.

We can argue for a long time and stubbornly about economic models, approaches and tools, recalling and operating on the examples of the late Keyne and Hayek, appealing to various experiences and results, but we will not do this. This does not make sense, because the proposals that the representatives of Ukraine voiced to the donors did not reveal the basic questions that arise for everyone who wants to invest even a penny in our country. Without answers to them, it does not matter what other things the Ukrainian government officials and Shurma have fantasized about.

The first and most important thing is the vector of development. It would seem, and what is the problem? Ukraine offers traditional projects that are based on the decades-old economic model that every good and smart businessman approves of. However, this economic model of a small open raw material economy in general has never been liked by anyone here. After all, it slowed down growth, productivity and manufacturability. So, if politicians want to involve this unprofitable and ineffective model in the future of our country, explain why. Well, at least tell the investors about it. If stable and balanced development is small and medium-sized businesses, if the greatest added value is services and technologies, if jobs are light and food industry, then why do you need an agricultural and metallurgical raw material complex managed by Kosyuk and Akhmetov? What will you do with all this in the world of Industry 4.0? What profits should an investor see here?

Well, the government team will tell us, these are big tax payers, we can't do without them. However, in reality, the biggest taxpayers in Ukraine are consumers with their VAT, which the exporting titans only reimburse. What about foreign exchange earnings? Unfortunately, we have much more powerful channels of currency receipts. It seems that it is time to change something. But large commodity producers are also skillful lobbyists, and without war they are oligarchs with influence. Look at it from the investor's point of view: without explaining the logic of development, the Ukrainian proposal is either very stupid or very corrupt. Even if Shurma's presentation had started with the slide "I want Akhmetov to love me like before," that would have been a better explanation than none at all.

The second key issue is people. There is no development without people, they produce, they consume, they generate everything, from ideas to tax revenues. And the problem is that we don't have people. Every time Svyrydenko mentions future economic growth, somewhere a demographer sighs heavily and an investor raises his eyebrows in surprise.

And so Ukrainian proposals appear on the scene: the "Return Talents" program for workers in creative industries, temporary employment in short-term projects, a digital platform for return and reintegration, and a program of social services and compensation (including resettlement in temporary housing).

Behind the stage, the German "open labor market" program for migrants, the Polish card and the Canadian CUAET visa are laughing out loud.

This is about the return of our people from abroad, there was not a single word about the involvement of foreigners at all. Even before the war, there were estimates that we need to attract 300-500 thousand adult migrants every year to compensate for demographic failures. Now this number can be safely doubled. Of course, no one expected ready-made proposals for simplifying legislation, analysis of the labor market or ready-made programs for attraction and integration. However, at least the intentions should be voiced, at least hinted that there will be someone to work for and someone to consume in Ukraine, and most importantly, we are ready to compete for people.

The third key issue is investment protection. What's wrong with that? Here are the "powerful three", the fund monitoring system, and the eternal anti-corruption reform.

Well, let's just imagine that an investor invests money here, and suddenly an unscrupulous notary transfers his asset to some unscrupulous owner of a LLC. And at this time, a dishonest law enforcement officer says that he cannot do anything to help in this unfavorable situation, a dishonest judge is on the side of the defendant, and a dishonest member of the Security Service of Ukraine can even come in with searches to prevent excessive activity. This is a classic – BLM in the Ukrainian style!

In our country, statesmen treat local business like a stepmother treats Cinderella, to say nothing of some foreigners.

How can the members of the "powerful three" help in this situation, or monitoring the receipt of Western monetary aid and control over the further distribution of funds? Ideally, the rule of law and the inevitability of punishments would be needed here. If there are none, then at least some sovereign guarantees, including security ones, would be useful. Well, or at least the resurrection of "investment nannies". However, unfortunately, we don't have any of this at all.

Probably, there was not enough space, otherwise the development of culture, the improvement of the sports environment and the reform of school education would simply not fit in, and without these ideas, you understand, it is even better not to contact investors at all.

***

"What are you saying," the reader will be indignant, "because they gave us so much money, and financial guarantees, and promises."

Divide 50 by four, you will get 12.5 billion euros per year for a need of 30 billion. For a better understanding, it is worth noting that in the last six months we have already spent 20 billion, without large-scale projects, just for living (because for war, Western financing is not directed). And we must remember that in the future our country will have to rebuild destroyed cities, and in the past we have lost a third of the economy. Nothing can be gained by de-occupation alone, because no matter how much Bakhmut generated GDP earlier, it will not generate anything for a long time after the liberation. It is worth noting that not only the city of Bakhmut will find itself in this state of affairs.

So let's not get carried away, interstate support is priceless politically, but financially, we cannot do without partners from the market, joint projects, technology transfer, expansion of markets, etc.

We have a Recovery Council with a secretariat, 24 working groups, two and a half thousand experts, an advisory council and an office for the promotion of reforms, and the impression is that none of them have seen a live investor in their eyes.

This is not stupidity, this is meanness. After such a decline, simply due to the effect of a low base of comparison, it will be possible to show quite decent economic growth even with a minimal improvement. Some money will still be found and will be mastered, some people will still return, some businesses will survive. Somehow the situation will improve.

And problems will begin after returning and finding all these factors.

Read this article in russian and Ukrainian.