“So many Swedish investors opened start-ups in Ukraine” – Sweden’s ambassador on business climate and reforms

Swedish Ambassador to Ukraine Tobias Thyberg says "The potential of Ukraine is simply phenomenal economically: the level of education, the human capital, the entrepreneurship, the ingenuity, the creativity in Ukraine is phenomenal." Snapshot from video of interview  

International, Reforms

Editor’s Note

In the second part of the interview with KYIV NOT KIEV, Swedish Ambassador to Ukraine Tobias Thyberg:

  • told that Sweden supports Ukraine’s diplomatic efforts to launch the Crimean Platform;
  • praised Ukraine’s digitalization, media and financial reform;
  • suggested Russia has an immense interest in Ukraine failing to carry out crucial reforms;
  • said that the recent opening of Swedish IKEA in Ukraine is a success, but the fact that it took 15 years to achieve this speaks about investment problems.

The first part about his attitude to Ukrainian culture, the Swedish approach to work as a Chair of the OSCE, and things that made him revise his understanding of the conflict in the East of Ukraine can be read here:

Crimea issue in Swedish-Ukrainian dialogue

“The Russian occupation of Crimea is a gross unacceptable violation of Ukraine’s territorial integrity.”

According to the Ambassador, the occupation of Crimea is an issue that affects not only Ukrainian security. It is a threat to international law and a gross human rights violation on which the UN human rights monitoring mission has repeatedly reported. Ambassador Thyberg reminded that the Russian navy is located in the middle of the Black Sea, which creates intimidation in this part of Europe.

Sweden strongly supports Ukrainian efforts to use diplomacy tools to keep Crimea high on the international agenda. Ambassador Thyberg praised the Ukrainian initiative to create a Crimean platform, to hold the focus of international attention on this problem.

Initiated by the Ministry of Foreign Affairs, the Crimean Platform is the international forum established to address the challenges emanating from the occupation of Crimea. On 17 November 2020, the First Deputy Minister for Foreign Affairs of Ukraine Emine Dzheppar presented the “Crimean Platform” initiative to the EU member-states ambassadors.

The Crimean platform will work on several levels. The first is the highest political level, which foreign heads of state will join. The second is the level of foreign ministers and defense ministers. The third is the inter-parliamentary level. And the fourth is the level of experts. This forum will become a new international format for improving the international community’s efficiency and coordination on the de-occupation of Crimea and protection of human rights and interests, formalizing and systematizing all existing and new formats of cooperation.

About essential reforms that commenced in Ukraine

Ambassador Thyberg emphasized that support of Sweden will persist as long as Ukraine will proceed with reforms. However, Sweden does not have a checklist to estimate Ukrainian achievements. The important thing is the steady focus on reforms.

In the Ambassador’s consideration, the most critical reform that Ukraine has undertaken is decentralization:

“[Decentralization] is one of the most important and successful reforms.”

The Ambassador explained the meaning of self-government for citizens. They can affect the decisions, directly impacting them on a local level.

In Ukraine, the decentralization process began in 2014. This reform aims to form effective local self-government, which will create and maintain a comfortable living environment for citizens, high-quality public services, establish institutions of direct democracy and harmonize the interests of the state and territorial communities.

Decentralization — a true success story from Ukraine

No less important, according to Ambassador Tobias Thyberg, is media reform. He noticed that Ukraine has a media landscape dominated by commercial players. The most popular Ukrainian TV channels belong to oligarchs Ihor Kolomoyskyi, Rinat Akhmetov, Victor Pinchuk, and Petro Poroshenko. Thus, it is necessary to establish impartial public broadcasting controlled neither by the state nor by private entities. Functioning public broadcast will work on principles of independence and neutrality.

The Ambassador also mentioned financial sector reform in Ukraine and praised those dedicated public officers whose work contributed to the financial stability of Ukraine. The financial sector reform took place after the collapse of PrivatBank. Ambassador Thyberg noticed that due to reforms made back in 2015-2016, Ukraine now is in much better shape than it could be considering the Covid-19 pandemic that affected economies of all countries of the world.

Several oligarchs own Ukraine’s main TV-channels. Source: snapshot from the interview

Speaking about whether the pace of the reforming process is satisfying, the Ambassador stated that as for the country which gained its independence 30 years ago, is now dealing with security challenges and is not a member of the NATO and the EU (like its neighbor Poland), Ukraine is doing well. Ambassador Thyberg stated that the EU and Sweden, in particular, understand and evaluate all the problems Ukraine is facing now.

The Ambassador noticed that it would not be wrong to suppose that Russia has an immense interest in Ukraine failing to carry out those reforms. Russia’s hybrid aggression is aimed at undermining any attempts to provide an effective policy,

“I wouldn’t be surprised if Russia had limited interest in the success of Ukrainian reforms.”

About the investment climate in Ukraine

Recently, Swedish company IKEA, the world’s largest retailer of furniture and household goods, opened its first city-format store in Kyiv, marking the company’s entry into the Ukrainian market. The Ambassador praised that fact as a sign of positive changes. However, he mentioned that problems in the investment climate in Ukraine remain,

«The fact that it took about 15 years to set up here does say something about remaining challenges when it comes to improving the investment environment in Ukraine».

Ambassador Thyberg expressed his admiration for Ukraine’s economic potential, geographical position, human capital, level of education, entrepreneurship, and creativity. Many successful Swedish start-ups are developing in Ukraine,

“I know so many Swedish investors who set up start-ups in Ukraine and who are enthusiastic about their business here and happy about being in Ukraine.” 

The Ambassador noticed that the quality of human capital in Ukraine could never be found in Sweden, and the issue is not about low wages – as the salaries in Ukraine are now growing in such spheres as IT, technologies, and communications.

About DIIA City and digitalization in Ukraine

Ambassador Thyberg dwelled on the topic of digitalization in Ukraine. He is aware of the creation of the project DIIA CITY, aiming to develop a special legal framework for the IT industry. He congratulated the success of Minister of Digital Transformation Mykhailo Fedorov,

“Deputy Prime Minister Mykhailo Fedorov is doing a phenomenal job when it comes to using technology and digitalization as a boost for the Ukrainian economy and business.”

The Ambassador mentioned that together with the digitalization process, establishing a legal system is necessary for investors not to worry about the efficiency and fairness of solving their legal problems.

DIIA City is a voluntary virtual free economic zone with a special tax, financial and legal regime. The authors of the DIIA City draft bill are willing to let Ukrainians and entrepreneurs from all over the world have the opportunity to quickly implement their most ambitious innovative business ideas without any government intervention. The virtuality of the zone implies that it will operate throughout Ukraine, and its residents will be able to work in any city or region.

About Sweden’s approach to Covid-19 

The Ambassador stated that the Swedish government plans to have vaccinated the whole country by June 2021. The approach is similar to the Ukrainian one – vaccination is being divided into phases due to citizens’ vulnerability.

Speed is the number one priority; the approach Sweden takes is the focus on the most vulnerable groups and then try to spread it out as fast as it can without trying to make it too complicated.”

Ukraine has also launched its vaccination process in February 2021, a lot later than European countries. Due to the Ukrainian approach, the first batch of vaccine will be delivered to the military, doctors and ambulance crews. Amid the growth of Covid-19 cases in the country, the vaccination process is proceeding despite many issues – communication failure, lack of trust and shortage of vaccines.

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