Business Ukraine 09/2019 by Business Ukraine magazine

Issue 09/2019

LVIV REGION INVESTMENT GUIDE

BUSINESS UKRAINE 09/2019: This month’s issue of Business Ukraine magazine has a distinctly Leopolitan flavor. Lviv has long been regarded as Ukraine’s cultural capital, but in recent years it has also emerged as a hub for tourism and international investment, with the IT sector and manufacturing attracting attention thanks to the city’s wealth of universities and close proximity to the neighboring EU.

Beware of Putin’s Potemkin peace process A collective sigh of relief could be heard across Ukraine late on 9 December as details of the Normandy summit in Paris began to emerge. In what was by far his biggest moment to date on the international stage, the country’s novice president Volodymyr Zelenskyy had looked Vladimir Putin straight in the eye and held his nerve. There had been no capitulation, no surrender of national interests, and no crossing of red lines. Instead, the long-awaited first face-to-face meeting of the Ukrainian and Russian leaders had merely served to confirm the gaping chasm separating their rival visions of how to end the undeclared war between the two countries. This anticlimactic outcome meant disappointment for those who had hoped to witness a genuine breakthrough towards peace in Ukraine. Such optimism was already in short supply prior to Paris. It now looks hopelessly naive. After all, while the progress achieved in France on minor issues such as troop disengagements and prisoner exchanges is to be welcomed, it cannot disguise the larger picture of strategic stalemate. In truth, neither president was ready to concede anything of substance. Both offered nominal support for the implementation of the Steinmeier formula, but their sharply conflicting interpretations of the formula itself make such commitments virtually meaningless. When it came to the only things that really matter, namely border control and the post-war status of the Donbas, the positions of the two sides remained as deeply entrenched and diametrically opposed as the frozen frontlines of the east Ukrainian battlefield. In the lead-up to the summit, some had wondered whether Ukraine’s fresh-faced comedian-turned-president could change the dynamic of Russia-Ukraine relations by force of personality alone. In reality, the Paris meeting exposed Volodymyr Zelenskyy’s limitations as a transformative figure in post-Soviet politics. For all his campaign trail talk of speaking man-to-man with Putin and place the peace process on a human footing, the new Ukrainian president proved no more capable than his predecessor of winning concessions from the Kremlin. When they met in Paris, an unmoved Putin simply reiterated his intransigence on every major issue. The Russian leader went even further once back in Moscow, claiming Ukrainian control of the border would lead to “a second Srebrenica”. Bloodcurdling references of this nature do not leave Putin with much room to maneuver during future negotiations. Nor do they suggest a man in search of the middle ground.

After Paris, it is increasingly clear that the path to peace is blocked by a combination of Putin’s tanks and Zelenskyy’s red lines. Nevertheless, none of the Normandy Four leaders appear ready to write off this latest attempt to resolve the conflict. All of them, in fact, have good political reasons for wishing to maintain the pretense of progress. A new round of Normandy talks has duly been scheduled for spring 2020, with Zelenskyy planning to push for a series of revisions to the Minsk agreements. In the meantime, discussion will continue over the technicalities of local elections in the occupied east. This is presumably intended to demonstrate the continued existence of political will, but it is likely to prove an exercise in diplomatic futility. A more honest appraisal of the current situation points directly and inescapably towards a longterm frozen conflict. With no end in sight to the Russian occupation of eastern Ukraine, the challenge now is to prevent Moscow’s military presence in Ukraine from becoming normalized. In the months ahead, Russia will likely try to blame Kyiv for the breakdown of peace talks, while at the same time promoting an imitation peace process that amplifies Moscow’s alleged goodwill without actually addressing the root cause of the conflict, which remains Russian military aggression. We have already seen this tactic in action during the run-up to the Paris summit, when Moscow made much of recent prisoner exchanges and the return of Ukrainian naval vessels seized illegally in the Black Sea. The Kremlin will have been particularly encouraged by President Macron’s enthusiastic response to these strategically meaningless concessions on Russia’s part. The next step will be to argue that Moscow has done more than enough to warrant sanctions relief and deserves a return to business as usual, despite continuing to occupy large swathes of eastern Ukraine. This approach is likely to resonate with Ukraine’s Normandy partners France and Germany, who have made no secret of their desire to end the confrontation with Russia. However, unless Paris and Berlin reject Putin’s Potemkin peace process, they risk legitimizing Russia’s hostile presence in Ukraine and setting the stage for further imperial adventurism. Much like the infamous fake villages erected by Prince Potemkin along the banks of the Ukrainian Dnipro in the days of Catherine the Great, Putin’s peacemaker posturing is designed to deceive. His real goal is not peace with Ukraine, but Ukraine itself.

About the author: Peter Dickinson is Publisher of Business Ukraine magazine and UkraineAlert Editor at the Atlantic Council

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economy

Record year for Ukraine’s world-beating hryvnia

Ukrainian currency shrugs off negative forecasts to post world’s best gains against US dollar in 2019

The National Bank of Ukraine slashed its key interest rate from 15.5% to 13.5% on 12 December as a series of positive economic indicators boosted expectations ahead of 2020. The 2% cut was double the consensus industry prediction and reflected increasingly positive appraisals of Ukraine’s macroeconomic position going into the final weeks of the year. Factors behind the cut included preliminary confirmation of a new IMF agreement, with the final green light expected to arrive in the first quarter of the coming year. The rate cut was also made possible by the strengthening hryvnia. Ukraine’s national currency has gained almost 20% so far during 2019, making it one of the world’s strongest-performing currencies against the US dollar. This is in stark contrast to forecasts earlier in the year, with most financial sector analysts predicting a gradual slide towards an exchange rate of around 30 to 1 USD. Instead, the currency has attracted international attention by making unprecedented gains throughout 2019, with the dollar rate tumbling from a yearly high of 28.2 in early January to mid-December levels of around 23.4., representing a four-year low. A number of factors are driving this impressive performance. Ukraine’s expanding agricultural export sector has bolstered dollar incomes, with the country emerging in 2019 as the EU’s number three international food suppler and the world’s leading grain exporter. An unprecedented influx of foreign money into Ukrainian hrynvia-denominated government bonds has also helped the currency to surpass all expectations, as has the flow of remittances from the wave of Ukrainian workers who left the country since 2014 in search of higher salaries in neighboring EU countries. The overall remittance figure for 2018 was around USD 14 billion according to the World Bank, representing a 19% year-onyear increase on the amount of money sent home in 2017. National 10

Bank of Ukraine officials expect the final figure for the current year to be slightly higher than in 2018. A less tangible factor is the mood of confidence surrounding the economic agenda of the incoming Zelenskyy administration, which has won approving nods for a series of reformist and businessfriendly legislative initiatives. However, the jury is still out over the ultimate effectiveness of the new government’s so-called “turbomode” approach to fast-tracking pro-business legislation through the country’s parliament. The rise of the hryvnia has proven helpful to Ukraine’s National Bank as it struggles to bring inflation down to manageable levels. Ukraine’s inflation rate fell in November to 5.1%, with National Bank officials crediting the rapid appreciation of the currency as a key factor behind the decline in inflationary pressures. However, with exports suffering the negative effects of a soaring domestic currency, the National Bank is now facing calls to intervene and stabilize the exchange rate in order to avoid a further loss of competitiveness. One of the more curious footnotes of the hryvnia’s excellent year is the relative lack of media coverage it has attracted. Since the sharp devaluations of 2014 and 2015, the slide of the Ukrainian currency has regularly featured in the Ukrainian media as a shorthand symbol of the country’s wider economic woes. Periodic declines have consistently received lurid headline treatment, with no shortage of “experts” eager to predict another impending collapse and widespread speculation forecasting exchange rates of 40, 50, or 100 UAH to the US dollar. These naysayers have been strangely silent regarding the Ukrainian currency’s stellar performance in 2019. It would seem that for many in the Ukrainian media, the hryvnia exchange rate is only an accurate indication of the country’s economic health when it is in decline. www.bunews.com.ua

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opinion

Apple appeases the Kremlin

Tech giant accused of putting profit before principle after app change shows Crimea as Russian Apple recently altered the labelling on its weather and map apps to show Crimea as part of the Russian Federation for users inside Russia. An outcry duly ensued. Days later, the tech giant announced it would take “a deeper look” at its policies concerning disputed areas. Whatever that means. Frankly, Apple should never have capitulated in the first place. There is no grey area here: Crimea is Ukrainian, not Russian. The seizure of Crimea took place in spring 2014 and was contrary to international law and existing treaties. The so-called “little green men” behind the takeover were actually Russian military personnel, and it was under their watchful eye that a sham plebiscite was staged in order to justify the annexation. The United Nations, United States, and European Union all condemned this act of international aggression. Serious sanctions have been imposed on Russia ever since. Last month, the International Court of Justice in The Hague ruled that it has jurisdiction to hear Ukraine’s allegations against Russia regarding Moscow’s occupation of Crimea and the Kremlin’s role in eastern Ukraine. Apple was not the first global tech giant to cave in to Russian demands. Google earlier revised its maps in a similar fashion. Google’s changes were only visible to those viewing from inside the Russian Federation. Outside Russia, Crimea remained Ukrainian. Touted as a compromise, this was actually a cop out. Publishing such “Potemkin” maps is unacceptable. They are inaccurate and designed to spread disinformation and propaganda. Such moves are part of Russian attempts to “normalize” its lawlessness. Apple says it came under sustained pressure from Russia on the basis that, according to Russian law, it is a criminal act to refer to Crimea as anything other than Russian territory. The tech company’s explanation of its recent actions fell short of satisfactory when it stated, “We review international law as well as relevant U.S. and other domestic laws before making a determination in labelling on our maps and make changes if required by law.” Obviously not. Russia flouted international

Ukrainian Foreign Minister Vadym Prystaiko took to social media to protest over Apple’s decision to recognize the Russian annexation of Crimea in its maps and apps law by seizing Crimea. Russia stole billions, if not trillions, from Ukraine by taking Crimea. Apple’s decision was not about upholding laws but about avoiding threatened legal action. Furthermore, Apple and Google each had a choice. Map labelling is about curating and providing accurate information, not about choosing sides. When dealing with a region subject to contesting claims, the labeling could indicate this status. That would have been a more acceptable compromise, but Apple and Google chose otherwise. Russian dissident and ex-world chess champion Garry Kasparov pulled no punches when he condemned the company in a tweet: “Apple changing its maps inside Russia to make Crimea part of Russia is a huge scandal. Regionalization of facts is unacceptable appeasement. Software is soft power. American tech companies should stand up for the values of innovation that made their success possible, not bow down to dictators for a little extra cash they don’t even need.”

What has bowing to Russian demands actually achieved? It has allowed these vast companies to maintain their foothold in a relatively small market the size of the Texas economy. At the same time, their actions tarnish them and represent a slippery slope globally. Consider that, since 2014, Russia has illegally occupied Ukraine’s nearby Donbas region. Over 13,000 have died, with a further 1.6 million people displaced. Will Apple and Google alter their maps once more if Moscow passes another law declaring it a criminal act to refer to the Donbas as part of Ukraine? What will Apple do if China, a genuinely gigantic market, insists its maps label Taiwan as a province of the People’s Republic of China? China has already begun throwing its considerable weight around with tech multinationals. In the past few years, it has virtually shut out Twitter, Google, and Facebook from the Chinese domestic market for not acceding to censorship requirements and other questionable requests. Apple still operates in China, and in October 2019 removed an app used by protesters in Hong Kong to identify police movements. This was justified by Apple Chief Executive Tim Cook as a “decision [that] best protects our users.” Can maps labelling Taiwan or disputed South China Sea islands as part of China be far away? In 2017, Apple’s Cook spoke frankly about the pitfalls of operating in countries without the rule of law. His comments were instructive: “Each country in the world decides their laws and their regulations, and so your choice is: do you participate? Or do you stand on the sideline and yell at how things should be? You get in the arena, because nothing ever changes from the sideline.” Of course, once you have agreed to enter the arena on the ringmaster’s terms, it means nothing will ever actually change. As an Apple and Google shareholder, I find this approach deeply disappointing. It is sad to see Silicon Valley’s hegemons, bigger and richer than most nation-states, stooping to threats from thugs and putting profit ahead of principle.

About the author: Diane Francis is a Senior Fellow at the Atlantic Council’s Eurasia Center, Editor at Large with the National Post in Canada, and Distinguished Professor at Ryerson University’s Ted Rogers School of Management 12

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Ukraine gets IMF green light

business briefs

The International Monetary Fund informed Ukraine in early December of preliminary agreement on a new three-year loan program worth USD 5.5 billion. The agreement is subject to approval by the IMF Executive Board, which is expected to address the issue in the first months of 2020. The loan remains conditional on Ukraine meeting a number of obligations including safeguarding the gains made in recent years by the reform of the country’s banking sector.

Moody’s upgrades Ukraine

Moody’s has upgraded Ukraine’s outlook from stable to positive. Moody’s analysts cited the rebuilding of Ukraine’s foreign exchange reserves, a marked improvement in macroeconomic stability, and the prospect of renewed reform momentum as key factors. This is the latest in a series of improved forecasts and favorable ratings revisions during the second half of 2019. Fellow ‘Big Three’ rating agencies S&P and Fitch upgraded Ukraine in September 2019, while the World Bank, IMF, and EBRD have all significantly improved their 2019 GDP growth forecasts.

Kharkiv IT sector grows 24%

COMING IN 2020: 4G ON THE KYIV METRO Ukrainian mobile communications operators Kyivstar, Vodafone Ukraine and lifecell signed off on technical supervision agreements with the Kyiv metro system operator in late autumn 2019, bringing the anticipated launch of 4G communications throughout the Ukrainian capital’s underground rail network one step closer. Talks are now underway on an access agreement, while the operators also await final approval from Kyiv City Council. According to current plans, the launch of 4G technology in the Kyiv 14

metro will begin at selected downtown stations in the first months of 2020, with coverage then expanding to metro tunnels and all additional stations during the course of the year. This is good news for the network’s approximately 1.3 million daily users. Opened in 1960, the metro is Kyiv’s primary form of public transport, accounting for almost 50% of journeys in the Ukrainian capital and carrying an estimated half a billion passengers per year. The Kyiv metro system features three separate lines and 52 stations.

An industry survey has found that the Kharkiv IT sector expanded 24% over the past year. Research by PricewaterhouseCoopers and IRS-group identified almost 500 companies active in the Kharkiv region IT industry, employing a total of 31,000 specialists. Average salaries in the Kharkiv IT sector are currently USD 2025 per month, or more than five times the regional average. If current growth trends continue, annual Kharkiv region IT sector revenues will reach around USD 2 billion by 2025.

IKEA to launch Ukraine e-store

Swedish furniture giant IKEA has announced plans to open its first official Ukrainian e-commerce store in spring 2020. The news comes following delays to the Scandinavian retailer’s Ukrainian market entry plans. IKEA attracted headlines in 2018 with news that it would be launching operations in Ukraine by the end of 2019 with a flagship Kyiv store, but issues with the preferred shopping mall site forced a rethink. IKEA officials now say the brand’s first Ukrainian store will open following the launch of e-commerce sales in the first months of the coming year. www.bunews.com.ua

investing in lviv

LVIV REGION INVESTMENT GUIDE • Lviv has a regional population of over two and a half million • Lviv region is Ukraine’s traditional gateway to the European Union • Regional capital Lviv is the largest city in western Ukraine • Lviv is one of Central Europe’s fastest-growing tourism destinations • Lviv region was formerly the eastern frontier of the Habsburg Empire • Lviv International Airport is Ukraine’s busiest regional airport • Lviv is home to Ukraine’s largest regional IT industry • Local residents of Lviv refer to themselves as Leopolitans • Lviv has medieval origins dating back to the mid-thirteenth century • Lviv experienced Habsburg, Polish, Nazi and Soviet rule in the 20th century • Lviv is widely recognized as Ukraine’s unofficial cultural capital • Lviv is preparing a bid to host the 2030 Winter Olympic Games • Lviv’s historic city center is a UNESCO World Heritage Site • Lviv University is one of the oldest in Central Europe dating from 1608 • Lviv region is emerging as a key manufacturing hub for EU exports

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Lviv Region Investment Guide

Sector-by-sector look at some of Lviv region’s most attractive investment opportunities

region due to its close ties and growing trade with nearby EU markets. Other infrastructure areas that deserve a closer look include railways and aviation, heating and water supply, public transportation, and smart city innovations. Meanwhile, effective waste management systems and waste recycling projects are still not in place in Lviv region. This sphere offers considerable investment opportunities in areas including waste collection and sorting, recycling plants, waste-to-energy projects, and other initiatives for the further utilization of the region’s waste.

Alternative Energy

About the authors: Timur Bondaryev is the Founding and Managing Partner at Arzinger. Natalia Anokhina is a Senior Associate at Arzinger West Ukrainian Branch. Lviv has big ambitions. The ancient capital of western Ukraine is eager to market itself on the global stage, and is one of the few places in the country to have created an international brand for itself. The city’s slogan, “Lviv is open to the world”, perfectly captures these aspirations to boost international engagement. Growing numbers outside the region seem to share such sentiments. Foreign investors are increasingly interested in Lviv and the surrounding region, but many lack the requisite practical insights and legal guidance to capitalize on the opportunities the region offers. The core advantages of Lviv region are already sufficiently public knowledge and do not require further elaboration. These include close to proximity to the EU border, deep historical and cultural ties with the rest of Central Europe, and a large pool of well-educated professionals. However, specific investment opportunities in the most promising sectors of the Lviv region economy are significantly less well known.

Commercial Real Estate

While the Ukrainian capital Kyiv now enjoys an extensive range of office premises, Lviv, 18

with its fast-growing businesses, currently suffers from a dramatic lack of suitable office space. As a result, offices tend to appear anywhere and everywhere. The list of improvised locations includes old apartment buildings, former Soviet administrative buildings, and even abandoned factories. Unsurprisingly, the occupancy rate for non-residential premises in Lviv is very high and prices are increasing steadily every year. The same applies to warehouses and production premises. The number of shopping centers, entertainment complexes, and conference venues in the city is also insufficient. This market gap creates unique opportunities to meet demand, while also making it realistic to attract anchor tenants at the early stages of commercial real estate projects.

Infrastructure Opportunities

In light of recent legislative changes to support the development of infrastructure concession projects and public-private partnerships in Ukraine, Lviv region’s road infrastructure is worth considering as a long-term investment opportunity. This is especially true given the importance of transport connections for the

Lviv is among Ukraine’s leading regions for alternative energy sector investment. There are currently up to 50 solar stations and 2 wind stations operating in the region, which collectively produce over 280 MW of energy. This sector has great potential for further growth, as Ukraine’s State Energy Strategy is to reduce the country’s natural gas consumption and increase the share of renewable and alternative energy sources. Investors should study recently adopted legislation on energy auctions when considering long-term commitments. Another energy-related investment option is energy storage as a tool for balancing energy supplies. There are also considerable opportunities in the development of the region’s energy network infrastructure.

Agriculture and Manufacturing

Agriculture is one of the traditional focuses of international investor interest in Ukraine, and this remains the case for the Lviv region. The anticipated end of the longstanding moratorium on the sale of agricultural farmland is an additional factor here, with restrictions set to stay in place for foreigners. Nevertheless, agriculture is still high on the investment agenda. Key focuses in the Lviv region include fruit and vegetable cultivation, along with stockbreeding and dairy production. There is currently a lack of investment in advanced agricultural techniques and food processing, with the possibility of exporting foodstuffs to nearby EU markets making the production of value-added agricultural produce particularly appealing.

investing in lviv

Manufacturing in general has been one of the leading investment trends in the Lviv region for the past twenty years. Relocating production facilities to the region allows for significant cost efficiencies while remaining close to EU consumers. However, Lviv region has recently experienced an outflow of skilled workers to neighboring countries, making it harder for investors to meet their recruitment and production capacity targets. Lviv region remains an attractive manufacturing option, but potential investors who are considering relocation should not count on paying minimum salaries.

Investing in IT

Over the past decade, Lviv has earned a reputation as a globally recognized IT outsourcing center. The city is now also receiving international attention as a hub for outstanding startups and tech product companies that are developing their own innovative solutions. There are a number of noticeable examples where investments have allowed Lviv-based IT companies to significantly boost revenues that were already in the billions, offering the prospect of further rapid multiplication of future investments over short periods. Lviv is an interesting R&D department destinawww.bunews.com.ua

tion for international tech corporations looking to develop new services and products. The city’s large pool of IT professionals includes many highly skilled engineers and qualified experts. Growing numbers of companies are also now considering Lviv as a competitive destination for business process outsourcing (BPO) centers. This includes outsourcing a range of services such as HR, accounting and call centers for businesses operating in Europe, the CIS region, and even North American markets.

Ukraine’s Tourism Capital

Lviv region has established itself as one of Ukraine’s most popular tourism destinations, with both numbers and average spends on the rising from year to year for well over a decade. Nevertheless, in some senses, the region remains unprepared for the rapid growth of its tourism industry. Lviv in particular suffers from a lack of suitable accommodation for increasing numbers of visitors. The region as a whole needs to attract more hotel operators, including international brands. Niche tourism offers particularly attractive investment opportunities, with medical tourism high on the list of the region’s tourism development priorities thanks to a large number of spa resorts.

Legal Framework Ukrainian legislation does not require investment permits, while there are also no restrictions on foreign nationals owning buildings or land (except for agricultural land). Investors can look to a range of investment protection mechanisms via national legislation, special state agencies and international treaties. Nevertheless, it is advisable to involve experienced legal advisors at the early stages of any investment project in order to conduct due diligence, obtain merger clearance from antitrust authorities, analyze tax issues, develop corporate structure and transaction documents, and support communication with the relevant state authorities. With international awareness of Lviv region’s investment appeal in the rise, there is a growing sense that now is the time to enter the market. Those who choose to wait today may find their niches already occupied by their competitors tomorrow. Anyone contemplating investment in the Lviv region would be wise to consider the words of Irish playwright George Bernard Shaw, who famously observed, “The people who get on in this world are the people who get up and look for the circumstances they want and if they can’t find them, make them.” 19

investing in lviv

Nestlé invests in Lviv Nestlé Lviv presence includes Svitoch production facility and international business service center

Nestlé CEO for Ukraine and Moldova Alessandro Zanelli International investment analysts are increasingly identifying Lviv as an attractive location for investments in product innovations, IT, and business process outsourcing (BPO). Nestlé is well ahead of the curve in this respect. The Swiss consumer goods giant is a major long-term investor in Lviv with a production facility and an international business service center in the city. Lviv’s Nestlé Business Service in Europe center, which is known as NBS Lviv, is the largest of its kind within Nestlé’s global network. Established in 2011, it has expanded exponentially from an initial team of 50 staff to a current workforce of over 1200 people. Thanks to this growth, it is currently one of the largest employers in the Lviv region, with a strong emphasis on youth employment and career development for young Leopolitans. The average age among NBS Lviv employees is 29 years. NBS Lviv handles a range of functions including financial and accounting services, human resources, content management and social media monitoring for internal Nestlé divisions around the world. The list of individual countries currently served from Lviv is truly global in scale, extending from Scandinavia, Italy and Greece to Brazil, Japan and North America. In order to meet the communications challenges this presents, NBS Lviv specialists speak more than 30 languages. Lviv’s centuries of cosmopolitan heritage as one of Central Europe’s great crossroads cities has proven a major asset in this regard, making it a logical candidate for the role of international business services hub. “We have found Lviv to be the ideal setting for the global service center,” says Alessandro Zanelli, CEO Nestlé in Ukraine and Moldova. “Before NBS Lviv was established, we conducted detailed analysis and found 20

that the city was able to offer a future generation of very well-educated people with the professional attributes and diverse language skills that we were looking for.” NBS Lviv is a continuation of Nestlé’s long relationship with Lviv, which started earlier with the Svitoch factory. The Swiss-based multinational entered the Ukrainian market 25 years ago and enjoys strong ties to the city. Lviv become the company’s first Ukrainian production location following the acquisition of the Svitoch confectionary plant, which now produces products for the Ukrainian domestic market and for export to EU markets including Hungary, Romania and the UK under a series of local and international brands. “Lviv offers a great combination of traditions and innovation,” says Mr. Zanelli. “I believe the diversity of the city, together with the high level of education among the local population and the spirit of openness towards new opportunities, will move Lviv forward and help our business grow further. Lviv also offers great logistical advantages, being located in the heart of Europe.” This long association with Lviv also continues in Nestlé’s investments into the social and cultural life of the city. The company sponsors the Oleh Krysa Violin Competition, is a longterm partner of the Lviv City Council’s annual municipal events, and contributes to community development by building inclusive playgrounds for children. Nestlé is investing in upgraded production facilities at the Svitoch factory in Lviv in order to meet anticipated expanding volumes as the facility prepares to take on new production transferred from other European countries. Elsewhere in Ukraine, a major expansion of production capacity is currently underway at Nestlé’s Mivina

factory in Kharkiv region in order to meet growing production targets for domestic and export markets. This is Nestlé’s only noodle production facility in Europe, meaning that all Nestlé noodles sold throughout Europe are produced in eastern Ukraine. The present investment program in Kharkiv envisages a three-stage expansion of production facilities that will continue until 2021. The aim is to have a state of the art production facility for this type of product. With the Svitoch factory and NBS Lviv set to grow further in the months and years ahead, much will depend on the western Ukrainian capital’s ability to continue providing the kind of candidates necessary to maintain high international standards. Nestlé has a number of long-term programs already in place to help the company meet recruitment challenges in what is an increasingly competitive region. “We play an active part in the global Nestlé Youth Employment Initiative,” explains Mr. Zanelli. “We also work with educational institutions, both within Lviv region and beyond, while participating in job fairs and establishing partnerships with youth organizations.” This youth outreach is very much in line with the company ethos. It also extends to a program of paid internships for students and graduates and specially tailored entry-level opportunities designed to allow talented young people to join the company at junior levels and progress to new positions at Nestlé locations throughout Ukraine as their career develops. “Nestlé is the first employer for the majority of the candidates we hire,” says Mr. Zanelli. “The professional opportunities we offer are highly appreciated by young talent in Lviv. They have the chance to learn on the job while applying the knowledge they have acquired at university in a practical business environment.”

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Ukraine’s EU gateway region Lviv Regional Administration Head Markian Malskyy on tourism and IT investment opportunities Lviv Regional Administration Head Markian Malskyy has long been a familiar face among members of the business and diplomatic communities in the west Ukrainian capital. Prior to taking on his current gubernatorial role in summer 2019, Malskyy was a Partner at the Lviv office of Arzinger law firm and served as the city’s Honorary Austrian Consul. He spoke to Business Ukraine magazine about his hometown’s IT, tourism and manufacturing investment appeal, and explained why he believes all Leopolitans need to start seeing themselves as unofficial ambassadors.

With a plethora of universities, large urban population, and close proximity to the EU, Lviv region looks well-placed to serve as a manufacturing hub for companies seeking to export to European Union markets. How can the regional authorities make sure Lviv builds on its obvious advantages in this regard? Lviv region is developing rapidly in this and a number of other directions. We are currently seeing growth in a range of strategically important sectors such as manufacturing, IT outsourcing, business process outsourcing (BPO), alternative energy, and the agriculture sector. Meanwhile, President Zelenskyy has recently initiated a program in support of the SME sector that will provide small businesses with access to cheaper loans. I regard this as a strategic priority for the Lviv region. There is huge entrepreneurial potential here that is in need of affordable financing. I believe this support for startups will have a positive impact on the region’s export potential that will be tangible within the coming few years. I also think we should be aiming to facilitate partnerships involving Ukrainian coownership wherever possible, rather than placing the emphasis entirely on attracting 100% foreign-owned investments into the region. Foreignowned companies are of course very welcome in Lviv region, but their commitment to Ukraine will necessarily be of a more pragmatic nature. For perfectly understandable reasons, they will continue to seek competitive locations beyond Ukraine. Promoting co-ownership with Ukrainian partners may help foster longer-term thinking. As Ukraine’s IT industry continues to expand, Lviv ranks among the country’s leading regions. How do you see the sector developing over

the coming few years, and how can Lviv maintain its current IT industry leadership position? Maintaining Lviv’s IT leadership position begins with supply and this means education. The good news is there are more students than ever studying at Lviv’s institutes of higher education, while many of the courses on offer include internships or part-time employment in their chosen field in the final years of undergraduate study. Cooperation between Lviv’s IT sector and the region’s educational institutions is particularly strong, which makes it possible to guarantee a steady flow of the kind of qualified graduates the IT industry requires in order to remain on its current upwards trajectory. Many Lviv region IT and tech companies have launched specific cooperation programs with universities, or have set up their own in-house training initiatives. These efforts will help to make sure that the Lviv IT sector continues developing along current lines for the next few years, as long as there are no drastic changes to the legislative framework or industry regulations governing the sector. A number of major projects are also progressing that will strengthen Lviv’s position as an IT hub for the entire Central Europe region. Construction work is currently underway at what will become the Lviv IT Park, which is one of the flagship projects of the Ukrainian IT industry as a whole. This ambitious undertaking will create an entire tech micro-district within the city, and should succeed in raising Lviv’s profile on the global tech map.

Lviv is now Ukraine’s unofficial tourism capital. How much revenue is the tourism industry currently generating for the region? It might seem straightforward to provide an exact answer to this question, but the reality is somewhat more complex and requires a nuanced approach. How do we define tourism spending in purely economic terms? The sector encompasses many different direct and indirect elements ranging from hotels, restaurants and excursions to a whole array of logistical factors and more. This makes it difficult to offer a specific figure for tourism revenues. Nevertheless, there is no question that tourism is bringing a range of significant benefits to the Lviv region. This makes it a top priority. There is now a clear consensus throughout Lviv region that we all share a common interest in attracting more visitors. The differences begin to emerge once the conversation moves towards the best ways of achieving this. I believe the

“Construction work is currently underway on what will become the Lviv IT Park. This ambitious undertaking should succeed in raising Lviv’s profile on the global tech map” 22

investing in lviv About the interviewee: Markian Malskyy is Head of the Lviv Regional Administration www.bunews.com.ua

investing in lviv

first step should be putting ourselves in the shoes of visiting tourists and trying to gain a feeling for their experience of Lviv region. What are their first impressions likely to be? Will they be able to navigate their way around and enjoy their trip if they lack local language skills? Can they trust taxi drivers and other service providers to charge fair and transparent prices? Another key ingredient in the tourism recipe for success is for all of us to become ambassadors of Lviv region wherever we go. By sharing our enthusiasm for the region with the people we meet internationally, which can generate considerable additional interest and support the further development of the Lviv tourism sector. How many tourists do you expect to visit Lviv region in total during the coming year? In my opinion, it is not necessarily helpful to focus on the official statistical data that we have available for the number of tourists visiting Lviv region during any given period. There are significant issues regarding the methodology used to calculate these figures, leading to questions over whether they offer a genuine impression of the current situation. What we can say without any doubt is that more foreigners than ever are now visiting Lviv, with key countries including Poland, Austria, Germany, Belarus, Turkey and Azerbaijan. In terms of concrete numbers, Lviv International Airport recently greeted its two millionth passenger of the year, setting a new annual record. With the number of airlines flying to Lviv expanding on a regular basis, we can expect the list of nationalities visiting the city to become even more diverse over the next few years. At the same time, the majority of tourists visiting Lviv region are actually Ukrainians from other parts of the country. I am particularly happy to see people from across Ukraine visiting Lviv and learning more about our local history and traditions. It is great to see the growing enthusiasm in Ukrainian society for all things Ukrainian as people embrace their roots and take an interest in national heritage. It is worth noting that local Lviv traditions are a big attraction for many tourists. www.bunews.com.ua

Tourist flows to Lviv region currently remain heavily concentrated on the city of Lviv itself. Which areas of the wider region hold the greatest potential as tourist attractions? It should not come as a surprise that first-time visitors tend to focus their attention on Lviv. There is so much to discover and so many different layers of the city to explore, from history and architecture to gastronomy and the arts. Lviv is a fairytale place with the ability to surprise and delight even those who have lived here for many years, so I can easily forgive visitors for wanting to take their time when discovering the city for themselves. However, the wider Lviv region also has a lot to offer tourists and is worthy of more attention. Tourists can explore beautiful castles and legendary fortresses that once played host to kings and emperors. They can admire the tranquility of ancient wooden churches that feature on the UNESCO World Heritage List, and delve into the timeless charms of the regionâ&#x20AC;&#x2122;s many picturesque little towns and villages. There is also plenty of nature to enjoy, including an abundance of mountains and rivers. Personally, my favorite spots in the region are the Carpathian Mountains and the Truskavets area, which is famous for its spa resorts. In addition to IT and tourism, which other sectors of the regional Lviv economy hold the greatest investment potential? There are opportunities throughout the economy but certain sectors stand out. Green technologies and alternative energy projects have huge potential in the Lviv region, while agriculture and light industry are also attractive for investors. As mentioned already, Lviv enjoys numerous advantages that make it an interesting potential production base, but successful future projects will likely focus on value-added products and sophisticated processes rather than relying on low salaries and access to cheap resources. Competition for skilled staff is now strong and employees are increasingly demanding in terms of their expectations. This is helping to create a market more suited to complex production requiring highly educated employees, with Lviv regionâ&#x20AC;&#x2122;s close proximity to the European Union adding to its economic appeal.

investing in lviv

Lviv offers a winning combination of geography and business climate

West Ukraine’s largest city has won international recognition as a competitive investment destination

About the author: Mykhailo Bechkalo is the Executive Director of UkraineInvest In spring 2019, Lviv made it into the inaugural Smart Locations of the Future ranking produced by Financial Times division fDi Intelligence. The western Ukrainian city featured in the global top ten of this new ranking for cost-effectiveness, occupying eighth position. The costeffectiveness category of the ranking assessed 115 investment destinations worldwide on such indicators as rental fees for office and industrial space, corporate and total tax rates, average salaries for skilled workers, and the costs of registering property and establishing a business. It is not hard to see why Lviv is so highly rated. The city has emerged in recent years as an increasingly modern business hub offering convenient location, favorable investment climate, developed infrastructure, and a highly qualified workforce. Lviv’s close proximity to Ukraine’s western border with the European Union makes it a particularly cost-effective option, while attractive utility tariffs, low costs of living and effective tax rates also contribute to this competitiveness. The Lviv region business community already includes a significant number of international companies active in a range of economic spheres such as IT, automotive components and manufacturing. This list includes Leoni, BADER, Electrokontakt and Fujikura. Among other 26

advantages, they benefit from the region’s large skilled workforce. The city of Lviv itself has an economically active population of 564,000 along with 111,000 students. In the IT sector alone, the city’s institutes of higher education produced 5,000 new graduates in 2019. These IT graduates look set to find themselves in demand. Lviv’s IT industry has experienced robust growth in recent years and emerged as one of the leading lights as the Ukrainian IT sector as a whole takes on an increasingly prominent role in the national economy. Thanks to this dynamic evolution, Lviv now has 317 IT companies employing around 21,000 highly qualified IT specialists and generating approximately 21% of the city’s GDP. The city’s Lviv IT Cluster is expanding at a rate of almost 30% per year with networks connecting more than 80 of Lviv’s leading IT companies including Softserve, EPAM, Intellias and N-iX. While the growth of the Lviv IT sector inevitably attracts headlines, it is only one of a number of engaging economic stories emerging from the western Ukrainian city. Today’s Lviv is well on the way towards becoming a modern regional transport hub. Lviv International Airport is currently Ukraine’s busiest regional airport at a time when the entire Ukrainian air travel industry is experiencing an unprecedented boom in passenger numbers. Lviv’s airport recently welcomed its two millionth passenger for 2019, setting a new annual record and maintaining strong growth rates stretching back to 2016. Meanwhile, Ukrainian railway operator Ukrzaliznytsia is currently developing plans for a rail connection between Lviv International Airport and the city’s main railway station, with Kyiv’s popular Boryspil Express set to serve as a model for the initiative. The tourist trade is also an essential part of contemporary Lviv’s investment story. The city has established itself in recent years as one of the rising stars of Eastern Europe’s tourism industry, with more than two million tourists expected to visit this year. Municipal authorities are now seeking to develop the conference and business tourism industry. Business tourism is already experiencing rapid expansion, with the number of conferences hosted in Lviv almost doubling in recent years from 237 in 2015 to 430 in 2018. City officials note that business tourism brings in more than four times the profit per person compared to traditional recreational tourism. Lviv’s diverse picture of economic evolution creates abundant ground floor opportunities for foreign investors, whether it is in the buzzing IT and business process outsourcing (BPO) sectors, tourism, manufacturing or infrastructure. One of the key challenges now is to harness this potential and help investors identify the opportunities that Lviv has to offer. The UkraineInvest team is currently working with international companies to bring technology, management and healthy business practices to the region, creating well-paid workplaces for highly skilled employees. At UkraineInvest, we share the Ukrainian government’s ambitious agenda and are ready to provide investors with the appropriate advice, contacts and personalized services free of charge, with the goal of saving months of legwork. www.bunews.com.ua

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Lviv region is leading the way

in Ukraine’s Euro-integration New survey ranks Lviv Ukraine’s No. 1 region as European integration trends take root nationwide Ukraine has fought harder than any other country for European integration. Progress has come at an incredibly high price, with efforts to conclude a relatively innocuous Association Agreement with the European Union in 2013 plunging Ukraine into a maelstrom of revolution, economic crisis and undeclared war with Russia that continues to this day. Despite these formidable challenges, a recent study conducted by the New Europe Center has found that European integra-

tion trends are taking root across Ukraine. Meanwhile, public support for the country’s European trajectory has consolidated significantly since 2014, despite the trauma and turbulence of the past six years.

Embracing Ukraine’s European Identity Ukraine’s struggle to move closer to the rest of Europe has been ongoing since the 1991 collapse of the Soviet regime,

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test movement forward. At a time when people throughout the EU itself were questioning the future of the European project, here was a powerful reminder of the principles the European Union represented to those looking in from the outside. Like many Ukrainians, I still have my Euromaidan EU flag at home.

Russia Fails to Derail EU Integration

investing in lviv

which had previously imposed artificial barriers while promoting ideas of otherness that contradicted Ukraine’s historic sense of European identity. The country’s post-Soviet European ambitions first hit the international headlines with the 2004 Orange Revolution, a people power uprising sparked by attempts to rig a presidential election in favor of a proKremlin candidate who seemed bent on steering the country away from Europe and towards the increasingly authoritarian Russia of Vladimir Putin. The quest for a European Ukraine entered a new phase in 2013 when Ukrainian President Viktor Yanukovych backed away from his commitment to sign an Association Agreement with the EU, leading to a fresh round of mass protests known as the Euromaidan Revolution. Millions of Ukrainians from different regions flocked to central Kyiv to join rallies in defense of Ukraine’s European choice. Many carried the flag of the European Union, which came to symbolize the European values of personal dignity and rule of law that drove the pro-

The Euromaidan Revolution reached a bloody climax in February 2014 with the massacre of dozens of protesters on Kyiv’s Independence Square followed by the flight of President Yanukovych to Russia. The interim authorities soon made clear their intension to proceed with the EU Association Agreement, but the country’s European integration drive has been overshadowed ever since by ongoing Russian military intervention in Crimea and eastern Ukraine. Moscow has also maintained parallel efforts to convince Ukrainian society that European integration is a foolhardy choice that can only bring impoverishment and war.

Trade and Visa-Free Travel

A number of key dates and numbers stand out in the narrative of Ukraine’s European integration. The signing of the EU Association Agreement eventually took place in summer 2014, with the terms of the Agreement coming into force in stages over the following few years. For a majority of Ukrainians, the most significant single event was probably the advent of visa-free EU travel in June 2017, bringing to an end decades of visa obstacles and passport apartheid. Meanwhile, the free trade component of the Association Agreement has helped boost the EU share of Ukraine’s overall trade to 42%. Earlier this year, Ukraine became the European Union’s number three foodstuffs supplier. These headlines are only part of the story. In order to get a sense of the grassroots European integration processes taking place across Ukraine, the New Europe Center recently conducted the country’s first nationwide research project covering every single Ukrainian region. In cooperation with the Government Office for European and Euro-Atlantic Integration, the project aimed to gauge European integration in an array of different spheres ranging from economy, energy and education to infrastructure, local government and civil society. Data processing took place in a comparative format in order to identify regional trends and gain greater insight into the relative pace of European integration in different parts of the country.

Lviv is Ukraine’s No. 1 Euro-Integrator

Based on 34 indicators in eight different spheres, researchers identified Lviv as Ukraine’s current Euro-integration leader. This result is in line with traditional perceptions of Lviv region as the most typically European part of Ukraine and reflects its favorable location on the EU border. However, the country’s Euro-integration top ten also featured southern Ukraine’s Odesa region, central Ukrainian Vinnytsia, and northeastern Sumy, which shares a border with the Russian Federation. Moreover, regions in southern and eastern Ukraine also took leading positions in a number of individual EU integration categories. Mykolaiv region in southern Ukraine displayed the strongest growth in exports to the EU, while eastern Ukraine’s great industrial hubs Kharkiv and Dnipro were among the leaders in terms of the number of enterprises with EU capi-

tal. Bordering the line of contact with the Russian-occupied parts of eastern Ukraine, Donetsk and Luhansk regions had the highest number of EBRD and EIB-funded projects. These results may strike some readers as surprising. Many local residents in the featured regions would likely share this sense of surprise. Interestingly, one of the few findings that was consistent across all of Ukraine was the practice of local authorities taking credit for EU-funded projects in their regions. Accordingly, these projects are helping to boost the popularity of local authorities but not necessarily leading to improved attitudes towards the European Union.

investing in lviv

The political upheavals and military disasters of 2014 have created a backdrop of economic turmoil that has added weight to Russia’s arguments. Nevertheless, public opinion polls conducted over the past six years show that support for EU membership has grown significantly among Ukrainians, with the number in favor now consistently close to or above the 50% mark, representing a landslide majority of those likely to participate in any future referendum on the subject. Nor does this support reflect unrealistic faith in the EU’s ability to heal all of Ukraine’s ills. On the contrary, surveys indicate a realistic understanding of Ukraine’s currently slim membership prospects. Moreover, the key Ukrainian request to the European Union during the post-2014 period has not been to offer fast-track membership or financial assistance, but rather to put more pressure on the Ukrainian authorities in order to accelerate reforms.

Ukraine Never Closer to EU Neighbors

The post-2014 boom in Ukrainian air travel and the arrival of low-cost airlines on the Ukrainian market has proven one of the biggest single practical drivers of the country’s European integration. Budget carriers now operate from many of Ukraine’s regional capitals, connecting them directly with EU destinations. As well as Kyiv and major cities like Odesa and Lviv, there are also now affordable regular flights to the European Union from the likes of Zaporizhia and Kherson. Dozens of new routes are set to enter service in 2020. A parallel upgrade of Ukraine’s domestic transport infrastructure is further facilitating internal mobility and European connectivity. With road connections gradually improving and dozens of cheap new flight services to European cities, more Ukrainians than ever are able to take advantage of the country’s visa-free EU breakthrough. Some travel for tourism and some seek seasonal work. Others are increasingly engaging in the educational, academic and cultural cooperation offered by European Union programs and individual national initiatives. Analysts at the New Europe Center found that between 2004 and 2013, only 329 Ukrainian students took part in the Erasmus Mundus program (the predecessor of Erasmus+) to study in Europe. During the four years from 2014, this figure skyrocketed to 10,158 Ukrainian students. Overall, this recent research attempt to get a sense of Ukraine’s Euro-integration realities produced a picture of varied progress across the country that defies regional stereotypes and, to a degree, runs counter to the geographical logic of the Ukrainian map. We can only hope that the temporarily occupied regions of the country, which currently represent 7% of Ukraine, will eventually become involved in this process. The experience of the past six years demonstrates that the idea of building a European Ukraine is not a mere whim. It is a way to modernize the country while preserving its independence. For those in occupied Donbas and Crimea, such progress is not possible while trapped in Russia’s embrace.

About the author: Alyona Getmanchuk is the director of the New Europe Center www.bunews.com.ua

like U: between the goal and the action, just one notebook Lviv is a unique city. It is imbued with the spirit of freedom, creativity and innovation. Lviv is a city of research and creative pursuits, where mathematician Stefan Banach formulated his works on functional analysis and impressionist Ivan Trush created his paintings. This is the city where the poet Ivan Franko composed the hymn, “The Eternal Revolutionary, the spirit that throws the body into battle,” and where the song “Chervona Ruta” was created by Volodymyr Ivasyuk. It is the city that presented the world with “the most beautiful and charming Butterfly” by soprano Solomiya Krushelnytsky, and gave birth to the success of rock band Okean Elzy. This rich heritage of success inspired the team of OZKO Ukraine to create its unique “like U” brand of notebooks, because we believe that the heroes of live among us today. We want everyone to make their dream their goal, and we want to help make their dream come true. To do this, we have created the like U notebooks collection. This collection features a wide range of sizes and formats so everyone can choose what works best for them. Lined pages in a flexible cover are ideal for journals. For calculations and drawings, squared paper works best. Dotted paper with a solid flat-panelled 180-degree opening is most convenient for drawings. All of our notebooks are a pleasure to use thanks to carefully selected cover materials and quality paper blocks made using classic technology from woodless paper that is opaque, resistant to aging, and meets the highest quality standards. The high quality of like U notebooks, with strict quality control in place at every stage of the design, production and packaging processes, as well as a wide selection of color, format and branding options, makes these notebooks ideal for the corporate market. In response to growing demand from business users, we have prepared a special, tailored offer for corporate clients. This includes a wide range of products, as well as additional opportunities for individualization according to your specific needs. Today we offer: • a range of like U notepads • business diaries • a collection of office accessories and products We make all of these products even more special by: • personalization of the product cover using different printing techniques: hot stamping, screen printing, digital printing, as well as combinations to emphasise important design elements • production of combined covers and elements incorporating materials of different texture and colours • additional accessories with the customer’s logo • information inserts into product blocks according to customer-specific requirements In addition, we offer manufacturing of products for individual projects. We work to ensure that, using our special features, our customers are distinguished by useful, high quality and desirable gifts for their customers.

How to contact us: www.likeu.ua b2b@likeu.ua +380 97 2027181 *All featured brand names and corporate logos belong wholly to the owners thereof and their use here is purely for illustrative purposes.

The impressive evolution of Lviv International Airport Euro 2012 and record growth have transformed Lviv into Ukraine’s busiest regional airport In late autumn 2019, Ukraine’s Infrastructure Ministry unveiled plans to transform Lviv International Airport into a regional transport hub. This envisioned expansion will see the addition of bus terminal facilities and a direct rail connection to the city’s imposing Habsburg era Central Railway Station. It representing the latest stage in Lviv airport’s evolution from end-on-the-line outpost to bustling Central European international gateway. Ukrainian railway operator Ukrzaliznytsia is already working on preparations for the construction of a rail connection between Lviv International Airport and the city’s main railway station, with Kyiv’s Boryspil Express set to serve as a model for the initiative. The Boryspil Express has proved hugely popular since its launch in November 2018, carrying around one million passengers during its first year of service. There is every reason to believe a future Lviv Airport Express will enjoy similar success, given the striking growth in passenger volumes the airport has experienced in recent years. Lviv airport set yet another record on 22 November 2019, reaching the two million passengers landmark for the first time. Airport officials expect to end the year with 2.2 million passengers in total, making Lviv comfortably the busiest regional airport in Ukraine and placing it in third position nationally behind Kyiv’s Sikorsky and Boryspil airports. This represents an approximately 40% 34

year-on-year increase on the figure for 2018, which was itself 48% up on the previous year. Overall, the number of travelers flying via Lviv has expanded tenfold over the past fifteen years since 2004. These figures are exceptional, even in the context of the unprecedented current boom throughout Ukraine’s air travel industry. Ukraine’s airports recorded passenger growth of 18.8% during the first ten months of 2019, with 20.475 million people in total flying to and from the country. This growth has been more or less consistent for the past four years, as new airlines enter the Ukrainian market attracted by the country’s expanding economy as well as the game-changing June 2017 advent of visa-free travel to the European Union for Ukrainian passport holders. Thanks to a range of local factors, Lviv International Airport is currently growing at approximately twice the national rate. Lviv has emerged over the past decade as one of Central Europe’s most dynamic tourism destinations, while the city also serves as a hub for the wave of economic migrants who have moved to Poland and other EU destinations since 2014 in search of higher salaries. These twin trends are evident in the list of the airport’s most popular international destinations, with the growing Ukrainian community in Poland helping to make Warsaw the top route, while Turkish tourists have helped place Istanbul in second position.

investing in lviv

All this is a long way away from Lviv International Airport’s former life as a lazy provincial outpost for much of the Soviet and early post-Soviet periods. The airport originally dates back to the interwar years of the early twentieth century when Lviv was part of Poland. Built in the 1920s, the first Lviv airport officially opened in 1929 with flights to Warsaw and Krakow. The inaugural international service connected the city with Romanian capital Bucharest, followed by the launch of flights to other regional destinations such as Sofia and Athens before the outbreak of WWII. Following WWII, the Soviet authorities constructed new terminal facilities in the 1950s. This infrastructure remained in use until 2010, when the airport underwent a major upgrade as part of Lviv’s preparations to serve as one of four Ukrainian host cities during the UEFA Euro 2012 European football cham-

pionship. The USD 200 million redevelopment of Lviv airport ahead of Euro 2012 included a runway extension and the construction of an entirely new terminal complex that quadrupled the airport’s capacity from around 500 passengers per hour to 2000. The new-look Lviv International Airport also underwent a rebranding and took on the name of King Danylo, the medieval Ukrainian ruler credited with founding Lviv in the mid-thirteenth century. With new state-of-the-art facilities in place, the quaint Soviet-era terminal building was retired from service and remained mothballed for a number of years. However, with new airlines touching down in Lviv on an almost monthly basis and rapid year-on-year growth in passenger numbers, the 1955 vintage facility reentered service in summer 2019 to take some of the pressure off the new terminal by handling domestic and charter flights.

Lviv International Airport’s annual growth rate of 40% is exceptional, even in the context of the unprecedented boom currently taking place throughout Ukraine’s air travel industry

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Rotary International Lviv

Rotary was founded 110 years ago by people of action wishing to solve real world problems through their passion, energy and intelligence. Providing service to others, promoting integrity and goodwill, Rotary members engage in shared responsibility to challenge some of the world’s most persistent issues, promoting peace, fighting disease, supporting education and helping to grow local economies. A major example of our work is the tireless effort, lasting over 30 years, to eradicate Polio, helping to reduce polio cases by 99.9%, providing immunization to over 2.5 billion children in 122 countries, and contributing more than $1.8 billion.

Our organisation has over 1.2 million members, organised in over 35,000 clubs worldwide.

In Ukraine and Belarus, Rotary is organised in District 2322, which contains over 50 clubs and over 1,000 members. The principal centres in Ukraine are Kharkiv (7 clubs), Kyiv (6) and Lviv (7). Rotary is also present in Dnipro, Cherkasy, Odesa, Uzhgorod and other cities, and we are growing!

Rotary has been working in Lviv since 1935. In Lviv, the youngest (founded in 2016) but also the largest club (which is also the largest club in District 2322) with 65 members, is RC Lviv International. It is the only English-speaking club in the city with members from around the world as well as a strong base of successful and committed locals. We work with the local and regional community, our fellow clubs in Lviv and the region, our District, and the international Rotary organisation. We also have an affiliated and very active Rotaract Club, the youth version of Rotary!

Successful projects over the last couple of years include: • Raising funds to purchase and deliver a special printer and other equipment for the school of visionary impaired children in Lviv with a budget of $4000, which benefited over 40 children. • Fundraising for the purchase of a modern portable ultrasound machine and diagnostic equipment for Ohmatdyt Children`s Clinic in Lviv, which helps to diagnose heart defects in children. Rotary contributed $47,000 to this project. • 47 beds for an elderly residential home in Lviv. • Student European Tour & Christmas Convoy.

We are currently working with Next Step Ukraine to build and equip a rehabilitation centre in Lviv for Ukrainian ex-combatants. Our target is to raise $90,000 and we are well on the way to achieving this, with help from partner clubs, individual donations and fundraising events such as the recent “ETNO Fashion Show”. Special thanks here for our sponsors especially Going Solar, STO and Kochergan, and all those who have supported this worthy cause!

RC Lviv International is always looking for new members and new projects! We meet every Thursday evening at 18:45 at the Leopolis Hotel in Lviv. We would be happy to welcome you! You can contact us via Facebook at our official page “Lviv International Rotary Club”

The story of Lviv Today magazine Leopolitan love letter to the world Launched in 2008, Lviv Today remains Ukraine’s only regional English-language city guide

The idea to launch Lviv Today magazine first began to take shape in late 2007. At the time, the capital city of western Ukraine was still very much off the beaten track in terms of international tourism, but there were already signs of the transformation that has seen Lviv reinvent itself over the past decade as the country’s most tourist-friendly destination. From the very beginning, our goal was to highlight the best of contemporary life in Lviv, not only for the benefit of inquisitive foreign guests, but also for local residents worn down by the relentless negativity of the Ukrainian media landscape. Putting a positive spin on Lviv has not been difficult. The city is one of the most photogenic in Central Europe. It boasts a rich and colorful heritage, thriving cultural life, and an increasingly 38

vibrant going out scene. Nor was there a shortage of events to cover. The first issue of Lviv Today, published in April 2008, coincided with the launch of Lviv Fashion Week, a stylish initiative that reflected the city’s growing self-confidence and set the tone for an ever-expanding cultural calendar of holidays, festivals and celebrations. Early highlights included culinary treats such as Chocolate Day and Coffee Day, along with events like the Leopolis Jazz Festival, which has since grown into a genuinely world class festival in its own right. The response to Lviv Today was both instantaneous and overwhelming. Readers and partners were soon commenting that the publication reflected the Lviv they knew and loved, rather than the often grim and politicized depictions they were accustomed

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investing in lviv

About the author: Viktoriya Larina is the Chief Editor of Lviv Today

investing in lviv 40

to encountering in the traditional mainstream media. Within months of the publication’s launch, local officials were dropping by our editorial offices to collect copies of Lviv Today for use as impromptu promotional tools at international events. There have been numerous particularly memorable moments during the magazine’s eleven years of publication. Lviv’s role as one of four Ukrainian host cities during the 2012 UEFA European Football Championship stands out as a time when the city blossomed on the global stage. The success of Euro 2012, which saw tens of thousands of fans converging on Lviv from across Europe and clearly reveling in the city’s ample charms, gave the Leopolitan tourism industry a real sense of swagger and convinced any remaining doubters that Lviv had what it takes to be truly competitive internationally. Along the way, Lviv Today has evolved and developed to reflect the changing dynamics of the city it serves. As investor interest in Lviv has increased, we have introduced a business section in

partnership with the West Ukrainian chapter of the European Business Association. With the number of new Lviv restaurants, cafes and clubs mushrooming on an almost weekly basis, we have had to abandon our comprehensive going out listings due to space limitations and focus instead on selected venues each month. There are simply not enough pages in the magazine to cover every new opening on the ever-expanding Lviv gastronomic scene. Meanwhile, in order to cater for our large Leopolitan readership, much of the magazine’s monthly content is now published in bilingual format of English and Ukrainian. Eleven years on, Lviv Today remains Ukraine’s only regional English-language city guide. As the publication has grown, we have always stayed true to the founding principle of Lviv Today, which is to celebrate the magic of Ukraine’s most cosmopolitan and enchanting city. This sentiment is perhaps best expressed in the slogan published every month on the cover page of the magazine: “The heart of Europe, the soul of Ukraine.”

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B2G Dialogue MEETING WITH YULIYA KOVALIV, DEPUTY HEAD OF THE OFFICE OF THE PRESIDENT OF UKRAINE AmCham Ukraine members had a productive discussion with Yuliya Kovaliv focused on business climate improvement, combating the shadow economy, and other strategic issues for the business community.

MEETING WITH IVAN BAKANOV, HEAD OF THE SECURITY SERVICE The business community united by AmCham Ukraine, Union of Ukrainian Entrepreneurs, and Business Ombudsman Council met with Ivan Bakanov to discuss the most acute issues companies are facing as well as plans of the Security Service. MEETING WITH THE TEAM OF THE U.S. EMBASSY IN UKRAINE AmCham Ukraine members met with the U.S. Embassy’s team – Counselor for Economic Affairs Megan Bouldin, Senior Commercial Officer Ilona Shtrom, and Agricultural Attaché Robin Gray. Participants had an opportunity to discover how the U.S. Embassy in Ukraine helps businesses pursue their goals in Ukraine with a wide range of services. MEETING WITH CHARGÉ D’AFFAIRES, A.I. OF THE U.S. EMBASSY IN UKRAINE WILLIAM B. TAYLOR AmCham Ukraine team and Board of Directors members were delighted to welcome Ambassador William B. Taylor and U.S. Embassy team at the Chamber offices on November 21.

B2G Dialogue BANKING & FINANCIAL SERVICES COMMITTEE MEETING WITH SERGII KHOLOD, DEPUTY GOVERNOR OF THE NATIONAL BANK AmCham Banking & Financial Services Committee members met with Sergii Kholod as well as Olga Vasylieva, Deputy Head of NBU Department on Payment Systems & Innovation Development to discuss, in particular, cashless economy, new trends in payment ecosystem and implementation of the second Payment Services Directive. PRESENTATIONS OF THE SOE “UKRAINIAN SEA PORTS AUTHORITY”: CORPORATE STRATEGY BY 2025 & FINANCIAL PLAN FOR 2020 AmCham Ukraine members got insights on USPA Corporate Stratty welcomes USPA steps to become “a company that develops ports egy until 2025 and Financial Plan for 2020. The business communiand enhances port services.”

PRESENTATION OF UKRZALIZNYTSIA FINANCIAL PLAN FOR 2020 Ivan Yuryk, UZ Board Member, and Oleksandr Karnachev, Deputy Director of UZ Strategic Development & Planning Department, presented Ukrzaliznytsia Financial Plan for 2020 to AmCham Ukraine members. According to it, the tariff freight turnover is supposed to increase by 5.5% over the expected 2019 turnover.

ROUND TABLE “PRIVATIZATION 2020: FROM THE CURRENT STATUS TO THE AMBITIOUS PERSPECTIVES” AmCham Ukraine members support the reform of state-owned enterprises’ sector and the launch of a transparent privatization. Pavlo Kukhta, First Deputy Minister for Development of Economy, Trade and Agriculture, Dmitry Sennychenko, Head of the State Property Fund, and Oleksii Sobolev, Director of SE “ProZorro.Sale” presented the concept of Privatization 2020.

B2G Dialogue TAX COMMITTEE MEETING WITH LEADERSHIP OF THE LARGE TAXPAYERS’ OFFICE AmCham Ukraine members met with Kateryna Ryzhenkova, Acting Deputy strategic and smooth cooperation with Large Taxpayers’ Office as well as havHead of the LTO and Iryna Korotkova, Deputy Head of the LTO. Maintaining a ing a clear understanding of its plans and priorities is crucial for taxpayers.

PRESENTATION OF THE ANALYTICAL PUBLICATION “SEEDS INDUSTRY IN UKRAINE’S ECONOMY” AmCham Ukraine presented the brand-new Seeds Brochure with actual data and facts on Ukraine’s place on the global seeds market, the seeds industry’s potential, and its role in Ukraine’s economy.

MEETING WITH DMYTRO DUBILET, MINISTER OF THE CABINET OF MINISTERS AmCham members met with Dmytro Dubilet to share expertise and ideas on how to improve conditions for doing business in Ukraine.

B2G Dialogue MEETING WITH OLGA SHEVCHENKO, ACTING HEAD OF THE STATE SERVICE FOR FOOD SAFETY AND CONSUMER PROTECTION AmCham Ukraine Agricultural Committee members met with Olga Shevchenko and Andriy Chelombitko, Head of the Department for Phytosanitary Safety & Seeds Control, to discuss key phytosanitary issues in the agricultural sphere and possible ways to eliminate trade barriers. MEETING WITH HANNA NOVOSAD, MINISTER OF EDUCATION AND SCIENCE AmCham Ukraine members met with Hanna Novosad to discuss science as well as the Ministry’s goals in the Government’s Action strategic plans and acute issues in the spheres of education and Plan.

MEETING WITH MYKYTA POTURAIEV, DEPUTY HEAD OF THE PARLIAMENTARY COMMITTEE ON HUMANITARIAN AND INFORMATION POLICY AmCham Ukraine Media & Communications Committee met with Mykyta Poturaiev to discuss the recently presented concept of the Draft Law “On Media.”

MEETING WITH VOLODYMYR BORODIANSKYY, MINISTER OF CULTURE, YOUTH AND SPORTS At the meeting with AmCham Ukraine members, Volodymyr Borodianskyy presented the Ministry’s new vision and strategy.

AMCHAM MEMBER TOUR: AIR â&#x20AC;&#x201C; WHERE YOUTUBE STARS ARE BORN AmCham Ukraine members visited the AIR company (Agency of Internet Rights). CEO of AIR Mykola Roginets told about the emergence of AIR and its evolution from a media network to a reliable multifunctional partner for both bloggers and business.

Agency of Internet Rights provides online video creation, monetization, and promotion services worldwide. Founded in 2010, it became a YouTube Certified Partner in 2011. The company is also the founder and organizer of the largest video culture, blogger, and fan festival in Eastern Europe â&#x20AC;&#x201C; VideoZhara.

AMCHAM MEMBER TOUR: DEPOSITPHOTOS â&#x20AC;&#x201C; CREATIVITY ACCESSIBLE TO EVERYONE

AmCham Ukraine members visited the company Depositphotos. Anna Zakharchenko, CSO at Depositphotos, shared the success story of Depositphotos since 2009 and how, within the few years, the company became one of the leading international stock photography platforms. Participants got insights

on the launch of Lightfield Productions, the largest photo-production studio in Eastern Europe, and other notable Depositphotos projects, such as Crello, an online graphic design tool, and two successful online magazines - Bird in Flight and WAS.

WELDI BUSINESS BREAKFAST “CEO’S STRATEGIC TALENT: HOW TO GET THINGS DONE” WELDI participants discovered which mindsets and practices are proven American Chamber of Commerce in Ukraine, Founding Partner and Chief to make CEOs most effective, how to work with stakeholders and lead the Executive Officer of Horizon Capital and Yuliya Badritdinova, Member of the top teams, how to be agile and what are the secrets of strategic planning Board of Directors of the American Chamber of Commerce in Ukraine, CEO for business growth in times of uncertainty. Two powerful and passionof McDonald’s Ukraine – shared their success stories and how actually to ate leaders – Lenna Koszarny, 2019 Chair of the Board of Directors of the get things done. PREMIUM SPONSOR

PARTNER

GET TO KNOW THE CANDIDATES BUSINESS NETWORKING COCKTAIL

AmCham Ukraine members had an opportunity to network with candidates for 2020 Board of Directors, discuss their vision of the future expansion of the Chamberâ&#x20AC;&#x2122;s successful operations in Ukraine as well as get first-hand knowledge about their background and interesting ideas.

PARTNERS

Kharkiv International Airport sets new passenger record East Ukraine’s largest air hub reports 39% passenger increase in first eleven months of 2019

Kharkiv International Airport saw passenger numbers rise by 39% year-on-year during the January to November 2019 period, with the airport servicing a record 1.2 million travelers in the first eleven months of the year. The growth rate for November 2019 was above this annual average, with 115,200 passengers using the airport during the course of the month, representing a 59% increase on the figure for the same period one year earlier. These latest Kharkiv airport statistics are in line with the broader growth trends of the past four years that have seen steadily rising numbers of passengers and the addition of new flights on a virtually monthly basis. The airport’s rapid development is now attracting international attention. Kharkiv ranked fourth in Europe during the third quarter of the current year among airports with passen50

ger volumes of below five million, according to a comprehensive industry ranking compiled by the Airports Council International (ACI) Europe. Kharkiv International Airport’s performance is significantly ahead of national trends at a time when the Ukrainian aviation industry as a whole is experiencing an unprecedented boom. Ukrainian airports serviced a total of 20.745 million people during the January-October 2019 period, representing an 18.8% year-on-year increase. Around 60% of these travelers flew via Boryspil International Airport, which remains by far Ukraine’s busiest air gateway. Beyond the Ukrainian capital, Lviv was the most popular regional airport with almost two million passengers during the ten-month period, followed by Odesa and Kharkiv airports.

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transport

One year, one million passengers

Boryspil Express proves a big hit

Direct rail link connecting Boryspil airport to Kyiv’s Central Railway Station launched in 2018 The Boryspil Express train service connecting Boryspil International Airport with Kyiv’s Central Railway Station marked its first anniversary in late November by passing the one million passengers milestone, according to data released by Ukrainian railway operator Ukrzaliznytsia. Launched in late 2018, the service has proved a big hit among travelers, with high levels of demand leading to the introduction of additional wagons during peak periods in the mornings and evenings. The Boryspil Express currently carries out more than 50 trips per day, with an average daily passenger volume of around 2,500 people. September 2019 proved the busiest month so far, with 107,600 passengers in total using the service. This popularity is in stark contrast to the service’s somewhat inauspicious start. Unveiled amid much fanfare towards the end of last year, the Boryspil Express quickly became the subject of mockery and a source of online memes when it broke down during the first few days of operations. Images and video footage of hapless passengers disembarking from the stranded wagon with their suitcases and traipsing through the snow towards the distant Boryspil airport terminal building earned the service an unenviable reputation as a symbol of incompetence. However, this awkward beginning has proven to be the exception rather than the rule, with further technical problems largely avoided. High levels of customer demand for the Boryspil Express have convinced the Kyiv authorities to expand the service. Work is now nearing completion on a major upgrade to the Ukrainian capital’s Vydubychi train station, which lies along the route of the Boryspil Express. The station is expected to open its doors to the public in redeveloped format by mid-2020. It will then serve as a transport hub for the wider Kyiv region, connecting the Boryspil Express to rail and bus services as well as the Kyiv metro system. The arrival of the Boryspil Express was long overdue. Initially planned as part of a wider infrastructure upgrade ahead of Kyiv’s role as one of four Ukrainian host cities during the UEFA Euro 2012 European football championship, the project failed to get off the ground amid a series of funding and construction missteps. This left the Ukrainian capital without a rail connection to the country’s main airport, a shortcoming widely seen as

a barrier to Kyiv’s international attractiveness as a tourism and business travel destination. As Boryspil International Airport modernized and expanded in recent years, this lack of a rail link came to look increasingly incongruous. Boryspil is Ukraine’s busiest airport, accounting for more than half of the country’s overall airline passengers. It has witnessed five years of strong annual growth in passenger traffic in a sequence stretching back to 2014, when the airport serviced just 6.89 million travelers compared to over 13 million in the first ten months of this year alone. In each of the past three years, Boryspil has set a new record for annual passenger volumes. The airport currently has a number of operational terminals, with Terminal D hosting the majority of international flights and serving as the point of arrival and departure for the Boryspil Express. Meanwhile, the mothballed Terminal F building recently reentered service to cope with an influx of budget airlines entering the Ukrainian aviation market. Ukraine’s air travel industry is currently experiencing a period of unprecedented expansion, with airports across the country posting double-digit annual growth in passenger numbers since 2016. This expansion is due to the arrival of new airlines drawn by Ukraine’s growing economy and the advent of visa-free travel to the European Union, which Ukrainian citizens secured in June 2017 within the framework of the country’s Association Agreement with the EU. In addition to the launch of the Boryspil Express, Ukraine’s main airport has sought to keep pace with growing passenger flows by improving other aspects of infrastructure. Spring 2019 saw the unveiling of a multistory car park alongside Boryspil Terminal D, bringing to an end a construction saga dating back around ten years. Also in spring 2019, Ukrainian government officials released plans for an ambitious upgrade that would see Boryspil’s capacity more than trebled over the coming 25 years at an estimated cost of over EUR 3 billion. These plans include the construction of a second runway and the expansion of Terminal D facilities in order to accommodate in excess of 50 million passengers per year by 2045.

High levels of customer demand for the Boryspil Express have convinced the Kyiv authorities to expand the service

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agriculture

Ukraine breaks grain record

with bumper 2019 harvest

Ukraine’s new annual grain harvest record beats previous all-time high established in 2018

Ukraine has underlined its status as an emerging agricultural superpower by breaking its own national record for the country’s annual grain harvest. By mid-December 2019, Ukrainian farmers had harvested approximately 75 million tons of grain, according to data released by the Ukrainian Ministry for Development of Economy, Trade and Agriculture. This represents a significant increase on the previous record harvest of 70 million tons, which was established one year earlier in 2018. Ukraine’s second successive record grain crop is helping to drive exports up. The country has boosted grain exports by approximately one-third during the first five-and-a-half months of the current annual trade cycle, which traditionally runs from July to June. Ukraine’s grain export total of 27.4 million tons between July and mid-December 2019 represents a 33% year-on-year increase as the country continues to consolidate its position as one of the world’s leading grain exporters. Some of the biggest gains this season have come in wheat exports, which rose from 9.8 million during the same period in 2018 to the current total of 14 million tons. This strong growth in exports should allow Ukraine to expand its global agricultural footprint further. Key export markets currently include India, Egypt, the Middle East and the European Union, while Ukraine has benefited from trade war tensions between China and the United States in order to make important inroads into the vast and 54

lucrative Chinese market. This broadening of the sector’s geographical horizons is already leading to record cargo handling volumes at Ukraine’s seaports. With Ukrainian grain harvests rising year-on-year and substantial further growth being widely predicted for the coming decade as the Ukrainian agribusiness sector continues to modernize, the race is now on to upgrade the country’s agricultural infrastructure in order to make sure expanding volumes are able to reach domestic and international markets. This Herculean task is already underway. Agricultural infrastructure has been one of the main focuses of international investment into Ukraine for a number of years, with eye-catching outlays by major multinationals on new port facilities along with storage and processing upgrades. Meanwhile, many agribusinesses are now looking to invest in their own railway wagon fleets in order to bypass seasonal shortages during peak harvest periods. As the Ukrainian rail network struggles to cope with the strain of record harvests, some agribusinesses are also turning to the country’s waterways in search of a sustainable solution. Grain shipments were a key factor behind a 22.6% increase in cargo transportation along the Dnipro River during the first ten months of 2019. As Ukraine continues to evolve from Europe’s breadbasket to global granary, the Dnipro River and other key Ukrainian waterways will have an increasingly important role to play. www.bunews.com.ua

Ukraine’s Euro 2020 challenge Can Shevchenko the manager

match Shevchenko the player? Ukrainian national team coach Andriy Shevchenko has silenced his critics by leading Ukraine to next summer’s European championships in style and ending the calendar year unbeaten for the first time in the country’s footballing history. Can the former Milan and Dynamo Kyiv superstar now make his mark at Euro 2020 and prove he has what it takes to succeed as a manager at the highest level?

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Shevchenko Silences Critics Ukraine’s national football team ended 2019 on a high note, rounding off the year unbeaten and well-positioned as one of Europe’s most fancied teams ahead of the Euro 2020 championship next summer. This is only the third time Ukraine has made it to the finals of the European Championship, and the country’s football fans are having a hard time remembering when they last felt so optimistic about their side’s chances. Much of this feel-good factor is down to the swashbuckling and self-confident brand of football promoted by Ukrainian head coach Andriy Shevchenko, who is beginning to build a managerial reputation to match his glittering career on the pitch as a star striker for Dynamo Kyiv, Milan, Chelsea and Ukraine. The current wave of optimism around the Ukrainian national team is a far cry from the sombre mood that shrouded the side when Andriy Shevchenko first took on the manager’s role three-and-a-half years ago in summer 2016. At the time, news of Shevchenko’s appointment as successor to the underachieving and uncharismatic Mykhailo Fomenko was met with a considerable amount of scepticism. Despite being a national team legend and his country’s alltime record goal scorer, Shevchenko was a complete managerial novice with no experience at club level and only a brief six-month spell as Fomenko’s assistant on his CV. Critics saw it as yet another uninspiring in-house appointment of the kind that had left the country’s formerly all-conquering club side Dynamo Kyiv mired in mediocrity. Shevchenko started slowly and failed to qualify for the 2018 World Cup in Russia. However, by the time qualification for Euro 2020 began, the former national team captain had grown into his managerial role. Over the past two calendar years, Shevchenko’s side have lost just one match while topping their Euro 2020 qualification group and winning their inaugural Nations League group. This run of success has included a string of standout performances such as the 5-0 drubbing of Serbia in summer 2019 and the autumn victory over European champions Portugal that secured Ukraine’s place in next year’s European Championship finals. Shevchenko cannot be given all the credit for the remarkable revival in the Ukrainian national team’s fortunes. The impressive coaching setup operating behind him has also played a significant role in the Ukrainian squad’s recent development. Italians Mauro Tassotti and Andrea Maldera, Spaniard Pedro Luis Jaro, and Ukraine’s very own Oleksandr Shovkovsky have all made important contributions to the training and preparation that have

enabled the side to flourish in a dynamic and open environment. Perhaps inevitably, Shevchenko’s success as Ukrainian national team manager and his global name recognition have combined to make him a potential candidate for numerous top jobs in club football. Autumn 2019 saw a flurry of speculation suggesting that the Ukrainian may be on the verge of a return to his beloved Milan. Those rumours eventually proved to be unfounded, but if Shevchenko succeeds in leading his side to the latter stages of Euro 2020 next summer, there is every chance this will translate into opportunities to manage in Europe’s top leagues. For now, though, Shevchenko remains focused on the task of building on the good form of the past few years and leading Ukraine to new heights at the European Championship.

Favorable Euro 2020 Draw

Euro 2020 will be a unique UEFA tournament, with games taking place in 12 different countries as part of one-off efforts to celebrate the sixtieth anniversary of the European Championship. Ukraine have been drawn in Group C alongside the Netherlands and Austria, with the final spot in the group set to be confirmed following early 2020 playoff ties. With the Netherlands among the 12 “host” nations at Euro 2020, Ukraine will begin their campaign with a tricky encounter against the Dutch in Amsterdam on 14 June. The Ukrainian bandwagon will then depart for Romanian capital Bucharest, where Shevchenko’s side will play Austria and an as-yet undetermined third group stage opponent. Neither of their confirmed Euro 2020 group stage rivals should leave Ukraine feeling overly intimidated. Ronald Koeman’s Netherlands side look to be on their way up after a number of years in the footballing wilderness. They have some big names in their side including this year’s Ballon D’Or runner up Virgil Van Dijk. With the domestic advantage in their favour, the Dutch certainly represent the toughest group stage challenge for Shevchenko’s side. Nevertheless, Ukraine’s victory over reigning Euro champs Portugal in autumn 2019 demonstrated the team’s ability to compete against European footballing aristocracy. Central European outfit Austria look beatable. Boasting the likes of ex-Dynamo Kyiv defender Aleksandr Dragovic, David Alaba of Bayern Munich, and former West Ham player Marko Arnautovic, the Austrians have a sprinkling of quality in some areas of the pitch. However, they have shown during the recent qualifying campaign that whilst they can dismiss weaker sides, they struggle against any kind of quality opposition.

Andriy Shevchenko is beginning to build a managerial reputation to match his glittering career as a star striker for Dynamo Kyiv, Milan, Chelsea and Ukraine

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WEST UKRAINE’S LIFESTYLE GUIDE №122/April 2019

MEET SOFIA STEFANOVSK A SMART, STRONG & BEAUTIFUL

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Ukraine’s final opponent in the Euro 2020 group stages will be either Romania or any one of Belarus, Georgia, North Macedonia and Kosovo. None of these sides represents particularly dangerous opposition, although with the tie set to take place in Bucharest, Ukraine would probably be better off avoiding Romania and the added headache of facing another opponent on their home turf.

Stable Squad

When pressed in late 2019 as to whether he had a fairly strong indication of the squad he will be taking to next year’s tournament, Shevchenko remained coy, saying, “There is still a long way to go and a lot can happen between now and then.” However, despite this quote from the head coach, it would be rather uncharacteristic of him and his backroom staff to draft in a large amount of surprise selections or instigate a complete squad overhaul before June 2020. Ukraine’s Under 20 World Cup winner Denys Popov could be one of the few wildcard selections if he continues to flourish at Dynamo Kyiv following the Ukrainian Premier League winter break. Another name to keep an eye on is attacking midfielder Bohdan Lednev. The Zorya Luhansk star will be aiming to force his way in as a late entry to Shevchenko’s squad. Given the recent performances of the national team, the current squad does not look to have any obvious weaknesses. Ukraine ended the calendar year unbeaten for the first time ever, with a record of seven wins and three draws. The aforementioned victories over Portugal and Serbia were obvious highpoints, but fans were also impressed by the professionalism instilled by Shevchenko and his hybrid Ukrainian, Italian and Spanish backroom team throughout the Euro 2020 qualification campaign. The spirit of the squad was on display during the final game of the qualification series in Serbia. With Ukraine already assured of a place at Euro 2020, they could have been forgiven for relaxing. Instead, the team fought back from 1-2 down to grab a last gasp equaliser in Belgrade and keep their unbeaten record intact. This “never say die” attitude has become one of the hallmarks of Shevchenko’s national side, and it is something that delights the team’s supporters. The team’s fighting spirit on the pitch reflects what appears to be a strong sense of camaraderie running through the squad, with strength in depth in all positions but no single star player hogging

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Supporters have enjoyed the sense of professionalism instilled by Shevchenko and his hybrid backroom team of Ukrainians, Italians and Spaniards the heroic headlines, despite the presence of numerous household names. Ukraine’s first choice midfield trio has been indispensable over the past 18 months. Taras Stepanenko plays at the base of this central triangle. He is the player who labors along as the team’s unsung hero, with his impact typically not being truly noticed until he is absent. It is absolutely vital Stepanenko remains fit for next summer, with many in the media calling him the squad’s most indispensable player. Ruslan Malinovksyi and Oleksandr Zinchenko have also come into their own this year. The latter broke into the first team of a domestic treble-winning Manchester City side despite being deployed as an unorthodox left back. Manchester City coach Pep Guardiola’s genius has helped Zinchenko develop into a more complete and rounded midfielder by adding greater defensive awareness to his game. His defensive abilities have improved tenfold this year, as has his maturity on the field. Many see him as a future national team captain. Likewise, Malinovksyi has been integral to the spine of this side. His work ethic in midfield and ability to drive with the ball from box to box have been a joy to watch, allowing him to initiate a number of counterattacking moves that ultimately resulted in goals. Meanwhile, his set piece deliveries and personal goal scoring contributions proved vital in helping Ukraine qualify. Taken together as a threesome, this could very well be the greatest midfield trio Ukraine has ever had. Special mentions need to be given to Roman Yaremchuk and Andriy Pyatov. Yaremchuk looks to have finally found his feet at international level as the long-awaited goal scoring heir to Andriy Shevchenko. He is still a work in progress, but Yaremchuk could well prove to be the piece of the puzzle Ukraine have struggled to replace ever since the current manager retired. At the other end of the pitch, goalkeeper Andriy Pyatov had the year of his life in 2019 for the national team. Whilst his performances for Shakhtar have raised eyebrows on occasion, his displays for Ukraine have been immaculate. This included a few key saves in home and away ties against Portugal, and an overall record of just four goals conceded in eight qualification matches. If Pyatov can continue this form into Euro 2020, he may well end up being recognized as Ukraine’s greatest ever keeper.

About the author: Andrew Todos is a London-based Ukrainian football expert and blogger. He runs Zorya Londonsk, an English-language online platform dedicated to Ukrainian football. www.bunews.com.ua

Huawei Ukraine holds Digital Transformation Forum Huawei Ukraine hosted an array of government, business and education sector leaders in Kyiv on 26 November for an event designed to accelerate the digitalization of Ukraine while boosting the country’s economic growth and ICT literacy. The Digital Transformation Forum 2019, which was held in cooperation with the Better Regulations Delivery Office (BRDO), featured a series of keynote speakers and panel discussions on topics including broadband development in Ukraine, while participants were also able to explore the latest technologies in an interactive demonstration zone featuring 16 stands. “At Huawei, our vision is to

bring digital to every person, home and organization for a fully connected, intelligent world. We believe only collaboration will get us there,” commented James Li, President of the European Region at Huawei. Ukraine featured as a rising star among adopters in the 2019 Global Connectivity Index published recently by Huawei, improving its GCI score by 12 points in just five years from 2015 to 2019. In the past three years, Huawei, together with local operators, has helped Ukraine move from 2G to 4G, saving three to five years of construction time compared with the experience of other countries.

networking events

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Kyiv Hosts Annual Eastern Europe Real Estate Awards Representatives of the Ukrainian and regional real estate industry gathered at Kyivâ&#x20AC;&#x2122;s InterContinental Hotel in late November for the fifth annual Eastern European Real Estate Forum and Awards organized by the Ukrainian Real Estate Club and Europaproperty.com. This year saw a 25-member jury pass judgment on over 300 applications from five countries before awarding 36 winners in a range of categories including residential, retail and office projects of the year for 2019.

networking events

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John Hughes Memorial Dinner Honors British Founder of Donetsk The British Ukrainian Chamber of Commerce (BUCC) and the Ukrainian Chamber of Commerce and Industry, together with the John Hughes Business Club, welcomed guests including Ukrainian Minister of Economic Development, Trade and Agriculture Tymofiy Mylovanov to Kyiv’s Opera Hotel in late November for the first annual John Hughes Memorial Dinner to be held in a number of years. This Ukrainian business community tradition celebrates the achievements of the nineteenth century British visionary who founded Donetsk and established Ukraine’s steel and coal industries. The John Hughes Memorial Dinner was formerly hosted each year in Donetsk by the BUCC together with the Donetsk Chamber of Commerce, until

the 2014 Russian invasion of the region forced its suspension. John Hughes was a remarkable nineteenth century British industrialist who made a huge contribution to Ukrainian history. Having already built a career as a leading figure in the UK steel industry, he took eight ships to Ukraine in 1869 with over 500 skilled engineers and built the first steel mills in Eastern Europe. The city initially took his name and was known as Yuzovka in recognition of his contribution (“Yuz” being a Russian-language approximation of Hughes). Decades later in 1924, the city was renamed “Stalino” in honor of the Soviet dictator, before eventually receiving its present name Donetsk in 1961.

networking events

Kyiv Exhibition Explores Historic Ukrainian Signatures Ukrainian law firm Sayenko Kharenko welcomed guests to the opening of a novel and interactive educational exhibition at Kyiv’s Lavra Art Gallery in late November. Entitled “Power of the Signature”, the exhibition explored the role of signatures throughout history. Visitors were invited to explore the stories behind some of the most important autographs in Ukraine’s long journey towards statehood, while also learning more about the signatures that shaped world history. The initiative was part of Sayenko Kharenko’s fifteenth anniversary celebrations, with project initiator Mykhailo Kharenko calling it “our gift to Kyiv and Ukraine as a whole.”

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Kyiv Hosts Annual Festive International Charity Bazaar

The International Womenâ&#x20AC;&#x2122;s Club Kyiv (IWCK) hosted the twenty-seventh annual International Charity Bazaar in late November at the Olympic Stadium complex in the heart of the Ukrainian capital. This fun yearly event is a popular fixture on the Kyiv expat calendar that brings together embassies and members of the international community to raise money for worthy Ukrainian causes. This yearâ&#x20AC;&#x2122;s event attracted the participation of 47 embassies and international missions, raising a grand total of UAH 3,205,742 for charity.

networking events

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Michelin Star Chef Delights Kyiv Gourmets Kyivâ&#x20AC;&#x2122;s Citronelle restaurant treated guests to two evenings of culinary discovery in late November when the French restaurant hosted celebrity chef Claude Legras for a series of VIP dinners. Swiss gastronomic maestro Legras has earned two Michelin stars during a glittering career spent mostly in Geneva. BMW Ukraine was the official partner of the evening, with additional support from Asters law firm, DIM Group, Zepter, Tulpania, Pied de Poule salon, Bomond boutiques and 11 Mirrors Design Hotel.

networking events

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Beaujolais Nouveau Celebrations in Kyiv Ukraineâ&#x20AC;&#x2122;s French diplomatic and business communities welcomed friends and colleagues to Kyivâ&#x20AC;&#x2122;s InterContinental Hotel in November for the annual Beaujolais Nouveau Soiree. Hosted by the French Chamber of Commerce in Ukraine (CCIFU), this yearly celebration of fine wines and French culture has become one of the most popular events on the Kyiv international calendar, with hundreds of guests in attendance.

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sport

Usyk in line for 2020 heavyweight title shot

Ukrainian boxing star Oleksandr Usyk is one step closer to becoming the country’s next world heavyweight champion after the WBO made him their mandatory challenger and ordered British title holder Anthony Joshua to finalize a fight agreement with the Ukrainian southpaw by 10 January 2020 or risk being stripped of his belt. Joshua regained the WBA, IBF, WBO and IBO heavyweight titles by defeating Andy Ruiz in Saudi Arabia in early December, and is now plotting his next moves. The towering Brit would be permitted to sidestep a mandatory Usyk bout if he can secure a unification fight with current WBC title holder Deontay Wilder. However, Wilder is scheduled to take on Britain’s Tyson “Gypsy King” Fury in early 2020, meaning Joshua would have to wait. Usyk’s path to the heavyweight title may also be obstructed by Bulgarian fighter Kubrat Pulev, who is next in line for Joshua’s IBF belt. One possible scenario would see

Joshua face Pulev in March before a showdown with Usyk in summer 2020. 32 year old Usyk’s rise to his current position among the top contenders in the heavyweight division has been rapid to say the least. The former Olympic heavyweight champion, who won gold for Ukraine at the London Games in 2012, made his professional debut in 2013 as a cruiserweight and continued to fight at that weight for the next five years. He eventually became the division’s first ever four-belt undisputed champion, before announcing plans to step up to the heavyweight division. Usyk made his heavyweight debut in October 2019, winning his first heavyweight contest in Chicago against Chazz Witherspoon. Usyk is widely regarded as a technically gifted fighter, but at 191cm in height, he is also considered somewhat small by the standards of today’s heavyweight division. This has raised question

marks over the Ukrainian’s ability to trade blows with fighters who enjoy considerable size and weight advantages. With only one heavyweight fight under his belt, the jury is still out on Usyk’s ability to step up divisions. However, it now looks like fight fans will not have long to wait before they see the Crimean native going toe-to-toe with the world’s leading heavyweights. If he proves successful, Usyk would become Ukraine’s third world heavyweight champion. The country’s Klitschko brothers made boxing history when they dominated the heavyweight division and divided world titles between themselves for much of the 2000s. Younger brother Wladimir Klitschko still holds the record for the longest cumulative heavyweight title reign of all time, with an astonishing 4,382 days as world heavyweight champion. During this period, he defeated 23 opponents in world heavyweight championship bouts, which is also a record.

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