Dragon Capital held its 15th Annual Ukraine Investor Conference on Feb. 12-13 in Kyiv.
The event drew about 400 foreign investors and local guests, with foreign institutions whose representatives attended boasting over $3 trillion under management, invited speakers and media representatives. This was matched by a high-profile speaker faculty, which included the president and prime minister of Ukraine, the National Bank governor, senior Cabinet officials, and many others. The size of the audience, one of the largest in the history of our events, demonstrated investors’ keen interest in Ukraine’s double elections this year, presidential in March and parliamentary in October. Politics was, therefore, a major focus of the conference.
Below please find our summary of the Political Panel.
Moderator: Vitaly Sych, Chief Editor, Novoye Vremya
- Inna Volosevych, Deputy Director, Info Sapiens
- Iryna Bekeshkina, Director, Democratic Initiatives Foundation
- Volodymyr Fesenko, Chairman of the Board, Center for Applied Political Studies Penta
- Oleksii Ryabchyn, Parliament deputy, political party "Batkivshchyna" (Fatherland)
- Rostyslav Pavlenko, Director, The National Institute for Strategic Studies
- Ms. Volosevych presented results of a late-January nationwide survey which showed non-mainstream candidate Volodymyr Zelensky advancing to the top of presidential polls with over 15% support (relative to total voters), opposition leader Yulia Tymoshenko slipping to second place with 13% and the incumbent president, Petro Poroshenko, ranking third on 10%. Another interesting finding was that voters generally grew more optimistic about their personal and nationwide prospects post-elections, with the share of those believing the economic situation would improve following the presidential ballot rising to 34% in January from 23% in December. Also, 55% of respondents named labor migration as the main current threat for Ukraine, followed by an economic decline (52%), poverty (47%) and price growth (39%). The risk of “all-out war with Russia” ranked only fifth on 35%. At the same time, answering the question about what Ukraine needed the most at the moment, 67% named peace, 40% stability and 37% order, followed by wellbeing on 34% (respondents could choose three options).
- Ms. Bekeshkina, calling the current poll leader Zelensky a “classic populist”, said populism will overshoot during this year’s electoral cycle due to Ukraine remaining a poor country overall. Another major feature of this year’s ballots is “uncertainty and unpredictability”, as leading politicians’ rankings remain low, leaving the outcome of the elections wide open, and some of the leading presidential candidates’ policy priorities (Zelensky’s, in the first place) are totally unclear. Zelensky indeed stands a high chance of making it into the second presidential round but the prospects for his victory are weak, his disadvantages being the lack of a loyal national activist network and reliance on predominantly young voters, many of which may ultimately decide not to come to the polls.
- Mr. Fesenko cautioned about the prospect of a political crisis erupting postelections, pointing to growing aggressiveness and mud-slinging in the current campaign. Zelensky is a terra incognita, “probably even Zelensky himself currently doesn’t know what he’ll do upon being elected”, but even his possible victory will not lead to Ukraine veering off its pro-western course. At the same time, Zelensky’s becoming president and associated uncertainty may force old elites to consolidate their forces in parliament to counterbalance the president. Considering that parliament in Ukraine has comparatively larger powers than the president, we may see the emergence of a de facto parliamentary republic with a sidelined president as a result. What makes the October parliamentary elections even more important is that parliament is responsible for forming the government, meaning the post-election reform outlook rests on the outcome of the parliamentary ballot.
- Mr. Ryabchyn sought to dispel what he called “myths” about his party leader Yulia Tymoshenko’s populist leanings and alleged opposition to the IMF. He said that under Tymoshenko’s presidency, Ukraine would continue to duly service its debts, maintain cooperation with the IMF, and continue to advance integration with the EU and NATO. He said President Poroshenko’s 2014 election campaign was also “populist”, as he promised (and failed) to end the war with Russia within weeks and harply revalue the currency. Tymoshenko’s populist rhetoric is actually helpful in that it allows the young wing of her parliamentary faction, of which Mr. Ryabchyn is part, to focus on advancing important reforms, particularly in the area of energy efficiency and alternative energy, which is Mr. Ryabchyn’s specialization, or civil service, which another young member of Tymoshenko’s party is heavily involved in.
- Mr. Pavlenko, commenting on the criticism that reforms during Poroshenko’s presidency have been too slow, said it was impossible to achieve quick wins as the president tapped into complex areas that had been left unreformed for decades. The president remains committed to improving the investment climate, particularly by depriving law enforcement agencies of any means of pressuring business, but one cannot make big institutional changes in this and other spheres quickly. The reforms of the past five years aimed at setting up new institutions, particularly in the judicial and anti-corruption areas, have created the basis for accelerating positive changes towards establishing the rule of law, which is ultimately positive for attracting investment. The president’s immediate priorities, in addition to the fight against corruption and reforming law enforcement and judiciary, include land reform, as a functioning farmland market is long overdue in Ukraine.