Ukrainian Small and Medium Business Became the Main Sponsors of Maidan

2014/02/12 • Analysis & Opinion

In the interview with the DW, the experts explained why most Ukrainian businessmen support protests against Yanukovych and sponsor protesters.

The experts say that unlike the oligarchs, many small and medium Ukrainian businessmen had preferred to stay away from politics but recently they changed their position and adopted political slogans in a place of economical requests. The experts explain the reasons urging Ukrainian businessmen to show solidarity with Maidan by sponsoring the protests.

State of Emergency for Business

Neither Maidan nor a revolutionary situation caused a steep deterioration of business climate in Ukraine, lack of investments and hryvna deflation, – said a political expert of Kyiv NATO Institute Vladimir Gorbach. It was a combination of repressive laws, corruption and economical crisis that put small and medium business on the brink of survival.

Among the factors that worsen the climate for small and medium business and caused the tax Maidan and Automaidan (the protests of transportation companies) the experts list a gradual increase of the taxes and a practice of exerting additional payments to the budget by conducting unannounced audits and imposing high fines. The opposition between business and government is caused by the economical factors. In expert’s opinion, over the last three years the state pressure on business increased and it contracted as a coil spring.

“Ukrainian business has been working under a state of emergency for quite a while ” – said Andrei Panaiontov, a member of the initiative group of People’s Board of Ukraine whose goal is to represent and defend the interests of businessmen. For several years, Andrei Panaiontov has been one of the organizers of Ukrainian protests (tax Maidan and Automaidan) against the discriminating laws.

Businessmen learnt to stood for their tights but little had changed: “there are no normal rules of the game, bribes and audits remained” – Panaiontov speaks from his experience and explains the current situation. In addition, due to the recession and economical crisis consumers’ demand shrink and the revenues of Ukrainian business followed.

Investing in the future

Vladimir Gorbach agrees with Andrei Panaiontov: “Business climate in Ukraine deteriorated mainly because of the actions of the government and the president Yanukovych who brought the country into the economical crisis and under a threat of default. When in November 2013 the Maidan protests started as a response to Kyiv’s refusal to sign an agreement on the association with the EU, small and medium business chose to support the protesters and focused on the political solutions to change Yanukovych’s regime, – said Gorbach.

Businessmen postponed the issue of defining business rules and decided to help Maidan in different ways – with money, goods and services. The tab for the protests is not small, thus “we can count small and medium business as main sponsors of the protests.”

“As a rule business does not flash a sponsorship of this kind, but Kyiv Maidan would not have been out there for three months and the protests in Ukraine would not have been possible without financing from businessmen”, – said the head of the Board of the Economists Andrey Novak. In his opinion, investing in Maidan means investing in the future. It shows that small and medium Ukrainian business needs substantial changes in economic and political systems.

The choice of the markets is a future decision

In response to the questions about the markets’ preferences for Ukrainian business – Russian or European, Andrey Novak said that it’s a future decision. Meanwhile, the main goal is to change the regime and to change the rules for business in Ukraine – to improve tax, customs and administrational laws by bringing them close to European ones.

Vladimir Gorbach agrees: “Right now the situation is so volatile that nobody is concerned about future markets.” He says that all business decisions right now remain in political sphere and the main relief would come from a resignation of Viktor Yanukovych, only after that it will be possible to announce a European choice of Ukrainian business”.

According to the experts, it’s important for Ukrainian entrepreneurs to understand that they should not remain apolitical in the country where only big business with ties to corrupt government has favorable conditions for the development while the rest business suffers from a headache caused by high taxes and bribes.

Source: DW Ukraine

Translated by Marta Kondratyuk

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