Ukraine's new leadership needs to back up its promises with action if it wants to see foreign money flow into the country, say investors eyeing the ex-Soviet nation. "There is tremendous potential," said M. Shafik Gabr, chief of Egypt's Artoc Group for Investment and Development. "But we're not there yet."
Gabr spoke at the close of an investment conference organised by the World Economic Forum in Kiev last week, at which the nation's new authorities sought to convince investors that they would create a safe and stable investment environment, following a 10-year regime marked by corruption and shadowy insider deals.
"We are ready to open our doors as wide as possible to investors," President Viktor Yushchenko, who won a protracted election last year on promises of placing his nation firmly in the Western fold, told investors. "Ukraine's choice in favour of the rule of law is irreversible."
But while agreeing that the country on Russia's western edge, with a solid industrial base, key energy transit pipelines and a population of 48 million, held tremendous opportunity, many investors said they would wait to see if Yushchenko's administration can deliver on promised reforms.
"Money wants to be here, but it wants to be in a safe and balanced place," said Paul Ostling, global chief operation officer at Ernst and Young.
"Great speeches are wonderful," said James Gallagher, a senior vice president at Nestle. "But at the end of the day we businessmen want to see things happen on the ground level."
The to-do list for the Ukrainian government is long - it needs to pass new laws on everything from private property protection to tax reforms, all the while trying to clean up rampant corruption in all government levels.
But while the authorities say that they will do whatever necessary to attract badly-needed foreign investment into the country - "we will be dancing around you," said Deputy Prime Minister Oleg Rybachuk - it is not yet certain they will be able to do so.
For one, Yushchenko does not enjoy a definitive majority in parliament, which has to pass the necessary legislation.
Secondly, the administration has dragged its feet on key issues of concern, like the so-called re-privatisation.
Ever since first coming to power early this year, Yushchenko and his administration have said that they would challenge some of the shadowy privatizations that took place under the previous regime, in which state enterprises were sold on the cheap to insiders.
For months, the administration has promised to publish a list of the sales that it planned to challenge, with Yushchenko ordering the government to make it as short as possible a week before the WEF conference.
"We have agreed that in a period of three to four days the government, taking my comments into account, will come up with... a list of repeat auctions," he said on June 9.
But during the conference, Yushchenko did an about-face, saying the government no longer had a list of firms whose privatizations would be reviewed and that all disputes would be decided by courts.
"There will be no list," he told AFP. "How can you have a list without judicial decisions?"
When asked whether the government would initiate judicial proceedings over some past sales, Yushchenko said: "I don't exclude the possibility."
Investors say that such confusing signals are going to deter the money that Yushchenko's team are desperately trying to attract into the country.
"The participants expect a clear binding and coherent statement... about the handling of the past privatizations (and) certainly hope that a list of those companies concerned is published as fast as possible," Klaus Schwab, the founder and chief of the WEF, told reporters. Investors warned that Yushchenko and his team don't have much time in their drive for foreign funds.
"Economic reform is like doing a medical operation," Gabr said. "There has to be preparation and afterward a recovery period... but the operation itself needs to take place very fast."
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