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By Bob
Edgren, MBITA Member
On March 23,
2006 President Bush signed a bill normalizing trade relations with
the country of Ukraine. So what does this mean? What opportunity
does this present? It is not the purpose of this article to provide
sources or direct links to trade with Ukraine. Most of my trade
knowledge comes from other Americans and foreigners, the American
Chamber of Commerce in Ukraine, and a few trade consultants and
groups who trade with Ukraine.

I have been
traveling to Ukraine for seven years. Each year I make a list of
items, mainly consumer goods that could be brought over. Every year
my list gets smaller as entrepreneurs quickly fill gaps. There exists
many opportunities both in trade and investment in this dynamic
country. However, I think it is equally important before one takes
a business venture, to analyze the political and social temperature
before making a move, and of course to be constantly vigilant to
any changes. What this article offers is a look into the average
Ukrainian person's views, outlook, and beliefs. In order to understand
this one must take a short step back into history.
Much
has happened since perestroika and glasnost. The end of a cold war
signaled a new world order, one based on freedom, democracy and
peace between the two major superpowers.
The early years
of the end of the cold war was not what all the experts were anticipating.
Here in the US, where the military industrial complex was in high
gear for decades, most expected to start manufacturing peacetime
products. The dismantling of our military complex was felt no more
than here in the San Francisco Bay Area with some 10 base closings,
thousands of people left jobless and a dramatic collapse of the
real estate market.
In
the eastern bloc countries the situation was not even comparable.
The collapse of the Soviet Union was a short celebration. Following
there was virtual lawlessness Thugs and organized crime groups sprung
up all over the ex Soviet countries. It was chaos. Old people were
thrown out of their apartments. Scientists fled with dangerous and
valuable weapons and technology information to be sold to the highest
bidder. Even President Gorbachev was kidnapped for a short time
as a military coup tried to take charge of Russia.
Approximately
300, 000 young girls were enticed, kidnapped, or dragged off the
street, and shipped off to a fast growing prostitute business with
buyers around the world. It was virtual anarchy that eventually
launched fascists governments in some ex Soviet countries, like
Belarus, and could have enveloped many more.
So put your
self in the shoes of a former Soviet citizen. Are things better
now?
I spent almost a year in Ukraine during the Orange Revolution. In
preparing for political interviews, especially one with President
Yuschenko that never came to fruition, I spent about 6 months interviewing
mainly people in the capital of Kiev. To my amazement and my interpreters,
young or old interviewees, were relatively split between pro west
candidate Yuschenko and pro Russia candidate Yanokovych.

The spontaneous
Revolution yielded Yuschenko as the final president. However, it
left Russian President Putin steaming. In early January Putin showed
his punishing hand by mandating to quadruple the gas prices to Ukraine,
during one of the coldest winters on record.
If the international
community did not step in, this would have been a disaster for Yuschenko
and his pro west policies. Nevertheless in the most current parliamentary
elections, Yuschenko's party followed third behind leading Yanokovych
and the flamboyant Hillary Clinton clone Yulia Tymoishenko.
In
Ukraine there are basically three countries. One is western Ukraine,
which is very open to democracy and joining the west. The other
is eastern Ukraine, home of the economic engine of Ukraine of steel
and coal, which is pro Russia. The third is a sleeper, and that
is a prize in itself, the Crimea region with its famous and important
ports to the Black Sea and historic vibrant city of Yalta. Most
people in Crimea are pro Russian; indeed, many Russians who vacation
there consider it part of Russia.
I
think it is clear now that most political analysts realize that
President Putin is not for a free and open democracy. Where he will
stir the country is unclear. Hopefully, at best, it will be towards
some sort of hybrid of free enterprise, socialism and some freedoms
. It is quite possible, however, he has intentions to stir Russia
into old Soviet era structure, in his own words, "perestroika
was a disaster." Any move though, must be watched carefully
as it will directly impact trade and political relations with all
of East Europe.
If he has a
master plan, he is keeping his ideas very closed. The economic success
since the free market arose has created much wealth among many individuals.
Probably few westerners know that there are now more declared millionaires
in Moscow that in New York city, and there are probably that much
more undeclared.
Ukraine teeters
between Russia's grip and being an independent country. However,
bear in mind that at least from this writer's perspective, more
people in Ukraine feel a stronger kinship with Russia than the west.
As Russia exerts its powerful oil muscle influence over the region,
I believe that Ukraine will drift away from the west and into Russia's
fold. I hope I am wrong.
So
what about trade? What does this new bill mean? Actually it is probably
more symbolic than anything. Bush signed it just before the parliamentary
elections trying to give Yuschenko a boost.
| Statistics
from the Ukraine Embassy of California web site |
From the import
and export people
I have had discussions
with, and the westerners who have done business in the Ukraine or
live there, one must be ready to go through a myriad of bureaucratic
steps, licenses, under the table fees to get anywhere. I don't think
this bill will change much of that.
Perhaps,
the only salvation for Ukraine to stay westernized is for a swarm
of deep pocket businesses to invade the country and set up a shop
and start conducting business. This is what Yuschenko promoted almost
instantly after becoming president.
| Statistics
from the Ukraine Embassy of California web site |
This is what
McDonalds did early on after the Soviet collapse. I think most Americans
are amazed at the popularity of MacDonald's in Ukraine.
As far as future
trade, this well remain in the crystal ball category as the political
situation evolves. Perhaps the only hope, as mentioned, is for some
large corporations to extend their recourses and open businesses.
Nevertheless, the actual business climate in Ukraine is very vibrant
and exciting. If you go, do not be surprised to see tall modern
office and apartment buildings under construction, Walmart and Home
Depot like box stores and state of the art new shopping centers.
There is no
doubt that free enterprise has a strong foothold in Ukraine and
people are enjoying profits that they never imagined they could
under the previous system.
The future, both economically and politically probably may also
lie in great part with the youth. The new young generation, many
nouveau rich, who never even experienced communism are traveling,
marrying westerners, and enjoying freedoms their parents and ancestors
are baffled at.
Ukraine is a country that has been a boon and can be a success to
invest in for the westerner. However, just remember that there are
cold north political winds of Siberia blowing down from the north
and there still exists corruption at many levels in Ukraine itself.

| Statistics
from the Ukraine Embassy of California web site |
One great thing,
if you make the trip, do not be afraid to wear American flags or
American red, white and blue garments. They are a trend there. It
is probably one of the few countries one can walk down any main
street and see young girls with the stars and stripes on their t-shirts
or embossed on their jeans. These I took plenty of pictures of because
I thought no one would ever believe it. I even bought and used daily
a US flag beach towel while in Yalta.
Most of the
fears and anxiety of the world's worst atomic power plant catastrophe
have subsided and have become an after thought for many Ukrainians,
Europeans, and the world. However, after 20 years, the hastily constructed
shield over the reactor has been, and is having problems. There
have been plans to construct another shield for some time with European
assistance. Chernobyl is about 100 miles north of Kiev, the capital.
This is something to maintain a close watch on. It will probably
be resolved. There is a new adult generation that were children
when it occurred. However, for the people who experienced the panic,
the fear, the fleeing, these memories remain as if it happened yesterday.
As a member
of MBITA, we are planning a future conference to highlight potential
trade opportunities and provide trade promotion services to companies
wishing to explore the Ukranian market. Please keep in touch with
the MBITA office or myself for any further information.
Bob Edgren
Ukraineconnect
Tel. 831-402-2111
email: agren7@yahoo.com
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