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U.S. Executives Promote Ukraine As Investment

  • Robert Lyle

Washington, Feb. 23 (RFE/RL) - President Leonid Kuchma met with a select group of 20 senior officials of leading American companies in Washington Thursday to encourage greater business activity and investment in Ukraine.

But it was the business leaders themselves who did the selling of Ukraine's economic future and Kuchma had only to urge them on.

Kuchma traveled to the U.S. originally to receive an award from a private human rights group, expanding the visit to three days to fit in meetings with almost every senior American government official.

Kuchma intended to emphasize Ukraine's economic development in every meeting he attended, so quickly agreed to a special, closed-door round-table meeting on his final day in the U.S. with a small circle of senior executives of companies which already have significant investments in Ukraine or will soon.

Sponsored by the U.S. Overseas Private Investment Corporation (OPIC), the agency which insures and sometimes finances U.S. investment abroad, the meeting was only the latest in what has been a steadily growing relationship OPIC has been developing with Ukraine.

In the last year alone, OPIC President Ruth Harkin has made three trips to Ukraine. She says OPIC has provided more than 230 million dollars worth of finance and insurance for investment into Ukraine and that there is "a large pipeline of projects" in the works.

On Kuchma's last visit to Washington in November, 1994, OPIC sponsored a large meeting with American business leaders and investors but this time wanted to go beyond public statements and get down to business. For one thing, experts say, the business leaders welcome the chance to raise specific problems with a country's leadership.

Kuchma said after the meeting Thursday that he told the business executives there is "no better country than Ukraine" for their investment. He said that while U.S. business has put hundreds of millions of dollars already into Ukraine, he wants it to quickly grow to thousands of millions.

"Ukrainian possibilities are well known in the world," he said, "and the market is limitless."

What no one really expected was the enthusiasm of the American business people who are now fully engaged in Ukraine.

Toby Moffet, a special advisor to the chairman of Monsanto Chemical Company, said business in a country in transformation is never easy, but that in Ukraine, it is "getting much, much easier, much faster."

He particularly praised Kuchma and other members of his government for supporting the reforms necessary to implement a strong and supportive business environment in the country while being willing to assist foreign companies that are having difficulties.

"We've had some problems," said Moffet, including the collection of old debts and the registration of some of Monsanto's chemical products, but "we've had total cooperation from President Kuchma, his office and government and we feel it's getting better."

Arunas Slekys, Executive Vice President of Hughes Network Systems, a major telecommunications company, endorsed Moffet's enthusiasm for Ukraine. "We see progress every day, literally," he said. "There are still elements that would prefer a state controlled economy, (but) there's clearly a direction toward privatization."

In fact, said Slekys, his company's market surveys show "there's a tremendous economy at the grass roots level developing and that's the best sign of all because it's the people that will make it happen. In some cases, perhaps, the people are outpacing the government's ability to set policy."

Moffet said another reason Ukraine is rapidly improving its business climate is the "equally important" support of the governments of the oblasts. "They're reaching out and very aggressively trying to get us to do more investing," he said.

He added that this is "not just in Kiev, not just in the central government, but out in those areas and that's where we feel as a company incredibly welcomed and incredibly encouraged to invest."

Jay Ganatra, General Director of New Business Development for the General Motors Corporation, said he was very encouraged by the comments of his colleagues and said the large automotive manufacturer is looking to "explore possibilities in Ukraine" soon.

Monsanto has a series of joint venture projects now underway with several former collective farms, at this stage providing training in modern, conservation-oriented farming methods to thousands of Ukrainian farmers.

Monsanto sells herbicides in Ukraine and is already helping a number of farms to greatly increase their yields, said Moffet.

Monsanto also owns the Searle pharmaceutical company, which will soon be selling mostly women's health products in Ukraine. Another company owned by Monsanto, called Kelko, is, according to Moffet, "about to launch a product" designed to be an antidote to strontium 90, an isotope in the fallout from a nuclear explosion that is absorbed in the bones. Made from a seaweed-based calcium alginate, the new product is designed to "extract the strontium 90 contamination, particularly out of the bones of children," said Moffet.

Slekys said Hughes is preparing to introduce later this year in Lviv a system employing the latest U.S. digital cellular telephone technology to provide a wireless system that is "very cost-effective as an alternative to land-line telepathy."

This will be coupled with a more premium mobile telephone service for both business and residents, said Slekys. However, because Hughes was a pioneer in the U.S. of direct satellite to home television service, the company is looking to provide an even more advanced system in Ukraine in the future.

New, powerful satellites, to be launched by a joint venture between Hughes, Boeing Aircraft and Ukrainian space rocket services, will provide "unlimited voice, data and video services" to homes in Ukraine, Russia and other nations of the region. The system requires only a small, 46 centimeter dish mounted on a roof or in a window to receive the signal and should be ready in two years.

As if to underscore the optimism of the business executives, OPIC said that the New Century Capital Partners Fund is just about ready to place 50 million dollars in investments into Ukraine businesses. The fund, one of 20 privately owned and managed investment funds which have OPIC backing, was started last June, fully subscribed in December and should begin its investments in Ukrainian enterprises in a few months. It will also be making long-term investments in Belarus, Estonia, Kazakhstan, Latvia, Lithuania, Moldova and Russia.