Attracting U.S. investments to Ukraine and the post-war economy: An interview with Oksana Markarova

Authors

Olexandra Zakharova , Kateryna Venzhyk

How to attract U.S. investments: An interview with Oksana Markarova

As Oksana Markarova, Ambassador Extraordinary and Plenipotentiary of Ukraine to the United States, has said in an interview with , the amount of aid provided to Ukraine by the U.S. has reached $111 billion. Moreover, the United States has changed its attitude towards Ukraine during the past year, and the work to shape the post-war world and Ukraine is already underway. However, are Americans ready to invest in Ukraine after the victory?

What can be done now to attract American business, and how will Ukraine's GDP grow after the war? talked with Oksana Markarova, Ambassador Extraordinary and Plenipotentiary of Ukraine to the United States.

Economic diplomacy: Supporting Ukraine during the war

Are there discussions about investment in Ukraine after the war? How do American businesses see investing in Ukraine with respect to industries and timing?

It’s an important question. As a finance expert and former minister of economy, I fully understand it. That’s why we at the embassy are actively working on all our key priorities, not just those directly related to the war. We work on cultural, educational, and scientific diplomacy as well as expert diplomacy, which is necessary to change the world's perception of us.

Oksana Markarova: How Ukraine’s economic diplomacy works. Photo: Getty Images

And of course, we pay special attention to economic diplomacy. It is important both for future reconstruction and for keeping Ukraine alive and fighting today. Because today we also need communications, and we need banks, coffee shops, and bakeries to work so that someone can create jobs and make quick repairs.

To that end, our businesses must at least stay afloat and preferably develop, and it will be great if international companies, especially American companies, will also work in Ukraine, and there will be more of them. It is also important today, first of all, to support the front because we finance our military expenses solely from our own taxes.

And this is happening on the part of American companies — for example, Boeing has an R&D center in Ukraine, and it increased its staff to 1,100 people during the full-scale war. Large agricultural companies such as Cargill, Bunge, and ADM also continue working. Citibank expands its activities, and Westinghouse continues to expand projects in Ukraine. And these are only a few of them.

Virtually every week, the Embassy holds meetings with American companies that work in Ukraine, especially with those whom we encourage to consider Ukraine as a potential country for investment now. And in addition to the meetings, we invite everyone to visit Ukraine, and such economic missions are very beneficial.

Thus, a recent visit by a political and economic team from the state of Utah is already developing into a few very important investment projects.

Of course, when it comes to post-war reconstruction, we plan to use as many funds confiscated from the aggressor as possible and will appreciate assistance from our partners. However, the massive involvement of private businesses is a crucial component, and the president, the prime minister, and all the Ukrainian team are working hard on it. The prime minister set this as a priority task for the Ukraine reconstruction conference to be held in London.

Ukraine’s five reconstruction priorities

There are five priorities for Ukraine’s reconstruction work that the prime minister presented at the Ukrainian round table as part of meetings with the IMF and the WB in Washington. The World Bank estimated the total need under these priorities during this year to be $14 billion (while the total losses were estimated at $411 billion as of February 24, 2023). The priorities are as follows:

energy;
humanitarian aid;
demining;
critical infrastructure;
support for businesses.

These priority challenges require direct assistance, but each of them will be easier to tackle with the additional active involvement of American businesses.

Russia has taught us how every sector can be weaponized. Therefore, we must build all these sectors to be self-sustaining and integrate into the European system. We need to become a solution to many problems, not a recipient that depends on everyone.

How will Ukraine’s GDP grow after victory?

Oksana Markarova: How Ukraine’s economy will grow after the war. Photo: Getty Images

From your point of view, what will be the dynamics of GDP growth in Ukraine after victory? What rates can we count on?

The only thing I can tell for sure is that we will be the fastest-growing economy in the region if we start our reconstruction properly. However, there will be a number of factors.

First. How will the security issue be settled in Ukraine after our victory, how soon will Ukraine become a NATO member, and what guarantees will we have before full membership?

Second. To what extent will businesses, both Ukrainian and international ones, be confident that they will have equal, clear, and fair conditions for all in Ukraine? This includes capable Ukrainian institutions at all levels, the rule of law, and a systematic fight against corruption. This will determine how massive the investment will be.

Post-war growth will require growth in sectors ranging from physical reconstruction (construction/road infrastructure) to services. And we have huge potential in basically every sector. Despite many changes and developments, overall productivity in Ukraine was very low.

Oksana Markarova: A Ukrainian economic miracle is possible. Photo: Getty Images

I was struck by the numbers in a 2019 survey that compared productivity in Ukraine and Germany: the yearly yield of one manufacturer in Ukraine was equal to the 18-day yield in Germany. The reason is not that we don’t work hard, but the lack of access to capital, innovative technologies, etc. This is where we have the potential for growth, and we can increase productivity in each sector.

Third. It’s crucial that the growth of GDP be stable. This will make the partners believe in Ukraine’s long-term success, which will attract even more investors.

And then, we’ll have a chance to see the economic miracle that will not only revive crippled Ukraine but also, for the first time in all our years of our regained independence, become the foundation for real growth in the well-being of all Ukrainians.