Posts Tagged ‘China’

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China continues to penetrate the otherwise impenetrable – Ukraine

November 22, 2016

In April 2016 the blog noted a(nother) significant investment by China in Odessa – and by extension Ukraine – “It has now become public knowledge that the Chinese company CNBM International (part of CNGC) has acquired eight solar panel plants (previously owned by Activ Solar behind which were the Kluyev brothers, both now wanted in Ukraine having done rather too well within the Yanukovych regime for all their business dealings to be entirely above board).

The two “Franko” solar farms in Starokozache , both “Danube” solar farms in Artsyz, the pair of “Lakeside” solar farms in Kilivy, and twin “Limanskaya” farms in Renne have certainly been acquired by CNBM.

It is quite likely that the remaining Activ Solar farms in Bolgrad have the same CNBM owners too, although as yet that cannot be confirmed.  Also unconfirmed, but of reasonable likelihood given the source, is a further solar farm being built by CNBM.  CNBM is after all, a renewable energy superpower across Asia and a global heavyweight in wind farm blades – not withstanding thin film solar cells.

(It will surely not be long, if it hasn’t quietly happened already, that parent company CNGC expands its own interests into Ukraine – cement and drywall production and raw material trading on truly global scales.)

Regardless, China via CNBM has just acquired in Odessa one of the top 50 solar power plants in the world, and seemingly intends to expand its solar energy production in Odessa even further.

(With regard to these solar power plants/farms in Odessa, more than 70% of the parts are actually manufactured in China by part of the CNGC industrial empire – thus no surprise that its subsidiary CNBM have now acquired the Activ Solar assets.  Indeed the Kluyev brothers Activ Solar loans were underwritten by these Chinese produced assets.)”

The entry concluding thus – “A reader may perhaps wonder, with Ukraine no longer the most receptive of markets for the Russian Federation – and therefore opportunities aplenty exist where they once did not – why it is China that is prepared to walk the business investment walk, whilst it is the Europeans with the DCFTA and reform financing leverage over Ukraine, that are still engaged in business talk.”

To be blunt the size of the aforementioned Chinese investments whilst certainly not small, are only part of more than $10 billion invested in Ukrainian clearly identifiable infrastructure sectors in recent years.  There will be no reader that is not aware that China invests where China feels it will benefit – whether or not that is also beneficial to the location/nation/business market it decides to invest in.

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The reason this Chinese investment was worthy of note (far in excess of the notice actually taken) was that it penetrated the otherwise impenetrable – the Ukrainian energy sector with energy generating assets located in Ukraine.

It appears that China has not been put off by the experience either – in fact it is going to expand its presence in the Ukrainian energy market further – yet again in solar energy.

Another $1 billion investment will begin to physically manifest by way of solar power plants in the 10 kilometer exclusion zone around Chernobyl.  Those solar power plants expected to generate 1 GWh per annum.

The investors this time being,  GCL System Integration Technology (part of the GCL Group) and the China National Complete Engineering Corp.

Well so be it.  With the Russian Federation far from welcome in the Ukrainian energy market and no noticeable committed long-term western entry thus far, China may as well capture the solar generation market – move over Rinat Akhmetov’s DTEK.

It would appear that the early bird once again catches the worm.  (There is certainly not much concern over it usually being the second mouse that gets the cheese – for China is selfish, it is far too big, and far too influential than any Ukrainian mouse trap that would kill the first mouse.)

It would be somewhat ironic that as Ukraine legislatively progresses toward meeting its EU 3rd Energy Package obligations if only China manages to penetrate the Ukrainian energy production market.

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When is cyberwar an act of war? Is NATO getting close to answers?

May 3, 2016

Just over a month ago, an entry appeared raising some issues that to be quite blunt, remain somewhat perplexing.  The entry was inspired by a chat with an Oxford University boffin at the Odessa Security Forum.  Answers, it has to be said despite over a month of pondering, are still difficult to reach.

“Whether it be something approaching a temporary national convulsion as experienced by Estonia in 2007, with banks, the parliament, and broadcasters being downed, or the disruption of technical operations in conventional warfare experienced by Georgia in 2008, or the physical infrastructure damage such as that caused by the Stuxnet worm in 2011, or system wide computer malfunctions experienced by Sony in 2014, or the 2016 hack of the Ukrainian power grid, there would appear to be an empirical trend of escalation – or “pushing the envelope” to use the Tom Wolfe idiom.  (It is perhaps a blessing that so old and ignored is Ukrainian infrastructure since independence that manual systems still exist to rectify matters swiftly.)

Directly or indirectly lives may have been lost through such acts, perhaps deliberately so on the battlefield, and perhaps as a consequence of downing power grid (or other) infrastructure.

The above incidents are employed to simply display a perception of escalation – there are numerous public domain incidents that could have been cited, and undoubtedly even more incidents remaining without the public domain that could have been used that may have already led to the loss of life.

All of which leads to the especially difficult question regarding what, exactly, will be the threshold for a cyber act that is deemed an act of war?  Particularly so when such acts can be far more easily and deniably outsourced to non-State entities by the State?

Clearly those attacking any system have the advantage over those trying to defend it.  There is no such thing as 100% security – on line or off line.  Where there is a will there is a way with sufficient skill, determination, time, or money – or a combination thereof.

How do those on the receiving end recognise the difference between espionage (which all States engage in) and what is an attack (which perhaps not all States currently have the capability for) that will leave behind something nasty and that in the months ahead bring down critical defences and/or infrastructure?

Yet further, how easy would it be to misinterpret intent or miscalculate effects?  How to judge the proportionate response – at least in a timely manner?

……..there is an empirical convergence of cyberspace and terrorism.  There is an empirical convergence of cyberspace and organised crime – indeed with some States it is not always easy (if at all possible) to separate the State from organised crime, or organsised crime from the State.  There is an empirical convergence of cyberspace and geopolitics.  All of which leads to the empirical convergence of the space between war and peace – and ultimately what will be deemed and act of war – or not?

There will never be an international law that bans espionage – because every State engages in it.  Domestic statute will predominantly deal with those caught engaging in espionage against the domestic interest, but will not ban the practice against others.”

cyber

These are all particularly difficult and thorny issues.

When does cyberwar become an act of war?

NATO Secretary-General Jens Stoltenberg recently told a key alliance planning summit that “cyber is now a central part of virtually all crisis and conflicts, NATO has made clear that cyber attacks can potentially trigger an Article 5 response.”  Quite rightly too.

When sparing with Chairman of Russia’s Federation Council Committee on International Affairs Konstantin Kosachev over whether NATO would bomb a nation suspected of cyber attacks, the NATO Secretary General stated “We will do what’s necessary to do to protect all allies, but I’m not going to tell you exactly how I’m going to do that … that’s the main message.”  The return of ambiguity in an very ambiguous theatre perhaps – or perhaps such a strategy and protocols remain work in progress, thus ambiguity masks developing strategy.  Perhaps a little of both.

Having previously stated – “How do those on the receiving end recognise the difference between espionage (which all States engage in) and what is an attack (which perhaps not all States currently have the capability for) that will leave behind something nasty and that in the months ahead bring down critical defences and/or infrastructure?

Yet further, how easy would it be to misinterpret intent or miscalculate effects?  How to judge the proportionate response – at least in a timely manner?”, the NATO Secretary General half-answered this issue raised with a statement that would infer, perhaps deliberately misleadingly (perhaps not) that policy is seemingly still under development when he said NATO should “sharpen our early warning and situational awareness … so we know when an attack is an attack.

That statement does perhaps also infer that what constitutes an attack (that crosses certain thresholds) has at least been defined – as has what doesn’t constitute an attack (which doesn’t meet the parameters, whatever they are defined as).

Perhaps NATO is getting closer, or has indeed answered for itself, the issues raised by the blog last month.  If so, bravo, for certainly the convergences mentioned above continue placing time constraints upon clever thinking.

Perhaps it will only be when policy triggers are pulled when as yet unknown red lines are crossed – and those red lines may not all be particularly obvious to those “pushing the envelope”.  What then to do if those lines are crossed by deniable outsourced entities with no clear links to a State?

It’s a policy realm that’s enough to make your head hurt – but it is one faced by all the protagonists (for better or for worse)!  It is also a theatre of war in which Ukraine can theoretically hold its own.

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Meanwhile, China marches on in Odessa

April 22, 2016

Over the past few years this blog has attended numerous business and investment forums in Odessa.

On 22 April there is another, the Nordic Business Forum.

As this blog has no business interests whatsoever – anywhere – other than occasionally writing for publications that request a few (far more professional and erudite) lines in return for a small token of appreciation, its attendance at such events are either from a general interest regarding the who, what, where, when and why, rather than schemes, plans, PEST and SWAT considerations, or to meet specific diplomats that contact the blog wanting to put aside some time for a chat – or normally both.

The diplomatic chats aside, the contents of which don’t appear on the blog, there is naturally a lot of chit-chat from the business community about investment, investment climate, nefarious dealings, corrupt and unreliable courts, local and national political problems and how to mitigate as much of the threats and leverage as many of the positives where ever possible – all of which can be done.

At none of these innumerable events has this blog ever witnessed a Chinese presence.  Not once.

Yet China is well on its way to reaching its investment target of $12 billion here – and is likely to go beyond that.

It has spent many $ billions in Odessa Oblast on industrial parks, grain silos and food storage already.

A Chinese company is about to buy a very large IT company with offices in Odessa for approximately $1.2 billion.  The name of both parties cannot be disclosed at the time of writing but will very soon become known – a matter of weeks.

china

It has now become public knowledge that the Chinese company CNBM International (part of CNGC) has acquired eight solar panel plants (previously owned by Activ Solar behind which were the Kluyev brothers, both now wanted in Ukraine having done rather too well within the Yanukovych regime for all their business dealings to be entirely above board).

The two “Franko” solar farms in Starokozache , both “Danube” solar farms in Artsyz, the pair of “Lakeside” solar farms in Kilivy, and twin “Limanskaya” farms in Renne have certainly been acquired by CNBM.

It is quite likely that the remaining Activ Solar farms in Bolgrad have the same CNBM owners too, although as yet that cannot be confirmed.  Also unconfirmed, but of reasonable likelihood given the source, is a further solar farm being built by CNBM.  CNBM is after all, a renewable energy superpower across Asia and a global heavyweight in wind farm blades – not withstanding thin film solar cells.

(It will surely not be long, if it hasn’t quietly happened already, that parent company CNGC expands its own interests into Ukraine – cement and drywall production and raw material trading on truly global scales.)

Regardless, China via CNBM has just acquired in Odessa one of the top 50 solar power plants in the world, and seemingly intends to expand its solar energy production in Odessa even further.

(With regard to these solar power plants/farms in Odessa, more than 70% of the parts are actually manufactured in China by part of the CNGC industrial empire – thus no surprise that its subsidiary CNBM have now acquired the Activ Solar assets.  Indeed the Kluyev brothers Activ Solar loans were underwritten by these Chinese produced assets.)

Thus there is over the past few years a significant (almost $10 billion) Chinese investment in Odessa in industrial parks, food silos (and storage), energy, soon IT, and a rumoured port terminal (probably Yushni) – undoubtedly justifying the biggest consulate in the city – without any attendance at a single investment conference, nor indeed hosting one.  Indeed the only time the Chinese diplomatic and/or business leaders are to be seen (and chatted with) are at certain restaurants in the city occasionally.

A reader may perhaps wonder, with Ukraine no longer the most receptive of markets for the Russian Federation – and therefore opportunities aplenty exist where they once did not – why it is China that is prepared to walk the business investment walk, whilst it is the Europeans with the DCFTA and reform financing leverage over Ukraine, that are still engaged in business talk.

Still. the Scandinavians are a smart lot – we shall see what they have to say at the Nordic Business Forum beyond the usual PEST and SWAT diet (and off the record diplomatic “chats”).

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Trade reciprocity and circumvention – Ukraine & the neighbourhood

December 25, 2015

Looking away from the usual “last minute legislation” expected from the Verkhovna Rada when it comes to facilitating its domestic and international obligations, most recently the tax and budget laws for 2016, the Verkhovna Rada also passed legislation allowing the Ukrainian government the ability for reciprocity when The Kremlin trade embargo with Ukraine commences on 1st January 2016.

A Kremlin inspired embargo (in all but name) is timed to commence simultaneously with the full implementation of the EU DCFTA with Ukraine.  In short the Government of Ukraine may now apply the same rules of the game to Russian produce as The Kremlin will do to that of Ukraine.  The Ukrainian law passed on 24th December with 291 votes in favour from the 420 deputies registered in the chamber.  (226 votes were required to pass the law).

So be it.  Trade between Ukraine and Russia has plummeted following the illegal annexation of Crimea and the occupation of parts of The Donbas in the east.  With a further $900 million reduction anticipated from The Kremlin applied embargo to Ukrainian products, there is really little further damage of significants any Ukrainian instigated trade warfare with Russia will do to its own economy.

Indeed Ukrainian trade will expand with China, the EU, Turkey, Israel and several MENA nations.  Most economists predict economic growth of about 2% in Ukraine during 2016.  They may be right, depending upon the scale of Kremlin designed and controlled hostilities in eastern Ukraine that will undoubtedly continue throughout 2016 – and beyond.

The issue for Ukraine is not returning to growth in 2016 – the issue is maintaining that growth in 2017, for that will require market reforms that thus far have been glacial in coming.

However, necessity is the mother of invention – or perhaps better stated, the mother of circumvention.

Belarus

Just as it is possible to purchase Belorussian (EU produced repackaged) seafood products in supermarkets in Moscow – Belarus being that entirely landlocked nation renowned for its seafaring abilities (not) – it seems highly likely it will be possible to buy Kazakh produce (that it doesn’t produce – Ukrainian products repackaged) in Moscow supermarkets too.

Indeed it is of note that since The Kremlin’s actions against Ukraine, fellow CIS and EurAsian Union (EEU) nations Belarus and Kazakhstan  have hardly been swift in publicly supporting Moscow.  An inherent problem with allies being coerced or bought off by The Kremlin in order to earn the title of “Kremlin ally”.

Kazakhstan has recently seemed to have taken, if not a more anti-Kremlin stance, then certainly a stance that is so pro-Kazakh – that will be perceived as somewhat anti-Kremlin.  Despite the supposed trade rules of the EEU, Kazakhstan went ahead and signed a political and trade agreement with the EU on 21st December.

Kaz

Perhaps understandable, for Kazakhstan and Ukraine have some commonalities within The Kremlin – President Putin has inferred publicly that both are not truly sovereign/real States over the past few years.  It may thus be felt in Astana that whilst The Kremlin distracted by busily making poor decisions over Ukraine, Syria, Turkey (and eventually it will with Iran too) – notwithstanding even worse domestic decisions –  now is the time to act and prudently insure its essential place in a Sino-European trade route now.

That said, Astana will be more than aware that President Putin looks set to remain in power for at the very least (discounting ill-health) a few more years yet – and the “collective Putin” even longer.  Some delicate decoupling is required, together with a swift coupling with Chinese and European interests to avoid any gaps, and thus weaknesses, that can be exploited if and when the Kremlin’s Eye of Mordor fall upon Kazakhstan.

Kazakhstan is also receiving more than 10 times the Chinese FDI than Russia currently – much “Silk” related.  Indeed due to the Chinese Silk Road/Iron Rail/Silk Belt projects, Kazakhstan and Turkmenistan particularly in Central Asia, are looking east to China and also west to Europe along these trade routes – no doubt Turkey and perhaps Iran eventually will too.  What is becoming painfully obvious is that it looks far less to Moscow, instead is turning a cool (if not cold) shoulder.

It comes then as little surprise that Kazakhstan has apparently reached agreement with Ukraine over continuing trade that appears to simply ignore The Kremlin imposed trade embargo with Ukraine – an embargo that theoretically should effect all EEU members.  Some may opine that such an agreement simply underlines the hollowness of the EEU project – and certainly when not all EEU members are WTO members, then any trade block/major economy to trade block negotiations will not go very far at all.

Furthermore, Kazakhstan and Ukraine have apparently agreed an intensified industrial cooperation too – and having mentioned Turkmenistan, Ukrainian – Turkmen relations appear fairly warm.  A recognition perhaps that Ukraine may ultimately be the final central/northern spur into Europe for the Chinese “Silk” projects, whilst Turkey services the southern European entry – all of which deliberately avoid the territory of Russian Federation entirely.

The relationship between Ukraine and Kazakhstan may well be something worth keeping an eye upon, for it will say as much about the Kazakh intent in the neighbourhood as it will of that of Ukraine.

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The Trans-Caspian Corridor – Next stop Ukraine?

December 5, 2015

There is an inherent problem with taking actions that frame a nation as truculent, belligerent, unpredictable and by extension untrustworthy – that problem being that any relationship that is necessary with such a nation is purely transactional in nature, and conducted with the minimum amount of goodwill due to a strong undercurrent of competitor/adversarial discord.

“If needs must”, or “only if it can’t be avoided” policy decisions are made – and policy decisions are usually fairly long term in their nature – unless they quickly prove to be poor and counterproductive decisions.

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Trust and predictability take a long time to build with others – but only moments to break when all is said and done.  This is indeed true of the current Kremlin occupants, the “collective Putin” and the regime change that has seen Russia witness a move from “managed democracy” to authoritarianism – a clear regime change has taken place, despite the people involved remaining (more or less) the same.

Indeed as the “collective Putin” has shrunk in number, whilst institutional cronyism has insured the best and brightest get nowhere near the top, increasingly occurring and prickly domestic issues are receiving poor and untimely decisions that further compound problems.  Both blame and diversionary adventures are required, and this is clearly apparent in Kremlin domestic and foreign policy with the associated fairytale propaganda.  Everybody is to blame except those that are to blame and make the decisions.

For those that are able, avoiding as much unnecessary contact as possible is wise – certainly for the moment as evermore retarded decisions are made.  For those that saw it coming, avoidance options were set in motion prior to the current events.

Having blogged on 3rd October 2013, “I suppose we should now look toward socially engineered discontent in Crimea and other pro/ethnic Russian regions, via agent provocateur or subterfuge, during any time period of signing and ratification as a real policy option for the Kremlin.  A few years of uncharted water lays ahead – agreements signed or not.” – thus pre EuroMaidan, that the Kremlin would start societal mischief in Crimea (albeit in no way foreseeing it going as far as illegal annexation), it will have been crystal clear to those people with far better minds and much greater intellect than the author of this blog, who saw similar writing upon The Kremlin walls too.  Indeed that writing was starting to appear upon The Kremlin walls with the “Russia without Putin” protests of 2012 – perhaps before that for those with a trained eye.

As such, with the writing daubed upon the wall being read by some very clever Chinese and Central Asian people (and the Central Asians have long petitioned for logistics routes avoiding Russia since the collapse of the USSR), the Trans-Caspian route avoiding Russian territory when transporting Chinese goods to Europe that was set in motion some years back will indeed prove to be prudent.  This is not to ignore a similar route avoiding Russian territory from Baku, Tibilisi and Kars to Europe (called the TRACECA) which  is due for commissioning in 2016 when the final stretch of railway line is completed.

Whilst all international headlines were on Turkey’s downing of the Russian bomber, a logistics and transportation consortium quietly signed an agreement.  The project founders are China’s Minsheng Logistics, Georgia’s Trans Caucasus Terminals (TCT), Kazakhstan’s KTZ Express (part of the Kazakhstan Railways), Azerbaijan’s Karvan Logistics and Caspian Shipping Company with Turkey the destination – and an apparent option for Ukraine to join then serving as a transportation link to central and northern Europe.   China did make a formal invitation to Ukraine to do so in April 2015 – and Ukraine would be foolish not to take the opportunity after all.

All in all, none of this appears to be particularly good news for the Trans-Siberian railway – albeit welcome news to almost all Russian neighbours – particularly with it being a Chinese project that The Kremlin will therefore leave well alone.

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Right idea, but the asset management? – Yatseniuk on foreign trade

July 1, 2015

Arseniy Yatseniuk, amongst his rhetorical fluff, has a gift for stating the obvious.  That is not meant in a derogatory way.  There are times when the obvious must be stated, because the obvious is not obvious to all – or the obvious is obviously not being done, or done as well as it could or should be.

Often when being called “insightful”, policy makers, commentators (and even your author) are simply stating the obvious.  A case of seeing the wood for the trees, root causes amongst the (expedient or otherwise) distractions and symptoms.  The substance (or lack of) under innumerable layers of beautifully veneered (but otherwise empty) form.  If there are those that argue about a glass being half full, or half empty, somebody has to ask if it is indeed the right glass.

Recently Mr Yatseniuk has hit one of the Ukrainian trade nails on the head – at least with regard to what is lacking, although not entirely well with regard to how best to employ the existing Ukrainian tools already projected into other countries.

“The Government is obliged to be an economical advocate of Ukrainian companies abroad. This is the practice of all countries, and I ask you to act in the same way.” – Absolutely!

He then went on to state that Ministers should do far more to facilitate international trade for the nation when on international visits.  He made note of the sterling efforts of the Minister of Economic Development and Trade of Ukraine Aivaras Abromavicius and Minister of Finance of Ukraine Natalie Jaresko in this regard – Quite rightly!

He stated it would be expedient to establish a council of exporters, which will involve “all Ukraine’s companies that are able to export and take over other markets” and determine for each company, how to assist it and in what country. – A good idea, but perhaps a little unwieldy depending upon how such a council will be structured, how it will function and the level of interaction it will have with the government.  A nationally and internationally functioning, rather than existing but regionally insular network of  the Ukrainian Chamber of Commerce?

Something else, if not building on existing entities such the the Odessa Chamber of Commerce in the link above?

Odessa has its own regional Ministry of Foreign Affairs office headed by a friend of you author of more than a decade, Konstantin Rzhepishevski.  He and his office are consistently hosting trade delegations and attempting to promote trade from Odessa to the surrounding nations – amongst other things.  Where would that role sit in any newly formulated council?  Would central Gov UA, do a better or worse job when it comes to knowing exactly what is what in, and from, Odessa, or have such a close rapport with neighbouring nations?

Perhaps the Odessa Chamber of Commerce and its regional MFA Office, plus others, multiplied by all the regions?  Nothing would get done – it would simply become too unwieldy.

priorities

However, returning to the Prime Minster’s words, there are some obvious points – and ommissions.

Rightly he states Ministers on foreign visits should promote Ukrainian trade.  We are to expect then, that all Ministers on foreign visits will be accompanied at the very least by an exceptionally knowledgeable functionary from the Ministry of  Economic Development and Trade, if not a full (or meaningful) trade delegation, henceforth?

Where there is enormous scope for pushing Ukrainian trade, and which is not mentioned by the Prime Minister, is the existing, permanent Ukrainian outposts across the world – its foreign ministries.

Foreign Ministry outposts in the form of embassies and consulates are not, first and foremost, there to supply Ukrainians with new passports should they lose theirs.  They are not there, first and foremost, to repatriate Ukrainians who die abroad.  They are not there, first and foremost, to supply diplomatic assistance to those that fall foul of local legislation.  They are not there, first and foremost, to provide voting locations for Ukrainians to vote abroad when elections are taking place.  They are also not there, first and foremost, for its diplomats to gorge on canapés, attend high brow parties, and enjoy a Ferrero Rocher lifestyle as depicted in television advertisements.

If that is what the Ukrainian government, and the Ukrainian people, expect from its embassies and consulates abroad, then the entire Ministry of Foreign Affairs needs a radical change of institutional culture with immediate effect, as do those with such expectations looking in.

The Ukrainian embassies and consulates abroad will have, or should have, priorities set by government as to their activities.

They are a projection of Ukrainian governance and governmental priorities abroad.  As such, the Ukrainian diplomatic establishments in every single nation should be promoting Ukrainian interests, working to protect the nation through frequent interaction with partner nations, creating ever-closer relationships with the nations within which they are situated, and be prepared to assist Ukrainians caught up in any national disaster in their country of responsibility.

In short, the pursuit of national security and the national interest as priority number one.

The second most vital thing each and every Ukrainian embassy and consulate should be doing very robustly, is promoting trade with Ukraine and Ukrainian business abroad.  If these diplomatic missions are not daily, stoically, trying to further opportunities for Ukrainian businesses abroad, (and opportunities within Ukraine for businesses from within their host nation), then they are spectacularly failing in what is beyond doubt, their second-most important role.

Only then, as the third priority, do we reach what can be lumped together as “consular services” for Ukrainians in distress abroad.

Those are, or should be, the very clear priorities – and in that order.

Prime Minister Yatsenuik further stated “We need to open sales representative offices in the United States, Belgium, Germany, France, China and the Middle East: It should be done by the end of this year.”

Why?

Those offices already exist in the form of every single Ukrainian embassy and consular office.  Certainly there are gains to be made by ramping up the dedicated economic and trade staff numbers (not to mention accountability for trade results) within those diplomatic out-stations, but there seems no real requirement to open new “sales representative offices in the United States, Belgium, Germany, France, China and the Middle East“.

Indeed, when it comes to the USA, a nation that is currently the most critical to Ukraine for reasons of diplomatic and political support, would it not be far wiser to first appoint a Ukrainian Ambassador to the USA, than to prioritise opening a “sales office”?

No offence meant to Yaroslav Brisiuck who has been a capable Chargé d’affaires whilst running the Ukrainian embassy in the USA for the many, many months during the absence of an appointed, credentials accepted, Ukrainian Ambassador, but the continued and open-ended absence of an Ambassador in what is a vital nation for Ukraine is simply very bad diplomatic form.  It is as much, if not much more of a priority, than a “sales office”.

Why is there still no Ukrainian Ambassador to the USA after so many months?

Returning to the issues of increasing trade, does it not make much more sense to bolster the trade and economics personnel within the existing embassies and consulates of Ukraine, than it does to open new “sales offices”?  In doing so, does it not also make sense to give those embassies and consulates a GDP% target for it to bring to the Ukrainian economy via its endeavours?  Should the Ministry of Foreign Affairs not also be tasked with the recovery of the Ukrainian economy, and thus employ its international network to those ends without the need for additional overheads when opening “sales offices”?

Is this not obvious?  (It is surely not “insightful”.)

Of course, all of this will be for naught, if Ukraine does not produce what buyers want, at a price they like, and to standards they expect – underpinned by a legislative environment that is conducive to business and impartiality.

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Ukraine 13th July Investment Conference – USA

June 13, 2015

For those who are unaware – which is almost everybody – there is to be an investment conference relating to opportunities within Ukraine – to privatisation, energy, etc., not to mention the promulgation and reiteration of just how far financial reforms have gone, and have yet to go, in order to boost confidence for those investors attending – on 13th July in the USA.

The amount of the information from the International Support for Ukraine Conference of April 2015 that can be reused is probably rather limited.  A different audience entirely.

Thus detailed and fevered preparation is on-going within the relevant Ukrainian ministries to collate information and generate terribly interesting and attractive opportunities to tempt the US corporate (and perhaps affluent entrepreneurial and philanthropic) community – or not.

Though risk aversion is the current en vogue meme within the “West” politically and economically, that is perhaps not so within the world of big business.  Opportunity is opportunity when all is said and done, and US Embassy Kyiv would be rather pleased to see US interests – outside of the geopolitical – arrive and flourish whilst it holds significant sway with the current Government of Ukraine.

There will be far fewer hurdles to negotiate now than ever before for any US entrant/investor considering the current government composition and considerable US diplomatic effort (and corresponding influence) in Kyiv.

It is logical therefore to have an easily accessible, short investors conference in the US for CEOs and politicians who are otherwise far too busy to fly off to Kyiv to attend what may be a hit or miss event from their perspective.  A few hours can perhaps be found to attend.  A few days, probably not.

Yet investment and partnership deals there are aplenty.  Whether it be Motor Sich and South Africa’s Paramount Group signing contracts to develop the Superhind Mi 24 helicopter, or Dutch companies owning and operating industrial parks in Ukraine, opportunity there certainly is.   China continues with its $10 billion investment plan undaunted.

Opportunity presents itself particularly so when there is a Ukrainian government looking for genuinely foreign investment, rather than recycled and laundered money buying up assets through the facade of Latvian, UK or Cypriot front companies and also seeking to avoid Russian strategic purchases.

A nation as large and with such a well educated populous does not rebuff its internal oligarchical interests and throw itself prostrate before the alter of large foreign corporation investment every day.  Neither is such a nation often as dependent upon the goodwill of the Europeans and US either.  The Donbas aside, a more accommodating Ukraine there has never been for foreign corporate/business entry.

Indeed, if it hadn’t been for Kremlin interference within Ukraine by force, the desire and need for genuine foreign investment would possibly have been far more muted, and certainly held hostage  oligarchical control to a far greater degree.  It is now though, a case of needs must.  And when needs must, those that can meet those needs negotiate from a position of strength – as every large corporation/investor knows.

What many in Ukraine will find most interesting in the short term however, is which State owned/controlled entities will be on the list for privatisation submitted for the US audience consumption?  A cherry-picked list?  A full list (if it has been completed)?  A list designed to lead US corporations/investors down a certain sectoral path?

Will there be a similar conference for the Europeans?  (It is to be hoped so with the DCFTA coming into force in less than 6 months.)

What about the Asians?

Should separate conferences for China and India to be held in those nations, thus giving the perception they are held in equal potential investment esteem?

If so, when?

The bigger the foreign corporation/investor, the more they have access to, and the ear of, their national governments.  Thus the more diverse the significant foreign investment interests, the more relevant Ukraine remains in more far flung corridors of power.

The attraction toward US corporations and investors is fair enough, and the reasons why clear enough – indeed it is right to pursue it with vigor – but diversity of investment source is the key to confronting internal oligarchical and Russian strategic purchases by diluting concentrations of power – it reclaims economic sovereignty in the long term whilst simultaneously throwing open Ukraine for global business.

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